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Jordaan v Mount Isa City Council[2021] QIRC 310

Jordaan v Mount Isa City Council[2021] QIRC 310

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION:

Jordaan v Mount Isa City Council  [2021] QIRC 310

PARTIES:

Jordaan, Jorrie

(Applicant)

v

Mount Isa City Council

(Respondent)

CASE NO:

GP/2020/13

PROCEEDING:

General Protections – application for costs

DELIVERED ON:

7 September 2021

MEMBER

Hartigan IC

HEARD AT:

On the papers

ORDERS:

  1. 1.The application for costs is dismissed.
  2. 2.The Applicant is granted leave to discontinue the proceedings.
  3. 3.I direct the Industrial Registrar to provide a copy of the Reasons for Decision to the Legal Services Commissioner.

CATCHWORDS:

GENERAL PROTECTIONS – APPLICATION FOR COSTS – Industrial Relations Act 2016 (Qld)where Respondent seeks costs on an indemnity basis –  general rule that person ordinarily bears their own costs for proceedings before Commission – whether application was made vexatiously or without reasonable cause and/or reasonable  prospects of success and/or with an ulterior motive – whether Applicant's representative should pay the costs – where discretion to depart from the general rule not enlivened on the circumstances - orders dismissing the application and grant leave to discontinue proceedings.

LEGISLATION:

Industrial Relations Act 2016 (Qld), s 282, s 285, s 545

Industrial Relations (Tribunal) Rules 2011 (Qld), r 68(3)

CASES:

Augusta Ventures Ltd v Mount Arthur Coal Pty Ltd (2020) 384 ALR 340

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

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd 1998 81 ALR 397

Headline Distribution Pty Ltd v Quinn (2006) 181 QGIG 213

Kanan v Australian Postal Telecommunications Union [1992] 43 IR 257

Kelsey v Logan City Council & Ors [2021] ICQ 11

MIM Holdings Limited v Australian Worker's Union (2000) 165 QGIG 371

Reasons for Decision

  1. [1]
    On 25 June 2020, Jorrie Jordaan ("Mr Jordaan") filed a general protections application in the Industrial Registry against his former employer, Mount Isa City Council, seeking, inter alia, an order for the payment of compensation, or, in the alternative, an order for payment of an amount by the Mount Isa City Council to Mr Jordaan for lost remuneration.
  1. [2]
    During the course of the proceedings, Mr Jordaan was represented by Employee and Executive Protect Pty Ltd ("EEP").
  1. [3]
    On 1 March 2021, Mr Jordaan filed a Notice of Withdrawal of Appointment of Lawyer or Agent and a Request for Discontinuance in the Proceedings ("the discontinuance").
  1. [4]
    On 9 March 2021, Mount Isa City Council wrote to the Industrial Registry and, pursuant to r 68(3) of the Industrial Relations (Tribunals) Rules 2011 (Qld) ("the Rules"), gave notice that it objected to the discontinuance on the basis that it wished to be heard on an application under s 545(2)(a) and (b) of the Industrial Relations Act 2016 (Qld) ("the IR Act") for Mr Jordaan, and/or, his representative, Mr Colin Dorber ("Mr Dorber"), to pay its costs.  Costs are sought by Mount Isa City Council on an indemnity basis.
  1. [5]
    On 22 March 2021, Mount Isa City Council filed an application seeking orders in the following terms:
  1. (a)
    pursuant to section 545(2)(a) of the Industrial Relations Act 2016 the First Respondent pay the Applicant's/Respondent's costs of and incidental to the General Protection Application 2020/13, to be assessed on the Supreme Court scale up to and including the date of the Applicant filing his request to discontinue proceedings and thereafter, the First Respondent pay the Applicant's costs of and incidental to the General Protection Application 2020/13 and including the interlocutory application on an indemnity basis; and/or in the alternative
  2. (b)
    pursuant to section 545(2)(b) of the Industrial Relations Act 2016 the Second Respondent pay the Applicant's costs of and incidental to the General Protection Application 2020/13, to be assessed on the Supreme Court scale up to an including the date of the Applicant filing his request to discontinue proceedings and thereafter, the First Respondent pay the Applicant's costs of and incidental to the General Protection Application 2020/13 including the interlocutory application for costs on an indemnity basis; and/or in the alternative
  3. (c)
    such further or other orders the commissions deems meet.
  1. [6]
    In written submissions filed on 22 March 2021, Mount Isa City Council identified the following basis upon which it sought indemnity costs against Mr Jordaan, and/or Mr Dorber:
  1. (a)
    wilful disregard of known facts;
  1. (b)
    making of allegations which ought never to have been made;
  1. (c)
    undue prolongation of a case by groundless contentions; and
  1. (d)
    imprudent refusal of an offer to compromise.
  1. [7]
    At a mention of the application on 21 April 2021, during which Mr Dorber and Mount Isa City Council attended, it was brought to the Commission's attention that:
  1. (a)
    Mr Dorber, a director of EEP was no longer in contact with Mr Jordaan; and
  1. (b)
    the application commenced by Mount Isa City Council incorrectly named Mr Dorber personally as Mr Jordaan's representative, rather than EEP which is the name of Mr Jordaan's representative listed on the Appointment of Agent form filed in the Commission.
  1. [8]
    Following the mention on 21 April 2021, I issued the following directions:
  1. (a)
    that leave be granted to Mount Isa City Council to file an amended application for costs in the Industrial Registry; and
  1. (b)
    Mount Isa City Council is to serve a copy of any amended application, together with the further directions order and any written material in support, personally on Mr Jordaan and the proper officer of EEP.
  1. [9]
    On 30 April 2021, Mount Isa City Council filed an amended application seeking orders in the same terms but identifying the Respondents to the proceedings as being Mr Jorrie Jordaan and EEP.  Orders were no longer sought personally against Mr Dorber.
  1. [10]
    On 14 May 2021, a Lawyer's Notice of Address for Service was filed in the Industrial Registry identifying that Mr Jordaan was now represented by Kilmartin Knyvett Lawyers.
  1. [11]
    Evidence and submissions were subsequently filed on behalf of Mr Jordaan and EEP separately, together with further submissions and affidavits filed on behalf of Mount Isa City Council.
  1. [12]
    On the material, two issues arise:
  1. (a)
    whether Mount Isa City Council should have the benefit of an order that Mr Jordaan and/or EEP pay the costs of the proceedings; and if so
  1. (b)
    whether the costs should be assessed on an indemnity basis.

