WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION PARTIES THE CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS APPLICANT -v- SNC-LAVALIN (SA) INC & OTHER RESPONDENTS CORAM COMMISSIONER S J KENNER HEARD THURSDAY, 1 DECEMBER 2005, MONDAY, 20 MARCH 2006, WEDNESDAY, 29 MARCH 2006 DELIVERED THURSDAY, 13 APRIL 2006 FILE NO. CR 13 OF 2004 CITATION NO. 2006 WAIRC 04186 86 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1149 Catchwords Industrial law - Right of entry - Application for costs - Whether order for costs should be awarded by Commission - State and federal jurisdiction - Principles applied - Present case does not fit the extreme circumstances criteria warranting costs order - Application dismissed - Industrial Relations Act 1979 (WA) s 26, s 27(1)(c), s 44, s 49H; Industrial Relations Commission Regulations 1985 reg 79; Workplace Relations Act 1996 (Cth) s 16, s 347 (repealed), s 824; Workplace Relations Amendment (Work Choices) Act 2005 (Cth); Workplace Relations Regulations 2006 reg 1.2(2); Judiciary Act 1903 s 39 Result Order issued Representation Applicant Mr T Kucera of counsel instructed by the Construction, Forestry, Mining & Energy Union of Workers First Respondent Mr D Parker of counsel instructed by Blake Dawson Waldron Solicitors Second Respondent Mr D Heldsinger of counsel instructed by David Heldsinger Barristers and Solicitors Reasons for Decision 1 The present proceedings have some history. The application originated in January 2004 with a claim by the applicant that the respondents had denied it a lawful right to enter premises at a construction site for an ammonia plant in the North West of this State. In the substantive proceedings the applicant claimed a lawful right to enter the premises pursuant to s 49H of the Industrial Relations Act 1979 (“the Act”). The applicant was successful in the proceedings and the Commission published a declaration to that effect: The Construction, Forestry, Mining & Energy Union of Workers v SNC-Lavalin (SA) Inc & Other (2005) 85 WAIG 139; 145; 146; 2 There were also proceedings commenced by the respondents in the Federal Court of Australia, in an attempt to prevent the applicants exercising a right of entry in accordance with the Commission's declaration. Those proceedings ultimately failed. The defence mounted by the respondents to the applicant's claimed right of entry under the Act, that being an alleged inconsistency between the right of entry regimes under the Act and that contained in the then Workplace Relations Act 1996 (Cth) (“the WRA”), was rejected by French J in the Federal Court proceedings: BGC Contracting Pty Ltd v The Construction, Forestry, Mining & Energy Union of Workers (2005) 143 IR 34). 3 Pursuant to a liberty granted the applicant now brings a claim for costs against the respondents under the Act. The Commission was advised by the applicant and it was not disputed by the respondents that a purported appeal of the decision of the Commission in this application to the Federal Court by one respondent, SNC Lavalin (SA) Inc (“SNC”) (application W75 of 2004), was not proceeded with. The applicant therefore contended that there is now no barrier to the Commission entertaining its claim for costs. 4 A number of grounds are advanced in support of the applicant's claim for costs. It is asserted that the respondents failed to admit relevant facts as contained in a notice to admit filed by the applicant in the substantive proceedings. The applicant says it was therefore required to establish the facts set out in the notice. It was also submitted by the applicant in its grounds that the respondents defended the application frivolously and without reasonable cause. The basis for this proposition was founded upon a number of particulars. These included that it was said that up until the opening of the respondents’ cases at the proceedings in Karratha, two defences were relied upon. The first was a defence based upon an interpretation of s 49H of the Act and the second being an alleged inconsistency between the right of entry provisions contained in the Act and the WRA. The latter was founded on an assertion that relevant employees were employed pursuant to Australian Workplace Agreements made under the WRA. 5 It was further said that the respondents failed to put a no case submission at the conclusion of the applicant's case, but rather opened their cases and chose to call no evidence. Thus no evidence was led to establish the factual foundation for the respondents’ defences. It was further said that if either of the respondents had no evidence or had no intention of calling such evidence, then they ought to have informed the Commission of this and the proceedings could have been heard in Perth thereby obviating the incurring of costs in connection with those proceedings. A bill of costs was filed by the applicant claiming costs in the sum of $13,726.41. An amended bill of costs was subsequently filed by the applicant, reducing the costs claimed to $4,715.41. These costs included costs for air travel, accommodation and miscellaneous expenses in connection with attending the Karratha proceedings. 