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  • Unreported Judgment

Ipswich City Council v Wendt & Ors

 

[2020] QIRC 164

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION:

Ipswich City Council v Wendt & Ors

[2020] QIRC 164

PARTIES:

Ipswich City Council

(Applicant)

v

Wendt, Wayne Earl

(Respondent – TD/2018/86)

&

Tully, Paul Gregory

(Respondent – TD/2018/87)

&

Bromage, Cheryl Anne

(Respondent – TD/2018/88)

&

Pahlke, David Allen

(Respondent – TD/2018/89)

&

Morrison, David Henry

(Respondent – TD/2018/96)

&

Pisasale, Charles Francis

(Respondent – TD/2018/100)

&

Sheila, Anna Ireland

(Respondent – TD/2018/107)

PROCEEDING:

Application for Costs

DELIVERED ON:

11 September 2020

MEMBER:

Knight IC

HEARD AT:

On the Papers

ORDERS:

  1. The Councillors pay the Council's costs of the applications for reinstatement and the instant application assessed on the standard basis according to the Supreme Court scale.
  1. If the parties do not agree upon the costs within 14 days of this decision, then:
  1. (a)
    the Council is to file in the Industrial Registry and serve on the Councillors its schedule of costs within 28 days of the date of this decision;
  1. (b)
    the Councillors are to file in the Industrial Registry and serve on the Council any objections to the schedule of costs within 28 days of being served therewith; and
  1. (c)
    the Industrial Registrar is to assess the costs upon receipt of the schedule of costs and any objections.
  1. The costs to be paid by the Councillors, whether agreed or assessed, are to be paid within 28 days of agreement or assessment.

CATCHWORDS:

INDUSTRIAL LAW – APPLICATION FOR COSTS – where applications for reinstatement dismissed for want of jurisdiction – where Applicant seeks costs – where general rule that person ordinarily bears their own costs for proceedings before the Commission – whether applications for reinstatement made without reasonable cause and/or whether reasonably apparent to the Respondents that applications for reinstatement had no reasonable prospects of success – whether an exception to the general rule exists– whether Commission should exercise discretion to award costs – whether costs assessed on standard or indemnity basis.

LEGISLATION:

Fair Work Act 2009 (Cth)

Industrial Relations Act 2016 (Qld)

Industrial Relations (Tribunals) Rules 2011 (Qld)

Local Government Act 2009 (Qld)

Uniform Civil Procedure Rules 1999 (Qld)

CASES:

Baker v Salva Resources Pty Ltd (2011) 211 IR 374

Burke v Simon Blackwood (Workers' Compensation Regulator) [2013] ICQ 23

Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Construction, Forestry, Mining and Energy Union and Others v Clarke (2008) 170 FCR 574

Deane v Paper Australia Pty Ltd (PR932454, Guidice P, Williams SDP and Simmonds C, 6 June 2003)

