Shunmoogam Pragalathan Pillay v Central Sydney Area Health Service [2003] NSWIRComm 297 | Case summary

1 On 28 May 2003 a Notice of Motion was filed on behalf of Dr Shunmoogam Pragalathan Pillay (the applicant) seeking a declaration and orders in relation to Heads of Agreement reached with the Central Sydney Area Health Service (the respondent/the CSAHS) in settlement of an unfair dismissal application in the Commission on 26 March 2002. 2 This decision deals with a later Notice of Motion filed by the respondent seeking an order that the applicant's Notice of Motion filed on 28 May 2003 be either struck out or permanently stayed. 3 Mr A Britt of counsel with Mr C Jayawardena, solicitor, appeared for the applicant on proceedings/respondent on Notice of Motion. 4 Mr R Goot SC with Mr G Jolly, solicitor, appeared for the respondent on proceedings/applicant on Notice of Motion. 5 Reference to the parties in this judgment will be to their status in the original proceedings. Background 6 On 19 October 2001 the services of the applicant as a senior staff specialist in transplantation surgery at Royal Prince Alfred Hospital (RPA) were terminated by the CSAHS. 7 On 24 October 2001, Dr Pillay filed an unfair dismissal application under s 84 of the Industrial Relations Act 1996 (the Act) seeking reinstatement to his former position. 8 A conciliation conference was convened on 26 October, but was unsuccessful in resolving the dispute. 9 A timetable was set for arbitration which commenced on 28 November 2001 and continued over the next two days. On 30 November 2001, the proceedings were stood over, part heard, to 28 February 2002, 1 and 26 March and 12, 16 and 17 April 2002. 10 On 6 February 2002, by consent, the Commission in Chambers, vacated the hearing dates of 28 February and 1 March, allocating in lieu hearing dates of 25 and 26 June. 11 When the proceedings resumed before the Commission on 26 March, Mr A Moses of counsel on behalf of the applicant, with the consent of Mr J Shaw QC, then appearing for the respondent, applied to have the matter stood down in the list because the parties were having discussions with the aim of trying to resolve the matter. 12 Upon resumption at 2 pm, the Commission was advised by Mr Shaw: SHAW: There have been extensive discussions between the parties which were conducted last week and today. We thank your Honour for allowing those discussions to progess. I can inform the Commission that the proceedings have been resolved on terms agreed between the parties. Those terms will include the reinstatement to his former position of Dr Pillay and a variety of other arrangements between the parties that have been the subject of agreement. I am authorised to say to the Commission both parties have agreed to resolve the matter and the Central Sydney Area Health Service withdraws the allegation of misconduct made against Dr Pillay in respect of termination of his employment. What is contemplated is between the parties a deed of release will be drafted and executed and upon the execution of that draft [sic] of release the applicant will file a notice of discontinuance of these proceedings with no order as to costs, and your Honour may be able to deal with that notice of discontinuance in chambers. 13 On 10 September 2002, a Notice of Motion was filed on behalf of the applicant seeking a declaration and a number of orders. The declaration and the first of six substantive orders sought were: 2 A declaration that the Heads of Agreement … entered into and signed by the Applicant and on behalf of the Respondent on 26 March is binding on each of the parties. 3 An order that the Applicant will be reinstated to his position within the Liver Transplant Unit as a Senior Staff Specialist - Level 4 at full pay. … 14 The remainder of the orders sought related back to the Heads of Agreement/proposed Deed of Release. 15 In relation to that Notice of Motion, on 11 September, Mr T Unsworth, solicitor, then appearing for the applicant advised the Commission that problems had arisen in relation to the Agreement made between the parties on 26 March 2002 and endeavours to settle those problems by means of correspondence and discussion between the parties' respective solicitors had not been successful. 16 The Notice of Motion was set for hearing on 4 October 2002. 17 On 4 October 2002, Mr A Moses of counsel with Mr Unsworth, solicitor, continued their appearance for the applicant. Mr R Goot SC with Mr Chin solicitor appeared for the respondent. At the request of the parties the proceedings adjourned to private conference with the Commission involved. 18 At 2.30 pm proceedings were resumed in open court. Mr Goot went through the items in the Heads of Agreement, indicating the stage reached in relation to each of them. In particular, the following statement was made by Mr Goot: Doctor Pillay is reinstated. He will be placed on the clinical roster forthwith and will take up duties in accordance with that roster as soon as the roster cuts in and will take up duties in accordance with the unit's operational requirements. 19 Mr Moses also placed a number of matters on the record, including the following: In terms of the agreement reached between the parties as outlined in the heads of agreement document that was reached back in March and annexed to the deed, my friend has said a few things on the record. Our position is we rely on the terms of the deed of release and the terms of it and we reserve the right to take any action against the Area Health Service if that deed is breached in its terms. 