Transport Workers' Union of New South Wales (on behalf of S & L Bozinovski Pty Ltd and MJW Transport Pty Ltd) and Glen Cameron Nominees Pty Ltd [2008] NSWIRComm 38

Industrial Relations Commission (NSW)|2008-01-31|Before: Sams DP, Macken Dr J, Ms P

CITATION: Transport Workers' Union of New South Wales (on behalf of S & L Bozinovski Pty Ltd and MJW Transport Pty Ltd) and Glen Cameron Nominees Pty Ltd [2008] NSWIRComm 38

APPLICANT (Respondent to Motion) Transport Workers' Union of New South Wales PARTIES: RESPONDENT (Applicant on Motion) Glen Cameron Nominees Pty Ltd

CORAM: Sams DP; Macken Dr J; Tinney Mr G

Notice of Motion - Contract of Carriage Tribunal - application for costs - original applications for compensation refused - applicants knew goodwill was not a requirement of principal contractor - whether applications "frivolous", "vexatious", or "commenced without reasonable cause" - first occasion costs sought in proceedings under Ch 6 Pt 7- meaning of words found in other sections of the Act - authorities in other jurisdictions - whether Tribunal can determine amount of costs and against whom an order is made - whether costs should be awarded as agreed or assessed. CATCHWORDS: Held; costs provisions given wide meaning - Tribunal may assess costs and make orders against whom a costs order is sought - applications not "frivolous" or "vexatious" - applicants' own evidence - applicants were aware that goodwill was not a requirement of the principal contractor - costs order not a punishment - Union had obligation to properly assess prospects of success - relied on documents tendered at early stage of proceedings - applications "commenced without reasonable cause" - order of costs - Presidential member's agreement to order.

Industrial Relations Act 1991 LEGISLATION CITED: Industrial Relations Act 1996 Legal Profession Act 2004

Attorney General v Wentworth (1988) 14 NSWLR 481 Burton v Shire of Bairnsdale (1909) 7 CLR 76 General Steel Industries Inc v Commissioner for Railways (NSW) and others (1964) 112 CLR 125 Henderson v Mainpoint Enterprises Australia Pty Limited (1998) 83 IR 182 CASES CITED: Imogen Pty Ltd v Sangwin (1996) 70 IR 254 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Peden v Lake Macquarie Refrigeration Pty Limited (2004) 134 IR 149 Shead v Summit Western Pty Ltd t/as Blacktown Mitsubishi (1998) 81 IR 347 Transport Workers' Union of New South Wales (on behalf on S & L Bozinovski Pty Ltd and MJW Transport Pty Ltd) and Glen Cameron Nominees Pty Ltd [2007] NSWIRComm 286

APPLICANT (Respondent to Motion) Mr O Fagir Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT (Applicant on Motion) Mr T Saunders of Counsel Solicitor: Ms P Tumpy Hunt & Hunt Lawyers

Transport Workers' Union of New South Wales (on behalf of S & L Bozinovski Pty Ltd) and Glen Cameron Nominees Pty Ltd

Notification by Transport Workers' Union of New South Wales on behalf of its member S & L Bozinovski Pty Ltd for a claim for compensation pursuant to section 348(2) of the Industrial Relations Act 1996

Transport Workers' Union of New South Wales (on behalf of MJW Transport Pty Ltd) and Glen Cameron Nominees Pty Ltd

Notification by Transport Workers' Union of New South Wales on behalf of its member MJW Transport Pty Ltd for a claim for compensation pursuant to section 348(2) of the Industrial Relations Act 1996

DECISION OF THE TRIBUNAL (Notice of Motion as to costs) [2008] NSWIRComm 38 1 The Contract of Carriage Tribunal ('the Tribunal'), which has been constituted according to the provisions of s 347 of the Industrial Relations Act 1996 ('the Act'), has been moved by the respondent in matters IRC07/64 and IRC07/65 (Glen Cameron Nominees Pty Ltd), for an order of costs against the applicant, (the Transport Workers' Union of New South Wales). The notice of motion filed on 14 December 2007, follows upon the respondent successfully defending the claims of the Union for compensation under s 346 of the Act on behalf of two of its members. The decision of the Tribunal was published on 30 November 2007 in Transport Workers' Union of New South Wales (on behalf on S & L Bozinovski Pty Ltd and MJW Transport Pty Ltd) and Glen Cameron Nominees Pty Ltd [2007] NSWIRComm 286. 2 The terms of the motion are that:

The applicant to the proceedings pay the respondent to the proceedings, costs as agreed or assessed, including the costs of the motion.