General power to award costs

  1. [13]
    Section 545 of the IR Act abrogates the general rule, in civil proceedings, that costs usually follow the event.
  1. [14]
    Section 545 of the IR Act provides the general power to award costs in the following terms:

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.
  2. (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—
  1. the party made the application or responded to the application vexatiously or without reasonable cause; or
  2. it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or
  1. (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. 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
  2. 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. [15]
    In Kelsey v Logan City Council & Ors[1] ("Kesley") Davis P, conducted an analysis of various decisions considering the operation of s 545 of the IR Act and identified the following relevant principles:
  1. [25]
    Section 545 and provisions like it have been the subject of analysis in various decisions. The following principles can be identified:
    1. (a)
      The starting point is that each party bears their own costs.
    2. (b)
      A discretion to depart from that point only arises, relevantly here, if one of the jurisdictional facts identified in s 545(2)(a)(i) or s 545(2)(a)(ii) are established.
    3. (c)
      The assessment of “reasonable cause” in s 545(2)(a)(i) is:
      1. an objective assessment; and
      2. made considering the facts existing as at the time of the institution of the proceedings, here the appeal.
    4. (d)
      Section 545(2)(a)(ii) prescribes a separate and distinct jurisdictional fact giving rise to a discretion to award costs. In consideration of whether s 545(2)(a)(ii) is engaged, facts which arise after the commencement of the proceedings may be relevant [footnotes omitted].
  1. [16]
    In Kelsey, Davis P had regard to the legislative policy underpinning an analogous provision of the Fair Work Act 2009 (Cth)[2] and considered the following passages from the decision of Augusta Ventures Ltd v Mount Arthur Coal Pty Ltd:[3]

[103] The evident legislative policy is that persons who seek by legal proceedings to vindicate rights or to obtain relief under the FW Act should be able to do so without exposing themselves to the risk of having to pay the costs of another party in the event that they are unsuccessful. So much was made express by the Minister in the Second Reading Speech for the introduction of s 197A into the Conciliation and Arbitration Act in 1973:

This is part of our policy of bringing the courts to the people, of overcoming the deterrent which often prevents a person from seeking to right a wrong because of the burden of costs he might incur where his argument has failed to carry the day … The possibility of having costs awarded against an applicant discourages the use of the courts as a means of settling disputes.

[107] It is important not to lose sight of legislative policy which underpins s 570. This can easily occur if one characterises it as being no more than a statutory fetter on the making of the usual order for costs. It is that, but it also reflects an attempt to address the underlying inequality of position commonly experienced by applicants in litigation for the enforcement of industrial entitlements.

  1. [17]
    Accordingly, the starting point for my consideration is that each party should bear their own costs of the proceedings.  A discretion to depart from that point only arises if one of the jurisdictional factors identified in ss 545(2)(a)(i) or 545(2)(a)(ii) of the IR Act are established.

