Dowling v Fairfax Media Publications Pty Ltd [2009] FCA 339 (9 April 2009)

Last Updated: 14 April 2009

FEDERAL COURT OF AUSTRALIA

Dowling v Fairfax Media Publications Pty Ltd [2009] FCA 339

INDUSTRIAL LAW – termination of employment of the applicant – whether applicant's employment was terminated for a prohibited reason – whether applicant proposed to make a complaint to a body having the capacity under an industrial law to seek compliance with that law – whether applicant proposed to participate in a proceeding under an industrial law – whether respondent has discharged the reverse onus imposed in proceedings under s 807 of the Workplace Relations Act 1996 (Cth) – whether respondent has provided an explanation of the real reason for termination of applicant's employment

COSTS – general restriction on costs under s 824 of the Workplace Relations Act 1996 (Cth) – whether some or all of the respondents in both proceedings are entitled to costs

Workplace Relations Act 1996 (Cth), ss 792, 793, 807, 809, 824
Evidence Act 1995 (Cth), s 27

Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; (2007) 162 FCR 392
Australian Workers' Union of Employees, Queensland v Etheridge Shire Council (No 2) [2009] FCA 58
Construction, Forestry, Mining and Energy Union v Clarke (2007) 70 FCR 574
Dowling v Fairfax Media Publications Pty Ltd [2008] FCA 1470; (2008) 172 FCR 96
Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 24
Heidt v Chrysler Australia Ltd (1976) 26 FLR 257
Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257
L v Human Rights and Equal Opportunity Commission,(2006) [2006] FCAFC 114; 233 ALR 432
Paras v Public Service Body Head of the Department of Infrastructure (No 3) (2006) 152 FCR 53
R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia [1978] HCA 51; (1978) 140 CLR 470
Seymour v Saint-Gobain Abrasives Pty Ltd [2006] FCA 1452; (2006) 161 IR 9
Shackley v Australian Croatian Club Ltd (1996) 141 ALR 736
Standish v University of Tasmania (1989) 28 IR 12

SHANE DOWLING v FAIRFAX MEDIA PUBLICATIONS PTY LTD
NSD 1743 of 2008

SHANE DOWLING v DAVID KIRK, RON WALKER, JULIA MARION KING, ROGER CORBETT, MARK BURROWS, DAVID EVANS, PETER YOUNG, JOHN FAIRFAX, NICHOLAS FAIRFAX, GAIL HAMBLY, LINDA PRICE, CAROLYN BRADLEY, KELLY DALY, NATALIE CARRINGTON, YEMEE FERNANDES, KEVIN STOKES and ROBERT WHITEHEAD
NSD 1744 of 2008

MOORE J
9 APRIL 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1743 of 2008

BETWEEN:	SHANE DOWLING Applicant
AND:	FAIRFAX MEDIA PUBLICATIONS PTY LTD Respondent

JUDGE:	MOORE J
DATE OF ORDER:	9 APRIL 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.
2. There be no order as to costs.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court's website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1744 OF 2008

BETWEEN:

SHANE DOWLING Applicant

AND:

DAVID KIRK First Respondent RON WALKER Second Respondent JULIA MARION KING Third Respondent ROGER CORBETT Fourth Respondent MARK BURROWS Fifth Respondent DAVID EVANS Sixth Respondent PETER YOUNG Seventh Respondent JOHN FAIRFAX Eighth Respondent NICHOLAS FAIRFAX Ninth Respondent GAIL HAMBLY Tenth Respondent LINDA PRICE Eleventh Respondent CAROLYN BRADLEY Twelfth Respondent KELLY DALY Thirteenth Respondent NATALIE CARRINGTON Fourteenth Respondent YEMEE FERNANDES Fifteenth Respondent KEVIN STOKES Sixteenth Respondent ROBERT WHITEHEAD Seventeenth Respondent

JUDGE:	MOORE J
DATE OF ORDER:	9 APRIL 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.
2. The applicant is to pay the costs of the second to tenth respondents.
3. Save for Order 2, there be no order as to costs.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court's website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1743 of 2008

BETWEEN:	SHANE DOWLING Applicant
AND:	FAIRFAX MEDIA PUBLICATIONS PTY LTD ACN 003 357 720 Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1744 OF 2008

BETWEEN:

SHANE DOWLING Applicant

AND:

DAVID KIRK First Respondent RON WALKER Second Respondent JULIA MARION KING Third Respondent ROGER CORBETT Fourth Respondent MARK BURROWS Fifth Respondent DAVID EVANS Sixth Respondent PETER YOUNG Seventh Respondent JOHN FAIRFAX Eighth Respondent NICHOLAS FAIRFAX Ninth Respondent GAIL HAMBLY Tenth Respondent LINDA PRICE Eleventh Respondent CAROLYN BRADLEY Twelfth Respondent KELLY DALY Thirteenth Respondent NATALIE CARRINGTON Fourteenth Respondent YEMEE FERNANDES Fifteenth Respondent KEVIN STOKES Sixteenth Respondent ROBERT WHITEHEAD Seventeenth Respondent

JUDGE:	MOORE J
DATE:	9 APRIL 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Introduction

1. This judgment concerns two proceedings which have been instituted by the applicant. In the first proceedings (NSD 1743/2008) (Principal Proceedings) the applicant claims that his employment was terminated by the respondent (Fairfax) in contravention of s 792(1)(a) of the Workplace Relations Act 1996 (Cth) (WR Act), which provides that it is unlawful for an employer, for a prohibited reason, or for reasons that include a prohibited reason, to terminate an employee's employment. The second proceedings (NSD 1744/2008) (Officers and Directors Proceedings) are related to the first proceedings. In the Officers and Directors Proceedings the applicant claims that each of the named respondents is liable under s 728 of the WR Act insofar as they were involved in Fairfax's contravention of s 792(1)(a) of the WR Act. Unless it is necessary to differentiate between the two proceedings, I will refer to both as the Proceedings.

The relevant statutory provisions

2. In the Principal Proceedings, the applicant made an application under s 807 of the WR Act. The applicant's case is that the Fairfax breached s 792(1) of the WR Act, which relevantly provides:

An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
(a)       dismiss an employee;
(b)       ...

