Martires v Endura Paint Pty Ltd (No.3)
[2020] FCCA 2039
•27 July 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MARTIRES v ENDURA PAINT PTY LTD (No.3) | [2020] FCCA 2039 |
| Catchwords: INDUSTRIAL LAW – Application for costs – Calderbank offer – reasonable opportunity to consider offer – failure to adequately advise the applicant of consequences of failing to accept offer – application refused. |
| Legislation: Fair Work Act 2009 (Cth), s.570 Federal Circuit Court Rules 2001 (Cth), r.1.05 Federal Court Rules 2011 (Cth), rr. 25.01-25.06, 25.10-25.12, 25.14 |
| Cases cited: Calderbank v Calderbank [1975] 3 All ER 33 Danidale Pty Ltd v Abigroup Contractors Pty Ltd (No 2) [2007] VSC 552 GIO General Limited v Allen [2002] NSWCA 333 Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 Jellett & Jellett (No. 2) [2012] FMCAfam 983 McDonald v Parnell Laboratories (Aust)(No.2) [2007] FCA 2086 |
| Applicant: | EDMUND RICARDO MARTIRES |
| Respondent: | ENDURA PAINT PTY LTD |
| File Number: | PEG 364 of 2018 |
| Judgment of: | Judge McNab |
| Hearing date: | Matter considered in Chambers on the papers |
| Delivered at: | Melbourne |
| Delivered on: | 27 July 2020 |
REPRESENTATION
Application determined on submissions without appearances.
ORDERS
The Respondents application in a case filed 27 April 2020 seeking costs of the proceedings be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 364 of 2018
| EDMUND RICARDO MARTIRES |
Applicant
And
| ENDURA PAINT PTY LTD |
Respondent
REASONS FOR JUDGMENT
On 20 April 2020 the Court made orders dismissing the Applicant’s claim and reserved the Applicant’s costs. On 27 April 2020 the Respondent filed an application in a case seeking orders that:
a)The Applicant pay the Respondents costs and disbursements of and incidental to the proceedings including this application on an indemnity basis on and from 25 August 2018.
b)Alternatively to order one, the Applicant pay the Respondents costs and disbursements of and incidental to this proceeding including this application, to be assessed or agreed.
c)Alternatively to orders one and two, the Applicant pay the Respondents costs and disbursements of and incidental to the proceeding including this application to be assessed or agreed on and from 25 August 2018.
The Applicant relies upon affidavits sworn by Kylie Michael dated 24 April 2020 and Aaron Julius Soos sworn 24 April 2020 and 22 August 2018.
Section 570 of the Fair Work Act 2009 (Cth) (“the Fair Work Act”) provides:
Costs only if proceedings instituted vexatiously etc.
(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) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a) The court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) The court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) The court is satisfied of both of the following:
(i) The party unreasonably refused to participate in a matter before the FWC;
(ii) The matter arose from the same facts as the proceedings.
Ms Michael by her affidavit deposes that she sent a letter containing a settlement offer to the Applicant by email at 12.10pm on 20 August 2018. That letter sets out in detail the factual basis of the Respondent’s defence to the Applicant’s claims and attaches photographs in support of the matters raised by way of defence. The letter stated that the offer was open for acceptance until 10.00am on 24 August 2018.
The offer of settlement is framed in the following terms:
“Our client will rely on all the above warnings and incidences of your unacceptable conduct and your unsafe work in defence of your claim.
In the interest of avoiding unnecessary, costly and lengthy legal proceedings, our client is prepared to offer, in full and final settlement of any claims between you and our client, the following:
1. Our client will pay you $5000 to be paid within seven days of you executing a deed of settlement; and
2. You execute consent orders dismissing the current court action with no order as to costs, and agree not to bring any other claims whatsoever against our client; and
3. You execute a deed of settlement.”
The offer refers to Calderbank v Calderbank [1975] 3 All ER 333 (“Calderbank”) and Australian decisions applying that case. The letter concludes stating:
…in the event that the above offer is not accepted, our client will rely on this correspondence on the question of costs. Further, take note that the value of your claim will be significantly reduced as a result of our client’s defence is set out hereinabove.
The Applicant did not accept that offer and he opposes the making of the orders sought in the application in the case on the grounds that the letter contained invented or fabricated stories which could not be accepted by any sensible person and that otherwise he is appealing the decision made on 20 April 2020.
The court has power to make a costs order pursuant to section 570 (2) (b) of the Act on the basis that a failure to accept an offer of settlement may constitute an unreasonable act or omission causing the other party to incur costs: McDonald v Parnell Laboratories (Aust)(No.2) [2007] FCA 2086 at [29] – [30].
The letter containing the offer which set out in detail the basis of the Respondent’s defence to the Applicant’s claims was comprehensive and coherent. In circumstances where the Applicant’s claim was for the sum of about $30,000 the offer of $5000 where he was unrepresented and had not incurred legal fees it was a genuine offer of settlement and not derisory.
However, there are a number of reasons why the Applicant’s failure to accept that offer did not constitute an unreasonable act or omission. I appreciate that these matters have not been raised by the Applicant in opposition to a cost order being made but in circumstances where the Applicant in unrepresented the court raises them as they are self-evident.
First, the offer was only open for acceptance for effectively two and a half days. For a Calderbank offer to be effective a reasonable length of time must be given to the offeree to consider the offer: GIO General Limited v Allen [2002] NSWCA 333 at [8] and Jellett & Jellett (No. 2) [2012] FMCAfam 983 at [27]. The time for accepting an offer of compromise served pursuant to the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”) (which adopt the relevant Federal Court Rules2011 (Cth) (“FC Rules”) regarding offers of compromise) is 28 days, see rules 1.05(2) and 1.05(3)(b) of the FCC Rules and rules 25.01 to 25.06, 25.10 to 25.12 and 25.14 of the FC Rules. I do not understand why a similar period was not provided to the Applicant. There would appear to be no reason for the Applicant to be given such a short time to consider the offer, other than, I surmise, that the Respondent wished to make clear that it was taking a no nonsense stance to the claim. The offer was made early in the proceeding and the Applicant was entitled to have a reasonable time to consider the offer.
Second, the letter of offer did not make clear that indemnity costs would be sought or the tangible consequences of failing to accept the offer. For instance, the letter did not provide that in the event that the Applicants claim is dismissed or that it succeeds only to an extent of an award less than $5000 that indemnity costs would be sought. The letter does state that the offer would be raised on the question of costs and raised that the value of any successful claim that the Applicant had may be diminished. The letter did not state that although costs are not ordinarily ordered in proceedings under the Fair Work Act, that if the Applicant obtained a result in the application less favourable than the offer, an application would be made for the Applicant to pay the Respondent’s legal costs incurred in the proceeding including indemnity costs. The failure to include a statement to that effect regarding the effect of not accepting the offer means that it was not unreasonable for the Applicant to reject or not accept the offer: Danidale Pty Ltd v Abigroup Contractors Pty Ltd (No 2) [2007] VSC 552 at [17] and Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242, 249-250. This is particularly the case given that the Applicant was self-represented.
For these reasons the Respondent’s application for costs must be dismissed.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge McNab
Associate:
Date: 27 July 2020
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