Section 545(2)(a)(i) - commenced the application vexatiously or without reasonable cause

  1. [18]
    Mount Isa City Council contends that the general protections application was commenced by Mr Jordaan vexatiously or without reasonable cause.
  1. [19]
    The parties have each referred to a number of authorities referencing the now repealed s 335 of the Industrial Relations Act 1999 (Qld).  That provision is analogous to s 545 of the IR Act and accordingly decisions referring to the operation of s 335 of the Industrial Relations Act 1999 (Qld) may be relevant to my consideration of this matter.
  1. [20]
    A summary of the relevant principles derived from the decisions considering the application of s 335 of the Industrial Relations Act 1999 (Qld) were referred to by Bloomfield DP in Headline Distribution Pty Ltd v Quinn[4] as follows:

'Without being exhaustive, the following leading decisions paint a clear picture of the circumstances which would need to prevail before the Commission would regard an application as having been made vexatiously or without reasonable cause.

In MIM Holdings Limited v AMEPKIU (2000) 164 QGIG 370, Hall P indicated:

"In the ordinary case in which an appellant who was a respondent in the commission is successful, it will be known at the end of the appeal that the application made to the commission could not succeed. As a matter of first impression, the purpose of s. 335 seems to be to spare parties the rule of having to pay the costs of an opposing party whilst providing a measure of protection to parties defending proceedings which have been instituted vexatiously or without reasonable cause, compare Heidt v Chrysler Australia Limited (1976) 26 FLR 257 at 272 per Northrop J. I am reluctant to construe the provision in such a way that a successful appellant (respondent) would always, subject to the (proper) exercise of discretion, recover costs of the appeal and the application whilst a successful appellant (applicant) would never do so. It seems to me to be more likely that s. 335(1)(a) is aimed at the case which was objectively recognisable as one which could not succeed at the time when the application was made.". (emphasis added)

In Walters v BT Equipment Pty Ltd (No 2) (2002) 169 QGIG 227, a Full Bench of the Commission (comprised of Hall P, Blades and Thompson CC) stated:

"The purpose of s. 335(1) is, plainly enough, to free parties from the risk of having to pay the cost of an opposing party whilst giving some measure of protection to parties defending proceedings which have been instituted vexatiously or without reasonable cause, compare Heidt v Chrysler Australia Limited (1976) 26FLR 257 at 272 per Northrop J. Here, the application for leave to appeal was neither made vexatiously nor made without reasonable cause. The most severe criticism which may be made of the application for leave is that the applicant's legal advisers made a forensic error in the construction of a novel, clumsily drafted and untested statutory provision. A conclusion that the application was not arguable may only be reached by basking in the wisdom of hindsight. There was no vexation or abuse of process.". (emphasis added)

In Albert Smith & Son (supra), Blades C stated:

"Provided that no injustice will be caused to a respondent, an applicant should in ordinary circumstances be allowed to discontinue an application. In Covell Matthews and Partners v French Wools Ltd (1977) 1 WLR 876 Graham J said:

'The principles to be culled from these cases are, in my judgment, that the court will, normally, at any rate, allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if it can, without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved.'. (emphasis added)

Of course, one of the considerations is the issue of costs. Section 335 of the Act gives the Commission a power to award costs only if satisfied that '(a) the party made the application vexatiously or without reasonable cause.'. It is insufficient, for a party seeking costs, to show merely inadvertence or neglect. 'Without reasonable cause' must take its colour from the preceding word 'vexatiously' although 'without reasonable cause' sets the lower standard of the two - see George v Allied Express Transport Pty Limited (2003) 173 QGIG 158 and Larorb Pty Ltd t/a Sunshine Office Supplies v Ball (2003) 174 QGIG 1013. In Thompson v Hodder (1990) 21 FCR 467 the Court said at 470:

'In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272, Northrop J said:

"The policy of s 197A of the Act is clear. It is designed to free parties from the risk of having to pay costs of an opposing party. At the same time the section provides a protection to parties defending proceedings which have been instituted vexatiously or without reasonable cause. This protection is in the form of conferring a power in the court to order costs against a party who, in substance, institutes proceedings which in other jurisdictions may constitute an abuse of the process of a court."

It is apparent from these authorities that 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.'

It was held by his Honour the President in MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (2000) 164 QGIG 370 that s. 335(1)(a) was aimed at the case which was objectively recognisable as one which could not succeed at the time when the application was made.". (emphasis added)

Later, in the same decision, Blades C observed:

"None of the questions raised by the pleadings has been determined and it is inappropriate to force the applicant to a trial of those issues if the applicant does not wish to proceed.

...

In Saddington v Oliver and Others (No 2) (1993) 49 IR 412 Gray J held that in a case involving disputed questions of fact, it is simply not possible to determine whether the proceeding was instituted vexatiously or without reasonable cause unless the matter is tried.