3. Section 793 sets out the prohibited reasons for the purposes of the preceding section.  The applicant relies on s 793(1)(j) and s 793(1)(k), which provide:

(1)  Conduct referred to in subsection 792(1) or (5) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:
...
(j)  has made or proposes to make any inquiry or complaint to a person or body having the capacity under an industrial law to seek:
(i)  compliance with that law; or
(ii)  the observance of a person's rights under an industrial instrument; or
(k)  has participated in, proposes to participate in or has at any time proposed to participate in a proceeding under an industrial law;

4. It is important to note the provisions of s 809(1) of the WR Act, which create a presumption in favour of the applicant in proceedings of this type. Section 809(1) provides:

If:
(a) in an application under section 807 relating to a person's conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and
(b) for the person to carry out the conduct for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person proves otherwise.

5. In the Officers and Directors Proceedings, the applicant relies on s 728 of the WR Act, which provides:

(1)  A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.
(2)  For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)  has aided, abetted, counselled or procured the contravention; or
(b)  has induced the contravention, whether by threats or promises or otherwise; or
(c)  has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)  has conspired with others to effect the contravention.

6. The liability of any one of the respondents in the Officers and Directors Proceedings is conditional on the applicant establishing Fairfax's liability in the Principal Proceedings. There can be no finding that any of the respondents in the Officers and Directors Proceedings is liable for breach of a civil remedy provision in circumstances where there is a finding that Fairfax itself did not breach a civil remedy provision.

History of the Proceedings

7. The Proceedings have had a rather long history. However it is unnecessary, save in one respect, to detail that history. The applicant's case in the Proceedings, when the matter was before the Federal Magistrates Court, was dismissed by a Federal Magistrate as having no reasonable prospect of success. The applicant appealed to the Federal Court and, in a considered judgment which is now reported: Dowling v Fairfax Media Publications Pty Ltd [2008] FCA 1470; (2008) 172 FCR 96, Jagot J concluded that, on the material before her, it was not possible to conclude that the applicant's claim had no reasonable prospects of success. In so far as her Honour had before her material concerning the facts, such material consisted of only untested allegations of fact by the applicant. In the course of reaching this conclusion, her Honour canvassed the operation of some of the relevant statutory provisions and concluded that the Federal Magistrate had adopted an unduly narrow construction of those provisions. Her Honour's judgment was in relation to the summary disposal of the proceedings. It is unnecessary to discuss the precise legal effect of her Honour's judgment as it relates to the final disposition of the applicant's case. That is because, in my opinion, the conclusions her Honour reached on the central legal issues about the scope of s 793 were correct and I will approach the matter on that basis.

The sequence of events

8. The following represents an overview of the circumstances leading to the Proceedings. In these reasons, unless I indicate to the contrary or the context suggests otherwise, all references to facts constitute findings of fact. The applicant commenced employment with Fairfax in January 2006 as a Telesales Executive within the SME Group. In October/November 2006 the applicant was promoted to position of Account Manager within the Fairfax Enterprises department. In the position of Account Manager, the applicant was required to actively seek and obtain business for what was known as the Direct Guides team. The role required the applicant to sell sponsorship of guides that were written by journalists on various topics, such as the "Essential Guide to Home Loans", which are given away free to the public but may be sponsored by a commercial entity such as a retail bank. In the role of Account Manager, the applicant was directly answerable to Ms Yemee Fernandes, who was then the Sales Manager for the Direct Guides team. The decision to promote the applicant to the position of Account Manager was made by Mr Kevin Stokes, who at the time held the position of Group General Manager, Fairfax Enterprises. Mr Stokes also made the decision to terminate the applicant's employment. Mr Stokes' role was a combination of strategic development and operational management of a number of discrete business units within the Fairfax Enterprises department, which included Fairfax Books, Direct Sales as well as Direct Guides.

The applicant's allegations

9. Before discussing the facts in greater detail, it is desirable to set out the allegations made by the applicant. They provide the context for the subsequent consideration of the facts. The applicant said his employment was terminated because:
   • On 16 April 2007, he sent an e-mail to David Kirk, the then CEO of Fairfax, complaining about a number of matters which might broadly be described as victimisation. In the e-mail, the applicant said if his allegations of a "clear breach of NSW Occupational Health and Safety Law and NSW Industrial Relation[s] Law" were "not dealt with summarily", he would "have no choice but to look at other options in dealing with them"; and/or
   • On 7 May 2007, in a meeting to discuss his work performance and behaviour, the applicant allegedly announced that "I will be getting Workcover involved"; and/or
   • On 8 May 2007, the applicant allegedly told Ms Linda Price that "[t]hey are threatening to sack me and (I) believe I can take out a court order stopping them from sacking me. I also told Natalie Carrington yesterday that I would be making a complaint to Workcover but have decided to at least wait until after the meeting with you and Carolyn Bradley tomorrow".

I should note, at this point, that Ms Price had been asked by Mr Kirk to investigate the allegations in the 16 April 2007 e-mail. Ms Price then (and still) held a senior position in Fairfax. She was the IT and Group Human Resources Director of Fairfax. The two people allegedly mentioned by the applicant in the above conversation were Natalie Carrington, who was employed at the time, as a contractor, by Fairfax as a Human Resources Manager (Fairfax Business Media) and Caroline Bradley who, at the time, was Human Resources Director (Corporate Services).

