Harpham v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (No 2)

In the matter of Harpham v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (No 2), the applicant, Mr Harpham, sought indemnity costs from the respondent, the CEPU, following a dispute in which he had recovered a sum by way of contractual damages. The CEPU had previously made three Calderbank offers, which Mr Harpham rejected. The CEPU applied for indemnity costs under the Fair Work Act 2009 (Cth) on the basis that Mr Harpham’s rejection of their offers constituted an unreasonable act or omission. Mr Harpham sought his costs of defending the CEPU’s application, contending that the CEPU’s application was vexatious and without reasonable cause.

The central legal issue was whether the rejection of the Calderbank offers by Mr Harpham constituted an “unreasonable act or omission” within the meaning of s 570(2)(b) of the Fair Work Act 2009 (Cth), thereby justifying the award of indemnity costs to the CEPU. Additionally, the court considered whether the CEPU’s application for costs was vexatious or made without reasonable cause, potentially entitling Mr Harpham to his costs of resisting the application under s 570(2)(a) or (b) of the Act. The court noted that the CEPU did not rely on s 570(2)(a), focusing instead on the alleged unreasonableness of Mr Harpham’s rejection of the offers.

The court found that Mr Harpham’s rejection of the CEPU’s offers, while not unreasonable, did not entitle the CEPU to indemnity costs. The CEPU’s application for costs was not considered vexatious or without reasonable cause. The court considered the stage of the proceedings when the offers were made, the time provided for consideration, the extent of compromise, the offeree’s prospects of success at the time, and the clarity of the offers. It concluded that the CEPU’s application for costs was not vexatious and had reasonable cause. Therefore, Mr Harpham’s application for his costs of defending the CEPU’s costs application was refused.

ORDERS:
1. There be no order as to costs.