20 The Motion was discontinued by consent. 21 The Commission heard nothing from either party until 28 May 2003 when Mr Chandra Jayawardena solicitor, now acting as solicitor for Dr Pillay, advised the Commission, in a covering letter to a Notice of Motion filed on that date, that: Despite the Terms of Settlement reached before Hon. Justice Glynn on 04 October 2002 between Dr Pillay and the CSAHS, and the Heads of Agreement and Deed of Release signed between the two parties, the matter relating to Dr Pillay being returned to full clinical duties remains un-resolved. 22 The following Notice of Motion was filed on behalf of the applicant: 1 A Declaration that the Heads of Agreement, (a copy of which is annexed and marked "A") entered into and signed by the Applicant and on behalf of the Respondent on 26th March 2002 is binding on each of the parties. 2 An Order that the Applicant will be reinstated to his position within the Liver Transplant Unit as Senior Staff Specialist - Level 4 at full pay. Without limiting the generality of the above, this will include:- a) Resumption of full clinical duties; 3 Costs of this Motion, including all costs incurred by the Applicant on or after 26th March 2002 in connection with the implementation of the terms of the Heads of Agreement made between the parties on an indemnity basis. 4 Such other Orders that the Commission considers appropriate. 23 The Grounds and Reasons to support the Motion were contained in the applicant's four page affidavit attached to the Notice of Motion. 24 On 13 June 2003, the respondent filed a Notice of Motion seeking the following orders: 1 An order that the Notice of Motion filed by the Applicant on 28 May 2001 ('Applicant's Notice') be struck out; 2 Further or in the alternative, that the proceedings herein be permanently stayed; 3 Further, an order that the Applicant pay the costs of and incidental to the Applicant's Notice and this motion; and 4 Such further or other orders as appears to the Commission to be appropriate in the circumstances. 25 Grounds and Reasons advanced in support of that Motion were: 1 The Commission does not have jurisdiction in respect of the orders sought in the Applicant's Notice, in that: (a) the proceedings previously commenced by the Applicant in the Industrial Relations Commission (IRC No 6943 of 2001) were settled ('Proceedings"); (b) as a term of the settlement, and in compliance with a deed of release exchanged by the parties on 4 October 2002, the Applicant was required to formally discontinue the Proceedings; (c) in the circumstances, the Applicant is estopped from denying that that the Proceedings are, have been, or should be held to be, discontinued; (d) the Commission, does not have power to any [sic] grant declaratory relief; and (e) the Commission does not have the power to make the order (concerning reinstatement) sought in paragraph 2 of the Applicant's Notice. The Applicant's Notice is not in respect of, nor is it an application to commence, proceedings under chapter 2 part 6, chapter 2 part 7 or chapter 3 part 2 of the Act. 2 Upon the grounds and for the reasons set out in the affidavit of Gayle Berg sworn 12 June 2003. 3 Upon such further grounds or for such further reasons as appears to the Commission to be appropriate in the circumstances. Submissions - Respondent (Applicant on the Motion) 26 Mr Goot submitted that the issue that has to be decided on the motion is whether the Commission has jurisdiction or power to grant the relief sought by the applicant Dr Pillay in his motion which the respondent seeks to strike out or stay. 27 The Deed of Release which had been prepared prior to 4 October was executed by the Area Health Service on 4 October and was exchanged on that day. 28 The notice of discontinuance which is dealt with in paragraph 1 of the Deed of Release is an agreement which is not subject to any precondition. It required Dr Pillay to cause the notice of discontinuance to be filed in effect forthwith after 4 October 2002 which was the day he received a copy of the Deed duly executed by the respondent and it was not expressed to be subject to anything else having occurred. It was completely unconditional. Based on that, certain steps were taken by the respondent. Dr Pillay was reinstated to his position with the respondent and his employment continued with the respondent since that time on the assumption that the proceedings were discontinued. The respondent's assumption that the proceedings had been discontinued was never disabused by him. 29 Dr Pillay however has said in his affidavit at paragraph 4 that he instructed his solicitors "not to file a Notice of Discontinuance until in accordance with the Heads of Agreement I had resumed full duties". If that statement is correct, then it is a clear admission by him of his breach of the Agreement represented in the Deed of Release. What he has said in paragraph 4 is in considerable contrast to what he told in writing to Mr Moses, namely that he had told Mr Unsworth not to forward a notice of discontinance until the issue of back pay is complete. It is also at variance with what Mr Unsworth said which was that he would hold off filing a notice of discontinuance until the costs of the motion are paid. 30 The costs of the motion were paid in October 2002. 