6 The costs application proceeded largely by way of written submissions. The parties were afforded the opportunity to make further brief oral submissions which they did. Furthermore, an affidavit of Mr Timothy Kucera was filed by the applicant in support of its application for costs. Annexed to the affidavit were various documents in relation to the expenses claimed. Contentions of Parties 7 The applicant submitted that the listing of the application in Karratha on 23 February 2004 was particularly at the request of two of the then respondents Shamrock Holdings Pty Ltd trading as Killarnee Formwork (“Killarnee”) and BGC Contracting Pty Ltd (“BGC”). It was submitted by the applicant that this request was pressed by the then counsel for BGC and Killarnee, Mr Hotchkin, late in the week prior to the matter being heard. The applicant submitted that the request by Mr Hotchkin was expressly made to enable the Commission to ascertain the wishes of the relevant employees working on the site, as that related to one of the respondents’ defences to the applicant's claim, that being the proper construction of s 49H of the Act. The applicant said that it made submissions at this time that it was not necessary for the matter to be heard in Karratha, if the interpretation point was dealt with as a preliminary issue. If the applicant's construction was preferred by the Commission, evidence of the employees’ wishes would be irrelevant. 8 Furthermore, the applicant filed a notice to admit on 11 February 2004, prior to the hearing of the matter, in accordance with regulation 79 of the then Industrial Relations Commission Regulations 1985. The respondents failed to answer the notice to admit, either prior to or at the hearing in Karratha on 23 February 2004. Counsel for BGC and Killarnee, by letter dated 13 February 2004, advised the applicant that its notice to admit was not accepted as a basis for the proceedings to not be heard in Karratha. 9 In relation to the proceedings themselves, the applicant referred to the evidence which it called from a Perth based organiser, Mr Buchan. It was contended that but for the respondents’ request to have the matter heard in Karratha, in particular that of Killarnee and BGC, Mr Buchan's evidence could have been adduced in Perth, given the failure by the respondents to reply to the applicant's notice to admit within the time specified under the regulations. The applicant also 1150 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 86 W.A.I.G. referred to the conduct of the respondents in the proceedings in Karratha. It submitted that the respondents called no evidence nor put any submissions in relation to their defences raised in their notices of answer, which included the issue of the construction of s 49H of the Act and the alleged inconsistency between the terms of the Act and the WRA as to right of entry. The only submissions put by the respondents were to the effect that the applicant had failed to establish its case, a finding not upheld by the Commission. 10 As to the relevant principles concerning costs in this Commission, pursuant to s 27(1)(c) of the Act, the applicant referred to decisions of the Full Bench such as The Construction, Forestry, Mining, Energy, Timberyards, Sawmills and Wood Workers Union of Australia - Western Australian Branch (1998) 78 WAIG 1581 and Brailey v Mendex Pty Ltd (1993) 73 WAIG 26, to the effect that an award of costs is an exercise of discretion under s 26 of the Act and that generally in industrial matters, costs should not be awarded except in extreme cases. 11 As to the federal element of the proceedings said to arise, counsel for the applicant submitted that the then s 347(1) of the WRA, which limits the making of costs orders except where proceedings are instituted vexatiously or without reasonable cause, has no application. The basis for this submission was that in order for any federal issues to arise in the proceedings it was necessary for the respondents to lead some evidence about the existence of AWA's which they did not do so, and upon which the Commission made findings. 12 In terms of the costs to be awarded, the applicant submitted that whilst costs for the professional services of a legal practitioner are precluded by s 27(1) (c) of the Act, expenses such as travelling and accommodation costs and the like, incurred by counsel, can be recovered. 13 A number of submissions were made by the first respondent SNC. As to the Commission’s powers under s 27(1)(c) of the Act, submissions were made generally consistent with those of the applicant. 