Kruger v Watsons Marine Engineering Pty Ltd (No 2)
[2024] FedCFamC2G 719
•8 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kruger v Watsons Marine Engineering Pty Ltd (No 2) [2024] FedCFamC2G 719
File number(s): BRG 311 of 2022 Judgment of: JUDGE EGAN Date of judgment: 8 August 2024 Catchwords: INDUSTRIAL LAW – COSTS – Where respondent made an offer to settle at an early stage of the proceeding, followed by two subsequent offers to settle – where the applicant failed entirely in his claim – where the applicant would have been better off had he accepted any of the three offers to settle made to him – where the applicant’s conduct was unreasonable – where party/party costs ordered to be paid by the applicant up until the time of deadline for acceptance of the first offer, and thereafter, on the indemnity basis. Legislation: Fair Work Act (2009) (Cth) s. 520(2) Cases cited: Calderbank v Calderbank (1975)
Melbourne Stadiums LTD v Sautner [2015] FCAFC 20
Saxena v PPF Asset Management LTD [2011] FCA 395
Division: Division 2 General Federal Law Number of paragraphs: 14 Date of last submission/s: 5 April 2024 Date of hearing: 16 February 2024 Applicant: Frederick Kruger, appearing on his own behalf Counsel for the Respondent: Mr Duhig of Counsel Solicitors for the Respondent: Gold Coast Litigation Lawyers ORDERS
BRG 311 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FREDERICK CHRISTIAN KRUGER
Applicant
AND: WATSON MARINE ENGINEERING PTY LTD
Respondent
ORDER MADE BY:
JUDGE EGAN
DATE OF ORDER:
8 AUGUST 2024
IT IS ORDERED THAT:
1.The applicant pay the respondent’s costs of and incidental to the proceeding on a party/party basis up until 16 March 2023, but thereafter on the indemnity basis, such costs to be as agreed, or failing agreement, as assessed pursuant to the provisions of Rule 22.02(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE EGAN
Introduction
By a judgement handed down on 16 February 2024, the application filed by the applicant on 26 July 2022 was dismissed.
After judgement had been handed down, it was agreed between the parties that the Court would hand down its decision on the question of costs “on the papers”, after each party had filed and served any affidavit material, and any written submissions.
The applicant filed an affidavit on the question of costs on 8 March 2024. That affidavit was largely a defence by the applicant of the claims made by him, and criticism by him of the Court’s rejection of such claims in its reasons for judgement, insofar as those reasons were adverse to such claims. [1] The annexures to the applicant’s affidavit were presumably included, erroneously, to reassert the validity of his rejected claims.
[1] See for example [45] – [53] of the applicant’s filed affidavit.
In an affidavit of Mr Taylor filed on 27 February 2024 on behalf of the respondents, Mr Taylor annexed copies of three (3) offers to settle made during the course of the proceeding. Those offers were annexures ST-1, ST-2 and ST-4. The offers were respectively open for acceptance by the applicant until 16 March 2023, 21 June 2023, and 18 October 2023.
The effect of the first offer to settle made on behalf of the respondents was that the applicant had 21 days from 23 February 2023 to accept the sum of $10,000.00, inclusive of costs, to settle the claim. A copy deed of release (also part of annexure ST-1) was sent at the time of the making of such offer. The offer was not accepted by the applicant.
The second and third offers of settlement were similarly not accepted by the applicant. Each of those offers was expressed as having been made in accordance with the principles in Calderbank v Calderbank (1975) 3 All ER 333, and each had, as a clause of the offer, a paragraph to the following effect:
“Beyond the Deadline, further significant costs will be incurred in preparing this matter for trial. Should this Offer not be accepted by the Deadline, our client will therefore rely on that non-acceptance in support of an application for you to pay its costs of the proceeding on the indemnity basis.”
Had the applicant accepted any of the above offers, the applicant would have been in a better position than that which he found himself in at the time of the handing down of judgment.
Section 570(2)(b) of the Fair Work Act (2009) (Cth) (“the FWA”) empowered the Court to order a party to pay costs should it be satisfied that that party’s unreasonable act or omission caused the other party to incur costs. In that regard, it has been held that the discretion to order costs under s. 570(2) of the FWA ought to be exercised cautiously. [2]
[2] Saxena v PPF Asset Management LTD [2011] FCA 395 at [6] per Bromberg J
It has further been held that a failure to accept a reasonable offer of settlement may constitute an unreasonable act or omission for the purposes of s. 570(2) of the FWA. [3]
[3] Melbourne Stadiums LTD v Sautner [2015] FCAFC 20 at [166] per Tracey, Gilmour, Jagot, White and
Beach JJ
The non-acceptance of the first offer to settle the proceeding was unreasonable. By the time that such offer had been made, pleadings had closed, and the applicant well knew that not only were his claims denied, but that serious allegations of defective workmanship and damage to tools on his part, during the course of his employment, had been made against him. [4]
[4] See [49(a)] of the Defence
The applicant ought to have appreciated, as found by the Court, that work performance and tool damage issues had been raised with him by the respondents during the course of his employment, and that those issues were not only likely to form a substantial part of the respondent’s case, but also a claimed repudiation of the defence to the applicant’s claims at trial. As it happened, it was so found that the applicant’s employment was terminated because of his poor work performance which caused damage to tooling.
Further, because the applicant had been employed for a higher wage at his subsequent place of employment, he must have appreciated that he did not have ongoing financial loss by reason of his having had his employment with the respondent terminated. Had he accepted the first offer, any claim for wages would have been well exceeded.
The affidavit of Mr Taylor failed to annexe any report from a qualified costs assessor who could have given evidence as to what a taxing officer might have assessed as to the quantum of costs recoverable pursuant to any Court order. In the absence of such evidence, the Court, lacking the relevant expertise of a costs assessor, was unable to assess whether any of Mr Taylor’s claims as to the appropriateness of the costs claimed on behalf of the respondent were reasonable or not.
The Court considers that it is appropriate that the applicant pay the respondent’s costs on a party/party basis up until 16 March 2023, but thereafter, that the applicant pay the respondent’s costs on the indemnity basis. The quantum of costs should be as agreed to between the parties, or failing agreement, to be assessed.
And it is so ordered.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan. Associate:
Dated: 8 August 2024
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