WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES’ COURT

PARTIES BARRY DAVID SPARLING

CLAIMANT

-v-

ALLSPICE HOLDINGS PTY LTD

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

DATE WEDNESDAY, 16 NOVEMBER 2005

FILE NO. M 77 OF 2005

CITATION NO. 2005 WAIRC 03145

CatchWords: Costs - "frivolous and vexatious" - costs thrown away

Cases referred to in decision:

CPSU v Murdoch University 85 WAIG 1998

Chub Security Pty Ltd – v- Danson 81 WAIG 738

Legislation

Industrial Relations Act 1979 sections 83, 83(4), 83C(1), 83C(2),

Long Service Leave Act 1958

Commercial Travellers Award

Industrial Magistrates Court (General Jurisdiction) Regulations 2005 Regs 5(2), 11, 15 & 68

Result: Application dismissed

Representation 

APPLICANT: Mr R W Clohessy appeared for the Claimant

RESPONDENT: Ms D Flint (Of Counsel) Instructed by Deacons appeared for Respondent.

Reasons for Decision

Background

1         On 6 July 2005 the Claimant lodged with this Court his originating claim pursuant to the provisions of the Industrial Relations Act 1979 (the IR Act).   It is alleged therein that the Respondent has failed to comply with the Long Service Leave Act 1958 (the LSL Act) and with the Commercial Travellers Award (the Award).  The Claimant seeks payment of $15,537.64 plus pre-judgment interest thereon.  A penalty is also sought for the failure to comply with the Award.  By its response lodged on 27 July 2005 the Respondent asserts that it has never employed the Claimant.

2         In accordance with the prescriptive provisions of the Industrial Magistrates Court (General Jurisdiction) Regulations 2005 (the Regulations), the Clerk of the Court, on 28 July 2005, listed the matter for pre-trial conference to be held on 16 August 2005 at 9.00 am.  On 3 August 2003 the Claimant filed another claim (M 86 of 2005) in this Court alleging the same breaches and seeking the same relief as in this matter (M 77 of 2005) but naming Stirling Food Wholesalers Pty Ltd as Respondent.  On 11 August 2005 Ms Danielle Flint, counsel acting for the Respondent, received by way of service the fresh claim (M 86 of 2005).  In her affidavit sworn 10 October 2005 Ms Flint explained what transpired following receipt of the fresh claim.  I repeat the relevant portions of her affidavit.

8. On 11 August 2005 I instructed Mr Michael Baldwin, an employee of Deacons, to call the agent for the Claimant, Mr Ray Clohessy, to inquire whether in light of his lodging Claim M86 he intended to withdraw Claim

M77.

9. I am informed by Mr Baldwin, and truly believe, that Mr Clohessy advised Mr Baldwin that he would seek instructions from the Claimant.
10. On 11 August 2005 I instructed Mr Baldwin to call the Industrial Magistrates Court (IMC) to find out, givn that there were now two applications on foot regarding the same subject matter, being Claim M77 and Claim M86, whether the pre-trial conference listed on Claim M77 on 16 August 2005 was to be vacated.
11. On 11 August 2005, Mr Baldwin informed me and I verily believed that the pre-trial conference before the IMC on Claim M77, listed for 16 August 2005, had not been vacated by the IMC.
12. I met Mr Barry McGougan of the Respondent regarding Claim M77 on 15 August 2005 at 3pm to discuss the pre-trial conference listed before the IMC for 16 August.  This meeting went ahead and lasted approximately 1 hour.
13. On Monday 15 August 2005 at approximately 4.20pm I was informed by

Mr Baldwin and truly believe that he had received a phone call from Mr Clohessy informing him that Claim M77 had been withdrawn.

