Smith v Eddie Azzi Australia Pty Limited (formerly referred to as Karl Azzi Australia Pty Limited [2005] NSWIRComm 1089 (10 June 2005)

Last Updated: 14 June 2005

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Smith v. Eddie Azzi Australia Pty Limited (formerly referred to as Karl Azzi Australia Pty Limited [2005] NSWIRComm 1089

FILE NUMBER(S): 3869

HEARING DATE(S): 10/06/2005

EX TEMPORE DATE: 10/06/2005

PARTIES:

APPLICANT

Michael Bruce Smith

RESPONDENT

Eddie Azzi Australia Pty Limited

JUDGMENT OF: Connor C

LEGAL REPRESENTATIVES

APPLICANT

Jan Shepley

RESPONDENT

Neil Sullivan

CASES CITED: Dima Homes Case (1989) 5 AILR Rep.4

Re Egg and I (Farm) Pty Limited (1973) 2 PSR 969

Luke v. Handicapped Children's Centre (unreported)

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: CONNOR C

Friday, 10 June, 2005

Matter No IRC 3869 of 2004

Michael Bruce Smith and Eddie Azzi Australia Pty Limited (formerly referred to as Karl Azzi Australia Pty Limited

Application under S.84 of the Industrial Relations Act, 1996

SUPPLEMENTARY DECISION

[2005] NSWIRComm 1089

Background

1 It is difficult for me to image a better example to illustrate the extraordinary lengths any employer would go to avoid its obligations to act fairly in its dealings with an employee than what has occurred in the current proceedings from which this supplementary decision flows. The facts are set out here and begin with a decision I handed down on Thursday, 9 December, 2004. The decision arose from an application under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act by Mr M B Smith who had been employed as a hairdresser and dismissed by his employer on Thursday, 10 June, 2004.

2 I concluded that Mr Smith's dismissal had been unfair and I ordered his employer to pay Mr Smith the sum of $7,500.00, to be paid no later than Thursday, 30 December, 2004. In my decision Mr Bdeir, representing Mr Smith in the proceedings, had foreshadowed an application for costs and subsequently pressed that claim which I listed for a further hearing on Friday, 8 April, 2005. That hearing did not go ahead, however. A more significant issue emerged and necessitated the matter being adjourned for further hearing on Friday, 10 June, 2005.

3 In fact, no payment has been made in response to my order of Thursday, 9 December, 2004. The Part 6 application recorded Mr Smith's employer as Karl Azzi Australia Pty Limited and my order had been made out in that name but it now appears that his employer was, in fact, Eddie Azzi Australia Pty Limited. Mr Sullivan, had at the commencement of the hearing of Mr Smith's Part 6 application on Tuesday, 23 November, 2003 handed up his notice of appearance representing Eddie Azzi (not Karl Azzi). I proposed to amend the name of the employer on the file. Mr Bdeir indicated that he had no objection to that course of action but Mr Sullivan indicated that he had no instructions to consent to the amendment of the Part 6 application and indicated that he was not ready to proceed with the hearing. Nevertheless, the matter did proceed to hearing with Mr Bdeir accepting the original identity of the respondent employer as Karl Azzi.

4 I have experienced some frustration in advancing this matter to an effective conclusion. I recorded the background to the proceedings in my decision (at pp.1 and 2), viz:

"...The matter was allocated to me by Registry staff and set down by them for conciliation and directions on Friday, 23 July, 2004... According to Mr Steve Bazaj, the floor manager of Karl Azzi, Mr Eddie Azzi, the director of the hairdressing salon, is the only person with authority to negotiate a settlement of the matter and he is at present incarcerated in Long Bay Gaol. I directed the parties into further discussions, however - with not much chance of success, I would think - but listed the matter for a mention on Thursday, 12 August, 2004.

There was no appearance by Karl Azzi at that time. I adjourned the proceedings for a further mention on Friday, 10 September, 2004 and wrote to it to inform it of the adjournment. It responded by facsimile transmission (at the foot of the notice I gave it) that Mr Bazaj '...will be on holidays and requests that the matter be rescheduled any time after Wednesday, 22 September, 2004...'

That further adjournment was opposed by the advocate of Employment Help Services (Ms Alameddine), who represented Mr Smith in the proceedings. Initially, there was no appearance for and on behalf of Karl Azzi on Friday, 10 September, 2004 and I programmed the matter for hearing on Tuesday, 23 November, 2004 but subsequently Mr DiGregorio attended the hearing room and, whilst he had not filed a notice of appearance, announced his appearance for Karl Azzi. He had nothing to advance to settle Mr Smith's claim and I informed him of the hearing date.