...

No adjudication has been made on the jurisdictional questions raised by the Commission in this case, nor has it been argued, and the respondent himself has never claimed a lack of jurisdiction, at least until the objection to the discontinuance was lodged. I do not consider it could be said to be 'objectively recognisable' that the application could not succeed. In Llewellyn v Property Sales Association of Queensland, Union of Employees (2001) 167 QGIG 266, the President said that it would be invidious to comment on the prospects of success of an appeal which had been withdrawn.

This is an industrial matter where the normal rule, set out in the Act, is that costs are not awarded. The phrase 'without reasonable cause' suggests conduct verging on an abuse of process, vide George at p. 159.' (emphasis added)

  1. [21]
    In Kanan v Australian Postal Telecommunications Union,[5] Wilcox J considered the meaning of the phrase "without reasonable cause" as follows:

'It seems to be that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise proceedings as being "without reasonable cause". But where it appears that, on the applicant's own version of facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.'

  1. [22]
    Mount Isa City Council contends that Mr Jordaan's application was commenced vexatiously or without reasonable cause and relies on the following matters, as summarised below:
  1. (a)
    Mr Jordaan's affidavit filed in support of the application was discursive and incoherent, disclosed no evidence of adverse action and referred, largely to, "workplace bullying" which has no relevance to a general protections claim;
  1. (b)
    Mr Jordaan's schedule of contraventions initially contained 16 alleged contraventions but five (5) of these contraventions were abandoned; and
  1. (c)
    Mr Jordaan's outline of evidence disclosed no:
  1. (i)
    injuries;
  1. (ii)
    alteration of his position; or
  1. (iii)
    discrimination.
  1. [23]
    Mount Isa City Council contends that the application was made vexatiously as it was made without sufficient grounds, for the purpose of causing trouble or annoyance to the Mount Isa City Council.
  1. [24]
    In the alternative, Mount Isa City Council submits that it would have been reasonably apparent to Mr Jordaan that his application was without reasonable cause because there was:
  1. (a)
    no adverse action; and/or
  1. (b)
    no adverse action taken against Mr Jordaan because he exercised a workplace right.
  1. [25]
    Whilst Mount Isa City Council has contended that, inter alia¸ the application was commenced vexatiously, it has adduced no compelling evidence that the application was commenced for the purpose of causing trouble and/or annoyance to the Mount Isa City Council.  Rather, its submissions have focused on whether the application was commenced without reasonable cause.
  1. [26]
    As noted above, whether a proceeding is commenced without reasonable cause requires an objective assessment to be made considering the facts as they existed at the time the application was commenced.
  1. [27]
    Mr Jordaan, contends, amongst other things, that adverse action was taken against him in contravention of s 285 of the IR Act.  Section 285 of  the IR Act  provides that:

285  Protection

  1. (1)
    A person must not take adverse action against another person—
  1. (a)
    because the other person—
  1. (i)
    has a workplace right; or
  2. (ii)
    has, or has not, exercised a workplace right; or
  3. (iii)
    proposes to or proposes not to, or has at any time proposed to or proposed not to, exercise a workplace right; or
  1. (b)
    to prevent the exercise of a workplace right by the other person.

Note—

This subsection is a civil penalty provision.

  1. (2)
    A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes to or has at any time proposed to exercise, a workplace right for the second person’s benefit or for the benefit of a class of persons to which the second person belongs.

Note—

This subsection is a civil penalty provision.