Hutchinson v Comcare (No 5) [2019] FCA 1665

Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257

Marriage v Devine Ltd (2005) 18 QGIG 118

Saxenan v PPF Asset Management Ltd [2011] FCA 395

Tomvald v Toll Transport Pty Ltd [2017] FCA 1208

Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190

Walters v B.T. Equipment Pty Ltd (No 2) (2002) 169 QGIG 227

Wendt & Ors v Ispwich City Council [2020] QIRC 002

Reasons for Decision

  1. [1]
    By order dated 14 January 2020, I dismissed seven applications for unfair dismissal lodged by former councillors ("the Councillors") of the Ipswich City Council ("the Council")[1] for want of jurisdiction.[2]
  1. [2]
    My reasons included a finding that the Councillors, having been appointed to the elected office of Councillor, could not be characterised as 'employees' within the meaning of that terms under s 317(3)(a) of the Industrial Relations Act 2016 (Qld) ("the IR Act").
  1. [3]
    The Council now seeks orders in the following terms ("the instant application"):
  • the Councillors pay the Council's costs of the proceedings on the indemnity basis (limited to each applicant being rendered liable for one-seventh of the Council's costs of the proceeding); or, in the alternative
  • the Councillors pay the Council's costs of the proceedings on the standard basis, and that such costs ought to be assessed by the registrar, on the scale payable in the Supreme or District Court and having regard to ch 17A of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR").
  1. [4]
    The Council's costs of the substantive proceedings up to the date the decision was released are approximately $55,711. The costs of the instant application are estimated to be $7,975.
  1. [5]
    Counsel for the Council argues the applications were made without reasonable cause and/or that it ought to have been reasonably apparent to the Councillors that their applications for reinstatement had no reasonable prospects of success. 
  1. [6]
    On behalf of the Councillors, Mr Taylor resists the instant application arguing the applications were made with reasonable cause. He also maintains it is not open to the Commission to find it ought to have been reasonably apparent to the Councillors their applications had no reasonable prospects of success, in circumstances where they relied on legal advice as to the merits of their claim. 

The Legislation

  1. [7]
    The Council relies upon s 545(2)(a) of the IR Act and r 70 of the Industrial Relations (Tribunals) Rules 2011 (Qld) ("the Rules").
  2. [8]
    Section 545 of the IR Act provides:

 545 General power to award costs

  1. (1)
    A person must bear the person's own costs in relation to a proceeding before the court or commission.
  1. (2)
    However, the court or commission may, on application by a party to the proceeding, order
  1. (a)
    a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied

 (i) the party made the application or responded to the application vexatiously or without reasonable cause; or

  1. (ii)
    it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or

 (b) a representative of a party (the represented party) to pay costs incurred by another party to the proceeding if the court or commission is satisfied the representative caused the costs to be incurred

  1. (i)
    because the representative encouraged the represented party to start, continue or respond to the proceeding and it should have been reasonably apparent to the representative that the person had no reasonable prospect of success in the proceeding; or
  1. (ii)
    because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the proceeding.
  1. (3)
    The court or commission may order a party to pay another party an amount reasonably payable to a person who is not a lawyer, for representing the other party.
  1. [9]
    Section 545(1) of the IR Act provides a person must generally bear their own costs in relation to a proceeding before the Court or the Commission. However, s 545(2) affords an exception to this approach in limited circumstances. Where the Commission is satisfied that such a circumstance arises, the discretion to require a party to a proceeding to pay some or all the costs of another party is enlivened.
  1. [10]
    While readily accepting the need for caution when awarding costs under similarly drafted provisions within the Fair Work Act 2009 (Cth),[3] Flick J has observed:

… there is also a need to keep constantly under scrutiny the manner in which proceedings are conducted, including proceedings under the Fair Work Act, to ensure that costs are not "unreasonably" incurred and that the public interest in the orderly and cost-effective administration of justice is not too readily placed to one side. Section 570, it may be noted, would not seem to preclude costs being awarded against an otherwise successful claimant for at least such part of a proceeding as has been unreasonably pursued.[4]

  1. [11]
    That aside, it is uncontentious that the discretion to award costs under s 545 of the IR Act in a jurisdiction such as the Commission, where costs do not ordinarily follow the event, must be exercised with caution and only where a clear case in support of such an order is presented.[5]
  1. [12]
    Consideration of this application therefore involves:
  1. (a)
    whether the Commission is satisfied the Councillors made the application without reasonable cause;
  2. (b)
    whether the Commission is satisfied it should have been reasonably apparent to the Councillors that the applications for reinstatement had no reasonable prospects of success;
  3. (c)
    where the Commission is satisfied in respect of (a) and/or (b) and its jurisdiction is enlivened, whether it should exercise its discretion and order the Councillors to pay the costs incurred by Council, as an exception to the general rule at s 545(1) that a person must bear their own costs in relation to a proceeding before the Commission; and
  4. (d)
    in the event the Commission exercises its discretion in favour of the Council, what is the basis on which costs should be ordered?

Were the applications for reinstatement made without reasonable cause?