14. I instructed Mr Baldwin to call the IMC to confirm that the pre-trial conference listed for 16 August 2005 had been vacated by the IMC.
15. I was told by Mr Baldwin on 15 August 2005 and truly believe that he was unable to contact the IMC as the IMC registry was closed for the day.
16. At approximately 8.30am on 16 August I received a facsimile from Mr Clohessy informing me that Claim M77 had been discontinued.  The facsimile did not include a Notice of Discontinuance.
17. Annexed to this affidavit and marked “DLF3” is a true copy of the facsimile from Mr Clohessy.
18. At approximately 8.35am on 16 August 2005, I telephoned the IMC to confirm that a Notice of Discontinuance for Claim M77 had been lodged and the pre-trial conference before the IMC had been vacated.
19. The IMC informed me that the matter was still scheduled for a pre-trial conference at 9.00am.
20. I then attended the IMC at 9.00am.

3         At 8.30 am on 16 August 2005 Mr Clohessy, on behalf of the Claimant, sent a letter by facsimile transmission to the Clerk of this Court in the following terms:

“Please accept this application to discontinue with this matter and confirm.”

4         By doing what he did the Claimant’s agent failed to comply with regulation 15 of the Regulations. Relevantly regulation 15 provides:

15. Party may discontinue claim

If a party wants to discontinue the whole or part of a claim made by the party it must lodge and serve a notice of discontinuance in the approved form.

5         The purported notice of discontinuance was not in the form approved by the Chief Magistrate pursuant to regulation 4.  Consequently it did not become operative and the matter remained listed for pre-trial conference at 9.00 am on 16 August 2005.  Neither the Claimant nor his agent appeared at the pre-trial conference.  Ms Flint, for the Respondent, did however appear.  Needless to say the pre-trial conference was aborted.

6         On 25 August 2005 the Clerk of the Court sent a letter to the Claimant’s agent in the following terms:

Barry David Sparling – and – Allspice Holdings Pty Ltd

On the 16 August 2005 you forwarded a letter advising that you wished to discontinue the above application.  You were advised to complete a Notice of Discontinuance – Whole of Claim form which was faxed to you but never returned.

Please therefore sign and date the completed Notice of Discontinuance –Whole of Claim form and return it to this office in the pre-paid envelope provided as soon as possible.

7         It suffices to say the notice of discontinuance in the approved form has never been returned and the claim has never been discontinued in accordance with the requirements of the Regulations

8         On 10 October 2005 the Respondent made an application seeking the following order:

“That the Claimant pay the Respondent’s costs thrown away, in the sum of $968 plus GST, forthwith.”

9         The application which was supported by Ms Flint’s affidavit was listed for hearing on 19 October 2005 at 10.00 am.  On 18 October 2005 at 3.35 pm the Claimant lodged a document entitled “Response and Counterclaim”.  The text of the document is as follows:

“The Claim dated 10.10.2005.

In relation to a claim for costs, the claimant states that the file is closed.  No costs were claimed prior to the matter being discontinued and no application or grounds exist to re-open.  Any costs incurred by the Respondent stems from the Respondent’s folly alone.

Should the claim proceed, the claimant claims expenses unnecessarily incurred in the Respondent falsely purporting that the Respondent was the Claimant’s employer.  Expenses include $40 filing fees and $30 A.S.I.C. search fees.  Agents costs at $80 per hour for 3 hours in the sum of $240.

ORDER SOUGHT:

1. The claim of 10.10.2005 be struck out and the Respondent pay the claimed $310 plus costs of the matter.

Authority: C.P.S.U. v/s Murdoch University Claim M19/2005.”

10      The Claimant failed by the date of the hearing of the application to lodge any affidavits in opposition to the Respondent’s application and/or in support of his own application albeit that his application was not in the proper form and had not been made in accordance with the Regulations. On hearing the application on 19 October 2005 the Court made certain programming orders to facilitate the provision by the Claimant of necessary affidavits.  The matter was otherwise adjourned to 2 November 2005 at 9.30 am for further hearing.  Subsequently on 27 October 2005 the Claimant filed a document with attachments in the following terms:

“RESPONSE AND COUNTERCLAIM

The Claim dated 10.10.2005.

In relation to a claim for costs, the Claimant states that the file is closed.  No costs were claimed prior to the matter being discontinued and no application or grounds exist to re-open.  Any costs incurred by the Respondent stems from the Respondent’s folly alone.