Such further or other orders as the Tribunal sees fit. 3 For the purposes of this decision we shall hereinafter refer to the respondent as the applicant on the motion, and the applicant as the respondent to the motion. 4 The grounds and reasons for the notice of motion were that pursuant to s 353(1) of the Act, the respondents' claims were "frivolous" and "vexatious" and "commenced without reasonable cause". At this point, we set out the relevant legislative provisions under which this motion is sought. Section 353 of the Act is expressed as follows: (1) The Tribunal may make an order for the payment of costs only if the Tribunal dismisses a claim on the ground that it is frivolous or vexatious, or was commenced without reasonable cause, or the Tribunal considers a party to have unreasonably refused to accept an offer of settlement of the claim.

(2) An order of the Tribunal for the payment of costs may only be made with the approval of the Presidential Member. 5 Two further matters are raised at the outset of our deliberation of this application. Firstly, it was accepted that the respondent in both these matters is the Union and not the individual companies represented by the Union in the substantive proceedings. Accordingly, the orders sought by the applicant are orders sought against the Union. 6 Secondly, as we understand it, this is the first occasion since the Tribunal was established under the 1991 Act (Act No 40 of 1994) that the Tribunal has been asked to make costs orders under s 353(1) of the 1996 Act. It will be necessary, therefore, to give careful consideration to the specific legislative provisions under which we are being asked to act. We shall return to this matter later in the decision. SUBMISSIONS For the applicant 7 Mr A Saunders of Counsel, submitted that while there were no authorities on the direct meaning of the terms of s 353(1) of the Act, guidance has been given by the Industrial Relations Court of Australia, the Federal Court, and the Industrial Relations Commission of New South Wales as to the meaning of the same expressions in the corresponding costs jurisdictions. Mr Saunders took the Tribunal to three authorities in this regard. He submitted 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 ( Peden v Lake Macquarie Refrigeration Pty Limited (2004) 134 IR 149 at [20]). * (our own addition - section omitted) The test for whether litigation may properly be regarded as vexatious may be expressed in the following terms ( Peden v Lade Macquarie Refrigeration Pty Limited at p28]): (a) Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought; (b) 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; and (c) 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. In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Wilcox J considered, at 264, the meaning of whether particular proceedings had been instituted without reasonable cause: "It seems to me that the 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 proceedings, 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 proceedings as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceedings must fail, it may properly be said that the proceedings lacks a reasonable cause." Of the three potential grounds for ordering costs against the Applicants (Respondents), 'without reasonable cause' is the lowest standard ( Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257). Accordingly, the Respondent (Applicant) will focus its submissions on the 'without reasonable cause' ground. 8 Mr Saunders distinguished the circumstances of this case with that in Peden v Lake Macquarie Refrigeration Pty Limited (2004) 134 IR 149. He put that the Commission has consistently held that it is not appropriate to make a finding of "frivolous" where there was an evidentiary contest which the Commission is required to resolve. However, in this case he submitted that even on the respondent's own version of the facts, their claims were bound to fail. 9 Mr Saunders referred to the three tests of what might determine whether litigation is "vexatious". He conceded that the first two tests in Attorney General v Wentworth (1988) 14 NSWLR 481, do not apply here. However, the third test of the claims being "manifestly groundless" does apply. 10 Mr Saunders relied on the definition of proceedings being "instituted without reasonable cause" as outlined by Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257. Mr Saunders said the jurisdictional foundation of this case fell under at least one of the three tests, "frivolous", "vexatious" or "without reasonable cause" and the second test is whether the Tribunal ought to exercise its general discretion to award costs. Mr Saunders said that the applicant is merely seeking the costs it incurred in defending proceedings which did not have any substantial prospect of success. Assessment of costs would be done in the conventional way; failing agreement, a costs assessor would be appointed to make the assessment. 