  1. [13]
    The concept of 'without reasonable cause' has been the subject of much jurisprudence. 
  1. [14]
    The views of Wilcox J are instructive in determining whether a proceeding was instituted without reasonable cause:

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 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 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.[6]

  1. [15]
    A Full Bench of this Commission has held that an order for costs may not be appropriate in circumstances where a conclusion "that the application was not arguable may only be reached by basking in the wisdom of hindsight".[7]
  1. [16]
    Counsel for the Council argues the applications for reinstatement lodged by the Councillors were, by their very nature, incompatible with the nature of the roles to which the Councillors sought reinstatement. That is, each Councillor was intimately aware of the circumstances in which they were appointed, having been elected to the office as part of the Council elections. 
  1. [17]
    It is submitted the question of law required to be determined by the Commission (that is, whether the Councillors were in fact employees of the Council) was not an 'arguable point of law'. Further, that it ought to have been plainly apparent to the Councillors that the circumstances of their appointment to the elected office of Councillor bore no resemblance to any established indicia of employment.
  1. [18]
    The Councillors argue they always had a reasonable cause for filing their applications.
  1. [19]
    Although it not entirely clear from the materials before the Commission as to the nature of the advice they received or the reasons why they considered they had a reasonable cause for filing their applications, the Councillors maintain they were advised by Mr  Fox, then a solicitor at the Council, that they had an arguable case. Likewise, it is submitted that Mr Morris QC advised the Councillors they had a strong case.
  1. [20]
    In support of their claims, the Councillors prepared affidavits which were annexed to the outline of argument filed in the matter. In circumstances where the parties requested the costs application be heard on the papers, no witnesses were called to give evidence or be cross-examined. Some of the material in the affidavits deals with events that occurred well before the applications for reinstatement were filed.
  1. [21]
    Along with several of the other Councillors, Mr Tully's affidavit provides details of the period leading up to the dissolution of the Council and the appointment of an interim administrator to act in place of the Councillors.
  1. [22]
    While not attached to his affidavit, Mr Tully refers to show cause letters issued to himself and other Councillors ahead of the dissolution. He maintains the language utilised in the correspondence led him to conclude that consideration was being given to terminating his 'employment'.
  1. [23]
    Mr Tully's affidavit included his recollection of a conciliation conference that was held prior to the hearing of the substantive matter and an interview where Mr Morris QC addressed media, adverting to the strength of the Councillors' claim and the unfairness of their removal.
  1. [24]
    Several Councillors depose to media commentary made by Mr Morris QC in respect of the dissolution of the Council and removal from office of the Councillors. As best I understand, the Councillors rely on Mr Morris QC's commentary in support of their submission that they were advised they had a strong case. 
  2. [25]
    I have approached the commentary in some of the affidavits with some caution given it is not clear from the materials – for example Mr Morrison's affidavit – whether Mr Morris QC was publicly commenting on the dissolution of the Council or the removal of the Councillors from office, or both.  The only media article I was directed to in the Councillors' submissions is one that reported on the hearing of the substantive matter and Mr Morris QC's submissions during those proceedings.
  1. [26]
    Several Councillors prepared affidavits highlighting their interactions with Mr Fox and his encouragement of them insofar as it related to filing an application with the Commission.
  1. [27]
    While Councillors such as Mr Tully participated in meetings with Mr Fox and Mr Morris QC, others, including Mr Pisasale and Ms Ireland, appear to have merely relied upon advice or guidance relayed to them by Mr Tully.
  1. [28]
    In any event, although it is not clear as to whether Mr Fox was formally retained for the purposes of providing legal advice, the Councillors collectively argue they were entitled to rely on advice or guidance provided or relayed to them at the time by Mr Fox, Mr Morris QC or Mr Tully, which, in turn, supports their contention they had a proper basis for bringing and continuing their reinstatement claims.
  1. [29]
    It is also argued the finding by the Commission that the Councillors were not employees is plainly a matter of hindsight, in circumstances where they had accepted legal advice to the contrary.   

