Nayla Azar and Dr Sushila Badami (Badami Family Medical Practice) Pty Ltd [2006] NSWIRComm 1190; [2006] [2006] NSWIRComm 1160 (26 October 2006)

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Nayla Azar and Dr Sushila Badami (Badami Family Medical Practice) Pty Ltd [2006] [2006] NSWIRComm 1160

FILE NUMBER(S): 4641

HEARING DATE(S): 29/09/2006, 06/10/2006.

DECISION DATE: 26/10/2006
PARTIES:
APPLICANT
Nayla Azar
RESPONDENT
Dr Sushila Badami

JUDGMENT OF: Murphy C

LEGAL REPRESENTATIVES

APPLICANT - Ms N Azar represented herself
RESPONDENT - Mr Seton of Counsel

CASES CITED: Donovan and Blaze on Stage Pty Ltd [2005] NSWIR Comm 1056
General Steel Industries Inc v Commissioner of Railways (NSW) and Others (1964) 112 CLR 125
Attorney General v Wentworth (1988) 14 NSWLR 481
Phillips v Ind Rel Comm of NSW & Anor [2006] NSW CA 183 Bankstown City Council v Paris (1999) 93 IR 209
Four Sons Pty Limited v Sakchai Limsiriphong 2000 100 IR 400

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

Matter No IRC 4641 of 2005

NAYLA AZAR AND DR SUSHILA BADAMI (BADAMI FAMILY MEDICAL PRACTICE) PTY LTD

Application by Nayla Azar re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 On 22nd August 2006 the Commission as currently constituted made a decision in this matter dismissing the application under Section 84 made by Ms Azar to the Commission.

2 The references to "applicant" and "respondent" in this decision means the parties as designated in that substantive decision.

3 That Section 84 application was filed on 5 September 2005, challenging the applicant's dismissal, which took place on 26 August 2005 for misconduct. The matter was the subject of two conciliation conferences before Commissioner O'Neill, the first of which occurred 21 September, followed by a further conference on 19 October 2005. The applicant was represented at the latter proceedings by Mr Jake Boghossian, who filed a notice of ceasing to act, the next day on 20 October 2005. Directions were issued for the filing of material in preparation for hearing.

4 The matter first came before me on 14 February 2006 for the hearing of a Notice of Motion filed by the applicant, seeking to have the respondent's application disallowed for late filing in contravention to the directions earlier given for affidavits/Witness Statements. On that day, by way of ex tempore decision, I ruled in favour of the admission of the respondent's material and the matter proceeded to hearing of the substantive matter on 16 and 17 February 2006 followed by 15 May, and along with final submissions on 22 June. I was asked by the respondent's Counsel for leave to apply for costs. I reserved on the costs question when handing down my decision of 22nd August, dismissing Ms Azar's application under S.84.

5 The Respondent subsequently made formal application by way of Notice of Motion for costs, and that matter was listed on 29 September 2006. The applicant was advised by my assistant to bring material and make submissions only on the subject of the costs application.

6 Ms Azar appeared on 29th September, 2006 unprepared to make her submissions, claiming that the matter should not proceed on the basis of the fact that she had lodged an appeal, which contained a provision for a stay order against any costs order from me. The applicant was advised that, inter alia, given the wording of the appeal papers, the matter would proceed on the basis that a decision first has to be given for it to be stayed. Mr Seton agreed with that interpretation and informed the Commission of his understanding that at the mention of the appeal matter No. IRC 3077 of 2006, the Bench had indicated that the Commission as currently constituted, might have handed down a decision on the costs application by the time of the next directions proceedings, which was timed for 26th October, 2006.

7 Ms Azar also claimed, incorrectly, that she had been told by my assistant not to bring any documentation for the costs matter on 29th September. This was rejected by me for the reasons on record.

8 Finally, Ms Azar raised certain medical conditions which she informed the Commission of, and at the urging of the Commission, produced some documentation to support her contention of not being able to proceed that day. These were marked Exhibit 2. Any scepticism displayed by the Commission on this score arose from the concern that the applicant had given no clue that she could not proceed that day, which caused additional expense to the respondent. The confused and disjointed manner in which she presented details of her medical condition did not assist the appreciation of her situation.