14 In relation to the notice to admit, the first respondent denied that its failure to admit the facts asserted should warrant the making of a costs order. Furthermore, it was said by counsel that the alleged facts set out in the notice were not material to the resolution of the dispute before the Commission and in any event, the applicant failed to adduce evidence to establish the matters set out in the notice. As to the proceedings being conducted in Karratha, the first respondent submitted that it never requested that the matter be heard in Karratha and it did not have a view either way where the proceedings should be listed for hearing. The first respondent further submitted that subsequent proceedings in the Federal Court, which further dealt with inconsistency arguments between the Act and the WRA, indicated that the proceedings were not vexatious or without reasonable cause. 15 As to the bill of costs itself, the first respondent submitted that claims for accommodation and like expenses incurred by the applicant's counsel are not recoverable. In this respect, counsel referred to Brailey to the effect that “costs” referred to in s 27(1)(c) as it applies to the services of any legal practitioner or agent, also includes “expenses” of the kind claimed, which are therefore not recoverable under section 27(1)(c) of the Act. There were also submissions made about the extent of costs claimed by the applicant's counsel travelling between Sydney and Perth, and also aspects of expenses claimed for Mr Buchan, by reason of him attending in Karratha on other union business, prior to the hearing. 16 Finally, the first respondent raised the issue of the applicability of the then section 347 of the WRA. Reliance was placed by counsel on a number of authorities including Re McJanet; ex parte Australian Workers Union of Employees, Queensland (1997) 74 IR 361; James v South Australia (1927) 40 CLR 1 and Fencott v Mueller (1982 - 83) 152 CLR 517. These authorities were referred to in support of the proposition that “a matter arising under this Act” (i.e. the WRA) for the purposes of s 347 is to be interpreted broadly to mean a justiciable controversy identifiable independently of the proceedings which are brought for its determination and encompassing all claims within the scope of that controversy. This is not limited by reference to the instituted proceedings, but also by the general conduct of the proceedings and the pleadings which define the issues arising. 17 The second respondent Killarnee, represented by different solicitors, made a number of submissions. As to the relevant law, counsel made submissions in relation to s 27(1)(c) of the Act consistent with those made by the other parties. As to the then s 347 of the WRA, the second respondent submitted that the matter before the Commission was “a proceeding... in a matter arising under this Act” (the WRA) under s 347 on the basis that a matter of defence raised by the respondents enlivens this section: Broad Construction Services (WA) Pty Ltd v The Construction, Forestry, Mining and Energy Union of Workers (No 2) [2006] FCA 44 which applied Fencott in relation to this issue. It was submitted that for these purposes the relevant “justiciable controversy” before the Commission also required a determination of the respondents’ defences relying upon the WRA and therefore the proceedings fell within the then s 347 of the WRA. 18 Alternatively, it was submitted that if the Commission considered that the then s 347 of the WRA does not govern the present matter, then consistent with relevant authority, under section 27(1)(c) of the Act, no costs order should be made. The second respondent submitted that this case does not fall within the terms of an “extreme circumstance” traditionally applied by the Commission. Furthermore, consistent with submissions made by the first respondent, the second respondent said that expenses incurred by advocates including counsel, cannot be recovered as such expenses are to be regarded as the “costs” of a legal practitioner for the purposes of s 27(1)(c) of the Act: Brailey. 