11 Mr Saunders submitted that the Tribunal had firstly, determined that the respondent had failed one of the jurisdictional prerequisites to the claims proceeding; namely, s 346(1)(e) which requires that the principal contractor did not have a requirement for a fee or premium to be paid. He said that the respondents' own evidence established that they knew the applicant did not have a requirement for a fee or premium to be paid. 12 Mr Saunders said that secondly, the Tribunal had found that the termination of the respondents' contracts could not be unfair, harsh or unconscionable (s 349) when continued engagement of the contractors was offered by the applicant, but not taken up, or even investigated by them or the Union. 13 In support of his submissions, Mr Saunders relied on various extracts of the Tribunal's decision which quoted the evidence of Mr Wilson and Mr Bozinovski in the substantive case. At paras [32] to [38] the Tribunal observed: 32 In cross-examination, Mr Wilson agreed that Mr Aldcroft had given him a copy of his own contract with the respondent in July 2003. He understood that the contract was for five years from October 2001 and that there was no assurance it would be renewed. He understood further that either party could terminate the contract on one month's notice and that the respondent could terminate the contract due to a 'fundamental change'. They had in fact discussed this at the meeting with Mr Carson. 33 Mr Wilson also understood that Mr Aldcroft couldn't assign his contract without the respondent's approval. He knew that Mr Aldcroft had only been with the respondent since 2001, having been earlier employed by Paperlinx for some 15 years. Mr Wilson understood from Mr Aldcroft that when he had joined the respondent he had been offered to be engaged as a contractor or an employee. All the drivers had come over as contractors without paying any goodwill. 34 Mr Wilson said he had not been provided with a document setting out the procedure for the assignment of a truck. Mr Aldcroft had given him an acknowledgement form after he had started training and had left his previous job. He had started paid work on 25 August 2003, the same day he had signed the acknowledgement form. He hadn't signed it on the 18 August because Mr Aldcroft had signed it on the 22 August and handed it back to him. 35 Mr Wilson deposed that in his meeting with Mr Carson there had been no mention of an expiry date of the Paperlinx contract. Rather, Mr Carson had said that Paperlinx was very happy with the arrangement, expected it to continue and would be looking to build its business in Sydney. Mr Wilson said he had an expectation the contract would continue after October 2006. 36 Mr Wilson was closely questioned on when he had signed the acknowledgment form. He denied signing it on 18 August 2003, but agreed he understood its terms as to " no custom and practice of goodwill at the yard ". However, he believed it was just a procedure. Mr Wilson acknowledged that Mr Carson had earlier said that the respondent did not require a premium to be paid but he hadn't used the words " custom and practice ". Mr Wilson said that he didn't really know what the respondent did or didn't do, but he conceded he understood the respondent didn't require a premium to be paid. 37 Mr Wilson agreed that he had obtained legal and accounting advice prior to the purchase and had taken Mr Aldcroft's contract to a solicitor. He had arranged finance with the bank on 19 or 20 August 2003, and obtained insurance for the vehicle on 22 August. He again denied signing the agreement with the respondent on 18 August. The first payment to Mr Aldcroft was 27 August and the balance was paid on 21 September 2003. 38 As to the meeting at which the drivers were told the respondent had lost the Paperlinx contract, Mr Wilson agreed that Mr Cameron had said it wasn't a reflection on the company or the drivers. Paperlinx wanted to in-source the work. Mr Cameron had said the respondent was very disappointed. Mr Wilson further agreed that Mr Cameron had said that if any driver missed out with Paperlinx they should give him a call and he would see what they could do. Mr Cameron had also said he expected all the drivers to fulfil their contracts to 22 October 2006. Mr Wilson denied rejecting Mr Cameron's offer to work as an employee driver. He simply hadn't responded to it as he wasn't in a financial position to do so.

and at paras [50], [55] and [58] to [61] observed: 50 In cross-examination, Mr Bozinovski said he first saw Mr Kulibab's contract with the respondent when he met Mr Carson on 18 February 2002. However, Mr Bozinovski had asked Mr Kulibab earlier about the terms of the contract and that they had only discussed termination of the contract where the driver may have " done the wrong thing ". Mr Kulibab had told him the contract had been renewed over 20 years and that he had joined the respondent when Paperlinx commenced in 2001. He didn't tell him that, at the time, he was offered either to be a contractor or an employee driver. He had told him he had paid goodwill four years earlier when he (Mr Kulibab) had bought the truck from Mr Paul Vella. ... 55 Mr Carson had given him a driver's agreement and advised him to seek independent legal and accounting advice. Mr Bozinovski saw his accountant with Mr Kulibab's last three years financial accounts, but did not seek legal advice. Mr Bozinovski recalled that Mr Carson spoke about the good relationship with Paperlinx and why he expected the contract to continue. ...