Consideration

  1. [30]
    In determining whether the Councillors instituted proceedings without reasonable cause, it is necessary to consider whether the application had reasonable prospects of success at the time it was instituted, rather than whether it ultimately failed.[8]
  1. [31]
    Matters that are generally considered by the Commission when determining an application for reinstatement include:
  • whether the employee was notified of the reason for dismissal;
  • whether the employee had been warned about the conduct, capacity and performance;
  • whether the employee was given an opportunity to respond to the claim about the conduct, capacity or performance; and
  • any other matters the Commission considers relevant.[9]
  1. [32]
    Before arriving at any conclusions in respect of the matters listed above, it was necessary for the Commission to be satisfied each of the former Councillors were employees, in order to access the jurisdiction.[10]
  1. [33]
    The Councillors failed to satisfy the Commission they were employees for the reasons set out in my decision, which included:
  • there was no evidence before the Commission which indicated Council had taken any steps to 'hire' the services or engage the labour of Councillors during the period they held office;
  • there was no evidence of an existing employment contract between the Council and any of the Councillors;
  • the Council had no direct control over the level of remuneration paid to the Councillors; and
  • the Councillors were elected by the local rate payers of the Council region resulting in a situation where the Council had no control over the persons elected or any ability to dismiss the Councillors.
  1. [34]
    I also dismissed the argument that the Councillors could be characterised as employees in circumstances where they enjoyed benefits under other Acts, including superannuation, on the basis that it did not necessarily follow that a Councillor being afforded the same or similar benefits as an employee, automatically equates to a conclusion that a Councillor is also an employee, for the purposes of the IR Act.
  1. [35]
    I determined the Councillors' reliance on indicia of employment such as business cards or the use of an office, ordinarily considered when distinguishing between an employee and an independent contractor, to be of no assistance given the circumstances of the case. 
  1. [36]
    The prospect of the Councillors being able to demonstrate they were employees at the time the proceedings were initiated should be considered in the context of what they knew at the time the proceedings were initiated and the evidence likely to be available during the proceedings.
  1. [37]
    In circumstances where there were limited (if any) factual disputes during the substantive proceedings, I am satisfied the following circumstances existed at the time the matter was instituted:
  • the Councillors were aware they had been elected to Council during the most recent local council elections;
  • the Councillors had not been hired by the Council to perform services or to provide labour to Council;
  • the Councillors' remuneration was set by regulation outside of the control of the Council;
  • the Council had no capacity to employ or dismiss a Councillor; and
  • it was not possible under the Local Government Act 2009 (Qld) for a Councillor to concurrently hold the role of both Councillor and employee. 
  1. [38]
    In his affidavit, Mr Tully relies heavily on language he maintains was included in show cause correspondence, which he states was issued to him and other Councillors by the Minister in the months before the Council was dissolved as the basis for a conclusion, on his part, that he was an employee.
  1. [39]
    I note this material was not provided to the Commission during the substantive proceedings, nor has it been attached to his affidavit. Given this, I am not able to make any findings that correspondence provided to Councillors in the lead up to the dissolution of the Council was written in such a way that Mr Tully could have reasonably concluded he was an employee of the Council at or around the time the proceedings were instituted. 
  1. [40]
    In their respective affidavits, several of the Councillors referred to their participation in a conciliation conference at the Commission prior to the substantive application. It is claimed by Ms Bromage that on the day "there was no clear indication that we could not proceed". It is not clear from her affidavit who did or did not provide such an "indication".
  1. [41]
    Industrial Commissioner Thompson, who facilitated the conciliation conference, issued the requisite certificate at the conclusion of the conciliation conference, which noted:

The [the Ipswich City Council] submitted that in opposing the application for reinstatement there were a number of grounds that would exclude the Commission from hearing the substantive application. These included:

  • applicant was not an employee pursuant to the Industrial Relations Act 2016;
  • applicant was not an employee under the Local Government Act 2009 (the LG Act);
  • the termination has not been at the initiative of the Respondent; and
  • ss 114, 123 and 244 of the LG Act place a "bar" on the Commission from hearing the application.
  1. [42]
    Ahead of the conciliation conference and well before the hearing of the substantive matter, Counsel for the Council prepared detailed submissions in support of Council's position which highlighted:
  • the definition of employee under the IR Act;
  • the contention the Councillors were not employed by the Council and, instead, were elected by the people of the Ipswich local government area;
  • the absence of any form of employment contract between the Councillors and the Council;
  • the inability under the relevant local government legislation for a Councillor to be concurrently a Councillor and an employee;
  • the inability of the Council to terminate or remove an elected Councillor from office; and
  • the steps taken by the Queensland State Government to dissolve the Council and replace the Councillors with an interim administrator.
  1. [43]
    Having considered the materials and the information that were available and known to the Councillors at the time the proceedings were instigated, I am satisfied the applications were made without reasonable cause. I do not accept the issue to be determined during the substantive proceedings was an 'arguable point of law'  I am also not persuaded the Councillors' purported reliance on advice from Mr Fox, Mr Morris QC or as relayed by Mr Tully, the nature of which is very unclear to the Commission, compels any different conclusion.  

Should it have been reasonably apparent to the Councillors the applications for reinstatement had no reasonable prospects of success?

  1. [44]
    In Deane v Paper Australia Pty Ltd, the phrase 'no reasonable prospect of success' in the context of costs applications was considered by a Full Bench of the Australian Industrial Relations Commission (as it was then):

Making due allowance for the caution which must attend to the exercise of a discretion to summarily dismiss an application, it appears to us that the approach in Wright is one we should follow. In other words, unless, upon the facts apparent to the applicant at the time of instituting the appeal, the proceeding in question was manifestly untenable or groundless, the relevant requirement in s. 170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.[11]

  1. [45]
    The Full Bench held in Baker v Salva Resources Pty Ltd ('Baker'):[12]

The concepts within s. 611 (2)(b) "should have been reasonably apparent" and "had no reasonable prospect of success" have all been well traversed:

  • "should have been reasonably apparent" must be objectively determined. It imports and objective test, directed to a belief formed on an objective basis, rather than a subjective test; and
  • a conclusion that an application "had no reasonable prospects of success" should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.[13]
  1. [46]
    It is argued on behalf of the Council that on the Councillors' own version of the facts, it ought to have been clear the applications for reinstatement had no substantial prospects of success and were essentially doomed to failed.
  2. [47]
    The Councillors argue the approach in Baker is relevant to the Commission's determination of this application, in circumstances where it is submitted, they each relied on legal advice given to them by Mr Fox and Mr Morris QC. It is argued there is no reason why it should have been reasonably apparent to the Councillors that they would not win their respective reinstatement claims.
  1. [48]
    Reliance is again placed on Mr Morris QC's representations to the media concerning the prospects of the reinstatement applications. The Councillors have directed the Commission to a media report on the substantive proceedings.[14] It is not entirely clear when the comments attributed to Mr Morris QC were made to the media, however several extracts from the report reads as follows:

Sacked Ipswich Councillors have told a court they should be legally considered "employees" as they try to win compensation for losing their jobs when council was dissolved last August amid allegations of widespread corruptions and poor governance.

But Ipswich City Council's legal representative argued …that as sitting councillors, the elected officials were if anything the employers, not the employees.

Tony Morris, QC, representing former Councillors…told the QIRC that even members of Parliament should be considered "employees of the Parliament" under common law and councillors had the same rights.

There was a brief interruption to the proceedings when Commissioner Knight told Mr Morris her version of the councillors' submissions appeared to differ from his.

Mr Morris then told the court: "Someone has decided they didn't lie my submissions and has decided to change them. Apparently one or two of my clients have decided they know more about the law then I do".

  1. [49]
    The Councillors rely on the media report and advice provided to them by Mr Fox and Mr Morris QC, arguing it was not reasonably apparent to the Councillors that they would not be successful in their respective claims. Again, the nature of the advice is not entirely clear within the submissions.