19 As to the amended bill of costs, counsel for the second respondent also made a number of submissions calling into question various aspects of the heads of costs claimed. As to the notice to admit, similar to the submissions of the first respondent, the second respondent submitted that the applicant in any event did not demonstrate that each of the alleged facts in the notice were material to the disposition of the proceedings and there was an onus on the applicant to establish its case by its own evidence. Furthermore, the second respondent submitted that the applicant did not notify it that there was to be reliance upon the notice to admit as an alternative to the proceedings being convened in Karratha and said that the second respondent left its options open as to whether it would call evidence or not in the proceedings in Karratha, presumably dependent on whether the applicant had established what it considered was a necessary prima facie case. 20 At the hearing listed on 29 March 2006, in relation to costs, to afford the parties an opportunity to make brief oral submissions, the first and second respondent also raised the issue as to whether the Commission had jurisdiction to entertain the present claim, by reason of recent amendments to the WRA effected by the Workplace Relations Amendment (Work Choices) Act 2005 (“Work Choices”). In particular, reference was made by counsel to s 16 of the WRA, which purports to exclude certain enumerated State and Territory industrial laws. The submission put was that this may preclude the Commission from entertaining the present claim, following the proclamation of Work Choices to commence on 27 March 2006. Given that this issue had not been previously raised, the parties were given liberty to make further written submissions as to this issue within 14 days, if they wished to do so. 86 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1151 Consideration Work Choices 21 In my opinion, for the following reasons, s 16 of the WRA is no barrier to the Commission dealing with this matter. Although s 16 purports to exclude some State and Territory laws, including the terms of the Act, the terms of the Workplace Relations Regulations 2006 (“the WR Regulations”) are also relevant. Whilst the scheme of the amended WRA and WR Regulations is not easy of understanding, I refer particularly to Chapter 2 Part 1 Division 2 Reg 1.2 (2) which provides as follows: “Rights and obligations — general (2) Subsection 16(1) does not apply to a law of a State or Territory (including a law relating to appeals) to the extent to which it relates to compliance with an obligation: (a) under: (i) that law; or (ii) another law of a State or Territory; which would otherwise be excluded by subsection 16(1) of the Act; and (b) in respect of an act or omission which occurred prior to the reform commencement.” 22 The effect of this regulation appears to exclude the purported effect of s 16(1) of the WRA to the extent that the Act in this case, “relates to” compliance with an obligation under the Act in respect of an act or omission which occurred prior to 27 March 2006. In this case, the relevant act or omission upon which the original proceedings were commenced, clearly satisfies the terms of reg 1.2(2)(b). Secondly in my view, the dispute as to right of entry related to compliance with an obligation under s 49H of the Act that was in existence at that time, in relation to the rights of the applicant to enter premises where relevant employees work, which included the premises of the respondents, for the purposes of reg 1.2(2)(a). The question then is whether the present costs application sufficiently “relates to” compliance with an obligation under the Act, for the purposes of this sub regulation. In my opinion, for the following reasons, it does. 23 The phrase “relates to”, and like phrases, have been judicially considered on a number of occasions. In Quality Bakers Australia Ltd v Bennett (1992) 47 IR 48 Moynihan P of the Industrial Court of Queensland referred to the meaning of “relating to” as depending upon its context, but suggested at 453 the need for “some direct or relevant connection between the two matters which are to be related: C O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 367 and 373; Central Queensland Speleological Society Inc v Central Cement Ltd (No 1) (1989) 2 Qld R 512 at 516 and 528; Rosser v Dongees (1990) 1 Qld R 490 at 492.” 24 In Joye v Beach Petroleum NL (1996) 67 FCR 275 the Full Court of the Federal Court, on appeal in relation to an external administration under the Corporations Law, considered the meaning of s 58 of the Corporations Law containing the phrase “relating to”. In this regard Beaumont and Lehane JJ said at 285: “But, in our view, the exercise of characterisation to be undertaken in determining whether a law is “with respect to” a specific subject matter is not an appropriate test here, where, as matter of form and of substance, the language and context are different. The relevant question here, whether the “matter’ is one “relating to” a winding up, is concerned with the existence of a relationship. It does not raise a question of characterisation. Of the phrase “relating to”, Taylor J said, in Tooheys Ltd v Commissioner of Stamp Duties (1961) 105 CLR 602 at 620: “… the expression… is extremely wide but it is also vague and indefinite. Clearly enough it predicates the existence of some kind of relationship but it leaves unspecified the plane upon which the relationship is to be sought and identified. That being so, all