31 As to the issue of back pay, Dr Pillay did not come to the Commission to seek orders under s 174. On 31 March 2003, he instituted proceedings against the respondent in the District Court of New South Wales (No 1360 of 2003), alleging a breach by the respondent of its obligation to pay the applicant back pay under the Heads of Agreement. Dr Pillay wants $62,511.76. But insofar as Dr Pillay now says that he was not reinstated, if that is what he says, or that he requires the tribunal to order that he be reinstated with the Liver Transplant Unit, he has told the District Court that that has already occurred. 32 He is estopped from denying these things. 33 It follows that the proceedings are not before the Commission because had Dr Pillay done what he had undertaken to do in the Deed of Release, but did not do it, a notice of discontinuance would have been filed and the proceedings would no longer be before the Commission. To the extent that he did not do what he promised he would do, that fact had estopped him from denying the effect of it because of the principle of estoppel. 34 In short, he cannot take advantage of his own breach by saying there are still proceedings before the Commission. In any event, the Commission has no power to grant the relief sought in his notice of motion and the only relief now sought is that contained in paragraph 2 that being an order that he be reinstated. That is so because the only power to reinstate is found in chapter 2 part 6 unfair dismissal, part 7 injured worker and chapter 3 part 2 dispute orders. None are applicable here and the proceedings ought to be stayed permanently. 35 What the applicant is seeking to do, is to enforce a settlement and to do so pursuant to s 174. He cannot do that. The matter was settled and it was settled substantively when the Heads of Agreement came into existence on 26 March 2002. If was not settled by conciliation involving the Commission. There was no conciliation conference as one would occur in relation to an industrial dispute. This was not a s 106 case where there had been s 109 conciliation. The parties discussed the matter, the parties reached an agreement and the parties revisited that agreement in October 2002 in the context of a Notice of Motion then filed by Dr Pillay. But there was no settlement by conciliation. Section 174 does not become operable. 36 The respondent sought the costs of the Motion pursuant to s 181(a) or (b). Dr Pillay had been given an opportunity on 6 March to withdraw the Motion, an opportunity taken up in part only. Submissions - Applicant (Respondent to the Motion) 37 It is conceded that the Commission does not have the power to grant any declaratory relief. However, the Commission does have the power to make an order as sought in these proceedings in relation to the second order sought, that is a power that arises under s 174 of the Act. 38 The respondent would have the Commission read s 174 by inserting the word "conciliation" before "the Commission" in this section. Those words are not found there. The unfair dismissal application made under s 84 did in fact settle between the parties on 26 March 2002. It did not settle in an arbitrated sense, with a decision imposed by a court; it settled as a result of discussions between the parties and such discussions and such agreements in fact amount to conciliation. It is not necessary that it be a formal conciliation before the Commission. Secondly, it is clear this matter did at one stage go to conciliation. It is a matter that has gone through a conciliation process and ultimately the matter has settled again. 39 There is no decision arising as a result of an arbitration. There is a decision arisen by way of a conciliation between the parties. The respondent's narrow reading to impose a requirement that it occur in a conciliation conference should be rejected. Plainly those words are not there and the section should not be read as if they are there. The applicant's notice of motion seeks to obtain an order consistent with the settlement in relation to a number of outstanding matters between the applicant and respondent. Those matters are that, while, in accordance with the Heads of Agreement Dr Pillay has been reinstated as a senior staff specialist level 4 at full pay, he has not resumed his full duties, and in particular, has not been restored to his clinical duties. It is clear on the evidence of Dr Pillay that he was not put on the clinical roster forthwith after 4 October 2002. Despite the representations made to the applicant on 4 October 2002 about the resumption of full clinical duties returning to surgical procedures and about being with Professor Schlitt for an initial period of time, that did not in fact occur, other than in one instance for a period of a week. 40 These are matters that the applicant did not draw to the attention of the respondent. It was not until the filing of this motion that the applicant took proceedings in relation to what the applicant alleges to be a breach of the Agreement. 41 Recital no 4 of the Deed of Release made it clear that the terms of the Heads of Agreement itself are incorporated into the Deed of Release. Conditional upon the respondent complying with paragraphs 1, 2, 3, 4 of annexure A, certain matters apply. One of the terms that has to be complied with is Dr Pillay be reinstated with a resumption of his full duties. Looking back at the Heads of Agreement, one of the terms of the Deed is that Dr Pillay will be reinstated with a resumption of full duties. 