9 In any event, the Commission granted the adjournment, consented to by Mr Seton, and the applicant had the benefit of Mr Seton's written submissions and other material, along with a viewing of the transcript for 29th September, 2006 to assist her reply, which was then listed for 6th October, 2006.

10 The Notice of Motion with affidavit in support from the respondent's instructing solicitor (Mr Morris) filed on 5 September 2006, seeking costs under section 181(2)(c) of the Industrial Relations Act 1996, then came before me for hearing on 6 October 2006. The respondent was again represented by Mr T Seton of Counsel and the applicant continued to appear self-represented.

11 The Notice of Motion and affidavit by the solicitor Mr Morris was marked Exhibit 2. Exhibit 1 was some evidence of attendance by the applicant at a medical facility and other material in the nature of a medical certificate tendered by the applicant on 29 September in support of an adjournment that day, as canvassed above, although not quite matching up with her somewhat shifting oral representations on that score.

12 The affidavit of Mr Morris attached a letter of offer of 2 November 2005 written by the respondents, then representative, the Australian Medical Association (AMA), noting that the applicant had made a written offer to settle for 6 weeks wages (i.e. @ $701 pw). The letter contained a counter offer of one (1) week's wages, as a full and final settlement and subject to the usual deed.

13 The other piece of correspondence attached to the supporting affidavit was a letter from Mr Morris' new firm of solicitors engaging his services, Hunt & Hunt, Lawyers. This made a further offer dated 20 December 2005 of four (4) weeks salary to be paid as an eligible termination payment, amounting to $2,804 less taxation, again with the usual deed of release.

14 Exhibit 3 was a letter tendered by Ms Azar, dated 7 March 2006, containing an offer to settle, but also revealing a series of correspondence, mostly attached as annexures, dealing with a broad range of topics and complaints, but also containing evidence of offers and counter offers, relevant to the question of costs.

15 In fact, Exhibit 3 was instructive of some of the areas not covered by Mr Morris' affidavit, and these matters will be dealt with more fully below, inclusive of a range of offers made between the parties.

16 The first example was an attachment marked "B" to Exhibit 3 - a letter dated 1st November 2005, addressed to the AMA containing an offer to settle for six (6) weeks payment as a redundancy, said to be "covering underpayment of wages holiday, still owing of one (1) week and $2065 being for overtime owed by respondent and three (3) weeks in lieu". The offer finished with a threat to claim costs.

17 Also attached to Exhibit 3 was annexure "C" (already referred to above as Exhibit 2), which was the offer of 2nd November 2005 from the AMA offering one (1) week to settle.

18 Annexure "E" to Exhibit 5 was another offer dated 28 November 2005 from the applicant, this time to Hunt & Hunt, the new solicitors for the respondent i.e. Mr Morris.

19 That offer of 28 November contained the following abbreviated components, after referring to the offer of six (6) weeks made at the 20 October 2005 further conference on behalf of the applicant:

(a) "In this regard on a commercial basis, the applicant makes the following monetary offer on a "without prejudice" basis provided payment is made in the time frame agreed:
(i) Payment of twelve weeks (12) remuneration @$701 gross per week, totalling $8,400 gross to be taxed as a redundancy (outstanding) the accrued statutory entitlements.
(ii) Payment of $2014 gross on compensation of the underpayment ... in respect of overtime ... not properly paid .....
(iii) Payment of ... accrued holiday annual leave still outstanding @ 701 including leave loading, to be taxed as an eligible termination payment.
(iv) Provision of a separation certificate to the effect that the applicant resigned.
(v) Provision of warranty to provide any oral references requested by prospective employers of the applicant in the terms of the written reference and such oral references shall not hinder the applicant's ability to seek gainful employment.
(vi) Deed of release to be prepared by you confirming the above settlement and including the following clauses ...
a) Mutual releases
b) Mutual confidentiality
c) Mutual non-disparaging"

20 At annexure F of Exhibit 3 was a letter dated 15 December. 2005 addressed to Commissioner O'Neil for the attention of Andrew Musgrave complaining that the respondent had failed to file its affidavits in reply due on 14 December under the Commissioner's directions. The letter complained also that the respondent had not responded with a counter offer to her efforts "to settle the matter genuinely". The letter finished by asking the Commission to reject the respondent's out of time documents (affidavits) under Rule 179(6) "and not allowed to be adduced any further as such failed under the directions to comply ...". She further sought under Rule 201 (a) (b) "to strike out any process of the party in default ...". She lastly sought orders from the Commission in her favour for the "payment of 12 weeks compensation ...".

