Iliff v Sterling Commerce (Australia) Pty Ltd (No.2)
[2008] FMCA 38
•24 January 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ILIFF v STERLING COMMERCE (AUSTRALIA) PTY LTD (No.2) | [2008] FMCA 38 |
| HUMAN RIGHTS – INDUSTRIAL LAW – Costs application – relevance of Calderbank offer and offer of compromise – discretionary nature of costs. |
| Workplace Relations Act 1996, ss.824, 824(2) Sex Discrimination Act 1984 Federal Court Rules 1979 |
| Bahonko v Sterjov [2007] FCA 1341 Rosselli v Rosselli(No 2) [2007] VSC 438 Rural Press Ltd v Australian Competition & Consumer Commission [2002] FCAFC 310 Sperandio v Lynch (No 3) [2007] FCA 1243 |
| Applicant: | BELINDA SUSAN ILIFF |
| Respondent: | STERLING COMMERCE (AUSTRALIA) PTY LTD |
| File number: | MLG 833 of 2006 |
| Judgment of: | Burchardt FM |
| Hearing date: | 13 December 2007 |
| Date of last submission: | 13 December 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 24 January 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr R. Millar |
| Solicitor for the Applicant: | Foster Harris Lawyers |
| Counsel for the Respondent: | Mr T. Jacobs |
| Solicitor for the Respondent: | Baker & McKenzie |
ORDERS
The Respondent pay the Applicant’s interest on the sums ordered to be paid her on 3 December 2007 in the agreed sum of $3,794.83.
Each party bear their own costs of and incidental to the hearing that took place on 12 November 2007.
Otherwise, that the Respondent pay to the Applicant eighty per cent of her costs of this proceeding, to be taxed pursuant to the Federal Court Rules in default of agreement.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 833 of 2006
| BELINDA SUSAN ILIFF |
Applicant
And
| STERLING COMMERCE (AUSTRALIA) PTY LTD |
Respondent
REASONS FOR JUDGMENT
On 3 December 2007, I issued judgment in this matter. I declared that the Respondent had contravened the Workplace Relations Act 1996 (“the WR Act”) and imposed a penalty of $33,000.00 for that contravention. Additionally, I ordered that the Respondent pay the Applicant $22,211.54 less tax for a contravention of the Sex Discrimination Act 1984 (“the SDA”). I would also, had it been necessary, have ordered that that latter sum be paid for breach of contract in any event.
On 13 December 2007, I heard argument as to costs.
It should be noted that the parties agreed that I should make an order in the sum of $3,794.83 in respect of interest in the Applicant's favour, this being interest upon the $22,000.00 sum from the date at which it accrued in 2005.
The sums that will be ordered to be paid to Ms Iliff therefore are $33,000.00, $22,211.54 and $3,794.83 interest, which cumulatively amount to $59,006.37.
The reason I set this out is because it now transpires that the Respondent, on 18 December 2006, served a Calderbank offer in the sum of $75,000.00 less applicable tax as a bona fide redundancy and thereafter, on 27 March 2007, served an offer of compromise. I will return to the terms of both of those documents in due course.
The Respondent sought its costs on two bases. The first was that the Applicant's SDA claim had largely failed. It was submitted the authority of Bahonko v Sterjov [2007] FCA 1341 (“Bahonko”) compelled the conclusion that costs in this regard followed the event.
The Respondent submitted, correctly, that the successful part of the Applicant's claim under the WR Act attracted the operation of s.824 of that Act.
The second and alternative basis on which the Respondent sought costs was the two without prejudice offers to which I have already referred. It was put that the conduct of the Applicant in not accepting these offers not only had the usual effect of non-acceptance of such offers, but also constituted an unreasonable act or omission within the meaning of s.824(2) of the WR Act. It was submitted that the Respondent had made genuine attempts to compromise and that the Applicant proceeded thereafter at her peril. It was submitted that she had had sufficient time to consider the Calderbank letter (Rosselli
v Rosselli (No 2) [2007] VSC 438 (“Rosselli”) at [27]).The Applicant submitted that she should receive her costs. It was submitted that s.824 of the WR Act operates only on the penalty provision part of the proceedings.
Counsel submitted that there was one controversy only; namely, the failure of the Respondent to give the Applicant back her job following her maternity leave. He drew attention to the fact that Bahonko involved two proceedings started separately and then consolidated.
He submitted that the Applicant had been successful as to one part under the SDA and also on her contract of employment and also on the penalty issue.
The Calderbank letter, he submitted, probably arrived on 19 December 2006. It constituted an offer of $75,000.00 less tax, which would have given the Applicant less than she has in fact recovered.
He submitted further that neither the Calderbank letter nor the offer
of compromise paid any attention to the Applicant's demand for a declaration that there had been a breach of the WR Act.
In this regard, counsel referred to Rural Press Ltd v Australian Competition & Consumer Commission [2002] FCAFC 310 (“Rural Press”) at [25]-[26] and Sperandio v Lynch (No 3) [2007] FCA 1243 (“Sperandio”) at [8] and [11].
It should be noted that the offer of compromise, of course, made
no reference to payment of any of the Applicant's costs. Indeed, both the Calderbank letter and the offer of compromise proceeded on the footing that nothing would be paid by the Respondent in respect of the Applicant's costs.
The offer of compromise expressly asserted, contrary to one of the submissions now advanced by the Respondent, that because the matter arose under the WR Act, no costs should be paid.