Directions were made for the filing of evidentiary material - Mr Smith was to provide such evidentiary material no later than Friday, 8 October, 2004 and the response from Karl Azzi was to be no later than Wednesday, 10 November, 2004. Mr Smith had, in fact, filed a witness statement on Monday, 13 September, 2004. No comparable material was file on behalf of Karl Azzi..."

It is in that light that the matter proceeded.

5 In my decision of Thursday, 9 December, 2004 I turned to such material as was available to me to support the claims made by Mr Sullivan on behalf of Eddie Azzi, commenting as follows in my decision (at pp.2 and 3):

"...In its formal response to the Part 6 application, it has recorded that Mr Smith '...was given lots of verbal notice. He never reached his targets. He occasionally produced doctor's certificate when he was sick. He didn't agree to work part-time when he was asked...' But there has been nothing before me from Karl Azzi to support such allegations and Mr Smith claims that he had received no warnings over his work performance nor over his failure to reached his targets.

Mr Smith had refused to work part-time, however, and I am satisfied on the basis of the evidence adduced in this hearing...that Mr Smith's refusal to work part-time was the reason for his dismissal..."

I was satisfied that the termination of Mr Smith's services was unfair. It constituted a summary dismissal since he did not receive one week's pay in lieu of notice. I accepted that there may have been a downturn in work in the hairdressing salon which may have made it necessary that the hairdressing salon reduce the hours of work for the employees it engaged. But I took the view that the manner in which the dismissal was effected - without consultation or notice - was unfair. Mr Smith was not given the opportunity to discuss the matter with Mr Azzi, the author of the substantial change to Mr Smith's contract of employment and, on the basis of Mr Smith's evidence, whilst Mr Smith's hours of work were being reduced, new staff were still being recruited.

6 When the matter resumed before me for hearing on Mr Smith's costs application on Friday, 8 April, 2005, Mr Sullivan again appeared to oppose the application and to make one of his own on behalf of Eddie Azzi for payment of his costs for the day of the hearing. In the light of this history of this matter Mr Sullivan's submission that he was not ready to proceed and his subsequent claim for costs for his appearance on Friday, 8 April, 2005 are offensive. But the issues for my consideration to bring this matter to a conclusion are firstly, to identify the true employer and to determine the competing claims for costs. I set the matter down for hearing on those issues on Friday, 10 June, 2005. On Monday, 6 June, 2005 Mr Bdeir had lodged a notice of motion to amend the name of Mr Smith's employer - from Karl Azzi to Eddie Azzi to confirm the argument between the parties.

7 Mr Shepley represented Mr Smith in the hearing on Friday, 10 June, 2005. Mr Sullivan did not appear in the proceedings. Nor was there any other representative of Eddie Azzi. Mr Shepley submitted that I should proceed ex parte to determine the matter and I propose to accede to that request. In proceeding ex parte I must be satisfied that two conditions are satisfied: (i) that there is proper and fair notice of the proceedings and (ii) sufficient evidence to move the matter forward [Dima Homes Case (1989) 5 AILR Rep 4]. Clearly Eddie Azzi was aware of the proceedings since its representative, Mr Sullivan, was informed of them (and, indeed was purportedly intending to present argument as to costs in them). The issue before me in this hearing is a simple one (and, indeed, something which I would not regard as capable of any real argument at all). It is time I brought this unmitigated farce to an end.

Conclusion

8 There does not appear to be any doubt now that Mr Smith's employer was at all times Eddie Azzi. It appears that whilst Mr Azzi was incarcerated in gaol, the hairdressing salon he operated traded under the name of "Karl Azzi" and business cards were produced to reflect that. I must confess to some surprise that a business could be conducted from gaol and I considered that it was natural to assume that there had been some change in the identity of Mr Smith's employer to regularize the hairdressing operations. Nothing more than a change to the trading name actually appears to have taken place, however. And a change in the trading name does not effect the true employment relationship for Mr Smith: his employer was at all times Eddie Azzi. Mr Bdeir now accepts that fact and Mr Sullivan has conceded as much in his submissions in the hearing.