21 Annexure "h" to Exhibit 3 was a letter dated 20 December 2005 from the respondent's representative, signed by Mr Morris making an offer of four (4) weeks, amounting to $2804, whilst denying any fault in the dismissal of the applicant. The offer was to remain open until 9th January 2006.

22 Exhibit 3 itself was a lengthy letter of 7 March 2006, written shortly after the first two days of hearing of the Section 84 application on 16th and 17th February, 2006, which was therefore after the end of the applicant's cross examination and in between the resumption of the substantive case on 15 May 2006.

23 Towards the conclusion of that letter of 7 March, the applicant made an offer to settle contained in the paragraph 45 of her letter as follows:

(a) Twelve weeks pay (12) being at $8412 as a redundancy payment ....
(b) Eight weeks of payment of $50 totalling $400 for underpayment of wages for the period 16 September 2004 to 26 August, 2005.
(c) $3088 being for Ms Azar underpayment of wages in relation to overtime ..... Ms Azar can start a legal proceeding in the Chief Industrial Magistrate.
(d) $820 being still owing ... annual leave with loading
(e) Two weeks in lieu @ $1,400 ...
(f) A deed of release stating that Ms Azar resigned.
(g) A reference stating the truth that include my nursing duties as per Ms Neville references to Ms Azar exhibit G and my IT work ...".

24 Significantly, the 7th March letter (Exhibit 3) was sent to the Commission in the midst of a hearing, inappropriately canvassing a whole range of allegations against the respondent, along with a number of irrelevant matters and matters already canvassed in her affidavit of evidence. The Commission expressed concern at being sent that material at the time during proceedings.

25 Exhibit 4 which was a letter of offer dated 10 January 2006 from Ms Azar to Hunt & Hunt, solicitors for the respondent, and predated the offer of 7th March in Exhibit 3 just dealt with, was couched in the following terms, extracted from paragraph 3 onwards:

26 On behalf of the respondent, Mr Seton provided the Commission with a written copy of his submissions, marked Exhibit 6.

27 Under the heading of Unreasonable Failure to Settle, he referred to the case of Donovan and Blaze on Stage Pty Ltd [2005] NSWIR Comm 1056 (6 May 2006), which was also referred to by Ms Azar in her submissions, which was a decision of Commissioner Tabbaa. The extract from that decision referred to the need to make a positive finding that a party had rejected a reasonable settlement of a claim and/or the conduct of the party could be said to be inconsistent with an intention to settle.

28 Mr Seton emphasised in his submissions that the offers made by the parties should be considered in the context of the relief sought by the applicant, in pursuing compensation of twelve (12) weeks, amounting to $8,604.

29 He referred to the two offers made by the respondent, the first of which was dated the 2nd November, 2005, for one (1) weeks wages and the second, dated the 20th December, 2005, of four (4) weeks, amounting to $2,804.

30 He claimed that the lowest offer made by the applicant was twelve (12) weeks pay and contained in letters dated the 21st December, 2005 and 10th January, 2006. This has been found to be incorrect as shown by the analysis elsewhere in this decision.

31 He emphasised that on the 7th March, 2006, the applicant sought the equivalent of twenty weeks payment plus some other conditions, amounting to $14,120, which was a substantial increase from the previous amounts claimed by the applicant. This is correct, again as shown by the analysis and summary elsewhere set out, and contrary to Ms Azar's submissions shown later.

32 Mr Seton drew the Commission's attention to the fact that on the 22nd December, 2005 before Deputy Registrar Musgrave, the applicant not only sought to strike out the respondent's evidence, but opposed the matter being referred to further conciliation. This is borne out by the transcript of that day.

33 By way of conclusion on that part of Section 181(2)(c), Mr Seton urged the Commission to make a finding of unreasonable failure to agree to a settlement and that the applicant's conduct was inconsistent with an intention to settle, and that in the light of the Commission's decision of 22nd August, dismissing her application, the rejection of Ms Azar's offers was reasonable.