Should the claim proceed, the claimant claims expenses unnecessarily incurred in the Respondent falsely purporting that the Respondent was the Claimant’s employer.  Expenses include $40 filing fees and $30 A.S.I.C. search fees.  Agents costs at $80 per hour for 3 hours in the sum of $240.

ORDER SOUGHT:

1.                 The claim of 10.10.2005 be struck out and the Respondent pay the claimed $310 plus costs of the matter.

Authority:  (1)  C.P.S.U. v/s Murdoch University

Claim M19/2005

(2)   Potter v/s Clarks Bread and Patisseri

WAIG. 2888/84 (M104/2004).

2.  (a) Warrant 21.5.2005

(b)                       Claim

(c)                       Business Card

(d)                       Allspice Holdings Pty. Ltd – Pay Advice 20.5.2005

(e)                       Deacons 17.6.2005 re Long Service Leave

(f)                        P.A.Y.G. Summary 6.7.2005

(g)                       A.S.I.C. Search 1.8.2005 Allspice Holdings Pty. Ltd.

(h)                       A.S.I.C. Stirling Food Wholesalers Services Pty. Ltd

(i)                        Discontinue Application dated 16.8.2005 filed.

 Sworn before me this 27th Day of October, 2005

(Sgd) David Manners    (Sgd) RW Clohessy

Justice of the Peace

8 Scarborough Beach Road 

Scarborough 

Western Australia 6019

Receipt No. 2455”

11      It is noted that the document lodged on 27 October was a replication of that lodged on 18 October 2005 with a further paragraph added.  The second document was purportedly sworn before a Justice of the Peace on 27 October 2005.  Insofar as the document is said to be an affidavit, it cannot be so because it does not identify its maker and does not contain the other necessary requirements of an affidavit.  Furthermore, it is not in the approved form as required by regulation 68 of the Regulations.  No other affidavits were lodged in contemplation of the further hearing of the matter on 2 November 2005.

12      When the application came on for hearing on 2 November 2005 the Respondent sought to amend the application to include a claim for disbursements incurred.  At that time the Claimant, through his agent, announced that he would not be pursuing the counterclaim with respect to costs.  Thereafter on that day the Claimant was permitted, over objection, to give evidence viva voce as to the matters in issue with respect to the application.  I decided that such was the best course of action to prevent further delay and costs to the parties whilst at the same time attempting to ensure that the parties were, so far as was possible, on an equal footing (see Regulation 5(2)).  In doing so I made it clear that if anything was said falling out of the Respondent’s counsel’s instructions I would permit an adjournment to allow her to gain further instructions.  As it turned out an adjournment was not sought as the matters raised were within instructions.  The Claimant was in that way able to put evidentiary material before the Court to resist the Respondent’s application.  Following the receipt of evidence and submissions I reserved my decision with respect to the application.

13      The aforementioned review of the process demonstrates a persistent failure on the part of the Claimant through his agent to comply with the Regulations and/or the orders of the Court, resulting in embarrassment and frustration particularly to the Respondent.  The Claimant’s conduct inevitably caused delay and increased cost to the Respondent.

Determination of the Application

14      The Respondent’s application seeking “costs thrown away” lacks statutory foundation. It may be for that reason that the application for costs has evolved into one based on frivolousness or vexatiousness pursuant to section 83C of the IR Act, which provides:

83C. Costs of enforcement orders

 (1) Subject to subsection (2), an order under section 83, 83A or 83B may be made in any case with or without costs, but in no case shall any costs be given against the Registrar, a Deputy Registrar, or an Industrial Inspector.

(2)                    In proceedings under section 83 or 83B costs shall not     be given to any party to the proceedings for the services of any legal practitioner or agent of that party unless, in the opinion of the industrial magistrate’s court, the proceedings have been frivolously or vexatiously instituted or defended, as the case requires, by the other party.

