Tapia v Emibarb Pty Limited trading as Lagoon Seafood Restaurant [2005] NSWIRComm 232 | Case summary

Tapia v Emibarb Pty Limited trading as Lagoon Seafood Restaurant [2005] NSWIRComm 232 | Case summary | Zoe

16 It would be immediately apparent that all of the above allegations except the first one, post-date the date on which the application was filed (27 March 1998). Although the events which post-dated the allegation of victimisation might have been relied upon only to lend context to that allegation, it does not appear to me that this was the approach taken by her Honour in relation to the incidents of alleged victimisation which occurred after the first allegation. Instead, her Honour treated each of those subsequent incidents as further allegations, and, made separate findings as to whether victimisation had occurred: cf Leotta v Public Transport Commission (NSW) 9 ALR 437, McGee v Yeomans [1977] 1 NSWLR 273 at 280; Pt 20 r1(3A) Supreme Court Rules ("SCR"). 17 The decision of Glynn J deals in detail with all of the allegations. This was because the applicant presented her case on the basis that she was victimised by her employer from the period 16 March 1998 until 23 April 1998 at which time she was summarily dismissed from her employment. 18 In the decision (at [300] and [337]) Glynn J outlined the approach she proposed to adopt in deciding the application: [300] For the applicant to succeed in her application that she has been victimised by the respondent (in the persons of Mr and Mrs Harrison) she must show that the actions alleged to constitute victimisation result from a relevant failure by the respondent. That "relevant failure" would encompass a failure to restrain the actions that would constitute victimisation of a person within their control, in this case, alleged to be Mr Manias. ....... [337] In considering the victimisation allegations, I have, to the extent that specific incidents are either referred to, or are identifiable in the general allegations, set those incidents out in chronological order commencing from 16 March 1998. I then consider the general claim of victimisation extending over the period from Mrs Tapia's return to work on 30 March to her last day there on 23 April. 19 Glynn J observed, (at [292]), that Mr Matters, "stressed", that Mrs Tapia's participation in industrial proceedings arose at two levels; first, as a witness in the fellow employee's unfair dismissal application, and, secondly, as the applicant in the s213 proceedings. (See also [107]). 20 During the proceedings, the applicant sought to adduce evidence, which concerned events prior to making of the 17 February 1998 witness statement. In an interlocutory decision handed down on 10 February 1999, Glynn J made a number of observations about the period within which evidence relevant to the applicant's victimisation claim may be taken into account: Tapia v Lagoon Seafood Restaurant (1999) 89 IR 436. At 439, 440 her Honour said:

21 As adverted to earlier, Mrs Tapia suffered a work related injury and did not attempt to return to work at the restaurant until 6 January 1998. The attempted return to work appeared to have been unsuccessful with Mrs Harrison refusing to allow Mrs Tapia to resume work because she was not fit to do so. Mrs Tapia did not return to the restaurant to work until 16 March 1998. 22 It was common ground in the proceedings that Mrs Tapia enjoyed a very good working relationship with the Harrisons at the restaurant prior to 6 January 1998. The circumstances surrounding Mrs Tapia's attempted return to work on 6 January according to Glynn J, laid the foundation for the "events which transpired", (presumably a reference to the victimisation allegations). These circumstances, as found by Glynn J, were that Mrs Tapia was desperate to return to work. Her husband was unemployed and she was the sole breadwinner. Preparations had in fact been made by Mrs Harrison in order to accommodate Mrs Tapia's return to work on 6 January 1998. When Mrs Tapia arrived at the restaurant on the day however, Mrs Harrison noticed that Mrs Tapia was limping, and, as a result, Mrs Harrison asked Mrs Tapia to obtain a medical certificate certifying that she was fit to return to work. 23 The applicant was not assessed as fit to return to work until 12 March 1998. She planned to return on 16 March 1998. In the meantime the Harrisons had come into possession of the witness statement made by Mrs Tapia on 27 February 1998. A meeting between the applicant, the Harrisons, and Mrs Tapia's rehabilitation provider, Ms Milne, was organised to take place at the restaurant on that day. Prior to that, on the same day, Mrs Harrison sought a private meeting with Ms Milne to discuss the contents of the 27 February statement with her. Following that meeting Ms Milne spoke to Mrs Tapia after which both persons then left the restaurant. On the evidence before Glynn J, Mrs Tapia did not return to the restaurant, or have any further contact with the Harrisons until her return to work on 30 March 1998. 24 I will return in more detail to the circumstances prevailing as at 16 March 1998. I note for completeness that s213(3) provided, at the time the proceedings were instituted, that applications for an order under s213 must be, "made within 21 days after the contravention occurred". The joinder application 25 A further preliminary matter which needs to be addressed before I can properly consider the two Notices of Motion before me, concerns an application for the joinder of Mr Matters as a party to the proceedings. This application was made by Emibarb by way of Notice of Motion before Schmidt J. 26 The application was not made until 15 June 2004. The Notice of Motion sought to join Mr Matters as a "defendant" to the proceedings for the purposes of making a costs application. The Motion also sought to join Fay Campbell ("Ms Campbell") as a "defendant" for the purpose of making a costs application. The basis for seeking the joinder of Ms Campbell as a party was said to arise from the operation of Pt 8 r 13 of the Supreme Court Rules which applied by virtue of Rule 89 (5) of the Industrial Relations Commission Rules ("the Commission's Rules"). 27 Pt 8 r 13 of the Supreme Court Rules allows for the joinder of a party, or parties, in order to represent other persons in a proceedings. Emibarb sought to join Ms Campbell (who was at the time the proceedings were heard before Glynn J an executive member of the SCLC), in order that she could be sued (for the stated purpose only of a costs application) on behalf of the members of the SCLC during the period 27 March 1998 until 20 June 2000. (The 20 June 2000 date is probably derived from an advice sent by facsimile, and, received by the Commission on the same date, by Mr Arthur Rorris of the SCLC. The effect of the advice was that the SCLC would no longer be appearing for the applicant, and that Mr Matters no longer represented, or had the capacity to represent, the SCLC in the proceedings.) 28 Schmidt J, in a decision dated 25 June 2004, refused to allow the joinder of Ms Campbell as a party to the proceedings. In relation to the application for the joinder of Mr Matters her Honour said at [11] and [12]:

38 In relation to Emibarb's application for costs brought by way of the first Notice of Motion, I consider myself bound by Glynn J's findings made in the proceedings in relation to the allegations of victimisation said to have occurred. Those proceedings commenced on 1 September 1998 and concluded on 10 October 2002 and occupied a total of fifty-one (51) hearing days. Her Honour handed down her decision on 22 October 2003. 39 Glynn J first dealt with the relevant law in relation to the application. Her Honour observed that although the application was brought under s213, in order for the provision to be activated, victimisation in the terms of s210 must first be found to have occurred. Her Honour then proceeded upon the basis that the onus was on the applicant to establish first the conduct said to constitute the victimisation, and, secondly that the conduct occurred because of the motives, or one of the motives prohibited in s210 of the Act. 40 The applicant alleged victimisation under s210(g) of the Act. Her Honour said that s210 does not deal with, "victimisation at large, but victimisation within the context of industrial activity, that being in the present case, participation or proposed participation in proceedings relating to an industrial matter (s210(g) as at the time of the alleged victimisation)". 41 Section 210(g) of the Act provided, at the time the proceedings were instituted: Section 210. An employer or industrial organisation must not victimise an employee or prospective employee because the person: ..... (g) participates or proposes to participate, in proceedings relating to an industrial matter,.... 42 Glynn J does not appear to have made a positive finding as to whether, in fact, the claim of victimisation arose from Mrs Tapia's participation or proposed participation in proceedings relating to an industrial matter. On the evidence, however, it was open to find such participation. The participation in proceedings, on the applicant's case, concerned her statement made in a fellow employees' unfair dismissal application lodged on 17 February 1998. Under s6(2)(e) of the Act, an example of an industrial matter, is expressed to be, "... the termination of employment of ... any person ... in any industry." 43 As adverted to earlier her Honour acknowledged that there was no contest between the parties that the applicant had enjoyed a good working relationship with Mrs Harrison at the time she left the restaurant on workers compensation in May 1997, and, that this situation had not changed on 6 January 1998, the day the applicant had intended to return to work. The attempted return to work was thwarted because the applicant was apparently limping heavily and, on that basis, Mrs Harrison would not allow the applicant to return to work until she received medical clearance. On that day, according to the evidence, the applicant encountered Mr Manias who said to her:

Narda, I do not want to see you. You have been a fucking bitch. 44 Glynn J considered the relevance of this particular incident to the proceedings and rejected the alleged abuse by Mr Manias as irrelevant to the victimisation claim because it pre-dated by some six weeks the making of the 17 February 1998 witness statement. Her Honour found (at [310]): There is direct conflict as to the events on 6 January 1998 between the evidence of the applicant and that of Mrs Harrison and Mr Manias. However, this judgment is concerned with victimisation alleged to have followed the making by the applicant on 17 February 1998 of the Sirijovska Statement. On that basis, the alleged abuse of the applicant by Mr Manias on 6 January 1999 pre-dated by some six weeks the making of the Sirijovska witness statement. That abuse at that time could not found the applicant's present claim of victimisation in terms of s 210(g). 45 Her Honour then dealt with evidence concerning the applicant's various attempts to enlist Union support for the return to work (set out in [311] - [336]). 46 An examination of events said to have occurred on 16 March 1998 (the proposed date for the applicant's return to work) was then conducted by her Honour. The applicant alleged she was victimised within the terms of s210(g) because she was required to withdraw parts of the 17 February 1998 witness statement as a precondition to her return to work. Because she refused to comply, she was unable to recommence work until 30 March 1998. The background to this allegation concerned a meeting scheduled to take place on 16 March 1998, at which it was arranged that Mr Manias, the Harrisons, Mrs Bokulic (an employee of Emibarb), Ms Milne (the applicant's rehabilitation provider), and the applicant, attend. 47 Prior to this meeting taking place Mrs Harrison contacted Ms Milne and requested an earlier private meeting with Ms Milne on 16 March 1998. During the meeting Ms Harrison showed Ms Milne the applicant's 17 February statement and asked her if she would be a witness when the Harrisons discussed the contents of the statement with Mrs Tapia. Ms Milne declined. While Ms Milne attended the private meeting with Mrs Harrison, Mrs Tapia, Glynn J records, remained outside the restaurant, under protest. Following the private meeting Ms Milne told Mrs Tapia that she understood the Harrisons' position to be that if Mrs Tapia "dropped the statement", she would get her job back (at [350]). 48 Her Honour then referred to further evidence given by Ms Milne during the proceedings in which Ms Milne had agreed that on 16 March 1998 neither Mrs Harrison nor Mrs Bokulic had said to her that Mrs Tapia could not return to work unless she withdrew the statement. 49 Her Honour then referred to other evidence given by Mrs Tapia during the proceedings. That evidence concerned the applicant's refusal to discuss the allegations against Mr Manias contained in the 17 February statement with the Harrisons. According to the applicant this was because she had instructions not to discuss the subject. It was also, on the evidence, based on her belief that her return to work and the allegations contained in the 17 February statement were separate issues and that the Harrisons could not discuss the allegations with her because she was a witness in the unfair dismissal proceedings. Ms Milne gave evidence in the proceedings that Mr Matters had told her in a telephone conversation that he had advised the applicant not to discuss the statement with her employer. 50 After reviewing this portion of the evidence her Honour found, (at [361] and [363]): Mrs Tapia was not required to withdraw parts of the Sirijovska Statement on 16 March 1998. The fact that she did not start work on that day was because she and Ms Milne left the Restaurant without advising Mr and Mrs Harrison that they were not going to discuss the return to work further. At all times the Harrisons were willing for that to occur, but were seeking protection for both Mrs Tapia and Mr Manias in the rehabilitation programme. ..... I find that there was no victimisation of Mrs Tapia by Mr or Mrs Harrison that resulted in Mrs Tapia not starting back at work on 16 March 1998. 51 Following this finding Glynn J examined in detail the applicant's criticism of Emibarb's investigation of the allegations contained in the 17 February statement. The applicant had asserted that the Harrisons conducted an extremely cursory examination into the allegations against Mr Manias. Mr Matters had submitted that Mr Manias was backed up and protected by the Harrisons, and, that Mrs Tapia, by contrast, was not supported or protected by her employer. 52 Glynn J found the evidence was quite to the contrary. According to her Honour's findings, the Harrisons specifically recognised there was a safety issue which needed to be addressed, namely, the prospect of Mrs Tapia working in close proximity to Mr Manias about whom she had made very serious allegations of verbal and physical assault and threatened sexual assault. Mr Harrison wished to discuss the allegations with the applicant because he apprehended the possibility that the restaurant could be sued for psychological injury or nervous shock if the applicant worked alongside Mr Manias. 53 Her Honour observed that it would have been a serious dereliction of the Harrison's duty, as employers, to allow Mrs Tapia to return to work before the investigations were investigated but that they were frustrated in their attempts to conduct an investigation. Their efforts to provide protection to Mrs Tapia were also frustrated, according to her Honour, by Mr Matters who had advised Mrs Tapia not to talk to the Harrisons. In the absence of any assistance from Mrs Tapia, who was acting on the advice of Mr Matters, Glynn J found that the Harrisons had investigated the allegations to the extent that they could, but that without further information from the applicant the investigation could not have progressed further. 54 Next, her Honour proceeded to deal with the evidence concerning events after 16 March 1998. That evidence revealed that Emibarb had attempted, unsuccessfully on several occasions, to contact Mrs Tapia in relation to her returning to work, and, to implement a procedure for a return to work. On 25 March 1998, Mrs Harrison sent Mrs Tapia a letter advising her that a return to work had been scheduled for Monday, 30 March 1998 and a roster had been prepared. This roster deliberately structured the applicant's shifts so that she would not be working at the same time as Mr Manias. Mrs Tapia was advised that her allegations against Mr Manias were being investigated and that endeavours would be made to provide for her a suitable working environment. The letter also stressed that Mrs Tapia's return to work had never been conditional upon her meeting with Mr Harrison. A copy of the letter was sent to Ms Milne. 55 In relation to this letter Glynn J found that it was written on the advice of an industrial organisation and clearly set out the efforts of Mr and Mrs Harrison to protect Mrs Tapia, and also Mr Manias. It also had the intended effect of getting Mrs Tapia to return to work, (on 30 March 1998). 56 Glynn J also examined, and rejected (at [696]), a claim of constructive dismissal said to have arisen when Mrs Tapia left the restaurant on 23 April 1998. In rejecting the claim, her Honour observed that she could only have found the claim made out if a preliminary finding had been made that the actions of Mr and Mrs Harrison, from 16 March, were not genuine efforts directed to ensure Mrs Tapia's return to work, and, to continue her workplace rehabilitation programme. 57 Glynn J also assessed Mrs Tapia's credibility and found that although some evidence given by Mrs Tapia could not have occurred as she claimed, and, was contradictory, that, nevertheless Mrs Tapia fervently believed everything she said. Later, in the decision, her Honour said (at [841]): In my view, it is evident, from the evidence I have set out earlier, that Mrs Tapia is not a person who would consciously be manipulated as to her actions by someone else. She had, however, minimal knowledge or understanding of either the New South Wales industrial or legal systems. She relied on Mr Matters for advice in both areas, and received no countervailing advice from anyone in respect of what she was told. I find that Mrs Tapia genuinely believed that she had been victimised and that she followed the advice given her by Mr Matters in good faith. 58 In a short summary at the end of the Decision Glynn J concluded (at [885], [886] and [889]):

