Lees v Asaleo Personal Care Pty Ltd (No 3)
[2022] FedCFamC2G 488
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Lees v Asaleo Personal Care Pty Ltd (No 3) [2022] FedCFamC2G 488
File number: MLG 2194 of 2020 Judgment of: JUDGE RILEY Date of judgment: 21 June 2022 Catchwords: INDUSTRIAL LAW – costs – s.570(2)(b) of the Fair Work Act 2009 – Calderbank offer – applicant bettering monetary aspect of the offer but not securing another provision of the offer – the offer including a term that would have constituted a fraud on the Commonwealth – not unreasonable for the respondent to have rejected the Calderbank offer – respondent making unreasonable walk away offer – whether it caused the applicant to incur costs. Legislation: Fair Work Act 2009, s.570
Federal Circuit and Family Court of Australia Act 2021 s.190.
Cases cited: Calderbank v Calderbank [1976] Fam Law 93; [1975] 3 All ER 333; [1975] 3 WLR 586; [1976] Fam 93
Cutts v Head [1984] Ch 290; [1984] 1 All ER 597; [1984] 2 WLR 349 [1984] 1 All ER 597
Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665; (2015) 229 FCR 221; [2015] FCAFC 20
MT Associates Pty Ltd v Aqua-Max Pty Ltd & Anor (No 3) [2000] VSC 163
Mutual Community Limited v Lorden Holdings Pty Ltd (unreported, 28 April 1993)
Stuart Lees v Asaleo Personal Care Pty Ltd (No 2) [2022] FedCFamC2G 264
Stuart Lees v Asaleo Personal Care Pty Ltd [2021] FedCFamC2G 347
Tucker v State of Victoria [No 2] [2021] VSCA 182.
Division: Division 2 General Federal Law Number of paragraphs: 25 Date of hearing: 30 May 2022 Place: Melbourne Counsel for the applicant: Rohan Millar Solicitor for the applicant: McDonald Murholme Solicitors Counsel for the respondent: Leigh Howard Solicitor for the respondent: Clayton Utz ORDERS
MLG 2194 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: STUART LEES
Applicant
AND: ASALEO PERSONAL CARE PTY LTD (ACN 005 442 375)
Respondent
ORDER MADE BY:
JUDGE RILEY
DATE OF ORDER:
21 JUNE 2022
THE COURT ORDERS THAT:
1.The applicant’s costs application, being the application in a proceeding filed on 11 May 2022, be dismissed.
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 RILEY:
INTRODUCTION
This is an application for costs in relation to a claim brought under the Fair Work Act 2009 (“the Act”). In Stuart Lees v Asaleo Personal Care Pty Ltd [2021] FedCFamC2G 347, the court made the following declarations:
1. The respondent contravened s.340 of the Fair Work Act 2009 (“the Act”), by taking adverse action against the applicant for a prohibited reason by:
a. presenting to him a performance improvement plan on 3 March 2020; and;
b. dismissing him from his employment on 11 March 2020.
2. The respondent breached its contract of employment with the applicant by not conducting formal annual performance reviews after August 2016.
In Stuart Lees v Asaleo Personal Care Pty Ltd (No 2) [2022] FedCFamC2G 264, the court made the following orders:
THE COURT ORDERS BY CONSENT THAT:
1.Pursuant to ss.545(1) and (2)(b) of the Fair Work Act 2009 (“the Act”), the respondent pay to the applicant compensation in the amount of $22,552.80 for economic loss in respect of his dismissal on 11 March 2020 in contravention of s.340(1) of the Act.
2. Pursuant to ss.545(1) and (2)(b) of the Act, the respondent pay to the applicant $2,002.44 for interest on the amount of compensation specified in order 1.
THE COURT ORDERS THAT:
3. Pursuant to ss.545(1) and (2)(b) of the Act, the respondent pay to the applicant compensation in the amount of $7,500.00 for non-economic loss in respect of his dismissal on 11 March 2020 in contravention of s.340(1) of the Act.
4. Pursuant to ss.545(1) and (2)(b) of the Act, the respondent pay to the applicant $666.82 for interest on the amount of compensation specified in order 3.
5. Pursuant to s.546(1) of the Act, the respondent pay to the applicant a pecuniary penalty of $22,050 in respect of the presentation to the applicant of a performance improvement plan on 3 March 2020 in contravention of s.340(1) of the Act.