that a court can do is to endeavour to seek some precision in the context in which the expression is used.” Taylor J went on to say (at 620) that “relating to” in the context there considered was not the “equivalent of ‘referring to’; the ‘relationship’ must be based upon some more substantial ground”. Other decisions of the High Court have acknowledged that, ordinarily, “relates to” is a wide term, and that it will depend upon context whether it is necessary that the relationship be direct or substantial, or whether an indirect or less than substantial connection will suffice (see Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 338 per Brennan J, at 347 per Dawson J, at 354 per Toohey J and at 370 per McHugh JJ and at 845-846 per Toohey and Gummow JJ; Re Jarman; Ex parte Cook (1996) 70 ALJR 550 at 553 per Brennan C and Gaudron J and at 556 per Kirby J. Tooheys’ case has been followed in this Court (see, eg, Secretary, Department of Foreign Affairs and Trade v Boswell (1992) 36 FCR 367 at 374 per Hill J and at 383 per Cooper J). In our view, there is nothing in the present context to suggest that the term “relating to”, where used in s 580 and when picked up by s 581(4), was not intended to have a wide operation or that an indirect, but relevant, connection would not be a sufficient relationship for present purposes.” 25 Adopting the approach outlined in the authorities to which I have referred, in my opinion, there is nothing in reg 1.2(2) which would, in its context, suggest that “relates to” as it is used in the regulation is to be given other than a wide scope. An indirect but relevant connection with the subject matter would suffice to bring the regulation into operation. 26 It is open to any party to proceedings before the Commission to make an application for costs pursuant to s 27(1)(c) of the Act. Because the ability to make an application for costs is necessarily an incident of the institution of the proceedings concerned, and which cannot arise independently of those proceedings, then in my opinion it is axiomatic that an application for costs by a party to proceedings dealing with compliance with an obligation under the Act, such as a lawful right of entry for union officials as in this case, necessarily “relates to” such proceedings. In this case in my opinion, there is a direct and substantial connection between the application for costs and the proceedings concerning the compliance with an obligation under the Act, about which reg 1.2(2) deals. 27 I am therefore well satisfied that any purported effect of s 16 of the WRA on these proceedings is excluded by the above regulation. 1152 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 86 W.A.I.G. Section 347 WRA 28 The next question is the application of s 347 of the WRA as contended by the respondents. This section, now s 824 of the WRA, was in the following terms: “Division 2 — Costs 347 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 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. (2) In subsection (1): costs includes all legal and professional costs and disbursements and expenses of witnesses.” 29 In my opinion, it is s 347 and not s 824 of the WRA, that arises for consideration in this case, on the basis that amending Acts are not presumed to operate retrospectively: Maxwell v Murphy (1957) 96 CLR 261. This is subject to any express reference or necessary implication to the contrary, which is not apparent in this case. 30 The application of s 347 of the WRA raises another issue, about which there were no submissions from counsel, but about which the Commission needs to say something, in order to deal with the point. Firstly, in my view, s 347 of the WRA was not of itself a head of power as to costs. That much is plain from its language. What it does is condition the seeking of a costs order under some other independent head of power. In this case, that is plainly s 27(1)(c) of the Act. The Australian Industrial Relations Commission (“AIRC”) has held that it did not have a general costs power under s 347, rather s 347 limited the source of power otherwise possessed: Lloyd v International Health and Beauty Aids Pty Ltd t/as Elly Lukas Beauty College (1998) 44 AILR 3 - 894; Amalgamated Society of Carpenters and Joiners of Australia and Ors v Parker 1993 AILR 137. In the case of the Federal Court, the power of the Federal Court to award costs is contained in s 43 of the Federal Court of Australia Act 1976. 