59 Emibarb's submissions seeking costs under the first Notice of Motion were both in writing, and supplemented orally during the hearing of the Notice of Motion. These submissions, almost exclusively, focussed on the conduct of Mr Matters. In oral submissions Emibarb explained that the only reason Mrs Tapia was joined as a party to the costs application was because in order to trigger the application of Rule 209 of the Commission's Rules (a rule dealing with the costs that may be incurred by barristers, solicitors and agents), Emibarb would have to satisfy the Commission that s181(2) of the Act was established. Emibarb specifically relied on the provisions of s181(2)(a) and (b) of the Act. 60 In further oral submissions made on 2 February 2005, Emibarb contended that the Commission's approach should be to first assess the conduct of Mr Matters as the applicant's agent in accordance with the principles of agency, that is, Mrs Tapia as principal, was responsible for the acts of Mr Matters, as her agent, within his actual or apparent authority. Secondly, and in addition, that that conduct fell to be assessed within the provisions of s181(2)(a) and/or (b) of the Act. The basis of this contention was said to be that there was a sufficient nexus between the conduct of Mr Matters in the context of the proceedings and, Mrs Tapia in order to facilitate a finding that Mrs Tapia was responsible for the acts of Mr Matters. 61 Emibarb then proceeded in submissions to detail discrete aspects of Mr Matters' conduct during the proceedings, which, it said, would satisfy the provisions of s181(2)(a) and /or (b) of the Act. 62 The first aspect relied upon was described as the applicant's failure to provide particulars. There were several components to this alleged failure. 63 First, the application under s213 was never served on Emibarb. Instead, Emibarb obtained it from the Commission. The application itself did not identify any issues in dispute between the parties. The failure to supply particulars at the outset was said to assume some significance over and above the ordinary requirement to supply particulars because of the type of form used (Form 19) to initiate proceedings for victimisation. 64 Secondly, when particulars were supplied they were said to be, "entirely inadequate", and, "late" (during final submissions). This had the effect of protracting the proceedings unnecessarily and was unfair to Emibarb because it did not know what case it had to meet and was therefore compelled to try to meet every contingency. Emibarb had to resort to a Notice of Motion seeking orders for the provision of particulars. The particulars that were provided in accordance with orders sought in the Notice of Motion were not adequate. 65 The second aspect concerned an attempt by the applicant to establish that Mr Manias was a partner of Emibarb. Emibarb contended that this was an irrelevant consideration because Mr Manias was not a party to the proceedings against whom a judgment could be enforced. No application was made that Mr Manias be joined as a party. Pursuance of this issue by the applicant resulted in time wasting. 66 The third aspect of Mr Matters' conduct concerned the necessity for Emibarb to call a witness, Ms Susan McGrath, in the proceedings (Ms McGrath was an officer of the Liquor, Hospitality & Miscellaneous Union ("LHMU"). Mrs Tapia had alleged that she was advised that she was not a member of that Union, but that the Harrisons were deducting her Union dues and not forwarding them to the LHMU. This was a serious allegation which the Harrisons had to meet. While in the precincts of the Commission, and during the hearing of the proceedings, Mr Matters received a telephone call from Ms McGrath who informed him that Mrs Tapia was a member of the LHMU and had paid all outstanding dues. Mr Matters did not advise the Commission of this and Emibarb called Ms McGrath so that it could meet the allegation (the fact of the telephone conversation between Ms McGrath and Mr Matters emerged much later in the proceedings). 67 The fourth aspect concerned the time spent in cross-examining Mrs Harrison as to an alleged underpayment of wages. Emibarb submitted, on the costs application, that the question of an underpayment of wages was not an issue relied upon in the proceedings, nevertheless, the issue was pressed for some time, and with considerable vigour by Mr Matters. Emibarb made a further submission in relation to this aspect, namely that Mr Matters, as both an advocate and one who became involved in the proceedings, should bear the responsibility for costs that arose out of the participation in issues which were entirely unrelated to any aspect of the case of the party whom he represented. (I interpolate here, in order that this latter submission may be properly understood, to observe that Mr Matters, with the leave of Glynn J, was apparently called as a witness by Emibarb in the proceedings on several occasions.) 68 The fifth aspect arises in the context of an allegation of constructive dismissal of the applicant. This issue, according to Emibarb, was pressed during the proceedings, although no particulars were ever provided and it did not form part of the allegation of victimisation. Evidence was heard during the proceedings from Ms Terri Martin and Mr Mark Nolan concerning meetings which took place at QBE Insurance. Mrs Tapia alleged in particulars provided that she had been summarily dismissed (not constructively dismissed) from her employment by Emibarb on 23 April 1998. Glynn J found that the primary reason for Mrs Tapia's non-return to work on that date was Mr Matters' determination that Mrs Tapia's rehabilitation programme should be continued elsewhere. Glynn J also found that Mr Matters' cross-examination of Ms Martin exemplified the problems associated with him being both an advocate and personally involved in events. Ms Martin, for example, was cross-examined by Mr Matters in relation to telephone conversations he had had with her. 69 Emibarb also made comprehensive and lengthy submissions in relation to the allegation of victimisation of Mrs Tapia upon her return to work on 16 March 1998. Emibarb referred to the findings of Glynn J that there was no victimisation of Mrs Tapia by the Harrisons in relation to events on 16 March 1998. On the contrary, her Honour found that Mr Matters had advised Mrs Tapia not to discuss the 17 February statement with the Harrisons, and, further that Mr Matters did not contact the Harrisons in relation to any difficulties Mrs Tapia might have had as a result of her rehabilitation programme which required her to work in close proximity to Mr Manias. Glynn J found that the Harrisons were endeavouring to meet with Mrs Tapia in order to investigate the allegations contained in the 17 February 1998 statement. The Harrisons recognised that there was a safety issue and that in the interests of safety it was important to provide a safe system of work for Mrs Tapia. 70 Emibarb's written submissions next deal with the allegations of victimisation said to have arisen during the period 30 March 1998 until 18 April 1998. These submissions point out that no particulars were provided by Mrs Tapia regarding what acts constituted victimisation during this period. 71 Also relied upon by Emibarb in written submissions was Mr Matters' conduct towards Mr Harrison during the course of the proceedings which was said to comprise a series of verbal abuses. In relation to Mrs Harrison, also, Mr Matters was said to have engaged in a "scurrilous attack" on her. Such conduct, which Emibarb contends had no bearing on any of the issues before the Commission, should properly be the subject of costs, arising as it does, out of misconduct on the part of Mr Matters. 72 Reliance was also placed by Emibarb upon settlement negotiations between the parties. A Heads of Agreement was drafted and an offer of $10,000 was made to the applicant. The offer was refused, according to Emibarb, on the basis that the sum was not tendered in full within the time provided in the Deed. The proceedings then continued and the applicant amended her claim from $10,460 to $49,300 (refer Decision at [16]). 73 Emibarb also relies on the findings of Glynn J in relation to any possible quantification of damages under s213 of the Act. Glynn J expressed concern in the Decision in relation to two medical reports which had been filed in support of Mrs Tapia's application for workers compensation, in about May and June 1998. Both reports had asserted that Mrs Tapia was permanently incapacitated for work as a cook, and, suggested that she should attempt work of a clerical and more sedentary nature. Glynn J noted the evidence which was before her that Mrs Tapia received approximately $40,000 compensation for her permanent incapacity. Under s213, Glynn J said, compensation is only available for what the worker may have lost as a result of any victimisation found to have occurred. Since Mrs Tapia could not have worked as a cook because of her permanent disability, and because she had already been compensated for her loss, there could be no causal nexus which would allow compensation to flow for the period claimed. 