Salby v Macquarie University and Anor (No.2)
[2017] FCCA 7
•25 January 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SALBY v MACQUARIE UNIVERSITY & ANOR (No.2) | [2017] FCCA 7 |
| Catchwords: COSTS – Applicant in long and complex Fair Work proceedings wholly unsuccessful – settlement offer not responded to – alleged non receipt of the offer – whether the proceeding was instituted vexatiously or without reasonable cause or whether the applicant committed an unreasonable act or omission considered. |
| Legislation: Fair Work Act 2009 (Cth), s.570 Federal Circuit Court Rules 2001 (Cth) |
| Cases cited: Calderbank v Calderbank (1975) 3 ALL ER 333 Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20 |
| Applicant: | MURRY LEWIS SALBY |
| First Respondent: | MACQUARIE UNIVERSITY |
| Second Respondent: | PAUL BEGGS |
| File Number: | SYG 1677 of 2013 |
| Judgment of: | Judge Driver |
| Hearing date: | Decided on the papers |
| Date of Last Submission: | 9 November 2016 |
| Delivered at: | Sydney |
| Delivered on: | 25 January 2017 |
REPRESENTATION
The Applicant appeared in person
| Counsel for the Respondents: | Mr Y Shariff |
| Solicitors for the Respondents: | Johnson, Winter & Slattery |
ORDERS
The Application in a Case filed on 22 March 2016 is dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1677 of 2013
| MURRY SALBY |
Applicant
And
| MACQUARIE UNIVERSITY |
First Respondent
| PAUL BEGGS |
Second Respondent
REASONS FOR JUDGMENT
Introduction and background
Dr Murry Salby sued his former employer (Macquarie University) and another (Dr Paul Beggs) under the Fair Work Act 2009 (Cth) (Fair Work Act), the Trade Practices Act 1974 (Cth) (Trade Practices Act) and the general law for damages arising out of the termination of his employment at Macquarie University and events preceding that termination of employment.
I gave judgment in that proceeding on 22 February 2016[1]. Dr Salby was wholly unsuccessful in his claims. My decision is under appeal in the Federal Court[2]. Nevertheless, by Application in a Case filed on 22 March 2016, Macquarie University seeks costs orders as follows:
1. An ORDER pursuant to section 570(2)(a) and/or section 570(2)(b) of the Fair Work Act 2009 (Cth) that the Applicant pay the First and Second Respondents’ costs in part or in whole of the proceedings.
2. An ORDER pursuant to rule 21.02(2)(b) of the Federal Circuit Court Rules 2001 (Cth) that the Court order that the costs payable pursuant to order 1 be on the ordinary basis of party/party costs and not fixed by reference to the costs in Schedule 1 of the Federal Circuit Court Rules 2001 (Cth).
3. In the alternative to order 2, an ORDER pursuant to rule 21.02(2)(b) of the Federal Circuit Court Rules 2001 (Cth) that the Applicant pay the First and Second Respondents’ costs on a fixed sum basis.
4. Further and/or in the alternative, an ORDER that the Applicant pay the First and Second Respondents’ costs on an indemnity basis from 5:00pm on 28 April 2015.
5. Such further or other orders that the Court considers appropriate.
[1] Salby v Macquarie University & Anor [2016] FCCA 3
[2] proceedings NSD 357/2016
The costs application is supported by the affidavit of Ruveni Desaa Kelleher made on 21 March 2016.
Dr Salby opposes any costs order against him. He relies on his affidavit made on 8 November 2016.
The parties have also prepared written submissions on costs. It was agreed that the Court would deal with the issue of costs on the papers.
Consideration
The principal proceeding was, for this Court, a long and complex one. The procedural history of the principal proceeding is set out in the affidavit of Ms Kelleher as follows:
A. Claims
The applicant commenced these proceedings on 23 July 2013 (Proceedings). Prior to the Proceedings, the Applicant had sought relief from the Fair Work Commission on three separate occasions in relation to his employment with the First Respondent, the last being an application filed on 16 June 2013.