31 Additionally, again whilst not dealt with in argument by counsel, it may well be necessary for s 347 of the WRA to condition any costs order in a proceeding before this Commission, for the Commission to be regarded as a court of a State for the purposes of s 39 of the Judiciary Act 1903, as exercising and being invested with federal jurisdiction, within the limits of its own jurisdiction as to locality, subject-matter or otherwise. In my opinion, this Commission is a court of a State for the purposes of s 39 of the Judiciary Act 1903. By s 12 of the Act, the Commission is a court of record. Furthermore, the Commission in this State is integrated into the hierarchy of State courts both directly and through appellate processes. Furthermore, the Full Bench of the Commission has previously held that the Commission is a court, not simply by reason of it being a court of record, but also on the application of the relevant authorities as to what is a court, when concluding that the Commission was a court for the purposes of the Corporations Law: Helm v Hansley Holdings Pty Ltd (under administration) (1999) 79 WAIG 23. 32 On this basis, how then is s 27(1)(c) of the Act to be reconciled with s 347 of the WRA and does a court of a State exercise dual State and federal jurisdiction in present circumstances? The initial view of the High Court appeared to be that dual jurisdiction was being exercised: Lorenzo v Carey (1921) 29 CLR 243 at 252. This was questioned in Ffrost v Stevenson (1937) 58 CLR 528 at 573 where Dixon J expressed the view that in the case where both State and federal jurisdiction arose, then because of s 109 of the Constitution, the State law was to be considered invalid and inoperative. This does not appear to be the current view at least as expressed in Felton where it was held by a 4 to 3 majority, that the State jurisdiction is excluded based on the notion of severability not inconsistency under the Constitution. 33 Relevantly for present purposes, in Felton it was held that a defence based upon a Commonwealth Act was sufficient to ground a contention that the relevant State court was exercising federal jurisdiction for the purposes of s 39 of the Judiciary Act 1903. Walsh J said at 403: “The applicability of s 39 (2) of the Act cannot be determined once and for all as soon as the proceedings are instituted and the claim made by them formulated. The “federal” questions may arise at a later stage. Section 39(2) grants federal jurisdiction in the matters in which this court [the High Court] has original jurisdiction or may have original jurisdiction conferred upon it, that is to say, the matters enumerated in sections 75 and 76 of the Constitution. If jurisdiction were to be conferred in general terms upon this court in all matters arising under any laws made by the Parliament, it would be essential that from the moment of the institution of the proceedings it should be known whether this court had jurisdiction or not. Therefore, the federal nature of the matter must be apparent from the claim itself. It would not be possible to allow the question of jurisdiction to remain in abeyance, so to speak, until all the issues were known. But I am of opinion that such arguments cannot lead to the conclusion that the invested federal jurisdiction of a state court can never be attracted by a matter raised by way of defence. The difficulty which is imposed by the arguments in relation to the jurisdiction of this court is perhaps of theoretical rather than of practical significance. But in any event, it cannot be decisive, in my opinion, of the question whether the federal jurisdiction, with which the state courts have been invested, may become exercisable by reason of matters raised by a defence. I am of opinion that it may be attracted by a defence or by an answer which is made to a defence if a “title, right, privilege, or immunity,” upon which the defence or its rebuttal is founded, is given by and depends upon the Constitution or upon a Commonwealth law”. 34 I therefore accept that the Commission can, as a court of the State, exercise federal jurisdiction for the purposes of s 39 of the Judiciary Act 1903 and relevantly, for present purposes, federal jurisdiction can arise by way of matters of defence (or more aptly by a notice of answer) in this jurisdiction. 35 As to the issue of whether the current matter could be regarded as “a matter arising under this Act” for the purposes of s 347 of the WRA, I agree with the respondents’ submissions that it can be so described. It has been held that “matter” for the purposes of s 347 of the WRA, is to be seen as “a single justiciable controversy identifiable independently of all the proceedings which are brought for its determination and encompassing all claims made in the scope of the controversy”: Felton at 603. I have earlier mentioned that Felton is also authority for the proposition that a federal matter can arise by way of a defence, which was also the conclusion of the High Court in L.M.C Industries Ltd v B.M.W (Australia) Ltd (1983) 151 CLR 575. On the face of it therefore, these respective elements are satisfied in this case. 36 However, there is one major and fatal stumbling block for the respondents in this matter