  1. [28]
    Mr Jordaan alleges a contravention of s 285 of the IR Act, by reason that he had a workplace right to make a complaint, exercised a workplace right by making a complaint, and/or, proposed to exercise his workplace right.  Mr Jordaan's Statement of Facts and Contentions referred, in very general and somewhat vague terms, to Mr Jordaan having a workplace right as provided for in s 284 of the IR Act.  A closer examination of the "contraventions" referred to in the Statement of Facts and Contentions reveals instances where it is alleged Mr Jordaan made, what could be said to be complaints, and/or enquiries, relating to his employment. For instance, in Alleged Contravention Item Numbers 3, 10, 11 and 13.
  1. [29]
    Mr Jordaan alleges that because of the exercise of the workplace rights, he was subjected to conduct that injured him in his employment, his position was altered to his prejudice and he was discriminated against.  Mr Jordaan also alleges contraventions of s 288(c) of the IR Act.[6]
  1. [30]
    Mr Jordaan's Statement of Facts and Contentions does not, in a methodical or clear manner, set out the elements of the alleged contraventions of the IR Act.
  1. [31]
    However, as referred to above, the Statement of Facts and Contentions refers to incidents that could possibly be construed as an exercise of workplace rights and further, to conduct that could possibly amount to adverse action.  An ultimate determination of these matters would require the adducing and testing of evidence at a hearing of the matter.  Given that Mr Jordaan sought to discontinue the proceedings prior to the hearing of the matter, that is something that is unable to be determined.  In any event, what is relevant for my consideration with respect to whether I exercise the discretion to award costs against
    Mr Jordaan, is whether, on the facts apparent to Mr Jordaan at the time of instituting the proceedings, Mr Jordaan did so without reasonable cause.  I am unable to consider that at the time the proceedings were instituted, Mr Jordaan commenced them without reasonable cause.
  1. [32]
    The Mount Isa City Council describes Mr Jordaan's complaints as complaints relating to bullying and that there is no evidence of Mr Jordaan being subjected to adverse action. Whilst I accept that Mount Isa City Council disagrees with the characterisation of the conduct as adverse action, I have formed the view that some of the conduct described by Mr Jordaan in which Mount Isa City Council describes as "bullying" may, if able to be established, constitute adverse action within the meaning of s 282 of the IR Act.
  1. [33]
    Whilst there is no doubt that the Statement of Facts and Contentions were clumsily drafted and leave themselves open to criticism, I am not satisfied that the matters referred to therein are so lacking in substance so as to render Mr Jordaan's application as being one which was commenced without reasonable cause.

Section 545(2)(a)(ii) – "reasonably apparent" and "no reasonable prospect of success"

  1. [34]
    The Mount Isa City Council also relies on the second limb of s 545(2) of the IR Act and argues that it would have been reasonably apparent to Mr Jordaan that the application had no reasonable prospect of success.
  1. [35]
    In Baker v Salva Resources Pty Ltd[7] it was held that:

'The concepts … "should have been reasonably apparent" and "had no reasonable prospects 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 real prospect 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'
  1. [36]
    The reasons relied on by Mount Isa City Council to contend that it should have been reasonably apparent to Mr Jordaan that his application had no reasonable prospect of success mirror the matters relied on by Mount Isa City Council to argue that the application was commenced vexatiously or without reasonable cause, namely:
  1. (a)
    there was no adverse action; and/or
  1. (b)
    there was no adverse action taken against Mr Jordaan because he exercised a workplace right.
  1. [37]
    As noted above, the assessment of whether it should have been reasonably apparent must be objectively determined.
  1. [38]
    Whilst Mount Isa City Council may have a view that there was no adverse action or no adverse action taken because Mr Jordaan exercised a workplace right, that, without an objective analysis of the material, is merely Mount Isa City Council's subjective view. 
  1. [39]
    As discussed above, Mr Jordaan's application contained allegations that may support an argument that he exercised a workplace right, and at least some of the conduct referred to in the Statement of Facts and Contentions may amount to adverse action.  For these reasons, I do not consider that the application was manifestly untenable or groundless or so lacking in merit or substance so as to be not reasonably arguable. 
  1. [40]
    For these reasons, I do not consider that the discretionary factors referred to in s 545(2)(a)(i) and (ii) arise on the facts of this matter.

Section 545(2)(b) – costs to be paid by representative of a party

  1. [41]
    Section 545(2)(b) of the IR Act provides that a representative of a party may be ordered 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. (a)
    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 proceedings;[8] or
  1. (b)
    because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the proceedings.[9]
  1. [42]
    The Mount Isa City Council submits that the Commission ought to be satisfied that orders be made against EEP on the following grounds:
  1. (a)
    proceedings were instigated with an ulterior motive;
  1. (b)
    a claim was made that had no basis and should never have been made in the first place; and
  1. (c)
    wilful disregard for known facts or clearly established law.
  1. [43]
    The arguments made by Mount Isa City Council in support of these grounds may be summarised as follows:
  1. (a)
    the ulterior motive in making the claim was to pressure Mount Isa City Council into settling the matter on commercial terms.  Such motive could be inferred from the statement made by EEP to the effect that "Councils like to settle on commercial terms";
  1. (b)
    the statement was made during the course of "without prejudice" telephone calls between the representatives of the parties, however, Mount Isa City Council contends that EEP waived the privilege attached to those discussions when it informed the Commissioner at a telephone mention of the matter held on 12 February 2021 that the "parties were looking to settle on non-monetary terms";
  1. (c)
    EEP knew or ought to have known that there was no reasonable basis for making the claim;
  1. (d)
    by its conduct in encouraging Mr Jordaan to start the claim it should have been reasonably apparent to EEP that Mr Jordaan had no reasonable prospect of success in the proceedings;
  1. (e)
    Mr Jordaan only agreed to discontinue the claim after receiving the "without prejudice save as to costs" letter from Mount Isa City Council, he then filed a request to discontinue the proceedings; and
  1. (f)
    it was an unreasonable act or omission of EEP to allow the claim to continue even after receiving the Mount Isa City Council’s submissions.
  1. [44]
    In addition to the above matters, Mount Isa City Council also raises a serious allegation levelled at Mr Stephen Arulogun ("Mr Arulogun"), a consultant seemingly engaged by EEP.  Mr Arulogun, together with Mr Dorber signed the Applicant's Statement of Facts and Contentions.  Mr Arulogun signed the Statement of Facts and Contentions purportedly in the following capacity: "Mr Stephen Arulogun, Consultant Advisor (Legal), Employee Executive Protect Pty Ltd". 
  1. [45]
    Mount Isa City Council contends that Mr Arulogun is not a legal practitioner and that "EEP considered Mr Arulogun’s advice and accepted that advice in circumstances where Mr Arulogun was not qualified to provide such legal advice."
  1. [46]
    It is somewhat unfortunate that serious allegations levelled against Mr Arulogun were made by way of reply. 
  1. [47]
    As a result of the fresh allegations that were made in reply by the Mount Isa City Council, the Commission issued orders[10] inviting Mr Jordaan and EEP to make any further submissions to the fresh matters raised in the submissions and affidavit of Mr Brian O'Shea, filed by the Mount Isa City Council on 7 June 2021.
  1. [48]
    No further submissions were received by either Mr Jordaan or EEP.

