Zhang v The Royal Australian Chemical Institute Inc (No 2) [2005] FCAFC 187 (5 September 2005)

Last Updated: 5 September 2005

FEDERAL COURT OF AUSTRALIA

Zhang v The Royal Australian Chemical Institute Inc (No 2) [2005] FCAFC 187

PRACTICE AND PROCEDURE – costs – application for cots under s 170CP of the Workplace Relations Act 1996 (Cth) – whether the appellant instituted the appeal vexatiously or without reasonable cause.


Workplace Relations Act 1996 (Cth), ss 170CK, 170CP, 170CR, 170CS, 170NE, 347



























HILDA ZHANG v THE ROYAL AUSTRALIAN CHEMICAL INSTITUTE INC

VID 1418 of 2004
VID 1607 of 2004




SPENDER, KENNY AND LANDER JJ
5 SEPTEMBER 2005
ADELAIDE (HEARD IN MELBOURNE)

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1418 OF 2004 VID 1607 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	HILDA ZHANG APPELLANT
AND:	THE ROYAL AUSTRALIAN CHEMICAL INSTITUTE INC RESPONDENT
JUDGES:	SPENDER, KENNY AND LANDER JJ
DATE OF ORDER:	5 SEPTEMBER 2005
WHERE MADE:	ADELAIDE (HEARD IN MELBOURNE)

THE COURT ORDERS THAT:

1. The appellant pay the respondent’s costs of the appeal on a party and party basis.














Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1418 OF 2004 VID 1607 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	HILDA ZHANG APPELLANT
AND:	THE ROYAL AUSTRALIAN CHEMICAL INSTITUTE INC RESPONDENT

JUDGES:	SPENDER, KENNY AND LANDER JJ
DATE:	5 SEPTEMBER 2005
PLACE:	ADELAIDE (HEARD IN MELBOURNE)

REASONS FOR JUDGMENT

THE COURT:

1 On 3 June 2005 the Court delivered its reasons for orders in which it dismissed appeals instituted by the appellant in two separate notices of appeal dated 18 November 2004 and 21 December 2004.

2 The first notice of appeal complained of an order made by Finkelstein J in which he dismissed the appellant’s application under s 170CP of the Workplace Relations Act 1996 (Cth) (the Act) for an order under s 170CR of the Act in respect of a claim that the respondent had contravened s 170CK of the Act by terminating the appellant’s employment with the respondent.

3 The second notice of appeal complained of an order made by Finkelstein J that the appellant pay the respondent’s costs of the proceedings incurred on or after 28 June 2004.

4 At the time of delivery of the reasons for judgment, no order for costs was made. However, the respondent applied for costs. The appellant objected to the Court making any order for costs on this appeal.

5 Section 170CS(1) of the Act provides:

‘(1) Subject to this section, a party to a proceeding under section 170CP must not be ordered to pay costs incurred by any other party to the proceeding unless the court hearing the matter is satisfied that the first-mentioned party:

(a) instituted the proceeding vexatiously or without reasonable cause; or

(b) caused the costs to be incurred by that other party because of an unreasonable act or omission of the first-mentioned party in connection with the conduct of the proceeding.’

6 Section 170CS may be contrasted with s 347(1) which provides:

‘(1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.’

7 Section 347 applies to any proceeding, including an appeal, other than an application under s 170CP. Section 347 has no application in this matter. This was an application under s 170CP. The question of costs, therefore, is governed by s 170CS.

8 Section 170CS applies to a proceeding under s 170CP but, unlike s 347, ‘proceeding’ is not defined within the section to include an appeal.

9 The other point of distinction between s 170CS(1) and s 347(1) is that s 347(1) does not refer to a ‘court’ or ‘Court’. That is consistent, of course, with s 347(1) applying in any proceedings except those brought under s 170CP.

10 ‘Court’ is defined in s 4 to mean the Federal Court of Australia whereas ‘court’ is not defined in the Act.

11 Not all proceedings under s 170CP are brought in the Federal Court of Australia. Some must be. Others must be brought in other courts: contrast s 170CP(1), s 170CP(2) and s 170CP(3).