6. Pursuant to s.546(1) of the Act, the respondent pay to the applicant a pecuniary penalty of $44,100 in respect of the dismissal of the applicant from his employment on 11 March 2020 in contravention of s.340(1) of the Act.
7. Within 28 days, the respondent pay to the applicant the amounts required by these orders to be paid.
The total amount that Asaleo Personal Care Pty Ltd (“Asaleo”) was required to pay Mr Lees was $98,872.06. Prior to the trial, Mr Lees had made a Calderbank offer, seeking payment of $61,788.46 and a letter stating that his employment ended for reasons of redundancy. Asaleo did not accept that offer within the time limited or at all.
In these circumstances, the applicant, Mr Lees, sought an order for costs pursuant to s.570(2) of the Act. Section 570 of the Act relevantly provides that:
(1)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) ….
(2)The party may be ordered to pay the costs only if:
…
(b)the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; …
As can be seen, in proceedings under the Act, costs do not ordinarily follow the event. Costs can only be ordered in specific circumstances. The specific circumstances that Mr Lees relied upon were two allegedly unreasonable acts or omissions of the respondent, Asaleo, that caused Mr Lees to incur costs. Mr Lees said that Asaleo’s unreasonable acts or omissions were:
(a)refusing to accept Mr Lees’ reasonable Calderbank offer; and, in the alternative
(b)offering to settle the case on a walk-away basis.
Asaleo argued that the costs application should be dismissed.
THE MATERIAL RELIED UPON
At the hearing of the costs application, Mr Lees relied upon:
(a)his application in a proceeding filed on 11 May 2022;
(b)the affidavit of Alan McDonald sworn on 11 May 2022; and
(c)his written submissions filed on 30 May 2022.
At the hearing of the costs application, Asaleo relied upon:
(a)the affidavit of Alan McDonald sworn on 11 May 2022; and
(b)its written submissions filed on 27 May 2022.
MR LEES’ PROPOSED COSTS ORDERS
The costs orders proposed by the applicant in his application in a proceeding filed on 11 May 2022 are as follows:
1.The Respondent pay the Applicant’s costs in the proceeding on an indemnity basis from 17 September 2021.
2. Alternatively to (1), the Respondent pay the Applicant’s costs in the proceeding from 17 September 2021 in accordance with Schedule 1 of the Rules at the time that the proceeding commenced.
ASALEO’S PROPOSED COSTS ORDERS
The respondent proposed in its written submissions filed on the 27 May 2022 that the applicant’s costs application be dismissed.
THE CALDERBANK OFFER
The Calderbank offer was contained in a letter dated 17 September 2021 sent by Mr Lees’ solicitor to Asaleo’s solicitor. The Calderbank offer outlined the strength of Mr Lees’ claims and then said that Mr Lees was prepared to settle the matter on the following basis:
(a)[Mr Lees] requests a statement of service detailing the duration of his employment, corresponding position titles and workplace achievements, confirming his employment ended by reason of redundancy;
(b) that he receive payment equal to $61,788.46, to be paid as a genuine redundancy;
(c) if requested to do so, our client will execute a deed of release in the usual terms; and
(d)payment is made within 7 business days following the Respondent's receipt of an executed deed of release.
The Calderbank offer stated that it remained open for seven days, until close of business on 24 September 2021. It also stated that, if the offer were not accepted, Mr Lees would seek an order for any costs incurred after the expiry of the order based on the principles expressed in Calderbank v Calderbank [1976] Fam Law 93; [1975] 3 All ER 333; [1975] 3 WLR 586; [1976] Fam 93 and Cutts v Head [1984] Ch 290; [1984] 1 All ER 597; [1984] 2 WLR 349 [1984] 1 All ER 597, which has been given effect in Victoria by Byrne J in Mutual Community Limited v Lorden Holdings Pty Ltd (unreported, 28 April 1993) and by Gillard J in MT Associates Pty Ltd v Aqua-Max Pty Ltd & Anor (No 3) [2000] VSC 163.
Asaleo did not accept the Calderbank offer by close of business on 24 September 2021. The Calderbank offer therefore expired at close of business on 24 September 2021.
In Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665; (2015) 229 FCR 221; [2015] FCAFC 20 Tracey, Gilmour, Jagot and Beach JJ said at [166]:
It is well established that a failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of subsection 570(2)(b) and its predecessors…
In Tucker v State of Victoria [No 2] [2021] VSCA 182 Kyrou, McLeish and Sifris JJA said at [32]:
The following principles apply in the case of s 570(2)(b):
(f) Paragraph (b) is enlivened when two criteria are satisfied:
(i)one party has engaged in an ‘unreasonable act or omission’; and
(ii)that unreasonable act or omission has caused the other party to incur costs.
(g)Unreasonableness is to be determined objectively. It is a question of impression and degree, to be assessed by reference to the particular circumstances of a given case.
(h)Unreasonableness is not to be confused with negligence or inefficiency. A failure to conduct litigation in the most efficient way does not, without more, enliven the paragraph. The fact that a party has conducted litigation inefficiently, made belated concessions, or adopted a misguided approach may be relevant to, but will not be conclusive of, the question of unreasonableness.
(footnotes omitted)
Asaleo acknowledged that Mr Lees was awarded more money than he offered in his Calderbank letter to settle for, being $98,872.06 as opposed to $61,788.46. However, Asaleo noted that the terms of the Calderbank offer included that Mr Lees be given a letter stating that his employment ended by reason of redundancy. Mr Lees’ employment did not end by reason of redundancy. Asaleo submitted, without challenge, that it would have been contrary to Australia’s taxation laws for Asaleo to provide a letter stating that Mr Lees’ employment had ended for reasons of redundancy when it did not. I accept that is the correct position. Redundancy payments are treated favourably under taxation law. It would have been a fraud on the Commonwealth for Asaleo to provide a letter stating that Mr Lees’ employment had terminated for reasons of redundancy.
In these circumstances, it cannot be said that it was unreasonable for Asaleo to not accept the Calderbank offer. Although Mr Lees bettered the amount of money that he offered to settle for, he did not secure one of the terms of his settlement offer. It follows that, overall, Mr Lees did not better his Calderbank offer.
WALK AWAY OFFER
On 29 September 2021, five days after Mr Lees’ Calderbank offer expired, Asaleo made its own Calderbank offer to Mr Lees. Asaleo’s Calderbank offer outlined the strength of its position, and then offered to resolve the matter on the basis that:
(a)Mr Lees' dismissal will be re-characterised as a resignation and Mr Lees will be provided with a statement of service, indicating Mr Lees' period of employment and referencing the resignation;
(b)execution of a deed of a release in the usual terms, including mutual releases regarding all claims in respect of Mr Lees' employment and its cessation (except statutory workers compensation and superannuation entitlements), mutual confidentiality and mutual non-disparagement.
Asaleo said that its offer remained open until 12 October 2021, being about two weeks. Mr Lees did not accept that offer by the specified date or at all.
Mr Lees argued that Asaleo’s walk away offer was not reasonable, as evidenced by Mr Lees being awarded $98,872.06. I accept that contention.
However, to obtain a costs order under s.570(2)(b) of the Act, it is necessary to show that the unreasonable act or omission caused the other party to incur the costs. In the present case, the trail of causation is difficult to discern. Asaleo making an unreasonable offer did not cause Mr Lees to incur costs. On the other hand, Asaleo refusing a reasonable offer would have caused Mr Lees to incur costs.
It may be that, if Mr Lees had responded to Asaleo’s Calderbank letter with an offer to settle on the basis of a resignation, and a payment of $61,788.46, Asaleo would have accepted that offer. If Asaleo had not accepted it, the court may have found it relatively easy to award costs against Asaleo. However, this is all speculative. It is not a basis for making a costs order under s.570(2)(b) of the Act. The second basis on which Mr Lees sought a costs order is not sustained.
ADDITIONAL ARGUMENT FOR A COSTS ORDER
Mr Lees also argued that Asaleo’s failure to engage meaningfully with his Calderbank offer was contrary to s.190 of the Federal Circuit and Family Court Act 2021. That provision says that the overarching purpose of the civil practice and procedure provisions is to resolve matters as quickly, inexpensively and efficiently as possible.
It would have been helpful if both parties had made sensible offers that were capable of being lawfully implemented. I do not consider that all of the blame for the matter not settling rests with Asaleo. I do not consider that either party’s conduct warrants an order under s.570(2)(b) of the Act.
CONCLUSION
For these reasons, the costs application will be dismissed.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Riley. Associate:
Dated: 21 June 2022
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