On 22 November 2013, the Applicant filed a Points of Claim, broadly setting out 7 claims against the Respondents. The 7 claims are categorised as follows:
a.Breaches and Contraventions of the Australian Workplace Agreement: Contravention of sections 345 and 359 of the Fair Work Act 2009 (Cth) (FW Act); sections 342(1) and 401 of the Workplace Relations Act 1995 (Cth) (WR Act) and breach of contract (Claim 1);
b.Misleading and Deceptive Conduct: Contravention of sections 52 and 53B of the Trade Practices Act 1974 (Cth) (TPA) (Claim 2);
c.The Startup Fund: Contravention of section 401 of the WR Act, sections 52 and 53B of the TPA, breach of the Startup Fund (Claim 3);
d.Repudiation of employment contract and contravention of the TPA: Contraventions of section 52 and 53B of the TPA (Claim 4);
e.Adverse Action: Contravention of sections 340(1) and 342(1)(a)-(c) of the FWA and the Higher Education Legislation Amendment 2005 (HELA) (Claim 5);
f.Further Adverse Action and Coercion: Contravention of section 343(1)(a) of the FW Act (Claim 6); and
g.Adverse Action based on political opinion: Contravention of section 351 of the FW Act (Claim 7).
B. Applicant’s Evidence
On 22 November 2013, the Applicant also filed an Affidavit in support of his Points of Claim, consisting of 7 annexures of 26 pages.
On 22 May 2014 and 18 December 2014, the Applicant filed and served 2 affidavits (Applicant’s Evidence Affidavits). The Applicant’s Evidence Affidavits annexed 94 documents which totalled 628 pages.
C. Interlocutory Applications
Between the filing of the Applicant’s Points of Claim and the final hearing, the Applicant filed numerous interlocutory applications and affidavits in support, including:
a.5 Application’s in a Case (on 15 October 2013, 29 April 2014, 1 May 2014, 9 May 2014, 12 May 2014, 13 October 2014) ; and
b.4 Subpoenas (on 1 May 2014, 26 November 2014, 15 April 2015 and 21 April 2015).
In relation to the numerous interlocutory applications, His Honour in the Judgement stated at [146]:
“There were many factual disputes in the case, and a great deal of time was taken up with interlocutory disputes which Dr Salby asserted were necessary to resolve in order for him to gain access to material to establish his claims. Not all of the factual issues ultimately raised are relevant to the resolution of the issues in dispute between the parties” (emphasis added).
D. Hearing
The Proceedings were listed for 5 days and were heard by … Judge Driver from 18 to 22 May 2015 (Hearing).
Based on my experience of having conduct and carriage of the matter and having reviewed the transcript of the Hearing, I believe that around 75% of the Hearing time allocated was occupied by the Applicant. Of the 5 days of Hearing, counsel for the Respondents spent:
a.approximately 5 hours cross-examining the Applicant;
b.approximately 45 minutes cross-examining the Applicant’s witness, Thomas Parker on 19 May 2016; and
c.approximately 1 hour and 45 minutes in oral submissions on behalf of the Respondents.
The remainder of the 5 day Hearing was utilised by the Applicant in his oral submissions, cross-examination of the Respondents’ witnesses and closing submissions.
E. Closing submissions and Judgement
At the close of the substantive hearing, His Honour granted the Applicant leave to file written submissions in reply by Friday, 19 June 2015.
On 22 June 2015, the Applicant served on the Respondents’ an affidavit marked “Applicant’s Evidence in Reply (Updated)” (Updated Reply) and Submissions in Reply. The Applicant’s Updated Reply consisted of an additional 9 annexures of 17 pages.
As the Applicant’s Submissions in Reply were not strictly in reply to the Respondents’ submissions filed on 22 May 2015, the Respondents sought, and were granted, leave from the court to respond by way of submissions in response. Annexed to this affidavit and marked “RDK-1” is a true copy of the Respondents’ letter to the Court dated 11 August 2015 and the Court’s email granting leave. The Respondents’ further submissions were 14 pages in length.
On 22 February 2016, his Honour handed down his Judgement in these Proceedings.
The costs claim
The respondents in the principal proceeding seek an order for costs under s.570 of the Fair Work Act which relevantly provides:
(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.
(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
…
The respondents contend that Dr Salby’s application was brought vexatiously and without reasonable cause. Ms Kelleher refers to “broad claims” brought by Dr Salby and refers to various paragraphs in my judgment. Ms Kelleher also refers to [506]-[509] of my judgment in relation to claims against Dr Beggs.