9 Nor can Mr Sullivan effectively argue that his client was denied the right to prepare a case against Mr Smith's claims. Mr Sullivan had appeared in the earlier proceedings in the name of Eddie Azzi and defended the claim, arguing (unsuccessfully) that Mr Smith had not met hairdressing targets, had been frequently absent from work and had, in fact, abandoned his employment. Mr Sullivan also suggested in his cross-examination of Mr Smith that an offer of reinstatement had been made to him during the conciliation phase of Mr Smith's Part 6 application but Mr Smith recalled no such offer: nor did I. The hearing of all substantive issues in dispute was concluded on Thursday, 9 December, 2004 when I handed down my decision. It remains only for me to correct the record and amend my orders by addressing them to the correct employer. But that course is opposed by Mr Sullivan.

10 Mr Sullivan's argument is one of form over substance in my opinion. It bears some parallels with the decision of the Court of Appeal of the State Supreme Court (Sugarman P, Asprey and Moffit JJA) in Re Egg and I (Farm) Pty Limited (1973) 2 PSR 969 where a defendant was described incorrectly in a summons as The Egg and I (Farm) Pty Limited - the word "the" being unnecessary - and the court had been informed that no company named in the summons existed. That distinction did not make the summons invalid, however. Moffitt JA expressed the view (at pp.972 and 973), that I also propose to adopt in this hearing, in the following forthright terms:

"...One could hardly conceive that in this century in the law, much less in this decade, there should parade as a judicial proceedings the charade that has led to the present application... Nobody for a moment could have any doubt that the summons referred to and only referred to the respondent, except perhaps some lawyer of a century or more ago in a layman's tale seeking to ridicule lawyers for their petty-fogging technicalities...

On the appointed day for the hearing, counsel... was present to represent the informant... There was also present in court...a counsel...with the solicitor for the respondent company. He did not announce his appearance for the defendant but told the court he was amicus curiae and, as such, had to inform the court that there was no company in existence which had the 'the' in front of its name and that, therefore, there was no such company which could instruct him to appear and that he was telling this to the court because he felt he had a duty to do so. I do not know whether we are expected to suppose he just happened to be in court when the case was called on and, being there, was moved by benevolence to aid the court..."

I am satisfied that Eddie Azzi and Karl Azzi are, in fact, one and the same entity. There is apparently no separate legal entity bearing the name Karl Azzi. To that extent, my orders on Thursday, 9 December, 2004 are deficient and should now be corrected. I propose to do so.

11 Costs applications for Part 6 applications are restricted by S.181(2)(c), viz:

"...the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals), who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious..."

There is no justification for costs by Mr Sullivan. Mr Smith's claim was neither frivolous nor vexatious. Nor was there any unreasonable refusal on his part to settle the matter before it proceeded to hearing. If Mr Sullivan wished to avoid the necessity of appearing in the aborted proceedings of Friday, 9 April, 2005, he simply could have contacted Mr Bdeir or Mr Shepley prior to the proceedings. This he did not do.

12 On the other hand, Mr Shepley's claim for costs before me in the hearing on Friday, 10 June, 2005 has merit, in my opinion. He has mounted his claim for costs against Eddie Azzi on the basis of an unreasonable failure to settle a matter. In my opinion, an order for costs on that grounds should be contemplated only in extreme cases. I accept that any party has a right to have his case presented in court without compromising it. As I indicated in my unreported supplementary decision of Wednesday, 4 May, 1994 in Luke v. Handicapped Children’s Centre [Matter No. IRC 2586 of 1994 at p.5]:

"...an order for costs on the grounds of an unreasonable failure to settle the matter should be contemplated only where there is such an obdurate refusal to participate in the discussions that there has been a total frustration of the conciliation process..."

But the conduct of Eddie Azzi in these proceedings leaves me with little doubt that there are grounds for the costs application which Mr Shepley has made. There has effectively been an "...obdurate refusal to participate in the discussions..." to the extent that the conciliation process was frustrated.

13 I therefore amend my order of Thursday, 9 December, 2004 as follows:

O R D E R

1. Eddie Azzi Australia Pty Limited shall pay the sum of $7,500.00 to Mr Michael Bruce Smith within 7 days.

2. Costs are ordered against Eddie Azzi Australia Pty Limited as agreed or assessed in accordance with the provisions of the 1987 Legal Profession Act to be payable to Mr Smith within 7 days of this decision.

3. This order shall take effect on and from Friday, 10 June, 2005.

P J CONNOR

Commissioner

LAST UPDATED: 10/06/2005