12 ‘[E]ligible court’ is defined in s 170NE to include the Federal Court of Australia, a District, County or Local Court, or a magistrate’s court but only for the purpose of Division 10 of Part VIB.

13 A ‘court of competent jurisdiction’ is defined in s 177A:

‘court of competent jurisdiction means:

(a) a District, County or Local Court; or
(b) a magistrate’s court; or
(c) the Industrial Relations Court of South Australia; or

(d) any other State or Territory court that is prescribed by the regulations.’

14 The respondent specifically acknowledged that s 170CS governed its application for costs. In doing so, it must have accepted that ‘the court’ referred to in s 170CS(1) included ‘the Court’. Moreover, the respondent accepted that s 170CS applied to an appeal notwithstanding the absence of a reference to an appeal.

15 Therefore, this application must be considered in the light of those concessions (i.e. that s 170CS operates in its terms). The respondent, therefore, can only obtain an order for costs if the respondent can satisfy the Court that the appellant instituted the appeal vexatiously or without reasonable cause.

16 In considering the respondent’s application for costs it has to be remembered that the decision of this Court, on appeal, was to uphold the decision of the primary judge that the appellant’s case was hopeless [46] and that the primary judge was right to order that the appellant pay the respondent’s costs from 28 June 2004, because the proceedings were thereafter continued vexatiously or without reasonable cause.

17 Because this Court was of the opinion that the application was always hopeless and after 28 June 2004 was continued vexatiously and without reasonable cause, it is hard to think that the appeal could be otherwise categorised.

18 In our opinion, on the law as it stood at the time that this appeal was brought, the appeal was hopeless. There were no prospects that the appeal could succeed. It follows, in our opinion, that the appeal was a proceeding brought vexatiously or without reasonable cause.

19 After the proceedings were brought the respondent sent by Express Post to the appellant a letter dated 23 December 2004 in the following terms:

‘We advise that we have been instructed by our client, the Royal Australian Chemical Institute Inc, that it is prepared to settle the above action on the following basis:-

1. You discontinue the Appeal lodged by you from the Decision of the Honourable Justice Finkelstein given on 29 October 2004; and

2. Our client will abandon the Costs Order made in its favour by the Honourable Justice Finkelstein on 3 December 2004.

This offer will remain open for acceptance by you until close of business on Monday, 10 January 2005. If the offer is not acceptable to you, then our client will seek to rely on this letter in support of an application for costs in the event that this Appeal, or any other Appeal, is unsuccessful.’

20 That letter offered the result which was sought in the second notice of appeal. It was not accepted by the appellant. In a sense, that letter is further proof of the unreasonableness of the proceedings.

21 The appellant relied on her own affidavit sworn on 1 July 2005. In that affidavit she once again addressed the issues on the appeal. There is nothing in that affidavit relevant to the question as to whether the respondent should have the costs of the appeal.

22 The appellant has contended that costs could not be awarded because this Court did not ‘hear the matter certified by the Australian Industrial Relations Commission (the "Commission") according to the prima facie merit of the case’. There is nothing in that point. The appeal to this Court was from the orders made by the primary judge. It was the correctness of those orders which was under consideration.

23 The appellant has also asserted that she has sought special leave to appeal to the High Court of Australia. She has exhibited the application for special leave which raises many grounds which are said to constitute error on the part of this Court. In those circumstances, she asserts that an order for costs should not be made.

24 It is not relevant that the appellant has sought special leave to appeal to the High Court of Australia. If special leave were granted and the appeal succeeded, the question of costs in this Court would become irrelevant.

25 In our opinion, the respondent has made out its contention that the appeal was brought vexatiously and without reasonable cause.

26 In those circumstances, there should be an order that the appellant pay the respondent’s costs of the appeal. The respondent did not seek indemnity costs. The costs should be paid on a party and party basis.

I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated: 5 September 2005

Counsel for the Applicant:	The Appellant appeared in person
Counsel for the Respondent:	Mr M D Murphy
Solicitor for the Respondent:	Gary Katz & Associates
Date of Hearing:	6 May 2005
Date of Judgment:	5 September 2005