15      The Respondent contends that the Claimant has frivolously or vexatiously instituted the proceedings.  In that regard the Respondent relies on the following three grounds:

1. The claim is brought against the wrong employer; and
2. That aspects of the claim are patently outside the jurisdiction of this Court, and
3. That the claim is in part with respect to money already paid.

16      The Claimant asserts that he named the Respondent as his employer because of documents given to him by his employer, which was suggestive of the fact that the Respondent was in fact his employer.  They included business cards, group certificates and copies of pay lodgements confirmation.  Apart from those documents he relied on the fact that the Respondent’s solicitors when writing to his agent on 17 July 2005 made reference to the Respondent.  More particularly in the letter to his agent the Respondent’s solicitors said the following:

“This payment finalises Allspice’s statutory obligation to Mr Sparling in respect of long service leave.”

17      I accept that the Claimant genuinely believed that the Respondent was his employer.  I can only infer that he now accepts that such is not the case.  I infer that because he has now filed claim M 86 of 2005 with respect to the same claims but against a different legal entity.   It appears that his intent was to discontinue this proceeding and start again.  I digress to note that he has not as yet successfully discontinued this claim despite the fact that it was clearly his intention to do so.

18      The fact that the Respondent has been wrongly named as Respondent does not, of itself, axiomatically give rise to a finding that the proceedings have been frivolously or vexatiously instituted.  In that regard I adopt my reasoning in CPSU v Murdoch University 85 WAIG 1998, which has, in my view, equal application in this matter.  Insofar as this application is based on that foundation it cannot succeed.

19      In considering the other grounds it is obvious that aspects of the Claimant’s claim are patently untenable in that this Court lacks the jurisdiction to hear and determine claims for superannuation and long service leave made pursuant to the LSL Act.  Indeed this Court lacks jurisdiction to make any order pursuant to the LSL Act in circumstances where a state award covers an employee (see section 4(3) the LSL Act).  Given that the Claimant contends in the originating claim that the Respondent has failed to comply with the “Commercial Travellers Award” the claim for long service leave pursuant to the LSL Act is seemingly untenable.  If that is so the major part of the claim, which relates to long service leave, is it seems doomed to failure within this jurisdiction.  There is force in the argument that the making of a claim, which in the main is doomed to failure, may well constitute the institution of a frivolous or vexatious claim.

20      As to the third ground, being that the Claimant has already been paid that which he seeks in the claim is a matter of dispute between the parties.  The issue cannot be resolved without a trial of that issue and that cannot be achieved in dealing with this application.  Given that I am not in a position to make a finding on that issue, the same cannot be considered.

21      The question remains as to whether this Court can, at this stage of the proceedings and in the manner sought, make an order for costs in any event.  Given that the issue of whether or not I could entertain this application at this stage of proceedings had not been raised or argued during the course of the hearing of the application, I caused the Clerk of the Court to write to the parties concerning the issue. On 4 November 2005 the Clerk wrote to the parties in the following terms:

“I have been instructed by His Honour to write to you seeking submissions from you in writing relating to the following issues not addressed during the hearing of the application but which have come to His Honour’s mind in consideration of the matter.

Firstly, given that the claim has not been formally discontinued in accordance with regulation 15 of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 and remains live, can the costs application be considered?

Secondly, if the costs application is appropriately considered, can the Court make an order for costs without first having made an order under section 83(4) of the Industrial Relations Act 1979 (the Act)?  In other words is the making of an order for costs contingent upon an order having been made pursuant to section 83(4) of the Act?

Could you please make available your written submissions within the next seven days.”

22      Written submissions were consequently received from both parties.

23      The Respondent submitted that on 16 August 2005 the Claimant lodged a notice of discontinuance. By “filing” his notice of discontinuance the Claimant signalled his intention to discontinue the claim in accordance with regulation 15.  The Respondent argues that notwithstanding the “filing” of a notice of discontinuance a matter is not formally discontinued until an order has issued from the Court.  It was submitted that an order to discontinue a matter is an order under section 83(4) of the IR Act, which enlivens the Court’s ability to make an order for costs under section 83C of the IR Act.  Finally the Respondent says that if the Court should find against it in its submissions then it should allow the Claimant to amend its application so as to seek dismissal of the substantive claim.