The facts

10. I commence with my impression of the witnesses. Three witnesses called by Fairfax were particularly impressive. They are Mr Kirk, Ms Price and Ms Carrington, each of whom gave a clear and considered answer to virtually every question. In saying this I am not suggesting the other witnesses called by Fairfax were not being truthful. I entertain no doubt that each witness endeavoured to give an honest account of their recollections of both the events before the applicant's e-mail was sent to Mr Kirk, and the events which followed leading to the applicant's termination on 9 May 2007. I thought Ms Fernandes was, on occasions, a little too ready to answer the question too quickly during cross-examination. This may have influenced the accuracy of her answers in her oral evidence. However, having regard to her evidence, which I accept, that she had been significantly troubled by the aggressive attitude the applicant had adopted towards her in the workplace, I could understand that it may not have been comfortable for her to give evidence under cross-examination by the applicant.
11. It is convenient, at this point, to say something about the course the final hearing took. When the trial commenced, the applicant initially refused to lead any evidence. His position then was that having regard to the judgment of Jagot J (Dowling v Fairfax Media Publications Pty Ltd [2008] FCA 1470; (2008) 172 FCR 96 and particularly what her Honour said at para [85]), a point had been reached where s 809 had been engaged and it was necessary for the respondents to lead evidence to prove that the alleged reason or reasons for the termination were not the reason or reasons or part of them. I indicated to the applicant that it was incumbent upon him to at least lead evidence at the trial to show that the basal facts which might engage s 809 of the WR Act could be established on his evidence. After some resistance, the applicant undertook this task which involved reading affidavits or parts of them and tendering certain documents. Senior counsel for the respondents wished to cross-examine the applicant. The applicant resisted this course. I allowed the cross-examination to commence. But shortly thereafter I decided, on reflection, that it would be procedurally fairer to require the respondents to adduce their evidence but on the basis that in due course, the applicant could lead any responsive evidence and then be cross-examined on all his evidence. The cross-examination stopped. The applicant agreed to this course and it is tolerably clear that he agreed to submit to cross-examination at the conclusion of the respondents' evidence.
12. After the respondents concluded their evidence several days later, the applicant indicated he did not wish to call any further evidence and was not prepared to submit himself to cross-examination. Section 27 of the Evidence Act 1995 (Cth) clearly provides that a party may questions any witness, except as provided by that Act. The Evidence Act regulates the conduct of cross-examination. For example, a party may generally not cross-examine a witness that has been called in error by another party (s 40), and improper questioning may be disallowed (s 41). Moreover, s 11 of the Evidence Act preserves the power of a court to control the conduct of a proceeding.
13. When the applicant said he did not wish to submit himself to cross-examination, I told him that it was necessary for him to be cross-examined. There was plainly at least one issue of fact of some significance in his case that was contentious. I also told him that if he did not submit himself to cross-examination, I would disregard the evidence he led at the beginning of the trial. He continued to refuse to be cross-examined. The respondents have been denied the opportunity to test the applicant's evidence by cross-examination. The way that be can addressed is to give the applicant's evidence on contested matters no weight. In the result, there is no evidence for the applicant to which I will attribute any weight on one issue, namely the conversation he alleged took place with Ms Price on 8 May 2007, and no evidence from the applicant to which I will attribute any weight on a number of subsidiary issues concerning his behaviour at the workplace.
14. I now address the facts. It is to be recalled that the applicant was promoted to the position of Account Manager in late 2006. Problems in the workplace involving the applicant began to emerge in late 2006 and early 2007. From both Mr Stokes' perspective and Ms Fernandes' perspective, the applicant was not, from that time, conducting himself as they both expected. He was, in effect, not performing his work as he had been instructed. In addition, Mr Stokes believed the applicant was not performing particularly well in making sales. By early March 2007 the applicant began speaking of making a complaint about events in the workplace. At various points he had conversations alluding to a complaint he had made, but it was not until 13 March 2007 that he sent an e-mail to Ms Kelly Young who was then the Human Resources Director (Heralds, Community News, Illawarra & Hunter Regions) in which he said he was making a "formal complaint". The applicant complained about bullying and intimidatory conduct on the part of other Fairfax employees.
15. Ms Young investigated the complaint with the assistance of another employee who was replaced by Ms Carrington. By about 22 March 2007, Ms Young had reached a conclusion (embodied in a written report) about the applicant's complaint and, in substance, did not accept any of the allegations he had made. She made a recommendation in her written report that the applicant be disciplined in relation to not following a reasonable management directive and potentially placing a key account in jeopardy. Ms Young also recommended that the applicant undergo training in two respects. Ms Young met with the applicant and Ms Fernandes on 4 April 2007 to discuss the result of her investigation. The applicant plainly did not accept her conclusions and became loud, aggressive and agitated. He raised his voice and leaned in and out towards Ms Young in what she then perceived as a threatening manner. The applicant was told he could have the matter considered further by Ms Price.
16. Ms Fernandes arranged a meeting with the applicant for 13 April 2007. They met. Ms Carrington also attended. The applicant did not accept her suggestions about how he should conduct himself. Plainly, by this time, Ms Fernandes was troubled by the applicant's attitude towards her. In an e-mail of 17 April 2007 to the applicant she said: "I do not appreciate you constantly threatening me and belittling me in front of the team". In probably April 2007, Mr Stokes has a number of conversations with Ms Carrington about the applicant's behaviour.
17. On 16 April 2007, the applicant sent Mr Kirk an e-mail. It was in the following terms (although some of the formatting has not been reproduced):

Dear David
I write this email to bring to your attention the gross amounts of bullying, intimidation and bastardisation that is being conducted by senior management at Fairfax Media in the NSW Head Office.
This conduct is a clear breach of NSW Occupational Health and Safety Law and NSW Industrial Relation[s] Law.
The bullying culture in the company seems to be widespread and not only tolerated by management but also supported and directed by management.
I personally have been on the receiving end of this conduct, even more so since I made a complaint about an email from Luke Trigwell (Mediacom) that Paul Kent (FIS Sales Manager) sent to my manager Yemee Fernandes (Fairfax Direct Sales Manager).
This includes but is not limited to:
James Hooke - NSW General Manager
1. Promoting bulling [sic] in an attempt to stop me making a formal complaint to HR (he had Yemee Fernandes and Kevin Stokes try and talk me out of making a complaint to HR by threatening me with disciplinary action).
2. Dereliction of Duty by not having a complaint fully investigated.
3. Bastardisation by not giving me and my team access to major accounts so we can best achieve our budgets.
Kelly Daly - NSW HR Director
1. Dereliction of Duty - Failing to investigate a complaint. (Luke Trigwell email) (See attached email one: FW: What was said yesterday)
2. Dereliction of Duty - not investigating complaint to any professional level and not interviewing people I had complained about. (A second complaint in relation to the Luke Trigwell email as she had not investigated the first, and also a complaint about bulling [sic] by a number of FIS members).
3. Bastardisation and Bullying - recommending to my management that disciplinary action be taken against me (yet not doing the same against people who had breached a directive from management. Also recommending to my management that I do extra presentation training (This is straight out bastardisation.)
4. Breach of protocol - Kelly organised a meeting to give me feedback to my complaint. It turned out to be a set up to try and bully and bastardise me into shutting up. She refused to give me any feedback in writing.
Karim Temsamani - NSW Sales Manager
1. Failing to give us access to the FIS accounts over a four month period. (Bastardisation)
2. Bullying - (see attached email two: FW) It has been five months and they have not got us one appointment directly with any customer as they are meant to, only a couple with the agencies. The agreement and his reply sound like some sort of engagement rules for a United Nations Peace Keeping force, it's a total joke. Yemee must have felt intimidated to agree to it in the first place and then Karim slaps her in the face and hits reply all and lets everyone know he is boss. He then says Guy or PK can make changes if they wish. He is telling us that they will do what ever they want).
Paul Kent - FIS Team Sales Manager
1. Making defamatory and slanderous comments about me. He said my presentations are poor based on feedback from Meredith Edwards and maybe Chris Greenwood. Kelly Daly told me this is feedback he gave her and is the reason the FIS team have not been getting me appointments. (Well what is their reason for the other two sales people in my team and why did they not mention it earlier?)
2. Bullying - Directing his Account Managers (FIS Team) to breach management directives to undermine myself and my team.
3. Bastardisation - Failing to get his team to get appointments with their customers.
Yemee Fernandes - Fairfax Direct Sales Manager
1. . Bullying - trying to intimidate me into not making a formal complaint in relation to the Luke Trigwell Email
(see attached email three: FW)
2. Bastardisation, bulling [sic] and breach of protocol - in the last couple of days she has sidelined me in a deal that I have been working on few months that is about to close. In doing this she has gone behind my back and breached protocol by not consulting me in rate negotiation.
3. Previously she has threatened to sack me and on another occasion told me that if we can not work together that I have to leave the company.
Kevin Stokes - Group General Manager - Fairfax Enterprise
Bullying - trying to intimidate me into not making a formal complaint in relation to the Luke Trigwell Email. He eluded to the fact that if I make a complaint to HR that I would be in trouble for twice breaching company directives, one of which was a total beat up. (This took place after he had a meeting with James Hooke and after Yemee had tried to stop me from making a complaint.)
Account Managers in the FIS Team
Bullying and bastardisation - See attached emails four and five: Shane Dowling - some points I would like to make and FW: FIS Problems
Attachment six and seven are the Luke Trigwell email and some of my viewpoints on the email
I have a lot more evidence of this conduct, but have briefly outlined the issues above so this email is not too long.
I have been dealing with these issues for a long time now and am getting sick and tired of them. Enough is enough, it is time this conduct was stopped.
This is my last attempt to have these issues resolved by the company. If they are not dealt with summarily I will have no choice but to look at other options in dealing with them.
I have thought of some potential solutions to the problems that I have raised and are happy to discuss if you so wish.
Yours truly,
Shane Dowling
Account Manager
Fairfax Direct