74 In relation to these findings of Glynn J, Emibarb submits that it should be awarded costs, because the applicant was never entitled to any damages under the Act. This means that the proceedings were run in circumstances where the applicant had no prospect of obtaining any remedy under the legislation, where the only remedy that was sought was damages. In relation to this particular submission, Emibarb seeks costs on the basis that the proceedings were frivolous or vexatious, or both, from the date Mrs Tapia refused the offer of $10,000 until the date she amended her claim asking for the higher amount. 75 Emibarb further submits in relation to this aspect of the submissions that costs should be awarded on the basis of the principles set out in Bankstown City Council v Paris (1999) 93 IR 209. Here, costs are available on two bases, first, because a proposal put forward by Emibarb was a reasonable settlement offer which was not accepted; and, secondly, because the applicant's conduct could be said to amount to conduct inconsistent with an intention to settle the proceedings. 76 Finally, Emibarb made submissions inviting the Commission to find that the application was both vexatious and frivolous. The application was said to be vexatious and frivolous on several grounds, namely: (i) no particulars were provided by the applicant in relation to the claim alleging victimisation; (ii) no victimisation existing as at 26 March 1998 was found by Glynn J. On the contrary, the finding was made that the Harrisons displayed a much higher level of concern for Mrs Tapia than was displayed by Mr Matters; (iii) the applicant's claim for damages was predicated upon her lost opportunity to work as a cook. Medical evidence confirmed that she was unable to work as a cook. The pursuit of an application for damages for lost opportunity to work as a cook leaves open the finding that the proceedings were frivolous and vexatious. 77 There then follows, in Emibarb's written submissions, a brief exposition of the meaning "frivolous" and "vexatious" and the principles to be applied. Emibarb submits that the test as to whether the proceedings are vexatious is objective, therefore, the applicant's mistaken belief that she was victimised is not relevant to the Commission's determination. The objective satisfaction of the Commission that the proceedings were either vexatious or frivolous triggers the Commission's jurisdiction to award costs under s181 and thereby to make an order pursuant to Rule 209 and s181(4)(a) against Mr Matters. 78 Mr Matters (who appeared for himself and for Mrs Tapia on the first Notice of Motion) also provided written submissions which were supplemented by oral submissions on the hearing of the first Notice of Motion. 79 In oral submissions, Mr Matters submitted that Emibarb had fallen at the first hurdle because it was unable to establish that Mrs Tapia's application alleging victimisation was in fact vexatious. In addition, Mr Matters contended that s181(2)(a) and (b) could not have any application to him because he was neither an applicant, nor a party, to the proceedings. In this context, Mr Matters referred to an issue raised by Emibarb during the proceedings, which was described in the Decision as a "conspiracy defence". This "conspiracy defence" (Emibarb had alleged collusion between Mrs Tapia and Mr Matters in bringing the proceedings as part of a vendetta against Emibarb and to perpetuate an unfair dismissal) was rejected by Glynn J. According to Mr Matters, had her Honour found in favour of Emibarb that there was in fact a conspiracy, then he, as agent, would fall within s181 and a costs order could then be made against him under that section. 80 Mr Matters emphasised in written submissions that the authorities allow only an extremely narrow basis for a finding that an action was "frivolous". The effect of the authorities is that for an application to be "frivolous", the Commission must find that the application either cannot possibly succeed or be manifestly groundless, or paltry or trifling, or "vexatious" and utterly hopeless. 81 Mr Matters also referred to findings made by Glynn J as to the applicant's credit. Her Honour did not find that Mrs Tapia had lied during the course of her evidence. This finding alone would preclude a finding that the application was either frivolous or vexatious. In addition, findings in regard to credit mean that there were contestable factual issues to be determined by the Commission, in terms of varying versions of conversations, actions and events that emerged in the evidence. 82 Next, Mr Matters sought to answer Emibarb's submission that the application was futile because no remedy under s213 was obtainable given the finding by Glynn J that Mrs Tapia was not entitled to damages for lost compensation as a result of her inability to work for Emibarb as a cook. Mr Matters advanced four reasons why the Commission should reject this submission of Emibarb: (i) some medical evidence was to the effect that Mrs Tapia could not work as a cook, but Mrs Tapia was engaged in a rehabilitation programme to return to the position of cook when she was subjected to victimisation. Moreover, Mrs Tapia gained employment as a cook at the Thirroul Leagues Club after she had alleged she was victimised by the respondent. Glynn J expressly referred to Mrs Tapia's employment as a cook at the Thirroul Leagues Club from early June 1998 (Decision at [689]); (ii) Mrs Tapia settled her workers compensation claim by way of a commutation of her rights for further claims. This settlement meant that she was neither barred from working as a cook, nor in any other classification of employment, nor was she barred from receiving compensation for loss incurred as a result of lost employment as a consequence of victimisation; (iii) if Mrs Tapia had been successful in making good her allegation of victimisation, any actual loss may have become an issue if Mrs Tapia's loss (income) was not in fact what was claimed. Section 213 creates a statutory tort and is a discrete section from s210; (iv) if the finding had been made that there was a breach of s210(g) then the application could have been amended in relation to the heads of damage. 83 Mr Matters also relied on the fact that if Glynn J had formed the view that the proceedings were "fatally flawed" in some way, then she could have utilised the provisions of s162 of the Act, specifically s162(2)(h) which provides: The Commission: ... may dismiss at any stage any proceedings before it if it considers the proceedings are frivolous or vexatious; ... 84 The fact that Glynn J chose not to avail herself of that provision is a clear indication, says Mr Matters, that her Honour was not adopting an interpretation relied upon by Emibarb. 85 Mr Matters also referred to the pleadings set out in the application, noting that the compensation sought therein does not read as being restricted to Mrs Tapia's employment as a cook. The reference to working as a cook related to the quantum claimed and was not restrictive of Mrs Tapia's economic loss. 86 In relation to the late provision of particulars, Mr Matters said that it was not an abuse of process for an advocate to be required to put a submission that is "in some respects" at variance with "initiating particulars", especially "in the context of a tribunal, not bound by the rules of evidence, and, in a long and difficult case". 87 The cross-examination of Mr Manias, Mr Matters said, was for the purpose of eliciting probative evidence and went to Mr Manias' credit. 88 In relation to Mr Matters being called as a witness (as to whether Mrs Tapia was a paid-up Union member of the LHMU), Mr Matters stressed that Ms McGrath's out of court statement was at variance with the sworn testimony of Mrs Tapia and therefore needed to be tested. 89 Mr Matters also said that he was entitled to cross-examine Mrs Harrison as to her employment practices, given that she had called "credit evidence". 90 Mr Matters emphasised that costs orders should not be made as a punitive sanction. 91 As a final submission, Mr Matters addressed the circumstances of the failed settlement and submitted that "... no order for costs should be made against (him) given the extraordinary circumstances of Emibarb without clean hands in this claim failing to mitigate its losses". Consideration