42 The evidence shows that it is at least arguable, that there is in effect a breach of the Heads of Agreement by the respondent and thus of the Deed by its failure to ensure that the applicant is reinstated and that he resumes his full duties. The applicant's position is reserved should there be any breach of the deed. 43 In terms of the Chief Justice's dicta in General Steel Industries Inc v Commissioner of Railways (NSW) [(1964) 112 CLR 125 at 129], the argument the applicant puts forward is not too obviously untenable that it cannot possibly succeed. In other words it does not have to be a conciliation in the sense of the Commission's involvement in the matter. Those words not being found in s 174. 44 It is, of course conceded that it is open to the Commission when exercising its discretion under s 174 to make orders in terms of the Heads of Agreement. There was in fact a binding agreement and a binding settlement on both of the applicant and the respondent and the respondent should in fact comply with it. The evidence shows on an arguable basis it has in fact not complied with it. 45 The agreement arises as a result of conciliation between the parties. If the respondents argument is correct and a notice of discontinuance should have been filed and, therefore, the applicant should not get the benefit of its failure to file such a notice, it is arguable in the terms of s 174 that the application need not be alive at the time of the application under s 174. That in itself is a new application and that is something arguable on the terms of s 174. Section 174 itself is not going to be defeated merely because a notice of discontinuance had been filed. What is required in s 174 is there had been an application, the application concluded and it concluded in conciliation. That is made out and arguable on the terms of s 174. That would have been made out even if the applicant had filed a notice of discontinuance. 46 In relation to s 174, this is an appropriate case, given the history of the matter for the Commission to make orders finally disposing of the matter and the Commission should make the orders. 47 There are relatively few decisions that have had to consider s 174. One such decision is the decision of Walton J, Vice-President in Fox v GIO Australia (Fox) [2002] NSWIRComm 318. That concerned an application under s 106 of the Industrial Relations Act and the applicant there conceded that was a matter that in fact "did settle" as part of a formal conciliation. 48 It is conceded that the applicant did in fact execute the Deed of Release and did so on 4 October 2002. It is also conceded that the applicant did not file a notice of discontinuance arising from that Deed of Release. The respondent says that the applicant is estopped by his conduct, one of the limbs being that the respondent has acted to its detriment. The actual agreement reached is the Heads of Agreement reached on 26 March 2002 and after 4 October the respondent hasn't acted to its detriment any more than the applicant has acted to his detriment based on the representations made to the applicant before the application on 4 October concerning the resumption of his full duties. Full duties includes his clinical duties, as well as the actual terms of both the Heads of Agreement and of the terms of the Deed of Release which incorporated them both in relation to a resumption of full duties. 49 In relation to the doctrine of estoppel, the applicant has also acted on this Agreement in that he has not proceeded with his unfair dismissal proceedings, that he has accepted the general agreement that was reached, albeit there is clearly a difference of opinion in relation to what was the effect of the compensation order in relation to the payment of money. 50 In essence the motion of the respondent in this matter is either a motion to permanently stay or strike out the applicants motion prior to the hearing of that motion. The principles adopted to hearing such a notice of motion are those set out by the Full Bench of this Commission in Nagle v Tilburg (Nagle) (1993) 51 IR 8. The test is, in essence, that the Commission has to be convinced that the applicant's notice of motion is so obviously untenable it cannot possibly succeed or it is manifestly groundless or so manifestly faulty that it did not admit of argument, or cannot succeed and under no possibility can there be a good cause of action. This is a particularly difficult case for the respondent to meet in relation to this particular application. A more modern statement of principles is found in Virtue v NSW Department of Education and Training (1999) 92 IR 428 at 447 over to 448. If there is an arguable foundation the application should be dismissed. 51 It is arguable, and that is all the applicant says. Section 174 applies. An action under s 174 in fact is not estopped by a term of the Deed; and, it is certainly arguable that the Commission should take into account all the circumstances surrounding the making of the Deed and compliance by both the applicant and the respondent in relation to the Deed. 52 Finally, in relation to the issue of costs, if the Commission dismissed the respondent's notice of motion, the applicant seeks to have the issue of costs in those circumstances reserved. 