24      The Claimant submitted that the Claim is still live and there is no legal capacity to award costs until the action is fully heard.  Hence the Respondent’s application is premature.  The Claimant argues that given that no finding that proceedings have been frivolously or vexatiously instituted has been made, no authority exists to order costs.  The Claimant argues that there is a “restriction” as to costs found in sections 83C and 84 of the IR Act.  The Claimant also referred the Court to Chub Security Pty Ltd v Danson 81 WAIG 738 at paragraphs 22 and 23 concerning premature applications.

25      In dealing with the written submissions I reject the Respondent’s contention that the claim has been discontinued.  The fact is that despite the obvious intention of the Claimant to discontinue the claim it has not been discontinued in accordance with regulation 15 which provides the only mode of discontinuance.  Regulation 15 is mandatory in its terms.  It provides that a party “must lodge and serve a notice of discontinuance in the approved form” (my emphasis added).  Quite fortuitously for the Claimant the claim remains live as a consequence of omission rather than design.  The filing of the notice of discontinuance brings the claim to an end without an order of the Court.  There is no provision in the IR Act or the Regulations that requires the Court to make an order to give force to the discontinuance.  If the discontinuance is made in accordance with regulation 15 it has immediate effect without an order of this Court.  Indeed it seems that there is no specific power granted to the Court to make an order of discontinuance.  The respondent submits that an order to discontinue is an order under section 83(4).  I disagree.  Section 83(4) of the IR Act provides:

(4)  On the hearing of an application under subsection (1) the industrial magistrate’s court may, by order-

(a)                   if the contravention or failure to comply is proved-

(i)         issue a caution; or

(ii)       impose such penalty as the industrial magistrate’s court thinks just but not exceeding $2 000 in the case of an employer, organisation or association and $500 in any other case;

or

(b)                 dismiss the application.

26      Section 83(4) only permits three types of orders. They are the issue of a caution, the imposition of a penalty or the dismissal of an application.  It is axiomatic that reference to an application within section 83 is a reference to a claim.  The provision does not encapsulate discontinuance.  The Court’s power to make an order for costs is contained in section 83C(1) of the IR Act.  The Court’s power to award costs pursuant to regulation 11 does not apply to claims made under section 83.  Section 83C(1) only enables a costs order in circumstances where the Court has made an order pursuant to sections 83, 83A or 83B.  For the purposes of this matter, only section 83 is relevant.  It suffices to say that no order pursuant to section 83 has been made in this matter.  It follows that a costs order cannot be made.  I accept the Claimant’s submissions in that regard.  Section 83C(2) only operates to confine the circumstances in which costs can be ordered pursuant to section 83C(1) when an order is made pursuant to section 83(4). 

27      Insofar that it might be argued that aspects of the claim do not fall within section 83 of the IR Act and that regulation 11 applies I take the view that regulation 11 should be considered in light of section 83C(1) which effectively restricts the making of an order for costs to situations where a matter has been finally determined.  That provision reflects the intent of Parliament.  Regulation 11 should be construed in the same way not only to reflect the intent of the legislature but also to avoid inconsistency.  The making of a costs order is necessarily contingent upon the final hearing and determination of a claim.  Indeed the very difficulty expressed above concerning the inability to resolve issues without a trial is reflective of the fact that it will almost always be very difficult if not impossible to arrive at an opinion as to whether proceedings have been instituted or defended frivolously or vexatiously without the benefit of tested evidence and hearing argument on the substantive issues.  Section 83C as read with section 83(4) refects that.

28      Accordingly for the reasons stated the application for costs cannot succeed.  Finally, I am not minded to allow the Respondent’s further application to amend its application so as to seek dismissal of the claim because to do so would result in procedural unfairness to the Claimant who has not had the opportunity to consider and argue the same.

29      The application will accordingly be dismissed.

G Cicchini

Industrial Magistrate