There was no issue at trial that this email was sent. In view of my ultimate factual finding about the actual reasons for the applicant's termination, it is unnecessary to determine whether the complaint at the beginning of the applicant's email about breaches of the law, and his later comment about "looking[ing] at other options in dealing with [the issues]", can be characterised as conduct comprehended by s 793(1)(j) and/or s 793(1)(k) of the WR Act. I am prepared to accept it is.

18. Mr Kirk requested Ms Price to investigate. As noted earlier, she did so with the assistance of Ms Bradley. In the following weeks two things happened. The first was that Ms Price and Ms Bradley investigated the applicant's complaint. The second was the continued deterioration of the applicant's relationship with others in the workplace.
19. In relation to the investigation of the applicant's complaint, Ms Bradley and Ms Young met in the morning of 24 April 2007 with the applicant to discuss the protocols of the investigation and the processes involved in conducting the investigation. During the course of the conversation, Ms Price informed the applicant that Ms Bradley would be meeting with a number of people in order to investigate the complaint. The applicant was also informed that during the investigation period, the expectation was that everyone would continue to perform their ordinary duties as normal.
20. During the course of the investigation, Ms Bradley interviewed some, but not all, of the Fairfax employees who were identified in the applicant's complaint. During the course of the investigation Ms Bradley heard concerns expressed that the applicant was not continuing to perform his usual duties as directed at the meeting of 24 April 2007. In the morning of 2 May 2007, she had the following conversation with Ms Carrington in relation to the applicant:

Ms Carrington: We're having some issues with Shane around keeping things business as usual. We're also bit concerned about Yemee given Shane's behaviour recently. Shane is also upset about Yemee knowing that he has made a complaint to David Kirk.
Ms Bradley: Shane and Yemme will need to sit down to work through it, Maybe you should be involved as well from an HR perspective. But I'm not going to meet with Shane on this issue because it's not part of, and shouldn't impact on, my investigation into his complaint. I'll need to keep out of it. I'm happy to email Shane to set up the meeting, would you like me to do that?
Ms Carrington Yes, that would be good.

21. The investigation into the applicant's complaint to Mr Kirk was still incomplete in the first week of May 2007. On 2 May 2007, Ms Bradley had a conversation with Ms Young in which Ms Young asked Ms Bradley questions about the progress of the investigation. In response to a comment from Ms Bradley that the investigation would not be finalised that week, Ms Young responded as follows:

Well, it needs to be finalised as soon as possible because the business is having other issues with Shane.

22. From April 2007, the working relationship between Ms Fernandes and the applicant deteriorated to a point where she feared for her physical safety. The applicant would become quite aggressive towards her, and during one-on-one conversations the applicant would become very angry and would point his finger at her. Ms Fernandes found this very distressing and was concerned that the applicant might become physically violent. She felt emotionally distressed in having to deal with the applicant personally and in having to respond to what she described as rude and blunt emails. In one of these emails, the applicant accused Ms Fernandes of lying when she stated that she did not know about the applicant's complaint to Mr Kirk. In a similar vein, Ms Carrington witnessed the applicant engaging in threatening behaviour, for example, the applicant banging the desk, getting off his seat and coming closer, going red in the face or pointing his finger. During this time, the applicant's relationship with members of other teams within Fairfax had deteriorated to a point where a number of individuals within those teams had expressed the feeling that they no longer wished to deal or work with the applicant.
23. The decision to terminate the applicant's employment was made by Mr Stokes, who came to this decision in probably late April 2007. Towards the end of April 2007 Mr Stokes had a conversation with Ms Carrington during which the termination of the applicant's employment was raised. Ms Carrington raised the issue of "performance managing" the applicant's employment in lieu of termination. Mr Stokes did not consider performance management to be appropriate in the circumstances.
24. Mr Stokes discussed the possible termination of the applicant's employment with Ms Young, Ms Fernandes, Robert Whitehead (who was Mr Stokes' direct superior) and James Hooke (who was Mr Whitehead's direct superior). Both Mr Whitehead and Mr Hooke supported his decision to terminate the applicant's employment.
25. In late April or early May 2007, Ms Carrington was directed to prepare a letter terminating the applicant's employment. The final version of the termination letter that was ultimately given to the applicant (see [39] below) was in different terms to an initial draft that was prepared by Ms Carrington. In contrast to the final letter, the draft letter articulated in considerable detail the particulars of what Ms Carrington considered to be the applicant's failure to perform according to his position description and the applicant's conduct that was said to be in breach of his contract of employment.
26. I accept Ms Carrington's explanation that the draft letter was quite lengthy given it was a document that, in effect, set out her entire thoughts on the matter, and was not necessarily the type of document that would be given to the applicant upon termination of his employment. Ms Carrington sent Mr Stokes a copy for his comment which he provided.
27. I am satisfied that sometime in early May 2007, but before 4 May 2007 (the date on which Mr Stokes made several amendments to the draft letter) Ms Carrington had been instructed to prepare a termination letter. This finding is consistent with Mr Stokes' evidence that a decision to terminate the applicant's employment was made in the last week of April 2007 (or perhaps very early May 2007). By this stage a decision to terminate had clearly been made and Mr Stokes was merely concerned with ensuring that the termination was effected promptly and in accordance with company policy, although he did not control the process.
28. It is necessary to refer specifically to the evidence concerning a meeting which took place at approximately 9:30am on 7 May 2007. The applicant attended this meeting along with Ms Fernandes, Ms Carrington and Mr Luke Osborn. Mr Osborn was in attendance to provide support to the applicant.
29. The evidence of both Ms Fernandes and Ms Carrington was that the purpose of the meeting was to discuss the applicant's work performance and behaviour. The are some slight differences between the evidence of Ms Fernandes and Ms Carrington in relation to what was said at the meeting.
30. According to Ms Fernandes, the following was said at one point during the meeting:

Ms Fernandes: [To Ms Carrington] I can't get any information out of Shane [about his pipelines].

Mr Dowling: Well, you tried to take my client in the IAG sale.

Ms Fernandes: Look, I've never tried to take your client, it's your sale, you get the commission, you get the incentives. It's your sale. I'm not on a commission structure, so whatever goes into the pot goes to you.

And later:

Ms Carrington: Look, this is how it should be, you still have to report her [Yemee].

Mr Dowling: I am going to speak to WorkCover.

Ms Carrington: You are absolutely within your rights to go to WorkCover if you want to, but what is the situation with WorkCover?

According to Ms Fernandes, Mr Dowling then walked out of the meeting without responding to Ms Carrington's question.

31. Ms Carrington's account of a conversation which occurred at the meeting is as follows:

Ms Carrington: [Directed to Mr Dowling] We're here to discuss the
performance and behaviour that we expect from you. In particular, we need to agree upon the following minimum standards of performance:

1. the number of calls you make each day;
2. your sales activities;
3. conducting effective sales meetings;
4. preparing for and properly participating in WIPs with Yemee; and
5. your derogatory and abusive remarks in emails.
   

Mr Dowling: I've done nothing wrong. I'm just doing my job. It's FIS that has the problem. They're blocking me from getting sales.

Ms Carrington: As we've discussed a number of times already, you can't be contacting FIS clients in the way that you've been doing.
...
Shane, we've received a complaint from another department about your behaviour. You can't be abusing and threatening people in other business units. This goes against Fairfax's Code of Conduct.

Mr Dowling: Well no one has said anything to me. Tell me who it is?

[Standing up and walking out of the meeting and saying in a raised voice] This is outrageous! I should make a workers' compensation complaint!

Ms Carrington's evidence was that as the applicant left the room, she said words to the following effect:

You're entitled to do that. But you will need to follow the correct procedure if you have a workers compensation claim.

Ms Carrington's evidence was that during the course of the meeting the applicant became very angry and raised his voice, threw his arms around and banged the desk. At one stage the applicant leant closer to Ms Fernandes and told her to "shut up".

32. The fact that Ms Fernandes and Ms Carrington gave slightly different accounts of the conversation that took place at the meeting is unexceptionable. The events to which both Ms Fernandes and Ms Carrington deposed had taken place 18 months before they made their affidavits.
33. Ms Young gave evidence that in the afternoon following this meeting, she had a conversation with Ms Carrington. Ms Young's evidence was that during the course of that conversation, Ms Carrington said the following words to her:

My meeting with Shane didn't go well.

Ms Young's evidence was also that she recalled sighting in Ms Carrington's notes that the applicant had stated that he was "going off to Workcover".

34. I am satisfied, on balance, that towards the conclusion of this meeting the applicant said words to the effect "I am going to speak to Workcover". Given that I am satisfied that the applicant said those words, it follows that I am satisfied that, for the purposes of s 793(1)(j) of the WR Act, he proposed to make a complaint to a body (Workcover) that has the capacity under an industrial law to seek compliance with that law: see Dowling v Fairfax Media Publications Pty Ltd [2008] FCA 1470; (2008) 172 FCR 96 at [85] per Jagot J.
35. Following the meeting, Ms Carrington drafted (after being given authorisation by Mr Stokes to do so) a warning letter that was to be given to the applicant. Also on 7 May 2007, Ms Bradley had a conversation with Ms Price to inform her that, following her investigation into the applicant's complaint to Mr Kirk, she had come to the conclusion that there was no basis for this complaint.
36. On 8 May 2007, Ms Carrington attempted to organise a meeting with the applicant to provide him with the warning letter that she had drafted. The applicant refused to attend such a meeting and so Ms Carrington delivered the warning letter to the applicant at his desk, along with a number of documents, including Fairfax's Code of Conduct, the applicant's contract of employment and position description, as well as a document entitled "Shane Dowling – Expectations Document". The warning letter was in the following terms:

Dear Shane,

This letter is a confirmation of the discussion that took place between 9.30am and 11.30am on Monday 7 May 2007. Present at that meeting was your manager, Yemee Fernandes, your support person Luke Osborn and HR Manager Natalie Carrington.
It was outlined to you in that meeting that your performance and behaviour is unacceptable. Specifically the following:

1. Sales activity including outbound calls, face to face meetings and sales revenue.
2. Preparation and responsiveness to management direction including; participation in WIP's, responding to your manager in regards to pipeline progress, coming unprepared to WIP's, participation in brain storming sessions.
3. Making derogatory, intimidatory and unfounded statements regarding the business, management and colleagues - specifically:
   1. Paul Kent has no credibility
   2. the FIS team are useless
   100. Stating that your manager was 'useless'
   4. Telling your manager to 'shut up' (during that meeting)
   5. Stating to you manager that 'I'm making you sweat'
   6. Stating that the Guides team is unprofitable
   7. Referring to your manager as a liar
4. Aggressive and rude behaviour – specifically
   1. Banging your fist on the desk and raising your voice to an unprofessional level during meetings when your performance and behaviour have been addressed.

Shane, your conduct as outlined above may result in further disciplinary action, including the termination of your employment.
Your behaviour is threatening and intimidatory for your colleagues and management and is of very serious concern. It will not be tolerated in the Fairfax working environment.
Your communication style has resulted in members of the FIS and Agency team refusing to work with you and this is means that you cannot fulfil your position requirements as outlined in our Position Description.
Your performance and behaviour is in direct breach of your Position Description, Code of Conduct and Employment Contract (attached). These documents were provided to you on your commencement and are attached again for your review.
Any response you wish to make to this letter will be attached and included in your personnel file.
If you have any questions regarding the details of this letter please contact Kelly Daiy HR Director on 02 9282 2753.

