Ters v Health Secretary in respect of the South Western Sydney Local Health District

Legislation and principles to apply

1. Section 181 of the Act relevantly provides as follows: 181 Costs (1) Subject to the rules of the Commission and any other Act or law: (a) the Commission may award costs, and (b) costs are in the discretion of the Commission, and (c) the Commission may determine by whom and to what extent costs are to be paid, and (d) the Commission may order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (2) However, the Commission may award costs only in the following cases - (a) the Commission may award costs against an applicant if it considers that the application to it was frivolous or vexatious, or (b) the Commission may award costs against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause…
2. In Dr A v Health District (No 4) [2014] NSWIRComm 56, Boland AJ, with whom Commissioners Stanton and Newall agreed, observed: "8. The Commission's jurisdiction (as distinct from the Commission in Court Session) is essentially a non-costs jurisdiction. There are limited exceptions, which are prescribed in s 181(2) of the IR Act. If one or more of the tests required by s 181(2) are met in any particular case it then becomes a matter for the Commission's discretion whether to award costs: s 181(1)(b)."
3. The observation that the Commission is "essentially a non-costs jurisdiction" was echoed by Chief Commissioner Kite in Elias v Commissioner of Police (No 2) [2019] NSWIRComm 1049 at [28].
4. That said, the legislature has evinced an intention that costs orders be available when the circumstances meet the requirements of s 181(2): Margaritte Joanne Colefax v Secretary, Department of Education (No 4) [2019] NSWIRComm 1017 at [62]; Bankstown City Council v Paris (1999) 93 IR 209 at 219.
5. The approach to be taken by the Commission to s 181 was described by the Full Bench in Re Operational Ambulance Officers (State) Award (No 2) [2011] NSWIRComm 85 ("Operational Ambulance Officers") as follows: "28. The exercise of the Commission's discretion to award costs involves a two stage process: see Bankstown City Council v Paris [1999] NSWIRComm 585; (1999) 93 IR 209 and Four Sons Pty Ltd v Sakchai Limsiripothong (No 2) [2000] NSWIRComm 131; (2000) 100 IR 400. The first stage requires a determination as to whether s 181(2) of the Act is enlivened. The second stage of the process requires the Commission to exercise its discretion whether to award costs under s 181(1) of the Act."

The basis of the costs application

1. There is some ambiguity as to the basis on which Ms Ters has applied for a costs order. In her Application for Costs, and in written submissions filed in support of it, Ms Ters invoked s 181(2)(a) of the Act only. Consistent with her reliance on that provision, Ms Ters's submissions are directed predominantly towards the contention that the Motion was frivolous or vexatious. She referred to an authority as to the meaning of "frivolous" (but not "vexatious").
2. However, in her Application for Costs and written submissions, Ms Ters also contended that the Motion was "instituted without reasonable cause". That is the language of s 181(2)(b). There is no mention of s 181(2)(b) in the Application for Costs or in Ms Ters's submissions. No authority was cited as to the meaning of "without reasonable cause".
3. In her written submissions, the Health Secretary stated: "7. It is presumed by the Respondent that as there is no reference to a reliance on s 181(2)(b) in the Appellant's Submissions, that reliance for an order of costs is based entirely on s 181(2)(a)."
4. Following receipt of the Application for Costs, the Chief Commissioner made directions, on behalf of the Full Bench, for its disposition. Those directions provided Ms Ters with the opportunity to file submissions in reply to those of the Health Secretary. In an email to the Industrial Registry on 23 March 2023, the solicitors for Ms Ters informed the Commission that "the appellant is content for the Full Bench to proceed on the basis that reply submissions will not be filed".
5. In the circumstances, the Full Bench takes it as agreed that the presumption in the Health Secretary's written submissions at par 7 is correct. We will proceed on that basis.

