Lynch v Alan Hingston as trustee for the AP Family Trust trading as Grafton Sawmilling

[2009] NSWADT 263

CITATION:	Lynch v Alan Hingston as trustee for the AP Family Trust trading as Grafton Sawmilling [2009] NSWADT 263
DIVISION:	Equal Opportunity Division
PARTIES:	APPLICANT Michael Lynch RESPONDENT Alan Hingston as trustee for the AP Family Trust trading as Grafton Sawmilling
FILE NUMBER:	081119
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	8 July 2009
DATE OF DECISION:	13 October 2009
BEFORE:	Furness G - Judicial Member; Mooney L - Non-Judicial Member; Nemeth de Bikal L - Non-Judicial Member
CATCHWORDS:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Anti Discrimination Act 1977
CASES CITED:	Salon Today Pty Limited v M.M.I.R. Pty Limited [2009] NSWADT 71 Sloey v State Transit [1999] NSWADT 40
REPRESENTATION:	APPLICANT C Smith, barrister RESPONDENT E Johnston, barrister
ORDERS:	The respondent is to pay $5000 of the applicant’s costs.

REASONS FOR DECISION

1 The applicant’s claim that he was unlawfully discriminated by his employer dismissing him on the grounds of disability, was the subject of a decision by the Tribunal on 8 May 2009 ([2009] NSWADT 102]).

2 Following the publication of that decision the applicant made application for costs. A timetable was set and the applicant’s submissions in relation to costs were filed on 10 June 2009 and the respondent’s submissions in relation to costs were filed on 8 July 2009.

Submissions

3 The applicant’s submissions are based on ss.88(1A)(c) and (e) of the Administrative Decisions Tribunal Act (the ADT Act). He, as did the respondent, referred to the decision in Salon Today Pty Limited v M.M.I.R. Pty Limited [2009] NSWADT 71 in which the Tribunal considered the meaning of the amended s.88. Among other paragraphs referred to, were the following:

77 But the real key to understanding the Section 88 amendments is Section 88(1A) (e): "any other matter that the Tribunal considers relevant". These are very, very wide words, quite deliberately chosen by the Parliament, which quite clearly enjoin this Tribunal to look very carefully at the concept/principle of fairness and to widen the scope, without restriction, of the various aspects of the litigation – indeed, all the aspects of the litigation – that may result in a finding that the Tribunal is satisfied that it is fair to award costs. In my opinion it would be wrong to attempt to restrict Section 88(1A)(e).
78 That is not to say, by any means, that the usual principle in the Supreme and District Courts that "costs follow the event" is now to be adopted by this Tribunal. It is not. Costs can only be awarded under Section 88, but plainly the aspects of the litigation that need to be examined by the Tribunal to determine whether it is fair to award costs have been more than considerably expanded by the Parliament and ought, in fairness to the successful party, be embraced by this Tribunal. The test is, as always, "relevance".

4 He submits that the respondent should have known that his actions in dismissing the applicant for threatening to make a workers’ compensation claim were in contravention of the Anti-Discrimination Act, particularly in the light of correspondence sent to him by the applicant’s solicitors referring to admissions made in the respondent’s affidavit.

5 The applicant submitted that Mr Hingston’s position was “untenable and indefensible”. It was further submitted that no arguments were made during the hearing challenging the contention that the applicant had at least in part been dismissed for threatening to make a workers’ compensation claim. It was further submitted that the respondent’s continued resistance to the claim of dismissal was unsupported by the evidence and unreasonable.

6 The applicant submitted that the respondent defended the claim vigorously and made allegations including that the applicant was lazy, the worst worker for taking sick days, a troublemaker and that he would concoct a new false injury in order to make a bogus workers’ compensation claim. Those allegations were made in the knowledge that the applicant had made a successful workers’ compensation claim in respect of the disability. He submitted that the person attacks upon him, his integrity and his reputation were unnecessarily distressing and unreasonable in all the circumstances.

7 The applicant submitted that on 19 March 2009 he offered to compromise the application in the amount of $30,000 inclusive of costs. That offer of settlement was rejected by lawyers acting for the respondent by letter dated 25 March 2009. Following the conciliation conference on 28 August 2008, the respondent had offered the payment of $2,000 as an ex gratia payment, by way of a letter from the conciliation officer of the Anti-Discrimination Board.

8 The applicant submitted that the respondent’s “blanket refusal, in the face of the unfavourable evidence before him, to counter offer or make any genuine attempt to compromise the matter was unreasonable”.

9 The applicant submitted that his legal fees in respect of the matter, prior to assessment were in excess of $17,500 and that if he is not awarded costs, the costs he has incurred will dispose of a significant proportion of the damages awarded.