58 Mr Bozinovski said he had signed the acknowledgement form on 26 February 2002 with Mr Vella as a witness. Mr Vella had told him he had to sign it or he would not be starting in the yard. He had read it and understood it, but felt he had to sign it or he wouldn't be working. At the time he signed it, he understood that the company had said there was no custom and practice of premiums being paid in the yard. 59 Mr Bozinovski was shown the contract he had signed which disclosed a contract term of five years commencing in October 2001. He agreed he had read and understood the provision relating to a 'fundamental change' which might terminate the contract. He had read and understood no compensation would be paid for the contract's termination on one month's notice. 60 Mr Bozinovski agreed that at the meeting on 20 October 2006 announcing the termination of the Paperlinx contract, Mr Cameron had said that: · Paperlinx's decision was not a reflection on anyone's performance; · Paperlinx wished to in-source its work; · he was very disappointed; · he would be pleased to meet with any displaced drivers with a view to offering ongoing work with Camerons; and · he appreciated the drivers' efforts and hoped they would maintain the standard to the end. 61 Mr Bozinovski acknowledged that when he was refused work with Paperlinx he did not make any contact with the respondent about alternative work. 14 Mr Saunders then referred to the Tribunal's conclusions at paras [163] and [164]: 163 This allowed a contract carrier to assign the remainder of his contract with the Principal Contractor to a third party, provided the incoming third party was acceptable to the Principal Contractor and provided the incoming third party acknowledged in writing that no compensation was payable should the contract terminate for reasons other than misconduct. Both applicants had copies of this contract prior to signing their own contracts, and Mr Wilson obtained legal and accounting advice and Mr Bozinovaki obtained his accountant's advice.

164 Both applicants in these matters signed an acknowledgement that they were advised of it not being a company requirement for goodwill to be paid and goodwill was not a custom and practice in the yard, prior to their commencing paid work for the respondent. Even if we accept that Mr Wilson signed the form on 25 August 2003 (the day he commenced work) he was well aware of its contents prior to this date. In Mr Bozinovski's case, we believe he received the acknowledgement form on 18 February 2002, well before his actual commencement date, and was fully aware of its requirements. 15 Mr Saunders submitted that the Tribunal did not make any finding of fact on contested evidence, because it did not need to. The evidence of the respondents was that they knew, before commencing engagement, that a fee or premium was not required to be paid and knew this before instigating these proceedings. Mr Saunders then referred to paras [173] and [174] of the decision: 173 It did not reflect well on the applicants that neither of them took up the offer of alternative work offered by the respondent to those contractors who failed to be picked up by Paperlinx when Paperlinx again in-sourced the work. There seems no logical explanation for this. It is no answer that the offer by the respondent was not specific and may have involved lesser rates. The fact was they were invited to inquire and failed to do so. The Tribunal is of the opinion that had the applicants offered themselves for ongoing work they could have reduced their exposure to continued debt and compensation would not have been necessary.