.................. 93 Section 181(2) imposes strict limits on the power of the Commission to award costs: see, for example: CFMEU v Newcrest Mining [2005] NSWIRComm 129 at [7]. 94 Emibarb in the present proceedings relies on sections 181(2)(a) and (b). These provisions focus on the commencement of proceedings and permit an award for costs to be made only if specific criteria are made out, that is, if the Commission considers that the application to it was frivolous or vexatious; or, if the proceedings were instituted without reasonable cause. 95 Sections 181(1) and 181(2) are inter-related in proceedings of the present kind. The provisions operate together when the Commission is exercising its jurisdiction not in court session. If, upon an application for costs made in the Commission not in court session, the Commission is satisfied that one or more of the sub-sections in s181(2) are made out in an applicant's favour, the provisions of s181(1) then become operative and the Commission may exercise its discretion to award costs in accordance with that section. 96 In Bankstown City Council v Paris, the Full Bench of the Commission, in entertaining an application for costs made under s181(2)(c), said (at 219): We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad powers and discretions under s181(1) are available for exercise. (My emphasis). 97 Section 181(1) is expressed to be subject to the Rules of the Commission and any other Act of law. This means that although the section clearly confers a wide discretion, it is not a discretion at large if there are in existence other statutory provisions, and Rules, etc, which may impact on the section. Rule 209 of the IRC Rules is one such provision. That Rule is in the following terms: 209 Barrister or solicitor or agent to repay costs due to delay, misconduct, etc (1) Where costs are incurred improperly or without reasonable cause, or are wasted by undue delay or by any other misconduct or default, and it appears to the Commission that a barrister, solicitor or agent is responsible, the Commission may, after giving the barrister, solicitor or agent a reasonable opportunity to be heard: (a) disallow the costs as between the solicitor or agent and the solicitor's or the agent's client, (b)disallow the costs as between the barrister and that barrister's instructing solicitor or as between the barrister and the client, (c) direct the barrister, solicitor or agent to repay to the client costs which the client has been ordered to pay to any other party, (d) direct the barrister, solicitor or agent to indemnify any party other than the client against costs payable by the party indemnified. 98 Rule 209 may be applied by the Commission not in court session, once any one of the provisions in s181(2) are satisfied, and, if the Commission decides to exercise its discretion to award costs. In deciding to exercise its discretion to award costs under Rule 209, the Commission must be satisfied that costs have been incurred, for example, because of misconduct on the part of an agent. If the jurisdictional gateway is opened then Rule 209 is to be read in context with s181(1). Section 181(1) is to be read subject to the Rules. Section 181(2) isn't expressed to be subject to the Rules. Instead it has a negative implication, namely, that the Commission when not in court session cannot award costs except in certain specified circumstances. 99 In these proceedings, Emibarb has submitted that the applicant, Mrs Tapia, is liable to pay costs under s181(2) because of the conduct of Mr Matters which may be attributed to her on the application of the principles of agency. In support of this submission, Emibarb handed up an extract from Halsbury's Law of Australia, Chapter 7, Relations Between Principal and Third Persons, Butterworths. I was not directed to any particular part of this extract, nor was the submission developed to any extent other than to assert that the relationship exists and, that, as a general principle, a principal is responsible for the acts of an agent who is acting within his actual or apparent authority. 100 I am prepared to accept, limited though the submissions were, that the relationship of principal and agent existed; however, a more pertinent question is whether the conduct, or as Emibarb asserts, the misconduct of Mr Matters, was within his actual or apparent authority. Without the benefit of comprehensive submissions on the point, I am unable to determine whether the conduct of Mr Matters can be attributed to Mrs Tapia. I incline to the view, however, that because the basis of Emibarb's application for costs against Mrs Tapia is the alleged misconduct of Mr Matters, and, in the absence of any findings by Glynn J that the applicant herself was guilty of any misconduct or other wrongful behaviour, that these matters would not lend themselves to a conclusion that, Mrs Tapia could be held liable for the misconduct of Mr Matters.