Yours sincerely

Kevin Stokes
Group General Manger
Fairfax Enterprises

The warning letter was given to the applicant after the decision was made to terminate his employment. While this seems curious, I am satisfied that it was the product of a number of people being involved in the processes that led to the termination and, I infer, there not being a high level of coordination between them.

37. The applicant initially gave evidence that on 8 May 2007 he had a phone conversation with Ms Price at about 6 p.m. The applicant's evidence was that he said the words set out at par [9] above. Ms Price denied that this conversation took place. For reasons already explained, I give no weight to the applicant's evidence. I accept Ms Price's denial.
38. At a meeting that took place on 9 May 2007, attended by Ms Price, Ms Bradley and Mr Whitehead, the applicant was informed that the complaint that he had made to Mr Kirk was without merit and that there was no basis for the allegations that the applicant had made. The applicant's employment was not terminated at this meeting, but at another meeting that was held immediately following the first meeting.
39. At the second meeting, the applicant was handed a letter terminating his employment. Ms Carrington, Ms Price and Ms Bradley attended the meeting. Mr Whitehead also attended, in place of Mr Stokes who was away interstate on business. At the start of the meeting Ms Carrington handed the applicant a letter. It was in the following terms:

Dear Shane
This letter is to advise that Fairfax is terminating your employment effective immediately.
This meeting is a follow up to the discussion that occurred on 7 May 2007 and the documentation subsequently provided to you on 8 May 2007.
As discussed, your employment is being terminated as you have:

1. Failed to properly discharge your duties;
2. Breached your employment contract;
3. Acted in a manner that does or is likely to bring Fairfax into serious disrepute; and
4. Breached Fairfax's Code of Conduct.

In accordance with your employment contract, Fairfax will pay to you an amount equivalent to one months pay in lieu of notice plus any accrued but untaken annual leave and normal pay, calculated up to today's date.
As per our termination policy, you are required to return any equipment or confidential information issued to you during the course of your employment to your manager. This includes security pass, mobile phone, disks, keys, fuel cards, desktop computers, laptop computers, palm pilots and so on. You are also required to return any hard copy or machine readable documentation which contains confidential information. I would also like to remind you that your obligations of confidentiality to the Company continue even after your employment terminates.
Fairfax will automatically notify the relevant superannuation company in relation to the termination of your employment. If you would like to discuss your superannuation or would like more information regarding superannuation, please find contact numbers below for the relevant fund used by Fairfax.
Mercer Super Trust (Fairfax Super)
Fund Administrator (William M Mercer Pty Ltd)
Phone: [phone]
E-mail: [e-mail]

Yours faithfully
Kelly Daly

Human Resources Director
Fairfax NSW

Reasons of Fairfax for the termination and s 809

40. In Seymour v Saint-Gobain Abrasives Pty Ltd [2006] FCA 1452; (2006) 161 IR 9 at [29] Buchanan J observed that in order to succeed the respondent will usually have to provide "an explanation of the real reason for dismissal [of the applicant] consistent with the absence of [a prohibited reason] as a reason". It is necessary therefore to consider the reasons advanced by Fairfax for terminating the applicant's employment. As is apparent from the terms of the termination letter, the reasons advanced by Fairfax for the termination are as follows:
    • The applicant failed to properly discharge his duties;
    • The applicant breached his employment contract;
    • The applicant acted in a manner that did or was likely to bring Fairfax into serious disrepute; and
    • The applicant breached Fairfax's Code of Conduct.

Given that Mr Stokes made the decision to terminate the applicant's employment, it is necessary to examine the explanation proffered by Mr Stokes as to why the applicant's employment was terminated.

41. In his affidavit, Mr Stokes states that there were four broad matters that were of concern in relation to the applicant's performance whilst in the Direct Guides team of the Fairfax Enterprises department. They were:
    • The applicant's limited ability to generate or grow revenue for the Fairfax Enterprises department;
    • The applicant's willingness to follow reasonable management directions, including from his direct manger (Ms Fernandes) as well as from himself;
    • The applicant's inability to develop strong and collaborative relationships with colleagues and clients; and
    • The applicant's lack of trust and respect towards senior management and key team members within Fairfax.

I will deal with each of the matters identified by Mr Stokes in turn.