53 In the event that the respondent is successful on the notice of motion, the respondent has relied upon s 181(2)(a) and (2)(b). In relation to 2(a), the proceedings brought by the applicant in his notice of motion is not vexatious or frivolous. Secondly, the power to award costs under s 181(2)(b) is limited to a proceeding which, in the opinion of the Commission, is instituted without reasonable cause. The particular issue as to what is meant by "without reasonable cause" was considered by Wright J, President, in Dorothy Jonns Total Beauty and Slimming Centre Pty Limited and Goode [2001] NSWIRComm 34, at paragraphs [13], [14] and [15]. In this case there was reasonable cause. 54 The Notice of Motion of the respondent should not be granted. The applicant's Notice of Motion is such that it shows an arguable case that the Commission has jurisdiction under s 174, notwithstanding the Deed of Release and certainly the applicant's case is that the Deed of Release has to be considered within the circumstances in which it was executed, including both its term and the terms of the heads of agreement and what the Commission was told on 4 October 2002. Submissions - In Reply 55 The respondent says that what was in the Heads of Agreement has been complied with. Mr Britt says that it is arguable that Dr Pillay has not resumed his full duties. The respondent says that he did resume his full duties. So much is clear from Professor Schlitt's letter of 26 March. 56 It is equally clear that no complaint, in the sense of any proceedings, or the attempted reinstitution of these proceedings, had occurred between October 2002 and May 2003, notwithstanding that Dr Pillay instituted District Court proceedings where he thought that the CSAHS was in breach of the Heads of Agreement, and/or the Deed in relation to the back pay issue, an entirely inconsistent approach. 57 Really, whether or not Dr Pillay's resumption of full clinical duties had been maintained is a side issue. The issue before the Commission is whether it has jurisdiction to deal with Dr Pillay's Notice of Motion, and the applicant, when he refers to Nagle v Tilberg and General Steel, misconceives the test before the Commission. At page 11 of Nagle, the Full Bench after reviewing various authorities say this: We draw from those authorities the proposition that whilst desirable for a case to be determined at an early stage it is only open to do so at the appropriate stage of the proceedings. That is where the facts either established by evidence or plainly agreed in terms enable the court to determine what the contract or arrangement is or at least the parameters of the contract or arrangement. It seems to us unless the facts are sufficiently established to enable the court to be satisfied it has the necessary material to reach a clear and final decision on the position, then an appropriate stage hasn't been reached. 58 That is an entirely different thing as to where there is a clear want of jurisdiction as is the case here. They go on to say: We're of the view the state of those facts was such that a separate determination of the jurisdictional question was premature. It is simply not possible in our view of the circumstances as they are known to be confident that the claim made in the summons ... it was premature. 59 The issue has got nothing to do with "arguable" or "sustainable" or any of the other words that are used by counsel for the applicant because it is a clear case. This is not a question of cause of action and the principles referred to by Wright J, President in Virtue v the New South Wales Department of Education and Training (92 IR at 447). The applicant says that the evidence shows that it is at least arguable that there has been a breach of the Heads of Agreement, or the Deed of Release, or both, by the respondent. He was talking about an arguable "cause of action". He is not talking about jurisdiction. 60 This is the appropriate stage to determine the matter. That is why the CSAHS raised the point on 6 June at the earliest possible opportunity. Lack of jurisdiction here is clearly demonstrated. 61 Insofar as jurisdiction is concerned, the Commission does not have any and it does not have any, firstly, because now it has been conceded that there is no jurisdiction to grant the declaration. Secondly, the Commission does not have jurisdiction because of the estoppel point; and Mr Britt has properly conceded that the notice of discontinuance was not filed. What he means by that is that his client is in breach of the deed. It also means that his client is estopped from denying that the proceedings are no longer before the Commission, unless it cannot be satisfied that the respondent acted to its detriment. There is no question that the Central Sydney Area Health Service relied on the assumption that he had filed a notice of discontinuance in taking further steps. 62 The evidence is that the respondent paid Dr Pillay's costs in October. It would not have done that if it thought that the proceedings had not gone away in accordance with this undertaking in the Deed. It put him on the roster. It paid him back pay: not all the back pay that he claimed because he wanted to be paid while he was earning income from a third party, but undoubtedly pursuant to the Heads of Agreement and the Deed. 63 Now what has been admitted here is unquestionably, a breach by Dr Pillay of the Deed of Release. One of the consequences of that breach in accordance with the Deed of Release which is Dr Pillay's document drawn by his then solicitors, is that the settlement of the proceedings set out in annexure A is null and void (see cl 2C on page 2 of the Deed) and he is in breach. 