34 He claimed that the applicant's conduct demonstrated an intention to pursue her claim at all costs, opposing further conciliation at the 22nd December conference, and that it could not be clearer that there was no intention to settle.

35 He claimed also that each offer of the applicant was either equal to or greater than the claim in her application. This is also found to be incorrect as shown by the analysis and table of offers prepared elsewhere in this decision.

36 Mr Seton also asked the Commission to make a finding that the application was frivolous and vexatious in terms of Section 181.(2)(c), and began by quoting the decision of Barwick CJ of the High Court in the case of General Steel Industries Inc v Commissioner of Railways (NSW) and Others (1964) 112 CLR 125. The extract relied upon, contained the relevant expressions; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless" and, further on in that extract, the description "so clearly untenable that it cannot possibly succeed".

37 He referred again to Donovan's case where the application was held to be frivolous, on the basis that there were no grounds upon which the applicant could have expected his claim to succeed, which he compared to Ms Azar's pursuit of her case.

38 Mr Seton next referred to the Commission's decision of the 22nd August, 2006 dismissing Ms Azar's Section 84 claim, which gave scant support for her various accusations, and where between paragraphs 19-136 of the decision, the applicant was shown to have refused to withdraw her accusations, even when presented with contrary material. Some examples by Mr Seton followed. Furthermore, it was found that her evidence was patently contradictory, as shown at paragraph 246 of the decision, he said.

39 Mr Seton concluded that the decision on 22nd August, 2006 itself made plain that the application was frivolous and that the evidence did not support any of the allegations contained in the application.

40 Further, he contended that the applicant could not be said to have reasonably held the view that the evidence supported her claims, as the material available to her at the time of lodging her application was contrary to many of her claims, and that no reasonable person could have formed the view that they would be successful. As such, the application was frivolous.

41 As for vexatiousness in terms of S.181(2)(c), Mr Seton quoted authority as to the relevant test to be applied, as contained in Attorney General v Wentworth (1988) 14 NSWLR 481 (Roden J at 487), which included the concepts of, inter alia, "instituted with the intention of annoying or embarrassing"; "brought for collateral purposes"; "manifestly groundless to be utterly hopeless".

42 He summarised that aspect of the respondent's case by telling the Commission that it was open to draw an inference that the applicant had the subjective intention of annoying and embarrassing the respondent, and avoided all reasonable attempts at settlement, preferring to proceed to hearing. He highlighted that Ms Azar made irrelevant accusations against the respondent, which demonstrated the purpose to embarrass the respondent. In any event, he believed that the Commission should find the application vexatious on an objective basis, and that upon the evidence, the application was manifestly groundless and had no objective basis of success.

43 Ms Azar provided the Commission with lengthy material in the form of Exhibits 7 and 8 in addition to extensive oral submissions in reply to Mr Seton as shown by the transcript, which totalled some 31 pages.

44 Exhibit 7 purported to be in the form of a Notice of Motion, at least in its covering page and was of some five pages in length.

45 Attached to Exhibit 7 was a supporting three page affidavit and attached thereto was a large number of annexures containing a breadth of correspondence and material of limited relevance to the costs claim overall, but which the Commission has had the opportunity to consider, along with her lengthy oral submissions on the 6th October, but which do not merit detailed treatment here.

46 It is fair to observe that the majority of Ms Azar's submissions, inter alia, sought to regurgitate the substantive case before the Commission, in addition to raising further serious allegations about the ethics and honesty of her former employer, Dr Badami.

47 Exhibit 8 titled "Applicant Submission on Costs" was a far more succinct and relevant document which, whilst raising the less relevant issue of her alleged entitlement to underpayments, did prove to be reasonably instructive as to some of the points on individual offers, which were in some conflict with Mr Seton's submissions, as alluded to earlier.

48 An example was that the applicant was found to be correct when pointing out that Mr Seton wrongly submitted that the lowest offer made by the applicant was for twelve (12) weeks payments. In fact, the above treatment by the Commission of the various offers marked as Exhibits 1-5 shows clearly that the applicant was correct, that she made offers of six weeks, totalling $4,200. She maintained that that offer was also made at the original conference and somewhat confusedly suggested that an offer of twelve (12) weeks was made by her representative at the time, Mr Boghossian at the second conference. These assertions were not however, backed up by documentary evidence as were the other offers, including six (6) weeks offered on 19th October, 2005.