174 Notwithstanding our earlier jurisdictional finding, we fail to see how the termination of the applicants' contracts could be considered unfair, harsh and unconscionable when continued engagement of the contracts was offered by the respondent, but not taken up, or even investigated, by them or the Union. 16 Mr Saunders put that it was unreasonable for the respondents to have commenced these proceedings when they had done nothing about securing alternative employment. For the respondent 17 Mr O Fagir submitted that the escape provision in s 346(1)(e) requires not just steps to be taken by the principal contractor (to advise that no fee or premium is required), but that the steps taken must be reasonable. He said it was unrealistic to look at the documents in isolation from what was actually happening in the yard. The reality was that there was a requirement for a premium to be paid as was made clear when Mr Wilson said he would go out and buy a truck independently, but was told by Mr Carson (from the applicant company) that he could not. Mr Fagir submitted that there was a contest as to when the acknowledgement forms had been signed and whether in reality it was simply too late to back out of the transaction. On the face of the filed affidavits there was a clear conflict of what was said by Mr Carson at the introductory meetings. 18 Mr Fagir said that it would be rare that an application could be said to have been made "without reasonable cause" simply because the escape provision in s 346(1)(e) had been met. 19 Mr Fagir put that the Union maintained the termination of the contracts were unfair, harsh and unconscionable due to inadequate notice, no compensation and a failure of the applicant to ensure an objective and transparent process when the drivers applied for work with Paperlinx. Mr Fagir said the offer by the applicant of alternative work was meaningless because they could not survive on what they were to be offered. 20 In referring to the authorities cited by the applicant's counsel, Mr Fagir said that all that is necessary for the applications to be reasonably commenced is that the arguments are worthy of consideration. 21 Mr Fagir relied on the definition of "frivolous" found in General Steel Industries Inc v Commissioner for Railways (NSW) and others (1964) 112 CLR 125. He said that clearly, this case was not "manifestly groundless" or "obviously untenable". 22 As to the Tribunal's discretion to award costs, Mr Fagir contended that the Tribunal would not do so for two reasons. Firstly, the applicant's conduct throughout the proceedings was not such as to attract the Tribunal's discretion to award costs. It had an absolute position from the outset that these applications could not be settled, except by arbitration. The Union had brought the action after a request from two members who were dismissed at short notice and who were suffering financial difficulties. Mr Fagir submitted that the Union should not be penalised for doing so. 23 Secondly, Mr Fagir said that the applicant had provided no estimate of costs, and, in those circumstances, the Tribunal would be reluctant to grant costs. 24 Mr Fagir agreed with Mr Saunders that because the section (353) is silent on whether the Tribunal itself can fix an amount for costs (unlike s 181 of the Act) then the power of the Tribunal is only available to make orders that costs be agreed or assessed. In reply 25 Mr Saunders submitted that a Union has a responsibility to take instructions from those it is representing and take a view as to the prospects of success. A Union has the same responsibility as any other litigant not to commence proceedings which have no chance of succeeding. 26 Mr Saunders said that it was unnecessary for the Tribunal to consider whether the applicant took reasonable steps to make the respondents aware that goodwill was not required. The fact was that the Tribunal found the applicant had taken the necessary steps to satisfy s 346(1)(e) of the Act "if you get there, you get there", he said. 27 Mr Saunders put that it was not necessary for the Tribunal to make findings as to what was said at various meetings because it came to its conclusions for other reasons. 28 As to the fairness of the termination of the contracts, Mr Saunders said it was moot because the jurisdiction was not established. 29 Mr Saunders agreed that no offer was ever made to settle the proceedings because it had taken a firm view which was subsequently vindicated. It would be a nonsense if a costs order was not available unless a party makes an offer of settlement, irrespective of the merits of the claim. CONSIDERATION Legislative Provisions 30 We have set out in para 4 the provisions relating to costs in matters before the Contract of Carriage Tribunal. As we have earlier observed, this is the first occasion the Tribunal has been asked to make an order for costs against an unsuccessful party in proceedings under Ch 6 Pt 7. The history of these provisions date from an amendment in 1994 to the Industrial Relations Act 1991 (No 40 of 1994), which established the Tribunal and set out its powers, including the power to award costs. The corresponding provision to the present s 353(1) is to be found in s 697H of the 1991 Act and is in identical terms. Subsection 2 of s 353 requiring the approval of the Presidential member of the Tribunal as to an order of costs, was first introduced in the 1996 Act. 31 During the course of argument, members of the Tribunal expressed some concern with both parties' submissions that the Tribunal's discretion to award costs did not extend to the same power available to the Commission, to not only award costs, but to "determine by whom and to what extent costs are to be paid" (s 181(c)) and "may order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 2004, or on any other basis" (s 181(d)). Both Mr Saunders and Mr Fagir submitted that the Tribunal's power to order costs did not extend to the power to determine by whom and to what extent costs are to be paid. This was so because these express provisions are not found in s 352 and, consequently, the legislature had a deliberate intention not to vest the Tribunal with the same power as the Commission. It followed, it was said, that the Tribunal only had the power to make an order for costs and that such an order could only be that the costs would be agreed or in the absence of agreement, assessed. 32 While in the ordinary cause it might be held that, if under the same Act a power of the Commission is set out in one section, but not in another in relation to the Tribunal, then it may be assumed the power does not exist, we do not consider that is necessarily the case here. We would observe, by way of similarity, that the express words of s 353 refer to "an order for the payment of costs" and makes no reference to "whether agreed or assessed". In other words, on the same logic as Mr Saunders' submission, there is no power to order costs as agreed or assessed either. We do not think that was the legislature's intention. That being said, we consider that the express provisions of the section are much wider in scope than the restrictions (as agreed or assessed) said to apply to the present proceedings. 33 We consider that the words "an order for the payment of costs" are sufficiently wide and reflective of the generally wide discretion the Commission has to award costs (once the respective tests are established), such as to include a power to determine against whom, and to what extent costs are paid. 34 We do not believe it was the legislature's intention to fetter or restrict the discretionary powers of the Tribunal to award costs in a different way to the Commission, particularly in circumstances where the Presidential member of the Tribunal must agree to any order of costs (s 353(2)). 35 We note, in addition, that Mr Saunders correctly, in our view, set out the two stage process in determining whether an order of costs should be made. Once one or more of the legislative tests are met, the Tribunal's power to award costs is discretionary. We see no reason why that discretionary power should be limited in the manner advanced by both parties' representatives. Meaning of "frivolous", "vexatious" and "commenced without reasonable cause" 36 The four grounds upon which the Tribunal may make an order for costs are that the claim has been dismissed because it was:

(d) that the Tribunal considered a party unreasonably refused to accept an offer of settlement of the claim. 37 Mr Saunders did not press the applicant's motion on the fourth basis so we need not trouble ourselves with its meaning here. 38 It will be readily seen that the other three grounds are also to be found in the general costs provisions under the Act in s 181. We accept Mr Saunders' argument that in the absence of any authority of their meaning in s 353, that it is appropriate to apply the interpretation of their meaning in various cases decided under s 181 of the Act. This is consistent with the ordinary approach to statutory construction "that there is an expectation that the same word is used with a consistent meaning throughout the statute": See Shead v Summit Western Pty Ltd t/as Blacktown Mitsubishi (1998) 81 IR 347 at 348. We note, however, the difference in wording in s 181(2)(b) referring to "instituting" proceedings without reasonable cause, as distinct to "commencing". We do not perceive any different approach to the two words as they mean the same thing: See Macquarie Thesaurus.

39 In General Steel Industries Inc v Commissioner for Railways (NSW) and Others, Barwick CJ described the tests to be applied where a course of action might be summarily dismissed. His Honour said: "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance". 40 This line of authority might be traced to a case in 1908 where O'Connor J of the High Court, in Burton v Shire of Bairnsdale (1909) 7 CLR 76 at 92, neatly expressed the general principle of the right of every litigant to have his or her case heard and determined, unless such a claim is so obviously untenable that it cannot possibly succeed: "Prima facie, every litigant has a right to have matters of law as well as of fact decided according to the ordinary rules of procedure, which give him full time and opportunity for the presentation of his case to the ordinary tribunals, and the inherent jurisdiction of the Court to protect its process from abuse by depriving a litigant of these rights and summarily disposing of an action as frivolous and vexatious in point of law will never be exercised unless the plaintiff's claim is so obviously untenable that it cannot possibly succeed."

A Full Bench of the Commission said in Peden : 19 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".

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 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.

and further at paras [28] and [29] the Full Bench said: 28 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":

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:

Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought.

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.

29 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. 41 Having considered the meaning of the terms "frivolous" and "vexatious" in the context of the applications in these proceedings, we are unable to arrive at a conclusion that they can be so characterised. We note that the Tribunal's decision primarily rested on a finding that the respondents had not satisfied the prerequisite jurisdictional test in par (e) of s 246. The Tribunal found all of the other four jurisdictional tests had been satisfied. In these circumstances we do not consider that the applications could be characterised as being "utterly hopeless or manifestly groundless". 42 As to the test of whether the claim was "commenced without reasonable cause" is a lower standard than "frivolous" or "vexatious", we concur with Mr Saunders' submission that it is appropriate to adopt Wilcox CJ's view in Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257: The respondent submits there is no substantial difference in meaning between "vexatious" and "without reasonable cause", as those terms are used in s 347 of the Act. 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. Accordingly, as I said in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, "for the qualification of s 347 to operate, it is sufficient that the proceedings be instituted 'without reasonable cause'". The word "proceeding" in s 347 includes an appeal; therefore the first question in the present case is whether Imogen's appeal was instituted without reasonable cause.