101 Even if it were found that Mr Matters had engaged in misconduct, and that Mrs Tapia was liable for the misconduct, such findings do not have any necessary application to the limited circumstances set out in s181(2)(a) and (b). The focus of Glynn J's findings in relation to Mr Matters, and the focus of Emibarb's submission, was on the conduct of Mr Matters throughout the course of the proceedings as Mrs Tapia's non-legal representative. A determination as to whether proceedings are vexatious, for example, is not concerned with the manner in which those proceedings are conducted, but whether the legal proceedings are, in fact, vexatious: Attorney-General v Wentworth (1988) 14 NSWLR 481 at 489, 492. 102 A further submission of Emibarb, which should be referred to at this stage, was that because the applicant, based on the findings of Glynn J, was never entitled to any damages under the Act, costs should flow. The provision said to be relevant here is s181(2)(a), namely, in the absence of any prospects of obtaining a remedy, the proceedings were frivolous or vexatious, or both, at least from the date Mrs Tapia refused the settlement offer of $10,000 until the date the claim was amended to reflect a higher amount. 103 It is difficult to reconcile this conduct of Mrs Tapia with a positive finding that the proceedings, from the point when the settlement offer was refused, were frivolous or vexatious under s181(2)(a). That section, in its terms, clearly invites consideration of the application itself to see whether it had any prospects of success. Such an approach would preclude a consideration of a collateral issue such as the rejection of a settlement offer which arose during the course of the proceedings. 104 The point is addressed in Bankstown City Council v Paris which dealt with s181(2)(c). The Full Bench in that case referred to the application of s181(2)(a) and (b) (at [218, [219]): Section 181(2)(c) on its face is a provision which is designed to apply only to unfair dismissal proceedings. It is the only provision designed to be applied specifically in that context. Also, when read in terms of the other provisions in the Act as to costs, it is one of only three provisions which may have application to unfair dismissal proceedings. The other provisions are paras (a) and (b) of s181(2). However, those provisions apply to many other proceedings before the Commission and, unlike the particular limb of s181(2)(c) relied on in this application , they are designed to operate where the Commission considers either the application itself, or the institution of the proceedings, was affected by considerations which made it manifestly inappropriate for the proceedings to have been commenced . The relevant part of s181(2)(c), on the other hand, does not require the Commission to focus upon the circumstances of the commencement of the proceedings, or to consider only the situation of the applicant. Instead the Commission is required to consider in a more general way, the conduct of the party in respect of which an application for costs is made; and, in that regard, to consider the conduct of the party in relation to the question of settlement of the claim. (My emphasis). 105 A related submission by Emibarb to the one considered immediately above concerns Glynn J's findings as to the prospect of Mrs Tapia obtaining a remedy under s213 when on the basis of two medical reports dated some time in 1998, Mrs Tapia could no longer have worked as a cook because of a permanent disability and because she had already been compensated for her loss in another jurisdiction. According to Emibarb, Mrs Tapia's inability to continue work as a cook and because she had already been compensated for her loss, effectively barred her from obtaining any damages under s213 and therefore it was open to find that the proceedings were frivolous or vexatious. 106 As a preliminary observation, I note that the application is generally framed as to payment sought by way of compensation. There is no mention in the application of any loss of payments incurred by reason of Mrs Tapia's occupation as a cook. The application specifically claims a loss of payments based on the alleged refusal of Emibarb to commence a rehabilitation programme. The amount claimed is described in the application as "... the difference between the applicant's workers compensation payments and the payments she was entitled to on the resumption of work". (According to the evidence, the applicant sought to amend the application to quantify the amount claimed as $49,300, apparently representing 12 months' payment.) 107 On the evidence which was before Glynn J, the purpose of the proposed meeting on 16 March 1998 was to work out a return to work rehabilitation programme for Mrs Tapia. This meeting never took place and Mrs Tapia did not return to work until 30 March 1998. In the interim period, on 25 March 1998, Mrs Harrison wrote a letter to Mrs Tapia advising her that her return to work had been scheduled for 30 March. A return to work programme listing suitable duties and a roster was also sent to Mrs Tapia. The relevance of this evidence is that it was clearly envisaged that Mrs Tapia would continue to work and earn an income at the restaurant in some capacity at least from 16 March 1998. 108 Glynn J, in observing that there was no necessary causal nexus which would allow an award of monetary compensation confined her comments to Mrs Tapia's apparent inability to work as a cook. At [790] of the Decision, her Honour said: Given what the Commission compensates for under s213 the only head is what the worker may have lost as a result of any victimisation that is found by the Commission to have occurred. Mrs Tapia could not have worked as a cook because of her permanent disability. Therefore, there is no causal nexus allowing compensation to flow for the period claimed arising from her inability to work as a cook. Further, Mrs Tapia has already been compensated for the loss in another jurisdiction. 109 In my view, if Glynn J had found on the evidence that the allegation of victimisation should succeed, then because it was envisaged that Mrs Tapia would return to work in some capacity at least from 16 March 1998, that some compensation was potentially payable from that date until the date the application was filed. 110 In making this observation, I should make it clear that it is not inconsistent with her Honour's findings. Those findings appear to me to be confined to Mrs Tapia's inability to work as a cook, only. The findings do not address Mrs Tapia's ability to work in some other capacity at the restaurant which was clearly anticipated by virtue of the return to work programme. 111 It follows from this that if some compensation were payable in the event the application had succeeded then that application could not be held to be frivolous or vexatious. 112 One final matter which should be mentioned before leaving this particular submission. It was not clear on the evidence whether the commutation of the applicant's rights to compensation was determined before, or after, the date upon which victimisation of the applicant was said to have occurred. If it was before, it is difficult to see what possible impact it could have had on any compensation that may have become payable as a result of a different claim (of victimisation) made in another jurisdiction. 113 In relation to the remaining issues raised by the parties the course I propose to adopt is, to consider whether any of the criteria set out in s181(2)(a) or (b) can be otherwise established. This will require an examination of whether the application brought by Mrs Tapia, as the applicant, was frivolous or vexatious; and whether Mrs Tapia, as a party to the proceedings, instituted those proceedings without reasonable cause. 114 If I am satisfied that the criteria either in s181(2)(a) or (b) have been established, I then decide whether or not to exercise my discretion in order to determine whether an award of costs can be made against either Mrs Tapia, or Mr Matters, or both. 115 The discretion to award costs must be exercised subject to the rules of the Commission and any other Act or law. In relation to Mr Matters, this will require a consideration of Rule 209 of the Commission's Rules in order to determine whether costs were incurred because of, for example, misconduct on the part of Mr Matters as Mrs Tapia's agent, and, if so, whether those incurred costs should be repaid by Mr Matters. 116 In Peden v Lake Macquarie Refrigeration Pty Ltd (2003) 134 IR 149 the Full Bench of the Commission examined the meanings of "frivolous" and "vexatious" in the context of s181(2)(c) of the Act. At [19] and [20] of the decision, the Full Bench said in relation to the meaning of "frivolous": We note that "frivolous" is defined by the Oxford English Dictionary as "of little or no weight, value, or importance; paltry, trumpery; not worthy of serious attention; having no reasonable ground or purpose". In light of the well established line of authority, and the ordinary meaning of the word "frivolous", we are satisfied that an application under s84 will be frivolous if, on its face, it cannot possibly succeed, if it is manifestly groundless or if it is a paltry or trifling matter. 117 The Full Bench in Peden v Lake Macquarie also considered whether the application to the Commission under s84 of the Act was vexatious. At [28] - [30] the Full Bench made the following observations: There is an absence of any discussion as to the nature of the test to be applied to determine whether an application is vexatious for the purpose of s181(2)(c). Counsel for the appellant submitted that the following definition of "vexatious" in Attorney General v Wentworth (1988) 14 NSWLR 481 per Roden J at 487 is "generally regarded in the Commission as useful":

Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought. 2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues for which they give rise. 3. They are also properly to be regarded as vexatious if, irrespective of a motive of a litigant they are so obviously untenable or manifestly groundless as to be utterly hopeless. The basis of counsel's observations as to Attorney General v Wentworth was its adoption by Sams DP in Stephan v RL Whyburn and Associates [2000] NSWIRComm 154 and by Harrison DP in Fairweather v Ladehai Pty Ltd T/as North Star Holiday Resort [2002] NSWIRComm 367. In our view, there is nothing in the findings in the decision on costs that supports the conclusion that the s84 application was vexatious. In particular, we note that the findings in paragraphs [25] and [26] of the decision under appeal do not assist in the determination of that question. 118 In Attorney-General v Wentworth, Roden J considered whether the appropriate test of whether proceedings are vexatious should be assessed on either subjective or objective grounds, or a combination of both. As the passage extracted by the Full Bench in Peden v Lake Macquarie Refrigeration above illustrates, Roden J held that it was a combination of both. 119 Whether proceedings are instituted by a party without reasonable cause has received much judicial comment. In R v Moore; Ex Parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470 Gibbs J said at 473: ...a party cannot be said to have commenced a proceeding 'without reasonable cause', within the meaning of that section, simply because his argument proves unsuccessful. 120 In Kanan v Australian Postal and Telecommunications Union of Australia (1992) 43 IR 257 at 264-265, Wilcox CJ said: It seems to me that one way of testing whether a proceeding is instituted 'without reasonable cause' is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being 'without reasonable cause'. But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. 121 In Imogen Pty Ltd v Sangwin (1996) 70 IR 254 Wilcox CJ at 257 dealing with a submission that there was no substantial difference in meaning between "vexatious" and "without reasonable cause" said: I doubt that this is correct; if the two expressions were intended to mean the same thing, there would have been no need for Parliament to use both of them. If there is a difference in meaning, "without reasonable cause" is the lower standard. 122 There is some overlap in the various meanings adopted above. An application, for example, brought by the applicant could be both frivolous and vexatious, on the objective test for vexatiousness, if it is manifestly groundless. 123 Applying the above principles to the circumstances of these proceedings, I make a number of observations, which I will deal with in turn. 124 There was a claim under s213 within jurisdiction. No argument to the contrary was put at any stage of the proceedings. 125 A number of factual issues needed to be determined by the Commission, They included:

Tapia v Emibarb Pty Limited trading as Lagoon Seafood Restaurant

At a glance

Court

Decision date

Before

Source

Judgment (70 paragraphs)

Parties

Cases Cited (11)

Cited By (10)