49 The applicant also claimed that "on more than three occasions the applicant put in an offer of six weeks, being $4,200 for final settlement", but elsewhere appeared to provide some exaggeration to that in paragraph 12 of her submissions "being for six weeks settlement by the applicant on more than twelve occasions according to the evidence in hands (sic)". (Emphasis added) This is an apparent contradiction as shown in the analysis and table of offers.

50 Whilst it is not intended to deal with the number of irrelevancies raised in all the material from the applicant, such as her attempt to introduce alleged criminal conduct by her former employer concerning the Tax Department and Medicare, as well as allegations of bias and discrimination towards her by the Commission itself, it is fair to record the fact of those irrelevancies being raised, at least to respond to Mr Seton's submission that the applicant's allegations against Dr Badami demonstrated the test of vexatiousness.

51 At paragraph 19 of her submissions the applicant wrongly contended that Mr Seton had engaged in "false and total lie" when he contended that her offer of the 7th March represented twenty (20) weeks compensation, when she said that in fact the total was $8,412 and not $14,120. A review of that offer contained elsewhere in this decision, shows that the applicant to have indeed claimed a total $14,120 (equivalent to around twenty (20) weeks wages) plain on the face of the document, and her submissions in this respect are therefore self deluding.

52 The applicant also referred to those authorities contained in Mr Seton's submissions and attempted to distinguish his reliance upon them.

53 In conclusion, the applicant reverted to a large number of irrelevancies, going back to the substantive hearing and its result and making further allegations against her former employer.

54 In her "Notice in Reply" the applicant contended matters, which were again largely irrelevant to the costs claim, also referring to her alleged underpayments and generally attempted to raise objections to matters already determined by the Commission, either in the case involving the respondent in this substantive matter involving Dr Badami, or in the case before Commissioner Patterson concerning Dr Ritchie, referred to in the substantive decision in a limited way.

55 Her three page affidavit filed on the 4th October was much more relevant to the cost issue and, as already commented upon, was helpful in providing a fuller picture of all the offers made between the parties and not fully covered by Mr Seton, although I am satisfied as to their authenticity.

56 It is unnecessary for me to repeat the particulars of those offers as again, these are outlined earlier and summarised later in this decision.

57 The legislative context in which costs may be awarded in unfair dismissal cases is set out as follows:

58 A summary of the established instances of offers of settlement made in date sequence is as follows:

Date of Offer	Offer
19.10.05	Applicant offers 6 weeks
1.11.05	Applicant offers 6 weeks (as redundancy and inclusive of underpayments claim)
2.11.05	Respondents representative offers 1 week, $701
28.11.05	Applicant offers 12 weeks ($8,400 as a redundancy + $2024 underpayments claim + $701 claim for holidays + resignation and conditions in deed. Total $11,125.
15.12.06	Applicant's letter to Commission sought to strike out respondent's affidavits due on 14.12.05 and not filed on time. The letter copied to the respondent's solicitor, concludes with request for orders for 12 weeks compensation.
20.12.05	Respondent's representative offers 4 weeks, $2805.
10.01.06	Applicant offers 12 weeks (as redundancy) i.e. $8400.
7.3.05	Applicant made offer during hearing of $8,421 (12 weeks) + $400 wages claim + $3088 unpaid overtime claim + $820 annual leave and (leading) claim + $1400 in lieu + deed with resignation clause + reference re Nursing and IT skills mentioned.
Note: As earlier mentioned the applicant claimed in submissions that the six (6) week offer was also made at the original 21st September, 2005 conciliation conference, although confusing the Commission by also stating that Mr Boghossian, her representative, offered twelve (12) weeks at 19th October, 2005 conference. The above represents offers recorded in writing only as more reliable

59 The preceding chronological schedule is remarkable, not only in showing that the applicant made a variety of offers to settle, which increased over time, but that, except for two occasions, her offers also insisted upon the inclusion of alleged underpayment of wages, overtime and statutory entitlements, as a basis of settlement. Also, (as already referred to) her last offer was made in the middle of hearing after her evidence in chief and cross-examination - the significance of which is dealt with later

60 The implications of including underpayment claims is that, whilst such claims are a common feature of negotiations and many such cases are settled at the conciliation phase, in tandem with unfair dismissal claims, persisting with such collateral claims into arbitration of S.84 matters, runs certain risks.