43 We think a helpful guide to the meaning of the expression "without reasonable cause" is to be found in Henderson v Mainpoint Enterprises Australia Pty Limited (1998) 83 IR 182 at pages 189 to 190: The meaning of this expression, in a similar legislative context, has been considered by the Federal Court on a number of occasions. In these cases the Court has been dealing with s 347 of the Act, or its predecessors. Section 347 states: "(1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by another party to the proceedings unless the first-mentioned party instituted the proceedings vexatiously or without reasonable cause.

(2) In subsection (1) 'costs' includes all legal and professional costs and disbursements and expenses of witnesses." In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 274 Northrop J said: " Great care must be exercised to ensure that in finding that a party has instituted proceedings vexatiously or without reasonable cause, that party is not improperly deprived of his freedom from liability to pay costs to an opposing party. The test is a substantial one." In Thompson v Hodder (1989) 29 IR 339 at 341, the Full Court of the Federal Court said: "... an applicant who has the benefit of the protection of s 347 will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances." In R v Moore; Ex parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470 at 473, Gibbs J made the following comment in relation to the meaning of "without reasonable cause": "... a party cannot be said to have commenced a proceedings 'without reasonable cause' within the meaning of that section, simply because his argument proves unsuccessful." The expression "without reasonable cause" was also considered by Wilcox CJ in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257. In that case his Honour said (applied in Imogen Pty Ltd v Sangwin (1996) 170 IR 258): "It seems to me that the 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 proceedings, 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 proceedings as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceedings must fail, it may properly be said that the proceedings lacks a reasonable cause." As noted by Senior Deputy President Williams in Ainslie v Ericsson Australia Pty Ltd (1998) 78 IR 325 there are differences between s 347 and s 170CJ. In that decision his Honour considered the authorities in relation to s 347 and then said: "These views as to the interpretation of s 347 must, however, be considered in light of the fact that the section, in effect, contains a prohibition against the awarding of costs except in specified circumstances. In Canceri v Taylor (1994) 55 IR 316 at 318, Moore J expressed the view that s 347 was not a source of power to award costs but 'should be viewed... as imposing a limit on a power to award costs that might arise elsewhere'. Further, as North J said in Nilsen v Loyal Orange Trust (1997) 76 IR 180 at 181: 'The evident policy behind s 347 is to allow an applicant, without risk of paying the costs of the opposing party, to institute a weak case as long as it is not utterly hopeless.' By contrast, s 170CJ(1) contains an express conferral of power to award costs against an unsuccessful applicant. That section was introduced into the Act by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth). The Explanatory Memorandum to the Workplace Relations and Other Legislation Amendment Bill 1996 states that the section is intended 'to discourage the improper use of Commission proceedings in relation to termination of employment' and 'to discourage applicants from making applications which are without reasonable foundation'. In my view, there is a substantial difference in content and policy between the two sections. The 'freedom from liability' referred to by Northrop J in Heidt no longer appears to apply in respect to applications that are made under s 170CE of the Act. Rather, applicants for relief under that section are now expected to bear responsibility for their actions in instituting applications that do not have any reasonable basis. Such difference in content and policy between the two sections does not, however, prevent guidance being obtained from decisions concerning the operation of s 347 in relation to the proper interpretation to be given to the expressions 'vexatiously' and 'without reasonable cause' as they are used in s 170CJ(1)." We agree with his Honour's comments and, with respect, adopt them. In our view the following propositions can be extracted from the above authorities: (1) In determining whether a s 170CE application has been instituted "without reasonable cause" the test is whether, upon the facts apparent to the applicant at the time of instituting the proceedings, there was no substantial prospect of success. (2) If the success of the application depends on the resolution in the applicant's favour of one or more arguable points of law it is inappropriate to conclude that the proceedings were instituted "without reasonable cause". An applicant is not liable to pay costs pursuant to s 170CJ(1) simply because an arguable point proves unsuccessful. (3) Where on the applicant's own version of the facts it is clear that the proceedings must fail it can properly be said that the proceeding was instituted "without reasonable cause". The above propositions should all be taken into account when considering an application for costs under s 170CJ. 44 Mr Saunders argued his client's case under the third proposition referred to above and he highlighted the various passages from the Tribunal's decision which supported the conclusion that the respondents knew that the applicant did not require a fee or premium to be paid. It followed that there were facts known to the respondents (and their Union) prior to, or at the time the proceedings were commenced, or at the very least when their affidavits were filed, which they knew were fatal to the success of their case. 45 In this regard, we note our earlier findings at par [164] to [166]: 164 Both applicants in these matters signed an acknowledgement that they were advised of it not being a company requirement for goodwill to be paid and goodwill was not a custom and practice in the yard, prior to their commencing paid work for the respondent. Even if we accept that Mr Wilson signed the form on 25 August 2003 (the day he commenced work) he was well aware of its contents prior to this date. In Mr Bozinovski's case, we believe he received the acknowledgement form on 18 February 2002, well before his actual commencement date, and was fully aware of its requirements.