Consideration

  1. [50]
    In the Industrial Court of Queensland, Martin P has concluded that "where an appeal is brought to the Commission on a footing which is misconceived and doomed to fail, costs should follow the event".[15]
  1. [51]
    In my view, the reinstatement proceedings initiated by the Councillors fall into this category.
  2. [52]
    I disagree with the Councillors' submissions the reinstatement proceedings were initiated in circumstances where it was not reasonably apparent, they had no reasonable prospects of success.
  1. [53]
    I rely on my decision dismissing all seven applications for want of jurisdiction in arriving at that conclusion. It is clearly apparent on the materials available at the time the proceedings were initiated that the Councillors were not employees and that no employment relationship existed between the Council and the Councillors.
  1. [54]
    Putting to one side my findings the Councillors were not employees, if one considers the available remedies arising out of reinstatement applications, I consider it would not have been possible for the Commission to identify an employer, let alone order an employer to pay compensation at the conclusion of the reinstatement proceedings, particularly in circumstances where the named respondent or 'employer' in the application was a Council that was not only incapable of being the 'employer', but also played no role in dissolving the Council and appointing an administrator.
  1. [55]
    Likewise, in circumstances where the primary remedy available to the Commission in relation to the applications, is reinstatement, there was no capacity on the part of the Commission to order the Councillors' reinstatement to a role to which they were previously elected and which no longer existed. 
  1. [56]
    In all the circumstances, I consider it should have been reasonably apparently to the Councillors their applications had no reasonable prospects of success.
  1. [57]
    Again, I do not think the Councillors' reliance on any advice provided by Mr Fox and Mr Morris QC and any comments made in the media, for example, by the former CEO of the Council, invites a different conclusion.

Should the Commission exercise its discretion?

  1. [58]
    In my view, the bar ordinarily imposed by s 545(1) of the IR Act is not applicable here.  I am satisfied the Councillors' applications had no reasonable prospects of success. Even if I were to be wrong on that, I am satisfied the applications were initiated without reasonable cause for the reasons set about above.
  1. [59]
    The Council was put to considerable expense to meet a case that lacked substance. I consider this is one those cases where, in an otherwise no costs jurisdiction, I should exercise my discretion to award costs in favour of the Council.

On which basis should costs be assessed?

  1. [60]
    When the Commission exercises its discretion to order that a party bear the costs of another party, it has a further discretion to decide whether the costs to be borne are some or all of the costs of the other party (on a standard or indemnity basis).
  1. [61]
    The Council submits the circumstances warrant the making of an order that the Councillors pay the Council's costs of the proceedings and the instant application on the indemnity basis (limited to each applicant being rendered liable for one-seventh of the Council's costs of the proceeding).
  1. [62]
    In the alternative, it is submitted the circumstances warrant the making of an order that the Councillors pay the Council's costs on the standard basis, assessed by the registrar under the scale of costs for the Supreme or District Court and having regard to ch 17A of the UCPR.
  1. [63]
    Unsurprisingly, the Councillors reject both submissions. They argue the Council should have, instead, sought a costs order against Mr Fox and Mr Morris QC.
  1. [64]
    It is contended that a failure on the part of the Council to recover its costs from Mr Morris QC should not result in the Councillors being liable for indemnity or standard costs, particularly when the Councillors relied on the legal services being provided to them at the time.
  1. [65]
    It is unclear on the submissions if the Councillors consider Mr Fox to have been providing a legal service, in circumstances where other materials before the Commission suggest he was engaged by the Council in the period immediately before the applications for reinstatement were filed.
  1. [66]
    In any event, in response to correspondence sent to the former Councillors by Council's representatives (during the costs proceedings), suggesting it was open to the Councillors to make an application[16] to join Mr Fox and Mr Morris QC to the proceeding and seeking orders that they be required to pay Council's costs, the Councillors asserted:

[They] have not conceded and do not concede that the advice from Mr Fox or Mr Morris QC was deficient in any way. [The Councillors] also do not concede that "Mr Morris QC and/or Mr Fox caused or contributed to their exposure to costs"...[17]