61 Firstly, the provisions of s181 (2) (c) are obviously designed to encourage reasonable behaviour in negotiations to settle compensation claims for alleged unfair dismissal. To superimpose demands into the arbitration phase related to matters not capable of being included in the impending arbitration, as in this case, as the basis for settlement, adds an artificial layer surely not contemplated by the standards of behaviour set by the legislative provision and the authorities, designed to govern negotiations in S. 84 claims.

62 In short, regardless of whether Ms Azar's claim for underpayments had merit or not, the fact is she used the threat of pursuing such an action in another jurisdiction as improper leverage in the S.84 negotiations. She did so at an early stage, although not immediately (see table summary) and continued to include the underpayments claims throughout, except apparently with the initial offer of 19 October, 2005, and 10th January, 2006, although that latter offer of twelve weeks, (to be paid as a redundancy), doubled her previous offer of 19th October and went back to the original claim in her application.

63 Ms Azar was conscious of her ability to lodge a separate application before the Chief Industrial Magistrate, as she directly threatened to do in the 7th March offer and has apparently since done so, as advised by her. As it turned out, her attempts to bring such allegations of underpayments into the hearing of her unfair dismissal claim were in fact met with convincing evidence from the respondent that they were irrelevant to those proceedings, but also which indicated that there was no case to answer. However those matters will now be properly tested elsewhere, and the Commission has no interest here in this decision in going beyond that broad observation to set the wider context in which the inclusion of demands in respect to the alleged underpayments could have prevented settlement of the S.84 application, especially given their usually highly detailed facts offering fertile ground for contest.. The claims for such alleged entitlements could not have been pursued before me and therefore should have been extricated from the negotiations before arbitration.

64 I had another concern, related to the timing of Ms Azar's final offer, in her 7th March letter to the respondent and copied to the Commission, which again "upped the ante", so to speak, involving a total $14,120 package, which, as Mr Seton correctly claimed, represented the equivalent of twenty (20) weeks. The significance of its timing, arriving shortly after Ms Azar's evidence in the witness stand, which as far as this member of the Commission is concerned, prompted a description of her as the most unreliable witness he had experienced, in the decision of 22 August, which dismissed her unfair dismissal application on the basis of a lack of merit clearly established in evidence. The instances of her contradictions and general lack of credit are replete throughout.

65 It is a measure of the air of unreality surrounding the whole conduct of her case, that she misjudged the situation at that point to the extent of contemplating taking an even larger prize from a respondent, who by that time, with the benefit of evidence in the part heard case, could only be reasonably expected to settle for a token amount, and then only to save further costs of continuing the case. The hindsight when the evidence of the respondent was completed on 15 May and 22 June, shows that the applicant should never have launched her application, let alone made settlement all the more difficult by effectively ratchetting up and broadening the basis of her claim for settlement.

66 The Commission, as constituted in both the substantial hearing of this matter and now the costs application, is always extremely mindful of the pitfalls of self representation and has no hesitation in making reasonable accommodation where honest endeavours go astray and lead to inadequate or inefficient handling of matters. In this case the effect upon the respondent was far out of kilter with what should have happened and how a reasonable person in the applicant's shoes should have behaved in the circumstances. Her style of running her case, commented upon in the earlier decision of 22nd August, exacerbated the situation for the respondent in terms of time wasted, although that is not a matter relied upon by Mr Seton. The applicant's contention in her submissions in reply to this costs application of not being an experienced litigant were shown to be far from accurate by the evidence before the Commission in the S.84 case. Her plea of not being a lawyer, defied the tenacious and aggressive pursuit of her litigation. There is, after all, a limit to how much allowance can be made for unrepresented parties, especially where behaviour adversely impacts upon another (innocent) party drawn into undeserved litigation.