Determination

1. The Application for Costs seeks an order for costs in respect of the appeal. The Health Secretary contended that s 181(2)(a) could not be enlivened, as she was not an "applicant" in respect of the appeal.
2. Ms Ters submitted that the Motion was frivolous or vexatious and that consequently it "was an unnecessary step in the proceedings…which resulted in [her] incurring costs of the Appeal Proceedings". In circumstances where the Full Bench's orders included one disposing of the Motion, we consider that it might be open to the Full Bench to award costs of the appeal were it to find that the Motion, which gave rise to the process culminating in the appeal, was frivolous or vexatious.
3. At the same time, on the arguments advanced by Ms Ters, it is important not to conflate the consideration as to whether the Motion was frivolous or vexatious with the findings of the Full Bench on the arguments advanced by the Health Secretary on the appeal. Equally, Ms Ters's success on the appeal is not necessarily indicative of the Motion having been brought frivolously or vexatiously. This is a matter to which we will return.
4. The Health Secretary also submitted that the Motion was not an "application", and she was consequently not an "applicant", within the meaning of s 181(2)(a). In support of this submission she cited the (obiter) observations of Commissioner Sloan in Cross v Secretary of the Department of Education (No 2) [2022] NSWIRComm 1115 at [27]-[28].
5. The Full Bench does not consider it necessary to determine that question for the purposes of disposing of the Application for Costs. It is not appropriate to do so in the absence of the parties having fully ventilated the issue (noting that Ms Ters filed no submissions in reply). It is in any event unnecessary to do so given the conclusions we have otherwise reached.
6. In Peden v Lake Macquarie Refrigeration Pty Limited [2004] NSWIRComm 66 the Full Bench observed: "20. In light of the well established line of authority, and the ordinary meaning of the word 'frivolous', we are satisfied that an application under s 84 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."
7. In Operational Ambulance Officers, the Full Bench (at [33]) considered the question as to whether proceedings were brought "frivolously" by reference to whether "they were brought thoughtlessly or flippantly or…the applicants' intention in bringing the proceedings was not serious".
8. As to whether proceedings are "vexatious", in Attorney-General v Wentworth (1988) 14 NSWLR 481 Roden J observed (at 491): "It seems then that litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds. I believe that the test may be expressed in the following terms: 1. 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."
9. On the arguments advanced by Ms Ters, our application of these tests can be limited to the prospects of success on the Motion. That is, can it be said that the Motion, on its face, could not possibly have succeeded or was "so obviously untenable or manifestly groundless as to be utterly hopeless"?
10. Ms Ters submitted that the Motion was frivolous or vexatious for three reasons. First, the Full Bench found in the Appeal Decision (at [97]) that she had an arguable case pursuant to s 213(2)(b) of the Act. Second, the Health Secretary had made a concession to that effect (citing the Appeal Decision at [90]), meaning that she was aware that the Motion could not possibly succeed. Third, the Health Secretary "ought to have contemplated that the Commission would give a broad statutory interpretation to section 213 of the Act" and, presumably, that its arguments on the Motion would inevitably fail.
11. None of these contentions support a finding that the Motion was frivolous or vexatious.
12. In the proceedings below, the Health Secretary contended in respect of the Motion that, first, s 213(2) of the Act contains an exhaustive list of the Commission's powers to make remedial orders for a breach of Ch 5 Pt 1, and, second, the relief sought by Ms Ters in the proceedings was not contemplated by that list. It is clear from [27]-[36] of the Appeal Decision that there had previously been inconsistent single-member decisions in the Commission as to whether s 213(2) is a "code" of the Commission's relevant powers. That the Full Bench was required to determine that question, and did so contrary to the position advanced by the Health Secretary, does not mean that the Motion was "manifestly groundless". Indeed, the contrary is true - the Health Secretary had an arguable basis on which to bring the Motion, even if she was ultimately unsuccessful.
13. The findings of the plurality of the Full Bench in respect of s 213(2)(b) of the Act at [90] and [97] of the Appeal Decision do not assist Ms Ters in her application for costs. The submission that the Health Secretary made a "concession" that Ms Ters had an arguable case under the provision is wrong, and misreads the Appeal Decision. All that can be said is that the Health Secretary recognised in the proceedings below that Ms Ters might seek to rely on s 213(2)(b), but contended that there was no basis on which she could do so.
14. Ms Ters's reliance on the observations of the plurality at [97] of the Appeal Decision falls into the same category as referred to at [27] above - Ms Ters seeks to equate success on the appeal as a finding that the Motion was manifestly groundless. The observation of the plurality at [97] of the Appeal Decision that "there may be an argument as to whether the removal of the Warning might constitute the 'advancement' of an employee in his or her employment" precludes the finding that it was "manifestly groundless" for the Health Secretary to contend to the contrary.
15. Finally, we accept the following submissions advanced by the Health Secretary: "34. In particular, the Appeal Bench noted: (a) both the Motion and the Appeal went to the Commission's powers to grant relief in applications brought under Ch 5 Pt 1, and the scope of that relief and these are significant issues going to the Commission's powers; (b) previous decisions of the Commission have come down on either side of the division between the parties in these proceedings; (c) the reasoning on whether s 213(2) was an exercise of statutory interpretation and the interpretation of the Appellant was ultimately preferred; (d) the opinion expressed at [21] in Morawsky was incorrect and in following that authority, Commissioner Webster was led into error; (e) there were single member decisions that supported the proposition that a threat for the purposes of s 213(2)(e) needed to be certain, imminent and unconditional; (f) that they did not consider that the analysis in Baker was apt in determining when the Commission might make an order under s 213(2)(e); (g) determined that the word threat might have different meanings in different parts of the Act; (h) if the threat or warning is issued on one of the proscribed grounds in s 210 there could be no impediment to the Commission intervening under s 213; and (i) the Commissioner fell into error in determining a threat of victimisation to the [sic] certain, imminent and unconditional. 35. At the time of filing the Motion those matters at (d), (f), (g), (h) and (i) had not been determined by a Full Bench and as such the Motion could not be described as frivolous or vexatious. 36. In these circumstances the jurisdiction gateway has not been opened."

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