64 The decision in the Shop Distributive and Allied Employees' Association NSW v Librus Pty Ltd t/as Dymocks Parramatta [2001] NSWIRComm 46 does not avail the applicant. This was where in an unfair dismissal proceedings Commissioner Elder in a preliminary hearing ruled that there was no jurisdiction whilst he was in conciliation, and Walton J, Vice President said that was premature. It is an important decision because it gives meaning to what is meant by the words "by conciliation" in s 174 in the commissioner's unfair dismissal jurisdiction. 65 Nor does Fox, which was a s 106 case where conciliation had been attempted by Hungerford J but had failed, assist the applicant. On 15 June 2001, a second conciliation conference had been convened before his Honour, and notwithstanding the earlier settlement the respondent changed its instructions. Section 174 was invoked because it was common ground that there had been a settlement by conciliation. The only issue before Walton J was whether it could be enforced because of an alleged illegality in the terms of the settlement, alleged by the respondent having regard to the terms of s 200B of the Corporations Law, and Walton J found that there was there was no illegality and that the settlement was enforceable under s 174. 66 The applicant's submission is that the words "by conciliation" do not refer to conciliation before a member of the Commission. The parties can just settle proceedings. If that was so, one might wonder why in s 174, why the words "before conciliation" appear at all. In this statute, to suggest that the words "by conciliation" encompasses or incorporates the parties sitting down and settling it by themselves is nonsense. The words "by conciliation" pick up the mechanisms that appear in ss 86, 87, 173, 133 to 135 of the Act, dealing with conciliation. That is what s 174 is directed to. 67 It is equally plain that here there was no settlement "by conciliation". There was a settlement, true it is, but it was not a settlement "by conciliation", and indeed it is not even put against the respondent that there was. It is not suggested that anyone on the Commission was responsible for the settlement. It is not suggested that the settlement came about as a result of the conciliation processes in the Act. Of course it did not come about because of that. It came about because the parties settled it independently of the Commission or any member of the Commission, therefore s 174 simply does not apply. 68 Section 174 importantly follows s 173. Section 173 gives some insight, if it would need it, as to what "by conciliation" means in s 174. Section 173 says that "The member of the Commission who attempted conciliation of an industrial dispute or other matter is not to exercise arbitration." 69 So it is the "member" who attempted conciliation who is not to exercise arbitration here referred to in this Act. "Conciliation" means by a member of the Commission, and to suggest otherwise is simply unarguable. 70 Section 86 makes it plain that in unfair dismissal proceedings, the Commission must endeavour by all means it considers proper and necessary to settle the applicant's claim "by conciliation", so that conciliation is by the Commission, and must be, and that is what "by conciliation" means where it appears in s 174. 71 Sections 133 to 135 also deal with conciliation in the context of industrial disputes. Section 135 instructs that "the Commission is to deal with an industrial dispute by arbitration only if it is not resolved by conciliation". Now what does that mean? Section 135(1) shows it means conciliation by a member of the Commission. It is only if a member of the Commission is satisfied that his or her attempts at conciliating the dispute are unsuccessful that one goes to the next point which is arbitration. Why should the words be given any different meaning than in s 174, more especially when to do so would completely rip up the objects of the Act and to make the words "by conciliation" completely otiose in s 174 as they would be in s 135 if the applicant's submission is correct. 72 Because s 174 does not apply there is no jurisdiction, no power, and that is the end of the matter for the applicant and for his Notice of Motion. If the Commission is against the respondent on that then what order on the agreed terms for settlement could be made? The Commission could make an order that as and from a date Dr Pillay will be reinstated, and without limiting the generality of the above this will include resumption of full duties. Well, that would just simply get the parties back to where they are, because he was reinstated to full duties, but then Professor Schlitt decided that he would have to supervise him. There were no transplants going that he could supervise him on and then Professor Schlitt left at the end of March, and the situation changed. 73 It is nonsense to suggest that the Commission would make orders on the agreed terms of settlement forever more and that regardless of any change in circumstances such as those referred to in annexure 14 to Dr Pillay's affidavit, Dr Pillay would resume his full duties. 