"Ulterior motive"

  1. [49]
    The Mount Isa City Council argues that EEP held an ulterior motive for commencing the claim.  It contends that the motive was to pressure the Mount Isa City Council into settling the matter on commercial terms.  The Mount Isa City Council relied on an alleged statement made by Mr Dorber in a without prejudice discussion that "Councils like to settle on commercial terms" in support of its position.
  1. [50]
    In the course of its argument, Mount Isa City Council relied on the decision in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd[11] ("Fountain"). In that matter, Woodward J, was required to determine whether costs should be awarded in relation to proceedings that had been commenced pursuant to ss 52 and 53 of the Trade Practices Act 1974. The proceedings were commenced against a company and its relevant directors.  As was noted in the decision in Fountain[12] the extent of liability of individuals under s 75B of the Trade Practises Act 1974, though predictable, was at the time the proceedings commenced, not then clear.  After a Full Court had ruled on the matter, the pending appeal to the High Court left the question without a final answer.  However, it was noted by early 1986, when the High Court's decision had been published, any practitioner in the field should have known the clear state of the law on the relevant point.[13] It was in these circumstances that Woodward J relevantly held;

'… I believe 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. Such cases, are, fortunately, rare. But when they occur, the Court will need to consider how it should exercise its unfettered discretion.'

  1. [51]
    The issues in this proceeding are able to be distinguished from those in Fountain.  In Fountain, the Applicant had no prospects of success due to the clear state of the law on the relevant point to be determined.  In Fountain, the proceedings were groundless and manifestly untenable on a matter of law.  For the reasons referred to above, that is not the issue in this proceeding.
  1. [52]
    I do not consider the expression of Mr Dorber's personal opinion that "Councils like to settle on commercial terms" implies that the proceedings were commenced for some ulterior motive.  Like most Courts, the Commission facilitates an array of dispute resolution processes, including, by holding conferences and by conducting conciliations. One of the aims of such dispute resolution is to encourage parties to explore whether they are able to resolve the proceedings on terms agreeable to all parties.
  1. [53]
    The without prejudice discussions relied on by Mount Isa City Council indicate that EEP and Mount Isa City Council's representatives engaged in without prejudice discussions during which a potential resolution of the matter was discussed. 
  1. [54]
    Neither EEP nor Mr Jordaan raise any objection regarding Mount Isa City Council's unilateral disclosure of the without prejudice discussion or to the potentially tenuous suggestion that the privilege attached to the conversation was waived when it was indicated to the Commission by Mr Dorber at a mention of the matter some several days later, that the "parties were looking to settle on non-monetary terms".
  1. [55]
    In any event, I do not consider that it was improper of Mr Dorber, on behalf of EEP, to state his personal opinion that "Councils like to settle on commercial terms" during the course of settlement negotiations.  Further, I am not satisfied that the uttering of those words supports a conclusion that the proceedings were commenced with an ulterior motive so as to enliven the discretion to order that costs be paid by EEP.