10 The applicant referred to the case of Sloey v State Transit as follows:

16 Whilst the Tribunal accepts that the complainant being out of pocket is not, on its own, a basis to justify the awarding of costs, it takes the view that in conjunction with other circumstances it could be regarded as a factor. The complainant in this matter was available to work at all times during which lost wages were awarded as damages, and it was only due to the respondent's decision that he did not work. Therefore the award of wages placed him in the position in which he would have been if the discrimination had not occurred. The costs, prior to assessment, total much more than the award for general damages, therefore the complainant is clearly out of pocket. To ignore this as a factor would mean that complainants are met with a significant disincentive to run matters such as this, because the costs will take a major proportion of their award.

17 This is a factor which the Tribunal considered.

11 That was a matter considered before the amendments to the ADT Act costs provisions.

12 The applicant submitted that neither counsel was given an opportunity to address on costs as the decision was not handed down in person. The applicant submitted that the absence of the mention of costs in the decision was not a defacto order as to costs but simply a failure to consider the question given that the Tribunal had not had the benefit of hearing submissions from either party.

13 The applicant seeks an order that the respondent pay the applicant’s costs of the proceedings, including the costs of the costs application, as agreed or assessed and in the alternative that the respondent pay the applicant’s costs of the proceedings as agreed or assessed except that the respondent pay the applicant’s costs incurred after 25 March 2009, including the costs of this costs application, on an indemnity basis as agreed or assessed.

14 The respondent submitted that the offer of compromise put forward by the applicant on 19 March 2009 and reaffirmed by facsimile of 25 March 2009 was less favourable to the respondent than the terms of the orders made by the Tribunal.

15 The respondent addressed s.88(1A)(c) and (e) of the ADT Act in his submissions.

16 The respondent submitted that his defence of the claim was reasonable, justified and arguable. He distinguished Salon on the basis that in that matter there had been no settlement offer from the respondent and the offers to settle were more favourable to the respondent than the terms of the orders made by the Tribunal.

17 The respondent submitted that the amount awarded is less than the amount sought in the offer of compromise and considerably less than the amount sought in the applicant’s points of claim. The respondent concedes that should a cost order be made in favour of the applicant, the respondent will be in a worse position than he would have been had he accepted the offer of compromise.

18 The respondent submitted that no objection was made by the appellant during cross examination in regard to either vigorous advocacy or alleged personal attacks and there was no intervention from the bench.

19 The respondent submitted that the applicant served a number of documents “at the twelfth hour” including the statement from the applicant detailing non economic and economic loss, the affidavit of Megan Coutts, and an affidavit from Noel Spencer.

20 The respondent submitted that there had been three major floods on the north coast in 2009 and is being forced to lay off employees.

21 The respondent resists the application for costs, although it does not ask for a costs order in its favour.

Provisions

22 Section 88 of the ADT Act provides as follows:

(1) Each party to proceedings before the Tribunal is to bear the party’s own costs in the proceedings, except as provided by this section.
(1A) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following:
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as:
(i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or
(ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or
(iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or
(iv) causing an adjournment, or
(v) attempting to deceive another party or the Tribunal , or
(vi) vexatiously conducting the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties , including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings,
(e) any other matter that the Tribunal considers relevant.
(2) The Tribunal may:
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act2004 or on any other basis.
(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs .
(4) In this section, "costs" includes:
(a) costs of or incidental to proceedings in the Tribunal , and
(b) the costs of or incidental to the proceedings giving rise to the application , as well as the costs of or incidental to the application .

Reasons

23 That section of the Act was amended with effect from 1 January 2009 and the amended provision applies to applications and proceedings that were made on or commenced but not finally determined before that date. (ADT Act, Schedule 5, Part 11, Clause 43(2)(i))

24 The key difference in the amended s.88 is that special circumstances which were required under the previous enactment are no longer necessary.

25 The test to be applied by the Tribunal is to award costs only if satisfied that it is fair to do so having regard to the matters set out above.

26 The respondent does not submit that the Tribunal cannot make an order for costs, only that it should not. An order was not made for costs because the Tribunal had not been addressed on the matter. The decision was handed down by the Registry, as is usual, not allowing the parties at that time to raise the issue of costs. The issue as to costs was properly raised by the applicant subsequent to the decision being published and, submissions were invited and received from each party.

27 The Tribunal finds that it has jurisdiction to entertain costs.

28 The Tribunal does not find that either party conducted the proceedings in a way which unnecessarily disadvantaged the other, nor is it satisfied that either party was responsible for prolonging unreasonably the time taken to complete the proceedings. Further, there is nothing in the nature or the complexity of the proceedings that would cause the Tribunal to be satisfied that it was fair to award costs.