74 The applicant's suggestion that his construction of s 174 is arguable is not the test. It would make the Act unworkable. Section 174 is there for a particular purpose. It is there to protect the Commission's process. It is there to enable the Commission, in appropriate circumstances, to enforce settlements that come about because of the intervention of the members of the Commission in the conciliation mode, as happened in Fox and in Payne v The University of Sydney [2000] NSWIRComm 102. The Act requires conciliation in certain instances including unfair dismissals. Absent a provision such as s 174, people could treat with disdain, a settlement reached by conciliation. 75 In summary, now that the declaration has gone as a matter of contention, because it is conceded the Commission has no power to grant declaratory relief when not in Court Session, the applicant Dr Pillay is estopped from denying that the proceedings are no longer on foot, or alternatively, if he is not estopped, there is no jurisdiction upon which the Commission can grant the relief sought in paragraph 2 of his Notice of Motion of 26 May 2003, namely ordering that he be reinstated, because the only source of power which he has pointed to is s 174. It is uncontroversial that the matter was not settled by conciliation in the sense of by a member of the Commission, that is conceded, therefore the respondent says it has not been settled by conciliation. 76 On the question of costs in reply, the respondent says if it was not frivolous or vexatious clearly it was without reasonable cause. They have conceded it in effect insofar as declaratory relief was sought. It is clear, having regard to s 174, that these proceedings namely the Notice of Motion of 26 May 2003, were instituted without reasonable cause. Legislation 77 The applicant seeks orders to be made under s 174. 78 Sections 173 and 174 are contained within Pt 5, procedure and powers of Commission, of ch 4 and provide as follows: 173(1) [Objection to conciliation Commissioner exercising arbitration powers] The member of the Commission who attempted conciliation of an industrial dispute or other matter is not to exercise arbitration powers in relation to the dispute or matter if a party to the arbitration proceedings objects and requests that a different member of the Commission exercise arbitration powers. 173(2) [Commissioner not attempted conciliation] A member of the Commission is not, for the purposes of this section, taken to have attempted conciliation merely because: (a) the member attempted conciliation after having begun to exercise arbitration powers, or (b) the member arranged or gave directions for a conference of the parties involved in the industrial dispute or other matter, or their representatives, to be presided over by the member, but the conference did not take place or was not presided over by the member, or (c) the member arranged or gave directions for those parties or their representatives to confer among themselves at a conference at which the member was not present. 174 If a matter that is the subject of an application to the Commission under this Act is settled by conciliation, the Commission may: (a) dismiss the application, or (b) make an order on the agreed terms for settlement. Consideration 79 At the outset of the present proceedings, the applicant conceded that the Commission as presently constituted does not have the power to issue the relief under s 154 of the Act. 80 In these proceedings I do not have to determine whether the orders sought by the applicant to be made under s 174 should be made. I do have to consider if they can be made. Whether the applicant has an arguable case that such orders may be made by the Commission and are not, in terms used by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "discloses a case which the Court is satisfied cannot succeed" is not decided in these proceedings. 81 It was submitted by the applicant that the Commission is required under s 163(1)(c) to act in accordance with equity, good conscience and the substantial merits of the case without regard to technicalities and legal form. In those circumstances, the Commission should consider the Deed in all the circumstances on which it was made. It is not equitable to hold the applicant only to the bargain as to the filing of the notice of discontinuance, whilst the respondent remains free arguably on the evidence in that there was a breach by it of the Deed in that Dr Pillay has in fact not resumed his full duties, in particular, his clinical duties. Furthermore, it is possible for the Court to draw the conclusion that the Deed in fact was entered into by the applicant as a result of a misrepresentation, that misrepresentation being both the terms of the Deed and what the applicant was told in this Commission would occur as part of the Agreement, that being he would go back on the roster, he would resume his clinical duties. That is a condition precedent that the Commission should consider in determining this matter. 82 Those are issues to be considered when the Notice of Motion filed by the applicant on 28 May 2003 is dealt with. The issue now before the Commission is whether it has the jurisdiction, in the circumstances put before the Commission, to make orders pursuant to s 174 as sought by the applicant. 83 In my view the applicant's arguments as to the reading down of a release in an appropriate case (Qantas Airways Ltd v Gubbins [(1992) 28 NSWLR 26] would also be more appropriately considered in a different stage of these proceedings. 