  1. [67]
    The Councillors further submit the Council has failed to identify why their representation by a Queen's Counsel is a relevant factor in the Commission's consideration as to whether costs should be awarded in accordance with the scale of costs for the Supreme or District Court.
  2. [68]
    In reply, Counsel for the Council argues the Councillors should be ordered to pay the Council's costs on the indemnity basis in circumstances where it is clear the Councillors commenced (and continued) their reinstatement applications in wilful disregard of:
  1. (a)
    known facts (and facts uncontentious in the proceedings) – for example (and critically), that each of the Councillors was elected to the office of Councillor of the Council, and that the Parliament had determined to dissolve the Council; and
  2. (b)
    established law – specifically, that none of the established indicia of a common law employment relationship existed (or existed in a meaningful way) in relation to the Councillors' appointment to the elected office of Councillor, and that therefore the Councillors were not (and could not possibly have been) employees entitled to seek the relief provided for in s 317 of the IR Act.
  1. [69]
    As regards the scale of costs, Counsel for the Council contends the Commission, by virtue of r 70(2)(d) which expressly permits consideration of 'any other relevant factor', should have regard not only to the scale of costs for the Magistrates Court but also the scales of costs for the Supreme or District Court.
  1. [70]
    In response to the Councillors concerns that the relevance of Mr Morris QC's representation has not been adequately explained in the context of ‘any other factor’ to which the Commission may have regard when considering the costs application, the Council argues the fact the Councillors elected to be represented by Queen's Counsel during the proceedings is a relevant consideration under the Rules,[18] because:
  1. (a)
    it demonstrates it was also necessary for the Council to be represented by solicitors and Counsel in the substantive proceedings; and
  2. (b)
    it is relevant to the quantum of the Council's costs and the question of whether those costs were necessarily and properly incurred. 

Consideration

  1. [71]
    Although substantial sections of the Councillors', and to a lesser extent the Council's, submissions were devoted to the issue as to whether costs ought to have been recovered from the Councillors' legal representatives, the only application I am required to determine here is the instant application which seeks costs orders against the Councillors.
  1. [72]
    In Colgate Palmolive Co v Cussons Pty Ltd,[19] Sheppard J propounded the principle that:

it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law.[20]

  1. [73]
    In determining the quantum of costs to be ordered, I am mindful that several of the Councillors, for varying reasons detailed in affidavits provided to the Commission,[21] were not actively involved in the management of the substantive proceedings and were seemingly reliant on information being relayed to them through Mr Tully. In those circumstances, I am not satisfied all of the Councillors commenced or continued reinstatement proceedings in wilful disregard of known facts or clearly established law.
  1. [74]
    The Rules in respect of costs provide:

70 Costs

  1. (1)
    This rule applies if the court or commission makes an order for costs under section 545 of the Act.
  1. (2)
    The court or commission, in making the order, may have regard to
  1. (a)
    for a proceeding before the commission the costs payable on the scale of costs for Magistrates Courts under the Uniform Civil Procedure Rules 1999, schedule 3; or

(b) for a proceeding before the full bench the costs payable on the scale of costs for the District Court under the Uniform Civil Procedure Rules 1999, schedule 2; or

(c) for a proceeding before the courtthe costs payable on the scale of costs for the Supreme Court under the Uniform Civil Procedure Rules 1999, schedule 1; or

(d) any other relevant factor.