in seeking to invoke s 347 of the WRA. This stumbling block is that it is clear that the ability to recover costs is not available to any party to the 86 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1153 proceedings, as is the case with s 27(1)(c) of the Act. The textual provisions of s 347, which are changed in the now s 824(2) of the WRA, make it plain that only the party instituting the proceedings can be the subject of a costs order under these sections. The provision requires the application to have been “instituted” vexatiously or without reasonable cause and the focus of the section clearly is on the institution of the proceedings by an applicant from their commencement: Bostik (Australia) Pty Ltd v Gorgevski (No 2) 1992 AILR 290. Put another way, it is not open for an applicant who has instituted proceedings to recover costs, applying s 347 of the WRA, against a respondent(s) to those proceedings, as is the present case. The Commonwealth Parliament has clearly limited the ability to recover costs, in the way described in the section. This is the interpretation to be given to the section in accordance with the ordinary and natural meaning of the words used. In the present case, s 347 of the WRA has no work to do and cannot be called in aid of the respondents’ submissions in this matter. In my view the case falls to be decided solely in accordance with s 27(1)(c) of the Act. Should Costs be Awarded? 37 As set out above, the general approach of the Commission is to not make an award of costs save where there exist some exceptional circumstances to warrant such an order as an exercise of discretion under s 26(1)(a) of the Act. Again generally speaking, this has been adopted as the correct approach so that parties may bring proceedings before the Commission without the risk of costs orders necessarily following the event, as they would do in litigation in the civil courts as an ordinary rule. Additionally, reflecting perhaps the more historical position that lay advocates as opposed to counsel or paid agents have been granted some preference in appearance before the Commission, the costs of such legal practitioners or paid agents may not be recovered under s 27(1)(c) of the Act. Section 27(1)(c) of the Act is as follows: (c) …order any party to the matter to pay to any other party such costs and expenses including expenses of witnesses as are specified in the order, but so that no costs shall be allowed for the services of any legal practitioner, or agent;…” 38 In my view, for the following reasons, the present case does not fit the “extreme circumstances” criteria that would warrant a costs order against the respondents or either of them. 39 As to the listing of the proceedings in Karratha, as a ground advanced in support of the applicant's claim for costs, a number of observations can be made. It is the case that at the outset of the proceedings, in s 44 conferences, there was a request from at least BGC and Killarney through their counsel that the Commission attend on the site to ascertain the views of the relevant employees as to right of entry by the applicant. There was no real opposition expressed to that requested course by the applicant at that time. After several compulsory conferences the matter was not able to be resolved by agreement. Accordingly, the matter was referred for hearing and determination pursuant to s 44(9) of the Act. 40 After hearing the parties in a number of preliminary proceedings, the Commission formed the view, based both upon the initial requests of the parties and the fact that it appeared to the Commission that both parties may wish to call evidence from persons on or involved with the site in Karratha, that it would facilitate the hearing of the matter if the proceedings were listed at that location. That was a decision made by the Commission. There was a significant amount of activity by the parties in the week prior to the hearing of the matter in Karratha, largely caused by the respondents commencing proceedings in the Federal Court, in an endeavour to prevent the applicant prosecuting its claim in this Commission, as was its lawful right. Whilst those proceedings were ultimately unsuccessful, and indeed, the outcome in those proceedings was little different to the outcome in the proceedings before the Commission as presently constituted, the fact remains that the decision to list the matter in Karratha was the Commission’s, which at that point was of the view that the proceedings would be most conveniently held at that location. 41 It was only at the conclusion of the applicant's case in the hearing at Karratha, that the first respondent’s then counsel, somewhat surprisingly, announced his intention to not call any evidence in support of the various allegations raised by it in its notice of answer, as to the existence or otherwise of AWA’s and the terms of them. This submission was made in the mistaken belief that there was insufficient before the Commission within the proceedings as a whole, including the inspections, to enable the Commission to proceed to determine the matter. 