84 The Notice of Motion filed by the applicant on 28 May 2003 is not, as the respondent correctly submits, in respect of an application to commence proceedings under ch 2, part 6, nor is it in respect of an application made under ch 2 part 7 or ch 3 part 2 of the Act. 85 I am not so certain that the Notice is "not in respect of" proceedings under ch 2, part 6. Just how effective it would be will depend upon findings made after hearing the applicant's evidence and submissions as to the misrepresentation alleged by him. The applicant did go back on to the roster for one week. The dispute is as to whether he went back to "full clinical duties". 86 Mr Goot submitted that for the Commission to find settled "by conciliation" means something that does not involve a member of the Commission would be quite wrong. 87 But can it be said that the agreement reached between the parties did not involve a member of the Commission? It is true that a member of the Commission was not involved directly in or party to the discussions that led to the Commission being advised by Mr Shaw on 26 March 2002, that the proceedings had been resolved. 88 Set out earlier are details of the progression from its original filing to these present proceedings of the applicant's unfair dismissal proceedings. That progression included unsuccessful conciliation before the Commission, arbitration proceedings part heard, resolution reached by the parties in the absence of a Commission member, that resolution formally placed on the record before the Commission, further proceedings, which did include the Commission, when the applicant claimed that the agreement had not been adhered to and further formal statements placed on the record by counsel for both parties. 89 The original agreement of 26 March 2002 was reached without the direct involvement of the Commission. But difficulties arose, or were perceived to arise by the applicant, in the implementation of the agreement, and the Commission was involved in private conference(s) with the parties on 4 October 2002. On that day, Mr Goot advised the Commission that "we wish to go into private conference with your Honour because we think there are only a couple of outstanding issues standing against a total resolution of the matter. So if we can, without further ado, go into conference, hopefully that will resolve the matter in conference". Mr Moses of counsel then appearing for the respondent raised no objection to that course, saying "we think the parties would be assisted by your Honour's involvement". 90 It is provided by s 135(9) of the Act that "nothing in this Act prevents the exercise of conciliation powers merely because arbitration powers have been exercised under this Act". 91 In Fox, the Vice-President was faced with a settlement arrived at in the course of proceedings under s 106. However, I do find the following statement at [72] apposite to my consideration in this matter: 72 In my view, it would do some violence to the terms of the section to accept the respondent's interpretation [that it must involve settlement "in its purest form"]. There is nothing in the section to qualify the condition which gives rise to the Court's power: all that is required is that a matter is settled by conciliation. In interpreting the section, particular regard should also be had to the statutory context of the section, and to the stated objects of the Act extracted above and discussed in the context of recent decisions concerning settlements and undertakings. Section 174 is part of a statutory scheme which emphasises conciliation and settlement, both generally (for example, ss86, 133, 146(2)(a) and 3(g) ) and in particular: s 109. 92 I have not been persuaded that the particular construction of s 174 urged upon me by the respondent actually fits the events leading to the present proceedings. The matter, an alleged unfair dismissal, was the subject of an application to the Commission under the Industrial Relations Act 1996. It was settled by conciliation in which the Commission was to some extent involved. In accordance with s 174, the Commission may make an order on the agreed terms for settlement. It was conceded by the applicant that it was open to the Commission in the exercise of its discretion under s 174 to make orders in the terms of the Heads of Agreement. 93 The Commission finds that it has jurisdiction pursuant to s 174 to make Orders pursuant to s 174 in relation to the Notice of Motion filed by the applicant on 28 May 2003, should such Orders be found, in the light of evidence adduced, to be proper to be made. 94 I do wonder, however, what practical benefit would accrue to the applicant in having either the order he seeks made or an order in terms of the Heads of Agreement/Deed of Release made. For all intents and purposes that brings him back to the point at which he would have been almost a year ago if he had filed a notice of discontinuance and sought the enforcement Mr Moses foreshadowed would occur if that was then thought to be necessary. 95 Costs are reserved to await determination of the applicant's Notice of Motion filed 28 May 2003. *****************

Shunmoogam Pragalathan Pillay v Central Sydney Area Health Service

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Judgment (7 paragraphs)

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Cases Cited (8)

Cited By (3)