Ms Kelleher deposes that the respondents’ total costs in the principal proceeding were $557,805.02. She deposes that under this Court’s event based costs scale, the respondents could only expect to recover a maximum of $92,031.66 which would be an “unfair” reflection on the actual costs incurred. She deposes that the respondents would accept costs fixed in the sum of $376,580.58. A final fallback position of the respondents is that they would be prepared to accept costs fixed in the sum of $234,306.12.
Ms Kelleher also deposes as to the making of a Calderbank offer[3]:
[3] At [28]-[31]
On 14 April 2015, on instructions from the Respondents, I caused a without prejudice letter to be issued to the Applicant making an offer to settle the proceedings (Offer). The Offer was made in accordance with the principles set out in Calderbank v Calderbank (1975) 3 ALL ER 333. Annexed to this affidavit and marked ‘RDK-3’ is a true copy of this letter. The Offer Letter was open for acceptance by the Applicant until 5:00pm on 28 April 2015.
JWS did not receive any response to the Offer and the Offer lapsed on 28 April 2015.
As a result of such refusal, the Respondents’ incurred approximately $154,442.29 in costs after the Offer lapsed in defending the Proceedings. These costs comprise of:
a. $102,102 (not including GST) in professional fees; and
b. $52,340.29 (not including GST) in disbursements.
For the reasons set out in the Offer, and based on His Honours findings as set out in the Judgement, it was unreasonable for the Applicant to refuse the Offer.
In his affidavit, Dr Salby refers to difficulties he encountered in gaining access to documents he considers he needed in order to gather evidence to support his case. He also refers to his perceived need for further and better particulars of the respondents’ points of defence and also access to records in order to obtain evidence in reply. Dr Salby refers to what he calls Macquarie University’s “chronic obstruction and unscrupulous treatment” in relation to access to documentary material.
In respect of the settlement offer, Dr Salby deposes as follows[4]:
In her affidavit of 21 March 2016, Ms Kelleher refers to an offer of settlement during April 0215. That offer was not received. I learned of it only in the hearing of 31 August 2016. It is noteworthy that this offer was issued before I had been permitted to complete my evidence. Included were records that invalidated mis-representations upon which Respondents’ defence relied.
[4] At [13]
In relation to his claim against Dr Beggs, Dr Salby deposes that Dr Beggs had held authority to assign classes in which staff would teach and deposes that Dr Beggs abused that authority.
Resolution of the costs claim
The default position under the Fair Work Act is that parties bear their own costs. As was conceded by counsel for the respondents, the fact that proceedings include claims under other legislation or under the general law does not alter that position, at least where the proceedings are essentially proceedings in relation to employment[5]. The fact that Dr Salby’s claims were wholly unsuccessful does not of itself justify a costs order. The Court must be satisfied, among other things, that he instituted the proceedings vexatiously or without reasonable cause or that he made an unreasonable act or omission which caused the respondents to incur costs. The respondents contend that Dr Salby’s points of claim did not clearly articulate the detail of his claims and that my findings in my principal judgment leave open a finding that substantial aspects, if not the entirety of Dr Salby’s claim, was commenced vexatiously or without reasonable cause.
[5] Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20 at [157]
I disagree. Dr Salby brought his proceedings in circumstances where he had been dismissed from his position at Macquarie University and his career was effectively over. He had been recruited from the USA in circumstances where he believed promises had not been fulfilled and the whole basis of his employment was altered without his agreement. He encountered bureaucratic obstacles at Macquarie University in pursuing his research work and he had grievances concerning the allocation of teaching duties to him which he considered unreasonably diverted him from his research efforts and which did not properly reflect his position at Macquarie University.
As Dr Salby points out in his written submissions, he did not bring the proceedings precipitantly. The issues concerning his employment mounted over a number of years and he did seek to resolve them first, directly with Macquarie University and then before the Fair Work Commission. Dr Salby addresses my judgment in the principal proceeding in detail and expresses disagreement with it, but that is not the relevant point. The relevant point is that Dr Salby is a litigant in person who was attempting to redress what he believed were civil wrongs calling for an award of damages. He was wholly unsuccessful on the legal issues but his grievances were real.
