FEDERAL CIRCUIT COURT OF AUSTRALIA
| EL SOUKI v MACUSHLA PTY LTD (No.2) | [2020] FCCA 1986 |
| Catchwords: INDUSTRIAL LAW – Costs – general rule that no order as to costs – whether costs should be awarded against the respondent – whether threshold reached – no order as to costs. |
| Legislation: Fair Work Act 2009 (Cth), ss.3, 12, 345, 357, 535(1), 536(1), 539(2), 546, 557, 570 Federal Circuit Court of Australia Act 1999 (Cth), s.81(1)(b) Federal Circuit Court Rules 2001 (Cth), r.21.07 |
| Applicant: | JIHAD EL SOUKI |
| Respondent: | MACUSHLA PTY LTD (TRADING AS SUNNYTOP BAKERY CIABATTA DELLA NONNA) |
| File Number: | MLG 1972 of 2015 |
| Judgment of: | Judge C. E. Kirton QC |
| Hearing date: | On the papers |
| Date of Last Submission: | 14 April 2020 |
| Delivered at: | Melbourne |
| Delivered on: |
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Details
- Case
- [2020] FCCA 1986
- Decision Date
CaseChat Overview and Summary
In *El Souki v Macushla Pty Ltd (No.2)*, the applicant sought orders for costs against the respondent following a determination of contraventions of the *Fair Work Act 2009* (Cth). The dispute centred on the applicant's claim that the respondent had failed to make a genuine offer of compromise, thereby justifying an award of costs against them. The matter was heard by Judge C. E. Kirton QC.
The primary legal issue before the court was whether the respondent's conduct in making an offer of compromise, which the applicant argued was inadequate and demonstrated no genuine willingness to settle, warranted an order for costs against the respondent. The applicant contended that the respondent's offer was significantly less than the eventual award and did not meet the requirements of a *Calderbank* offer, while the respondent argued that making any offer, regardless of its amount, demonstrated a reasonable approach and willingness to resolve the proceeding, and that imposing a threshold for such offers would be an unreasonable burden.
The court acknowledged the merit in the respondent's submissions regarding the general principles of costs discretion and the ability to pursue a robust defence. However, the court indicated it was not inclined to engage in a detailed consideration of the submissions. The applicant's argument was framed as the costs discretion being enlivened by the respondent's offer not demonstrating a genuine attempt to compromise, rather than an unreasonable refusal to accept an offer.
Ultimately, the court determined that no order as to costs should be made against the respondent.
The primary legal issue before the court was whether the respondent's conduct in making an offer of compromise, which the applicant argued was inadequate and demonstrated no genuine willingness to settle, warranted an order for costs against the respondent. The applicant contended that the respondent's offer was significantly less than the eventual award and did not meet the requirements of a *Calderbank* offer, while the respondent argued that making any offer, regardless of its amount, demonstrated a reasonable approach and willingness to resolve the proceeding, and that imposing a threshold for such offers would be an unreasonable burden.
The court acknowledged the merit in the respondent's submissions regarding the general principles of costs discretion and the ability to pursue a robust defence. However, the court indicated it was not inclined to engage in a detailed consideration of the submissions. The applicant's argument was framed as the costs discretion being enlivened by the respondent's offer not demonstrating a genuine attempt to compromise, rather than an unreasonable refusal to accept an offer.
Ultimately, the court determined that no order as to costs should be made against the respondent.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
The Applicant also submits that the absence of any genuine offers of compromise from the Respondent are also grounds for costs being awarded. The Applicant submitted as follows:a. Despite the admissions of Mr. Iaconis, the only offer of compromise made to the Applicant was received on 22 September 2016 and was for the amount of $12,334.92 for wages and $15,786.40 for super. This amount actually constitutes less than 10% of what the Applicant has actually been awarded for non-payment of wages and superannuation. b. On the 6 October 2016 the Applicant responded to the Respondent’s offer advising it of the inadequacy of the offer in that it did not sufficiently meet the requirements of being a Calderbank offer and that even on a calculation of the Respondent’s own accepted version of the facts, the offer made was still $50,000 below that. c. In its response to the so-called Calderbank offer received from the Respondent, the Applicant proposed that the Respondent pay it $100,000 as full and final settlement of all aspects of its claim and provided described why that amount was justified. No reply was received by the Respondent in response. In Conclusion d. Based on the extremely low and unjustified offer of compromise made by the Respondent and also considering that it was not willing to offer any settlement which remotely reflected even its own accepted version of the facts and law, it must be said that Mr.Iaconis or the legal representative of the Respondent had no genuine willingness to settle this matter. The Applicant provided a number of authorities in relation to a party’s failure to accept a reasonable offer of compromise. The Respondent argues that the authorities which the Applicant refers, concern an unreasonable refusal to accept an offer, however, the Respondent contends that this argument was not advanced in the submissions. Rather, the submissions focussed on the inadequacy of the offer by the Respondent. The Respondent submits that: It is doubtful that the positive act of making a Calderbank offer – whether low, high or otherwise - is capable of exciting the Court’s costs discretion. This idea is incompatible with the principles that a respondent is entitled to pursue a robust defence, advance arguable claims, and only bear costs in exceptional and clear cases. Imposing an obligation to not only make an offer of compromise, but to ensure that the sum of the offer meets a threshold, would impose a remarkable burden in ordinary commercial matters, let alone matters defended in a no-costs jurisdiction. The Respondent is not aware of any authority that would support such a novel proposition. That the Respondent did indeed make a Calderbank offer for approximately $28,000 is a matter that demonstrates a reasonable approach and a willingness to attempt to resolve the proceeding. The Respondent’s submissions are not without merit. However, the Court is not minded to descend into a detailed consideration of those submissions. Here, the Applicant’s argument goes no further than suggesting that the costs discretion is enlivened because the offer did not demonstrate a genuine attempt to compromise.
Ratio Decidendi
Legal Principle Established
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