Unreasonableness of representatives conduct

  1. [56]
    Alternatively, Mount Isa City Council argues that EEP knew or ought to have known that there was no reasonable basis for making the claim in the proceedings.  Further, it submits that EEP encouraged Mr Jordaan to start the claim and that it should have been reasonably apparent that Mr Jordaan had no reasonable prospect of success.
  1. [57]
    In this regard, the Mount Isa City Council contends that it was an unreasonable act or omission of EEP to allow the claim to continue following receipt of Mount Isa City Council's submissions.  The submissions referred to by Mount Isa City Council clearly put a number of factual and legal matters in dispute.  The reply submissions filed on behalf of Mr Jordaan takes issue with the factual and legal matters raised by Mount Isa City Council.
  1. [58]
    The Mount Isa City Council do not point to any matter in its submissions that would indicate that the claim was hopeless and bound to fail.  The matters raised involve disputed questions of facts and law which were open to be determined at a trial of the matter.  I do not consider it was an unreasonable act or omission to allow the claim to continue after receipt of Mount Isa City Council's submissions.  Further, for the reasons canvassed above when addressing s 545(2)(a)(ii), I do not consider that there was no reasonable basis for commencing the claim, or, that it should have been reasonably apparent that the claim had no reasonable prospect of success. 
  1. [59]
    In the course of responding to Mount Isa City Council's submissions regarding representative conduct, EEP, through Mr Dorber, stated that EEP was satisfied that a reasonable case in support of Mr Jordaan's case could be made and "commissioned independent advice which supported that proposition… the advice was obtained from a legally qualified person…".  In support of this submission and attached to Mr Dorber's affidavit is a letter dated 26 May 2020 under the hand of Mr Arulogun ("the letter").  There is no letterhead or other identifying features on the letter and whilst Mr Arulogun's name is listed as the author of the document, the letter does not state the purpose it is being provided for, or, in what capacity Mr Arulogun authors the letter.
  1. [60]
    In reply, the Mount Isa City Council refers to a number of email communications between the parties exchanged during the course proceedings, wherein it appears Mr Arulogun was purporting to act as a representative of EEP and was, at least, assisting in the carriage of Mr Jordaan's matter.  The communications do not identify the capacity in which Mr Arulogun was engaged by EEP.
  1. [61]
    Mount Isa City Council made the following submissions with respect to Mr Arulogun's conduct:
  1. 'On 21 January,[sic] 2021 his Honour Judge Barlow QC directed the Registrar of the District Court of Queensland to refer copies of various documents to the Legal Services Commission as he believed Mr Arulogun may have breached section 24 of the Legal Profession Act 2007 for engaging in legal practice.
  1. A person must not engage in legal practice unless the person is an Australian Legal practitioner. It is an offence to contravene that section, the maximum penalty for which is 300 penalty units or two years imprisonment.
  1. Mr Arulogun is not a legal practitioner.
  1. Mr Dorber deposes that on or about 29 May 2020 he appointed Mr Stephen Arulogun, a qualified lawyer to conduct a background interview with Mr Jordaan and to ascertain and advise [him] about Mr Jordaan's resignation which was submitted by him on 1 June 2020...".
  1. Mr Arulogun provided to Mr Dorber "[his] advice on the brief provided in relation to Petrus (Jorrie) Jordaan and Sarah Tulley, and their employment with Mount Isa City Council…".
  1. The advice referred to in the preceding paragraph is dated 26 May 2020.
  1. Mr Dorber relied upon Mr Arulogun's "professional assessment of the nature of the applicant claim (sic)…".
  1. The advice was, for all intents and purposes, legal advice provided to Mr Dorber and EEP.
  1. Mr Dorber conducted a number of interviews with the Applicant, as too did Mr Arulogun in a lawyers office "on a number of occasions".
  1. Mr Arulogun prepared, and EEP submitted a general protections application on behalf of the Applicant.  
  1. The Form 2 Application is signed by the Applicant with Mr Dorber of "Employee and Employer Protect (sic)" as his representative.
  1. Mr Arulogun prepared the Applicant' [sic] Statement of Facts and Contention's dated 11 September 2020 in the name of "Mr Colin Dorber, Industrial Relations Advocate, Employee and Employer (sic) Protect Pty Ltd" and "Mr Stephen Arulogun, Consultant Advisor (Legal), Employee and Employer (sic) Protect Pty Ltd.
  1. Mr Dorber and EEP were at all material times, the Applicant's representative.
  1. Mr Dorber relied upon Mr Arulogun for his "professional assessment" as a "qualified lawyer" in filing and serving the Applicant's General Application and Statement of Facts and Contentions.
  1. Mr Arulogun was appointed as a "qualified lawyer to give advice about matters of law" and Mr Dorber notes himself that "it is prudent for a paid agent getting legal advice from time to ignore it".
  1. Mr Arulogun is not in fact a person qualified to give legal advice as a licensed legal practitioner. That is, he is not admitted. Nor has he ever been admitted to the roll of solicitors or barristers of  the Supreme Court of Queensland and he presently does not possess a Practising Certificate issued by either the Queensland Law Society.
  1. It appears Mr Dorber, and therefore, EEP considered Mr Arulogun's advice and accepted that advice in circumstances where Mr Arulogun was not qualified to provide such legal advice.
  1. Further Mr Arulogun was acting as EEP's agent and in accepting Mr Arulogun's "legal advice" Mr Dorber and therefore, EEP caused costs to be incurred because they encouraged the Applicant to start or continue the proceeding when it should have been reasonably apparent to them that the Applicant had no reasonable prospects of success in the proceeding.'