29 In relation to the relative strengths of the claims made by each of the parties, it cannot be said that the respondent made a claim that had no tenable basis in fact or law.

30 The respondent’s position before the Tribunal during the hearing and in its costs submissions is that the threat of the applicant was to use his “then non existent” disability or injury as the basis of a workers’ compensation claim. The Tribunal’s findings in relation to that matter are set out in the earlier decision. The Tribunal finds that the relative strengths of the claims made by each of the parties do not warrant, on the basis of fairness, an award as to costs.

31 Turning then to the other matter raised in the submissions, namely, the offers of compromise. The amount the Tribunal ordered the respondent to pay was $26,272.74. The applicant offered to settle the matter for the payment of $30,000 inclusive of costs.

32 The applicant submits that his legal fees, prior to assessment are in excess of $17,500. They were presumably less at the time of the offer as they would not include barrister and solicitor costs for a two day hearing.

33 The test to be applied by the Tribunal differs from the test which applies in civil litigation elsewhere. In Commonwealth of Australia v Gretton [2008] NSWCA 117, the NSW Court of Appeal recently set out the principles which apply to offers of compromise in matters litigated before courts.

39 Part 20 , r 20.26 of the UCPR provides for the making of offers of compromise (a rules offer). Rule 42.15A governs the consequences that flow where an offer of compromise is made by a defendant under the rules (‘a rules offer’). If such an offer is not accepted by the plaintiff and the judgment is more favourable to the defendant, then, unless the court otherwise orders, the defendant is entitled to an order for costs of the proceedings. Those costs are to be assessed on an ordinary basis up to the day following the date on which the offer was made and thereafter on an indemnity basis. (There is a slightly different time at which the rule operates where the offer is made during the course of the trial.)

40 …The making of a Calderbank offer is one of the circumstances in which the court may exercise its discretion under r 42.1 to make some order other than costs follow the event.
41 There are public policy considerations that underpin the making of favourable costs orders where a Calderbank offer has been made. In Leichhardt Municipal Council v Green [2004] NSWCA 341 , Santow JA said at [14]:
“... the practice of Calderbank letters is allowed because it is thought to facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible. Furthermore, however, it can be seen as also influenced by the related public policy of discouraging wasteful and unreasonable behaviour by litigants.”

43 The making of a Calderbank offer does not automatically result in a favourable costs order, notwithstanding that the judgment is more favourable to the party making the offer than the terms of the offer. Rather, as Giles JA stated in SMEC Testing Services Pty Ltd v Campbelltown City Council at [37]:
“...the question is whether the offeree’s failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure ...”

34 It was not submitted by the respondent that the offer of compromise made by the applicant and the amount awarded should result in a costs order in its favour. In the context of the offer of compromise, the respondent merely submitted that the late service of documents did not permit proper reflection of them. The applicant submitted that the respondent’s refusal to make any genuine attempt to compromise the matter was unreasonable.

35 In light of the Tribunal’s findings in relation to the disability discrimination claim, the Tribunal is satisfied that the applicant made a reasonable offer to compromise the proceedings. Assuming his costs were more modest prior to the two day hearing involving counsel and a solicitor, and taking into account that that amount would be likely to be reduced on assessment, that offer was not significantly different from the amount awarded.
36 The Tribunal is also satisfied that no reasonable response or offer was made by the respondent. Leaving aside the amount of costs that was in fact incurred, the Tribunal is concerned that the effectiveness of the remedy conferred by the ADT Act is not undermined by the costs incurred by an applicant who seeks to vindicate his or her rights under it. This is especially so in a case where such an applicant has made a reasonable attempt to compromise their claim but a respondent has not thus forcing the applicant to incur the costs of the proceedings. Given all the circumstances, that is the offer that was made, that it was rejected, the result that was achieved and the rights sought to be vindicated the Tribunal is satisfied that it is fair to award the Applicant costs.
37 However, the Tribunal also considers that costs awarded should not be disproportionate to the nature and complexity of the case as presented to us. The matter was heard over two days and did not involve complex questions of law or fact. Further, the offer of compromise by the applicant was first made on 19 March 2009, only about a week before the hearing, thus reducing the costs which might otherwise have been saved, had it been accepted.

38 Pursuant to s.88(2)(a) the Tribunal may determine to what extent costs are paid. Having regard to the offer made by the applicant, the time at which it was made and the nature and complexity of the case, the Tribunal orders the respondent to pay the applicant as amount of $5000 in costs.