In my opinion, Dr Salby’s claims against Macquarie University were brought bona fide and reasonably in order to address intractable conflict between him and Macquarie University which had ultimately led to his dismissal. The policy behind s.570 of the Fair Work Act is that employees should not be deterred from brining genuine claims because of a fear of an adverse costs order. In my opinion, Dr Salby’s claim was genuine. He was wholly unsuccessful but that could not have been known at the time the proceeding was instituted. A significant reason for Dr Salby’s failure in the principal proceeding was that he laboured under the incorrect belief that his employment was governed by an Australian Workplace Agreement which had not been registered. That was a question of law of some substance that needed to be resolved. In other respects, Dr Salby failed on the evidence but that evidence needed to be obtained and assessed before a conclusion could be reached.
The respondents contend that the proceedings were unnecessarily protracted and complex because of the numerous interlocutory disputes that had to be resolved before a trial could take place and the wide ranging nature of the elements of Dr Salby’s claims. There was ongoing dispute between the parties at the interlocutory stage concerning access to documents and clarification of pleadings. Dr Salby, as a litigant in person, was at a disadvantage. He believed that in order to pursue his claims properly he needed access to documents which recorded the history of his dealings with Macquarie University. Those documents were largely in electronic form and in the possession of Macquarie University. They included a substantial amount of material that Dr Salby regarded as his own and which was being improperly retained by Macquarie University. The interlocutory processes added substantially to the costs of the proceedings. The interlocutory disputes were frustrating, both for the parties and the Court. I was determined, however, that Dr Salby should have every reasonable opportunity to gain access to material that he believed would support his claims and I sought to balance what I saw as that reasonable entitlement with the need for Macquarie University not to be unduly burdened in relation thereto.
I am not persuaded that now, after the event, Dr Salby should have costs of those interlocutory steps imposed upon him when those steps were considered by the Court at the time as necessary in order to prepare the case for a trial. I reject the contention that the conduct of the proceedings by Dr Salby involved an unreasonable act or omission.
I do accept that the proceeding against Dr Beggs should not have been commenced. That is apparent from my judgment in relation to the claims against Dr Beggs. That was, however, a very small part of the overall proceedings and it would, in my opinion, be wholly unrealistic to attempt to carve out an element of the overall costs to account for the claim against Dr Beggs.
The settlement offer
The settlement offer made by the respondents to Dr Salby on 14 April 2015 sought to compromise the proceedings on the payment of $90,000 gross, less applicable tax and subject to terms and conditions. The offer was open for acceptance until 5.00pm on 28 April 2015. The offer lapsed without acceptance by Dr Salby. In fact, there was no response. The respondents seek their costs on an indemnity basis from the time the settlement offer lapsed at 5.00pm on 28 April 2015.
Dr Salby’s short answer to the costs claim in relation to the settlement offer is that he did not receive any offer. He deposes that he learnt of it only at a costs hearing on 31 August 2016. Neither of the affidavits filed in support or in opposition to the costs application have been tested through cross-examination. In accordance with the agreement between the parties, the Court is dealing with the matter on the papers. In order for me to reject Dr Salby’s denial of receipt of the offer, there would need to be some proper basis for doing so. I have no doubt that the offer was made. It is documented. It was made by letter. Dr Salby’s denial on affidavit of receipt of the offer is supported by his reaction at the directions hearing on 31 August 2016 when the issue of the offer was first raised in court. He appeared genuinely surprised. He asked to see the offer document and when he read it, he said, from the bar table, that he had no recollection of receiving it.
Dr Salby is not an irrational person. He was seeking financial recompense for the loss of his employment and difficulties encountered during the course of his employment. It is hard to believe that, if Dr Salby had received an offer of $90,000, he would not have seriously considered it. There was no response at all to the offer. That is surprising. I would have expected, if Dr Salby had received the offer, that he would have responded in some way to it. He had a tendency to respond at length to communications from the respondents in relation to the proceedings. Dr Salby could not be taken to have unreasonably rejected or ignored a settlement offer which he did not receive. On the state of the evidence, I am unable to conclude that he did receive it.
Conclusion
I conclude, notwithstanding the complete success of the respondents in the principal proceeding, the protracted and costly nature of the proceedings generally (including the numerous interlocutory hearings) and notwithstanding the settlement offer made by Macquarie University, no order for costs should be made against Dr Salby.
I will order that the Application in a Case filed on 22 March 2016 be dismissed.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Driver
Date: 25 January 2017
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