42. During his period of employment in the Fairfax Enterprises department, the applicant achieved limited sales. The applicant was responsible for the sale of one guide in March 2007 (worth about $135,000 in gross revenue), although a display advertising account manager assisted him on this sale. The applicant was responsible for the sale of five advertisements for a Fairfax publication known as the "Beer Bible", (worth about $20,000 in gross revenue). Again the applicant was assisted by others in finalising this sale. Mr Stokes was of the view that the applicant was the worst performing member of the Direct Guides team, evidenced by the fact that during the period of his employment, the applicant generated the lowest amounts of sales revenue of any member of the Direct Guides team. I accept that this view was genuinely held and was reasonable.
43. The applicant was clearly a difficult employee to manage, and was very reluctant to accept help or change his sales strategy. One example of this is in relation to a sales presentation at Toyota Motor Corporation that the applicant attended along with Mr Stokes. Mr Stokes, who had considerable more sales experience than the applicant, offered the applicant advice in relation to the presentation. The applicant refused to accept any of the recommendations or advice offered. The applicant insisted that he was "going to do it my way". The applicant often refused to take instructions from Ms Fernandes, who was the applicant's direct superior. Ms Fernandes complained to Mr Stokes about the applicant's unwillingness to follow what she considered to be reasonable management directives. At times Ms Fernandes described (to Mr Stokes) the applicant as "unmanageable", while also pointing out that the applicant was argumentative, would not listen and would not provide her with the information that she had requested. The applicant also failed to follow the protocols that had been communicated to him by Mr Stokes on 12 January 2007 in relation to initiating contact with key Fairfax clients. On a number of occasions the applicant breached the relevant protocol (known as the FIS communication protocol) by directly contacting key clients of Fairfax (that is, clients that provided Fairfax with large advertising revenues, known as "FIS" clients) without firstly speaking to, or obtaining the approval of, the relevant FIS account manager. FIS account managers form part of the FIS team, which is a discrete business unit within Fairfax and is separate from the Direct Guides team. The evidence shows that applicant's conduct in directly contacting a certain client, without obtaining the prior consent of the relevant FIS account manager and after he had been warned not to do so, jeopardised Fairfax's relationship with a media agency that assisted Fairfax in obtaining advertising clients. The applicant's disregard of the FIS communication protocol exemplifies, in my opinion, the applicant's general attitude toward management and its right to issue directions.
44. The applicant clearly suffered from an inability to develop strong and healthy working relationships within Fairfax. His relationship with his direct superior, Ms Fernandes, was, in my opinion, toxic. On many occasions the applicant shouted and belittled Ms Fernandes, and generally took on an aggressive demeanour in his dealings with her. The applicant's inability to forge good working relationships was not restricted to Ms Fernandes, however. Indeed, by May 2007, the situation had deteriorated to the point whereby individuals in other teams with Fairfax (for example, the Agency team and the FIS team) refused to work with the applicant. The applicant also had a strained relationship with certain external clients. On one occasion where a representative of a media agency that assisted Fairfax in obtaining advertising clients complained to a member of the Fairfax FIS team about the applicant's breach of the FIS protocol, the applicant responded by saying that the relevant member of the FIS team was lying and had defamed him.
45. It is necessary to consider Mr Stokes' evidence about the matters relied on by the applicant in his allegations (set out at [9] above) concerning the reasons for his dismissal. In relation to the first allegation (namely, that the applicant's employment was terminated because of the Kirk email of 16 April 2007) the evidence was that Mr Stokes had been shown a copy of the email prior to making the decision to terminate his employment. The applicant drew Mr Stokes' attention to the draft termination letter in cross-examination, which included the sentence "[y]our email to David Kirk, CEO Fairfax, on 16 April 2007 demonstrates the lack of respect and trust you have in senior management and key teams within Fairfax". According to the applicant, the inclusion of this sentence in the draft termination letter evidences the allegation that Mr Stokes took the email to Mr Kirk into account when deciding to terminate the applicant's employment. I do not accept this is so. As noted earlier, the draft termination letter was prepared by Ms Carrington. Those words were the product of Ms Carrington and not Mr Stokes. While Mr Stokes gave evidence that he also considered that the email showed a lack of respect, I accept his denial that the making of the complaint played any role in his decision to terminate the applicant's employment.
46. In relation to the second allegation, there is no evidence that Mr Stokes was made aware of the statement the applicant made at the meeting that took place at 9.30am on 7 May 2007. Both in his affidavit and under cross-examination, Mr Stokes denied that he was ever made aware that the applicant had said words such as "I am going to make a complaint to Workcover". I accept his denial.
47. Mr Stokes was cross-examined at some length by the applicant. I accept that he had concluded on reasonable grounds that the applicant was not performing in his role, had made limited sales, was a difficult employee to manage, had very poor relationships with Ms Fernandes and other Fairfax employees, breached client communication protocols and was very dismissive of management and its right to issue directions.

Conclusion

48. The task of Fairfax in the Principal Proceedings is to displace the legislative presumption that it has acted for a reason that contravenes the WR Act, and I am satisfied that, having regard to all the evidence, Fairfax has successfully discharged the onus cast upon it by s 809 of the WR Act. I am satisfied that Fairfax has provided an explanation of the real reasons for the termination of the applicant's employment, which I accept were the reasons, and there is no basis for concluding that the alleged reasons played any role whatsoever in the decision to terminate, or the termination of, the applicant's employment. It follows that there can be no accessorial liability on the part of the respondents in the Officers and Directors Proceedings. Both the Principal Proceedings and the Officers and Directors Proceedings should be dismissed.

Costs – principles

49. I now turn to the issue of costs. The respondents sought an order that the applicant pay their costs of the Proceedings. Central to the issue of costs is section 824 of the WR Act, which provides that:

Section 824: Costs only where proceeding instituted vexatiously etc.

(1)  A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.

(2)  Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs.

50. As I noted in Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 248 at 259, the word "proceeding" does not have a fixed or immutable meaning and its precise meaning in any particular circumstance must be derived from the relevant statutory context. The meaning of "proceeding" in s 347 of the then Industrial Relations Act 1988 (Cth) (which is relevantly identical to s 824(1) of the WR Act) was considered by the Full Bench of the Industrial Relations Court of Australia in Shackley v Australian Croatian Club Ltd (1996) 141 ALR 736. In Shackley, Wilcox CJ (with whom von Doussa J agreed) said (at 745):

... the word "proceeding" is widely used to refer, not only to a principal action (or "proceeding") between parties, but also to any subsidiary application made during the course of the principal action. There is no reason to believe that the word is used in a different sense in s 347; indeed the word in parenthesis indicates the contrary. If parliament had intended that "proceeding" should be understood, in s 347, as meaning only a principal action that commenced when the Court's jurisdiction was first invoked and concluded with final judgment, it would have been absurd to say that an appeal alone might constitute a "proceeding".

The approach of Wilcox CJ in Shackley was subsequently approved by a Full Court of this Court in Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115; (2003) 129 FCR 271 at 274, where the Court said:

In an action brought to enforce a right given by the [Workplace Relations] Act, it would be quite contrary to this object to read s 347(1) narrowly such that interlocutory proceedings about, for example, discovery were not seen as proceedings "in the matter" at the heart of the principal proceeding and were instead seen as proceedings in a separate matter, defined according to the narrower and subsidiary controversy about discovery. Viewed in that way, the policy choice that s 347(1) reflects would be undermined since the so-called ordinary rule as to costs would often, perhaps nearly always, prevail in interlocutory matters. Only the trial of the principal action would be unassailably a proceeding in a matter arising under the Act. Such a result could not have been intended.

51. Senior counsel for the respondents submitted, as I understood it, that in the context of the Officers and Directors Proceedings, s 824(1) permits the Court to disaggregate the proceeding into its component parts, such that that the Officers and Directors Proceedings could be described as seventeen proceedings, one against each respondent. Although a single legal controversy may give rise to several different "proceedings", in my opinion the Officers and Directors Proceedings cannot be disaggregated into its component parts in the manner suggested by the respondents. However, in view of the reach of s 824(2), discussed shortly, it is a matter that I do not need to finally resolve.
52. The words of the s 824(1) of the WR Act require me to consider whether the proceeding was instituted vexatiously or without reasonable cause. In answering the question posed by s 824(1), I am required to undertake a qualitative assessment of the proceeding in its entirety, focussing of course on the party that "instituted" the proceeding (see Australian Workers' Union of Employees, Queensland v Etheridge Shire Council (No 2) [2009] FCA 58 at [27] per Spender J).
53. In considering whether a proceeding was instituted vexatiously or without reasonable cause for the purpose of s 824(1) it is necessary to distinguish between the situation where an applicant has merely been unsuccessful on the case he or she has sought to propound and the situation where the applicant's case was entirely misconceived. In relation to the former category, an application is not commenced without reasonable cause simply because the applicant's arguments are rejected by the Court: R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473 per Gibbs J. However, in relation to the latter category it is likely that it can be said that the proceeding was instituted without reasonable cause such that a costs award is appropriate: Standish v University of Tasmania (1989) 28 IR 129 at 139 per Lockhart J. The comments of Wilcox J in Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 at 264-265 are also useful in ascertaining whether a proceeding was instituted without reasonable cause. As his Honour said:

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 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 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.