The Applicant made a number of applications for further discovery
in the form of metadata. Counsel for the Applicant submitted that these were properly made inquiries which arose out of the way in which the Respondent had provided discovery on the drip. He said that there had at the time been good reason to doubt the genuineness of the restructure alleged by the Respondent and that discovery largely took place following the application made in respect of metadata.
The Respondent pointed out that on at least one occasion when the matter was before the Court on an interlocutory basis, counsel for the Applicant (Mr Miller's instructing solicitor) had made wide-ranging assertions as to possible fraud and forgery by the Respondent. Counsel for the Respondent's memory accords with mine.
It should be noted, however, that those assertions were not pressed
at trial.
In my opinion, the decision in Bahonko is binding on me. It means therefore that to the extent that it may be practicable to do so, the prohibition on costs arising in the WR Act claims does not extend
to the SDA claims.
The question of costs is inherently almost entirely discretionary, although the discretion must be exercised judicially. It should
be emphasised that every case turns on its own particular facts.
In this case, costs are in issue in so much of the proceedings
as involved the claims arising from the SDA. I note that in Bahonko at [19], Jessup J said:
“I could take the course of making a costs order which would leave it to the taxing officer to identify what costs the respondents incurred in relation to the HREOC Act claims, as distinct from the WR Act claims. However, given the relatively narrow compass of the facts of the case, I am reluctant to oblige the parties to undertake further, potentially costly, procedures, where a simpler, if less precise, formula would be adequate.”
His Honour went on to make an order that gave the Respondents half their costs subsequent to the consolidation of the proceedings.
In this case, unlike Bahonko, there has only ever been one proceeding.
Nonetheless, unlike Bahonko, where his Honour Jessup J on the facts found that in effect the proceeding involved an equal distribution of time as between the claims under the two pieces of legislation, in this case the vast majority of the factual and legal material before the Court were in my opinion relevant to the SDA case and not the WR Act case.
It is of course true that the Applicant's claims in relation to the SDA were in large part unsuccessful. Nonetheless, she did succeed
in respect of her claim for a redundancy payment under this heading. Further, to the extent that there were disputed issues of fact, she was largely successful. Further, again, unlike the Respondent, she did not act, in giving her evidence and in her conduct generally, in a manner that was less than honest. The Respondent actively sought to buttress its position by the preparation of the new position description to which I referred in my earlier reasons for judgment. I repeat, as I said there, that the Respondent's conduct in that regard did it no credit.
I would respectfully adopt what Jessup J said about the undesirability of putting the parties to a lengthy and confusing taxation process.
It is clear that the hearing date on 12 November 2007 was wholly concerned with the WR Act claims and neither party should have their costs of and incidental to their appearances that day.
Otherwise, however, and subject to the offers of compromise, I think that in the light of all the circumstances in this case, it is appropriate that the Applicant should have eighty per cent of her costs of the proceeding, to be taxed in default of agreement pursuant to the Federal Court Rules. That percentile gives appropriate weight both to the extent of the WR Act proceeding and to the time wasted on the Applicant’s pursuit of metadata.
As I say, the Applicant has succeeded in her case. She has been accepted as a witness of truth. The WR Act claims occupied very little of the proceeding. In my view, the order that I propose to make will do justice and will reflect, to paraphrase the words of Jessup J in Bahonko, the true costs of the Applicant with respect to the SDA claims, albeit that such order must necessarily, as his Honour said, be, to an extent, an approximation.
Turning to the Calderbank letter, there are a number of things to be said.
First, the Applicant was more likely than otherwise served with this offer on Tuesday, 19 December 2006 and had until 5 pm on Thursday, 21 December 2006 to accept it.
While I appreciate and pay proper regard to the remarks made
in Rosselli at [27], in my view, to serve an offer of this sort in the week before Christmas was not reasonable.
Furthermore, the offer was $75,000.00 less tax as a bona fide redundancy. There was some dispute before me as to whether, in net terms, that offer was greater or lesser than the amount that Ms Iliff has now recovered. Although I have not done the precise calculations myself, I think it is reasonably clear that $75,000.00 less applicable tax as a redundancy would produce a figure lower than $59,000.00. Furthermore, as noted, the Calderbank letter offered Ms Iliff noting for costs.
Turning to the offer of compromise, that offered Ms Iliff the sum
of $60,033.89, a figure slightly higher than what Ms Iliff has now recovered. Like the Calderbank letter, however, the offer
of compromise did not address the issue of declaratory relief. That was a matter to which reference was made in Rural Press at [26].
Furthermore, I note the observations of Jessup J in Sperandio
at [11] about cases where applicants are, as Ms Iliff was, seeking reinstatement.
In my view, the failure of the Calderbank letter and the offer
of compromise to address the issue of declaratory relief is important.
It is clear from the way in which Ms Iliff has conducted her case and from her demeanour during the entirety of the proceeding before me that she has felt very wronged by what the Respondent did to her.
Her desire to seek declaratory relief to the effect that the Respondent had breached its statutory obligations in respect of her return to work was entirely reasonable. Furthermore, her desire to be reinstated was, in the context of the information that was made available to her by the Respondent, itself also entirely reasonable. Furthermore, the offer of compromise expressly disdained to make any offer in respect of her costs. That is a position that the Respondent has not adhered to in the argument before me. That is also a relevant matter.
In all the circumstances, I do not think that either the Calderbank letter or the offer of compromise should prevent Ms Iliff from receiving, as I earlier indicated, eighty per cent of her costs of this proceeding.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Deputy Associate: Ann Pretty
Date: 24 January 2008
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