165 The acknowledgement which both applicants were required to sign before commencing paid work for the respondent included the following words:

It has been explained to me by Camerons, and I understand that Camerons does not require a premium or fee to be requested or paid in order to enter into a Driver Agreement with them and there is no custom and practice within Camerons that premiums or fees be paid to access work under a Driver Agreement.

166 The Tribunal believes that with such an explicit written acknowledgement, it could not be argued that the applicants were unaware that the respondent had a requirement that a premium not be paid. 46 In light of these conclusions and the Tribunal's references to the respondents' own admissions in cross-examination, (see para 13) we consider that the applicant's notice of motion for costs must be granted. 47 We note that Mr Fagir sought to re-argue the unfairness of the termination of the contracts in so far as inadequate notice, the failure to compensate the dismissed drivers and the failure of the applicant to ensure that Paperlinx adopted a transparent and unbiased process. We think it was implicit in our earlier decision that these arguments were rejected in favour of a finding that the termination of the contracts was not unfair because of the failure of the respondents to take up the offers of alternative employment; let alone make any inquiries about the offers. In any event, strictly speaking, the Tribunal never had to make such a finding because the jurisdictional hurdle was not able to be overcome. 48 Mr Fagir raised one further argument which we believe requires some comment. He submitted that the Union should not be "punished" for taking up the claims of its members. We would observe firstly, that an order for costs is not about punishment: See Kanan at pg 265. Secondly, we think it is incumbent on the Union to properly assess the prospects of success of litigation it initiates on behalf of its members, including making appropriate concessions, such as withdrawing from proceedings if facts emerge in the preparation of the case or during the course of the proceedings. That said, we note that there was no evidence the Union was unaware at the time it commenced proceedings of the significant facts in the case, or that its members, wittingly or unwittingly, withheld crucial facts from the Union. On the contrary, we understand from the transcript of the conciliation proceedings, that the relevant documents on which the applicant has consistently relied, were tendered during the conciliation phase of the proceedings; well before the case proceeded to preparation for hearing. 49 Having carefully considered the facts and concessions made by the respondents, we are left to conclude that the test of whether the claims were commenced without reasonable cause has been met. 50 In accordance with our earlier findings, and in the exercise of our discretion, we have decided that an order of costs in the amount of $6,000 is appropriate in this case. We so order. It may be accepted that the Presidential member sitting in this matter agrees with the proposed order, as required by s 353(2) of the Act.

ORDERS 51 The Contract of Carriage Tribunal orders that pursuant to s 352 of the Industrial Relations Act 1996:

The respondent to this motion for costs, the Transport Workers' Union of New South Wales, shall pay to the applicant, Glen Cameron Nominees Pty Ltd an amount of $6,000, being costs in matters IRC64 and IRC65 of 2007.

This amount shall include the costs of the motion.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Workplace Relations and Other Legislation Amendment Act 1996(Cth)

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