42 In my opinion however, the respondents cannot now be burdened with a costs order because of the foregoing, despite the second respondent’s apparent forensic decision to not call evidence on the central issues in the case regarding AWA’s and the application of the WRA provisions in relation to right of entry, as a consequence. 43 As to the first respondent’s submissions that it should not be burdened with a costs order because it did not advance any particular view whether the matter was heard in Karratha or Perth, there is some merit in this submission. However, the Commission also observes none the less, that the first respondent was an active participant in the proceedings before this Commission and before the Federal Court. The first respondent certainly did not act as a mere bystander in the proceedings. 44 In relation to the notice to admit, on 11 February 2004, the applicant did file a notice to admit and served the notice on the respondents. That notice sought the admission of various facts by the respondents. The factual allegations included that representatives of the applicant attended the project site on a nominated date and notified their intention to enter the site and hold discussions with employees of both BGC and Killarney and to undertake inspections in accordance with the Act. Particularly relevantly, the notice sought admissions that some, but not all, of the relevant employees employed by Killarney were parties to AWA's and but for this, the terms of the Building Trades (Construction) Award 1987 covered the terms and conditions of employment of some relevant employees on the site. Admissions were also sought that the sole reason the representatives of the applicant were denied entry, was by reason of the fact that some employees were parties to AWA's. 45 Having been filed on 11 February 2004, under the then reg 79(2) of the Industrial Relations Commission Regulations 1985 (“the Regulations”), the respondents were required to provide a written reply by 18 February 2004, admitting or denying the relevant facts with or without qualification, as the case may be. Any failure to reply to a notice to admit within that time enabled the Commission, pursuant to reg 79(4), to direct the party in default to pay the costs of establishing the relevant facts referred to in the notice. 46 The respondents submitted that by letter dated 13 February 2004, the then solicitors for BGC and Killarney replied to the notice to admit filed on 11 February 2004. It was submitted that the reply indicated that the service of the notice to admit by the applicant did not obviate the need for attendance at the proceedings in Karratha. Specifically, the reply by BGC and Killarney dated 13 February 2004 admits a number of facts as alleged but denies others. Some allegations were not able to be responded to as it was said that their client was not privy to many of the alleged facts set out in the notice. 47 Having considered the notice to admit and the reply from Messrs Hotchkin Hanly of 13 February 2004, the Commission cannot be satisfied that the first respondent failed to reply to the notice in accordance with the Regulations. In my 1154 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 86 W.A.I.G. opinion, this does not provide support for an order for costs as claimed. The first respondent substantially responded to the content of the notice to admit to the extent that it was able, within the time limit specified by the then reg 79. 48 Also, in relation to the dispute generally and the circumstances leading to the proceedings in Karratha, sight must not be lost of the fact that the Commission was then dealing with an industrial dispute as to a contentious issue in relation to the right of entry of union officials on a substantial construction project in the North West of the State. This dispute required expeditious resolution by the Commission under the Act. The Commission took the decision that it did in relation to the listing of the proceedings in light of these considerations and in my opinion overall, the circumstances of the case are not extreme such as to warrant an order for costs. 49 In view of my conclusions it is not necessary for me to express any concluded view as to the applicant’s submissions regarding the ability to recover expenses for legal practitioners, pursuant to s 27(1)(c) of the Act. However, in my opinion, sound arguments exist in support of that proposition, given the ordinary and natural meaning of the language used in this section of the Act. 50 The application is therefore dismissed. 2005 WAIRC 03211