In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 274-275 Northrop J said the following in respect of s 197A of the then Conciliation and Arbitration Act 1904-1975 (Cth), which was substantially in the same terms as s 824(1) of the WR Act:

In considering this matter the court must have regard to all the material properly before it. The test is not subjective to the party instituting the proceedings as at the time of the institution of the proceedings. The conduct of the opposing party prior to the institution of the proceedings may be relevant in deciding whether the proceedings were instituted vexatiously or without reasonable cause. The conduct of the opposing party both prior and subsequent to the institution of proceedings may be relevant to the discretion remaining in the court. It may be difficult to satisfy the test where disputed questions of fact arise and the proceedings eventually are dismissed because the court finds facts adverse to the party instituting the proceedings. Where the test is satisfied, having regard to the general policy of the section, the court may, nevertheless, in the exercise of its discretion, make no order as to costs.

54. I do not think that either the Principal Proceedings or the Officers and Directors Proceedings were instituted vexatiously or without reasonable cause. The applicant had, in fact, said he proposed to make a complaint to Workcover and adverted, more generally, in the email to Mr Kirk that he might take the matter elsewhere. The mere fact that this statement was made, and that a statement was made in the email, was a very tenuous basis for concluding that, in all the circumstances, the making of either or both the statements was at least part of the reason for his dismissal. However, I do not think that the Proceedings were commenced vexatiously and, on fine balance, I do not think they were commenced without reasonable cause.
55. I now turn to consider s 824(2) of the WR Act. The limitations that inhere in s 824(1) of the WR Act (as outlined in the preceding paragraphs) are somewhat ameliorated by s 824(2), which is cast more widely than s 824(1). Section 824(2) applies if a party "has, by an unreasonable act or omission, caused another party to the proceeding to incur costs ..." The Explanatory Memorandum describes s 824(2) (then numbered s 347(1A)) as an exception to s 824(1), which was then numbered as s 347(1)):
    2642. Pre-reform subsection 347(1) provides that a party to proceedings under the WR Act shall not be ordered to pay the costs of another party unless the first party instituted the proceedings vexatiously or without reasonable cause.
          
    2643. Proposed subsection 347(1A) would serve as an exception to subsection 347(1). It would enable a court hearing proceedings in a matter arising under the WR Act to order one party to pay the costs of another party where that first party has, by unreasonable act [or] omission, caused the second party to incur otherwise unnecessary costs. A costs order under this subsection could be made irrespective of the outcome of the proceedings.
          

The example given in the Explanatory Memorandum concerns costs incurred as a result of a party's non-compliance with Court directions and the raising of frivolous arguments during proceedings. Such a situation, it was said, would enliven the Court's jurisdiction to award costs to the non-defaulting party under s 824(2) of the WR Act.

56. In Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; (2007) 162 FCR 392 at [28] Tracey J made it clear that a party may potentially be liable to pay costs under s 824(2) even if it did not institute the proceeding in which the relevant conduct occurred. The power conferred by s 824(2) can be exercised irrespective of the outcome of the particular application in question, and of the proceeding in its entirety: Paras v Public Service Body Head of the Department of Infrastructure (No 3) [2006] FCA 745; (2006) 152 FCR 534 at [16] per Young J. Justice Tracey observed that the prosecution of a hopeless case can be regarded as an "unreasonable act" for the purposes of s 824(2): Australian and International Pilots Association v Qantas Airways Ltd (No 3) at [36]. Accordingly, I proceed on the basis that s 824(2) allows costs to be awarded where an applicant has quite unreasonably joined certain respondents to a proceeding in circumstances where the proceeding itself was not instituted vexatiously or without reasonable cause.
57. In the Officers and Directors Proceedings, the respondents other than the non-executive directors of Fairfax (the non-executive directors being the second to tenth respondents) were, or conceivably may have been, involved in the decision to terminate the applicant's employment. There was at the time these proceedings were commenced, and this remains the case, no conceivable basis for joining the non-executive directors or prosecuting the claim against them. It was not more than fanciful speculation to think that they may have been involved in the termination. Joining them and prosecuting the case against them was an unreasonable act. The applicant should pay their costs.

A further observation

58. I think it is necessary to conclude with some observations about how the applicant behaved from time to time both in directions hearings and, to a lesser extent, at the final hearing. Periodically he engaged in strident abuse of the legal representatives of Fairfax and the respondents and, in particular, their junior counsel, Ms Eastman. At no point was there any justification whatsoever for this abuse. He made allegations about me which, in other circumstances, might have given rise to contempt proceedings. He made allegations about other judges of this Court which might likewise, in other circumstances, have given rise to contempt proceedings. Some of what he said was, on its face, entirely irrational or had the appearance of being the product of an unconstrained imagination.
59. What is important, for present purposes, is that I was and remain satisfied the applicant was capable of conducting his case. Notwithstanding the behaviour I have referred to, the applicant appeared to be able to grasp and address legal and factual issues even if, on occasions he misunderstood the law. One example of this misunderstanding was his insistence that the judgment of Jagot J, together with s 809, meant that it was unnecessary for him to call any evidence at trial whatsoever. It is possible to appreciate why the applicant adopted this position having regard to her Honour's reasons. During the trial itself the applicant mostly conducted himself unexceptionably (in the sense of not acting materially differently to many self represented litigants who, for obvious reasons, do not have a lawyer's familiarity with legal processes), although there were occasions when he did not. However his behaviour did not raise, in my mind, any question about his capacity to conduct his case: see L v Human Rights and Equal Opportunity Commission [2006] FCAFC 114; (2006) 233 ALR 432.
    

I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated: 9 April 2009

The Applicant appeared in person.
Counsel for the Respondents	A Robertson SC with K Eastman
Solicitor for the Respondents:	Freehills

Dates of Hearing:	23 – 25 March 2009, 31 March 2009
Date of Judgment:	9 April 2009