[Footnotes omitted].

  1. [62]
    Having raised these serious allegations, Mount Isa City Council concludes its submissions by stating that reliance on an unqualified legal practitioner's advice, even if EEP believed that person to be qualified, does not absolve EEP from any responsibility under the IR Act.  Mount Isa City Council does not submit that any findings should be made against Mr Arulogun personally.
  1. [63]
    It follows from this, that the only finding the Mount Isa City Council seeks the Commission to make,[14] is that EEP's reliance on advice sought by a third party (whether qualified or not) does not absolve it of its responsibilities under the IR Act.  I accept that submission as a general proposition, however for the reasons referred to above, I do not consider that the discretionary factors referred to in s 545(2)(b) of the IR Act are enlivened on the material before me.
  1. [64]
    However, I must now consider how the Commission should deal with the information provided with respect to Mr Arulogun.  As noted above, both Mr Jordaan and EEP were invited to make additional submissions addressing the fresh material raised by Mount Isa City Council in its submissions in reply, but no further written submissions were received.
  1. [65]
    It is unclear if Mr Arulogun is still engaged in any capacity by EEP.  Further, I am unaware of the initial nature of the engagement by EEP, although I note Mr Dorber's reference in his affidavit to "Mr Arulogun was appointed as a qualified lawyer to give advice about matters of law".  EEP has not sought to clarify that statement in any way.
  1. [66]
    Mr Arulogun is not currently involved in the proceedings and has not been heard in relation to the allegations made by the Mount Isa City Council.  Consequently, I am not in a position to form a view as to whether Mr Arulogun was qualified or not, held a practising certificate, or was engaged in legal practice within the meaning of the Legal Profession Act 2007 (Qld).
  1. [67]
    However, the information before me identifies matters which may warrant further consideration or inquiry by the Legal Services Commissioner.  For this reason, I will refer these Reasons for Decision to the Legal Services Commissioner and will issue a direction to the Industrial Registrar to that effect.  It will ultimately be a matter for the Legal Services Commissioner to determine whether any further steps will be taken upon receipt of the referral. 

Indemnity costs

  1. [68]
    As I have determined that the discretionary factors referred to in s 545(2)(a) and (b) of the IR Act are not enlivened, there is no basis for costs to be awarded including on an indemnity basis.

Conclusion

  1. [69]
    Mr Jordaan sought to discontinue the proceedings prior to the matter proceeding to hearing.  The Mount Isa City Council contends that the Commission should only grant leave to discontinue on the basis that it awards costs to Mount Isa City Council.  It seeks costs against Mr Jordaan or, in the alternative, EEP on an indemnity basis.
  1. [70]
    I am not satisfied, on the material relied on by Mount Isa City Council, that the jurisdictional factors that enliven my discretion to depart from the starting point that each party bear their own costs has been established in the circumstances of this matter.  Accordingly, there is no need for me to determine whether costs should be awarded on an indemnity basis.
  1. [71]
    I will issue orders dismissing the application and grant leave to Mr Jordaan to discontinue the proceedings.

Orders

  1. The application for costs is dismissed.
  1. The Applicant is granted leave to discontinue the proceedings.
  1. I direct the Industrial Registrar to provide a copy of the Reasons for Decision to the Legal Services Commissioner.

Footnotes

[1] [2021] ICQ 11, [25].

[2] s 570.

[3] (2020) 384 ALR 340.

[4] [2006] QIRC 21; (2006) QGIG 3, [3].

[5] [1992] FCA 539; 43 IR 257, [29].

[6] The Mount Isa City Council makes no submissions with respect to this allegation.

[7] (2011) 211 IR 374.

[8] IR Act s 545(2)(b)(i).

[9] IR Act s 545(2)(b)(ii).

[10] On 26 July 2021.

[11] [1988] FCA 364; 81 ALR 397.

[12] Ibid [17].

[13] Ibid [18].

[14] Following the submissions made at [31] – [48].

Close

Editorial Notes

  • Published Case Name:

    Jordaan v Mount Isa City Council

  • Shortened Case Name:

    Jordaan v Mount Isa City Council

  • MNC:

    [2021] QIRC 310

  • Court:

    QIRC

  • Judge(s):

    Hartigan IC

  • Date:

    07 Sep 2021

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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