67 Whilst it is unnecessary for me to repeat in any detail the litany of examples of where the applicant's credibility was found wanting, I feel compelled to take that aspect into account in the consideration of the case relied upon by the respondent through Mr Seton of Counsel. He claimed that costs ought also to be awarded for a frivolous and vexatious application, in addition to an unreasonable failure by Ms Azar to agree to a settlement.

68 In this case, it has been hard to separate the two limbs of s181 (2) (c), in as much as the lack of merit meant that the respondent should not only not have been pursued at all, by way of the application - being a situation known to the applicant from the outset. It was not shown to be a case, which might have gone either way or even part of either way. The paucity of justifying features was profound, as shown by the applicant's credit rating, along with the strengths of the respondent's case as to the instances of misconduct. Ms Azar showed no signs of being willing to assess her prospects of success at any stage.

69 In respect of the other limb of s181 (2) (c), more related to the behaviour of the parties in negotiations, it is necessary to have regard to the authorities relevant to assessing whether there has also been an unreasonable failure to agree to a settlement, which might also assist in determining both limbs of the provision.

70 In Phillips v Industrial Relations Commission of NSW & Anor, the Court of Appeal on 13th July 2006 in considering, inter alia, the objective test of reasonableness referred to in Bankstown City Council v Paris (1999) 93 IR 209, made the observation at paragraph 20 of the decision:

71 Their Honours also said at paragraph 29, in quoting with approval from the judgement of the Full Bench appealed against by Mr Phillips, at [44]:

72 In respect to Four Sons Pty Limited v Sakchai Limsiriphong (No 2) 2000 100 IR 400 a decision of the Full Bench of the Commission, the following extract of that decision from paragraph 11 is apposite to the consideration of the conduct of parties generally in assessing costs applications under s181 (2) (c), and again refers to the need for bargaining parties, such as the applicant in this case to have regard to the merits of their case:

73 A more general but nonetheless essential guide is contained in the following passage from the Full Bench consideration of cost matters in S.84 applications at paragraph 219 of the Paris v Bankstown Case reported at (1999) 93 IR 209:

74 I believe Mr Seton's emphasis upon Ms Azar's conduct being inconsistent with an intention to settle on a reasonable basis is not misplaced when her overall tactics, such as ramping up the settlement terms, dealt with above are considered.

75 Accordingly, I am persuaded that she unreasonably failed to agree to a settlement in terms of S181(2)(c).

77 Likewise, Mr Seton's insistence that the applicant showed an intention to annoy and embarrass the respondent through her continued allegations, has been sustained as the test for vexatiousness in this S.84 application, as suggested by the caselaw referred to by him of Attorney General and Wentworth..

78 As I have already indicated her lack of credibility was profound and the extent of her misleading of the Commission must demonstrate the test of an application which was also frivolous in its manifestly groundless claims and being clearly untenable that it could possibly succeed, again as supported by the cases (General Steel Industries Inc.).

79 Either limbs of S.181(2)(c) are satisfied in this case, as the applicant Ms Azar unreasonably failed to agree to a settlement and her application has been found to be frivolous and vexatious.

80 The Commission is concerned to exclude from any costs paid by the applicant, the proceedings involving a Notice of Motion brought by her heard on the 14th February, 2006, which, whilst disallowed, was brought about by the late filing of material by the respondent. The Commission allowed the late material for good reasons given in its Ex-tempore Decision of the 14th February, 2006, but nonetheless, believes there was residual fault on the respondent's side, causing the Notice of Motion to be heard. It is therefore intended to exclude from any costs, the preparation and hearing of Ms Azar's Notice of Motion heard that day.

81 (1) Costs are to be paid by Ms Azar to the respondent, Dr Badami (Badami Family Medical Practice) Pty Ltd for the preparation and conduct of the case in Matter No. IRC 4641 of 2005, involving the hearing of this matter from the 16th February, 2006 onwards, but not including the preparation for and the hearing of the Notice of Motion heard on the 14th February, 2006.

Industrial Relations Commission of New South Wales Decisions

Nayla Azar and Dr Sushila Badami (Badami Family Medical Practice) Pty Ltd [2006] NSWIRComm 1190; [2006] [2006] NSWIRComm 1160 (26 October 2006)