  1. (3)
    The court may order that costs be assessed by the registrar and, in assessing costs, the registrar may have regard to the Uniform Civil Procedure Rules 1999, chapter 17A.
  1. [75]
    I accept that the representation of the Councillors by Queen's Counsel is a relevant consideration in determining the quantum of costs because it informed the Council's position insofar as its own legal representation was concerned. It is also relevant to the way those costs were incurred.
  1. [76]
    The Commission may, in exceptional circumstances, order costs payable on a scale other than the Magistrates Court scale. For instance, in Marriage v Devine Ltd,[22] Asbury IC (as she then was) departed from a strict application of the relevant Magistrates Court scale in circumstances where the application involved claims for amounts beyond the monetary jurisdiction of the Magistrates Court, the hearing was lengthy and the issues complex.
  1. [77]
    In my view, the order which best accommodates the conduct of the parties and the discretion available is that the Councillors pay the Council's costs of the proceedings on the standard basis according to the scale of costs for the Supreme Court (limited to each Councillor being rendered liable for one-seventh of the Council's costs of the substantive proceedings).
  1. [78]
    I am also of the view the Councillors should pay the Council's costs of the instant application in circumstances where the representatives for the Council wrote to each Councillor, and:
  1. (a)
    offered to resolve the instant application on the basis that the Councillors each pay 65% of their respective one-seventh share of the Council's costs of the applications for reinstatement; and
  2. (b)
    informed the Councillors that, if the offer to settle were not accepted, the Councillors would be subject to an application for costs to pay the Council's costs of the instant application.

Orders

  1. [79]
    I make the following orders:
  1. The Councillors pay the Council's costs of the applications for reinstatement and the instant application assessed on the standard basis according to the Supreme Court scale.
  1. If the parties do not agree upon the costs within 14 days of this decision, then:
  1. (a)
    the Council is to file in the Industrial Registry and serve on the Councillors its schedule of costs within 28 days of the date of this decision;
  1. (b)
    the Councillors are to file in the Industrial Registry and serve on the Council any objections to the schedule of costs within 28 days of being served therewith; and
  1. (c)
    the Industrial Registrar is to assess the costs upon receipt of the schedule of costs and any objections.
  1. The costs to be paid by the Councillors, whether agreed or assessed, are to be paid within 28 days of agreement or assessment.

Footnotes

[1] For clarity, I will hereinafter refer to the applicants in the substantive proceedings as the Councillors, and the Respondent in the substantive proceedings as the Council.

[2] Wendt & Ors v Ipswich City Council [2020] QIRC 002.

[3] See s 570.

[4] Tomvald v Toll Transport Pty Ltd [2017] FCA 1208, 85 [315].

[5] Hutchinson v Comcare (No 5) [2019] FCA 1665; Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190, 3 [8] (Siopis, Collier and Katzmann JJ) citing Saxenan v PPF Asset Management Ltd [2011] FCA 395, 2 [6]; Construction, Forestry, Mining and Energy Union and Others v Clarke (2008) 170 FCR 574, 582 [29] (Tamberlin, Gyles and Gilmour JJ).

[6] Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257, 264-265.

[7] (2002) 169 QGIG 227.

[8] Hutchinson v Comcare (No 5) [2019] FCA 1665, 3 [9].

[9] Industrial Relations Act 2016 s 320.

[10] Ibid s 317.

[11] (PR932454, Guidice P, Williams SDP and Simmonds C, 6 June 2003) 2-3.

[12] (2011) 211 IR 374.

[13] Ibid 376 [10] (my emphasis) (footnotes omitted).

[14] Outline of Arguments on behalf of Costs Respondents filed 6 April 2020, 3.

[15] Burke v Simon Blackwood (Workers' Compensation Regulator) [2013] ICQ 23, 5 [19].

[16] See Industrial Relations Act 2016 s 545(2)(b).

[17] Affidavit of Rebecca Pezzutti sworn 1 May 2020, Exhibit 2.

[18] r 70(2)(d).

[19] (1993) 46 FCR 225.

[20] Ibid 231.

[21] Filed with Outline of Arguments on behalf of Costs Respondents on 6 April 2020.

[22] (2005) 178 QGIG 118.

Close

Editorial Notes

  • Published Case Name:

    Ipswich City Council v Wendt & Ors

  • Shortened Case Name:

    Ipswich City Council v Wendt & Ors

  • MNC:

    [2020] QIRC 164

  • Court:

    QIRC

  • Judge(s):

    Member Knight IC

  • Date:

    11 Sep 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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