Sharma v QSR Pty Ltd t/as KFC Punchbowl (No 2)[

[2010] NSWADT 87

CITATION:	Sharma v QSR Pty Ltd t/as KFC Punchbowl (No 2)[ [2010] NSWADT 87
DIVISION:	Equal Opportunity Division
PARTIES:	APPLICANT J Sharma RESPONDENT QSR Pty Ltd t/as KFC Punchbowl
FILE NUMBER:	071102
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	4 November 2009
DATE OF DECISION:	8 April 2010
BEFORE:	Smyth M - Judicial Member; Hayes E - Non-Judicial Member;
CATCHWORDS:	Costs - sexual harassment – sex discrimination –
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Anti-Discrimination Act 1977 Administrative Decisions Tribunal Amendment Act 2008
CASES CITED:	Corrigan & Gibson v Watson [2009] NSWADT 110 Hughes v WA Cricket Assn (Inc) [1986] ATPR 48 Jordan v North Coast Area Health Service (No 3) [2005] NSWADT 296 Salon Today Pty Limited v MMIR Pty Limited [2009] NSWADT 71 Sloey v State Transit [1999] NSWADT 40
REPRESENTATION:	APPLICANT P Elias, solicitor RESPONDENT J Murphy, barrister
ORDERS:	Application is dismissed

REASONS FOR DECISION

1 In the substantive proceedings the applicant’s complaint of sex discrimination and sexual harassment was substantiated in part - Sharma v QSR Pty Ltd t/as KFC Punchbowl [2009] NSWADT 166 . The applicant applied for costs under section 88 of the Administrative Decisions Tribunal Act 1997 (ADT Act). Each party provided written submissions and the application has been determined on the papers in accordance with section 76 of the ADT Act.

2 The respondent submitted that s 110 of the Anti-Discrimination Act 1977 (AD Act) was the relevant cost provision. Section 110 was amended by the Administrative Decisions Tribunal Amendment Act 2008, Sch 2.3 [3] and the amendment commenced on 1 January 2009. By Schedule 1, clause of the AD Act 1977:

Section 110, as substituted by the amending Act, extends to proceedings in the Tribunal that were commenced, but not finally determined, before that substitution.

3 As this matter was commenced, but not finally determined, by 1 January 2009 the amended section 110 of the AD Act applies to the present proceedings. Section 110 currently provides:

The Tribunal may award costs under section 88 of the Administrative Decisions Tribunal Act 1997 in respect of proceedings before the Tribunal in relation to a complaint.

4 Section 88 of the ADT Act states that:

(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 Act 2004 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.

5 In Corrigan & Gibson v Watson [2009] NSWADT 110, the Tribunal discussed section 88 observing that [at 9]: Section 88 begins with a general statement of principle that each party to proceedings is to bear his or her own costs. That principle is different from the principle that applies in courts. In the absence of special circumstances, courts generally exercise their discretion to award costs in favour of the successful party, that is ‘costs follow the event’: Thiess v TCN Channel Nine Pty Ltd (No 5) [1994] 1 Qd R 156 at 207-208. Section 88 gives the Tribunal a discretion to award costs ‘but only if it is satisfied that it is fair to do so’ having regard to certain matters which are listed at (a) to (e). Those matters include ‘any other matter that the Tribunal considers relevant’.

6 The applicant submitted that costs should be awarded to the Applicant for the following reasons:

The respondent had failed to participate genuinely in mediation;
The respondent conducted the proceedings to unreasonably prolong the time taken to complete the proceedings;
The issues resolved were of importance to the respondent and its sizeable workforce including many minors;
The case tested guidelines in the respondent’s handbook regarding sexual harassment and sex discrimination;
Public policy and the effect of other similar cases in the fast food industry;
The applicant’s legal costs exceed and are disproportionate to any damages awarded.

Failure to engage in mediation

7 The applicant submitted that the respondent showed no interest at all in attempting to resolve the matter by conciliation or mediation. The applicant said that while the matter was before the Anti-Discrimination Board the respondent faxed a late reply to the complaint to the Board on 9 July 2007 prior to the conciliation conference scheduled for 12 July 2007. At the Conciliation Conference, the respondent’s solicitor appeared on the respondent’s behalf without anyone from the respondent company appearing personally and with no instructions to attempt to settle the matter.

8 The applicant made a number of attempts to initiate a settlement. Their solicitor wrote to the respondent asking them to obtain instructions on settling the matter on 24 July 2007 and followed this up with a letter of 31 July 2007. No response was received to these letters.

9 When the matter came before this Tribunal the respondent’s solicitor sought to vacate a case conference set down for 24 October 2007 as their Human Resources Manager was not available on that date. That request was refused and the conference was stood over to 7 November 2007. At that conference the respondent’s solicitor informed the applicant that the respondent was not interested in mediation. The applicant again wrote to the respondent on 5 December 2007 inviting the respondent to attempt to resolve the matter by mediation or further negotiation. Again no response was received.

10 . The respondent claimed that the applicant’s submission was misconceived. In relation to the applicant’s reliance on the fact that “no one from QSR appeared personally” the respondent submitted that they were represented by an experienced employment law solicitor who was, if required, able to get immediate instructions from her client.

11 The respondent submitted that the proposition that the “QSR Solicitor appeared with no instructions to attempt to settle the matter”, was not only improper but wrong. The respondent submitted that the reason the matter was not capable of being settled by mediation or conciliation could be ascertained from the manner in which the applicant’s initial complaint was framed and the way her case was pursued. The respondent claimed that the initial complaint to the ADB was wide ranging in terms of the alleged incidents and time frames. They pointed out that the allegation that the applicant had complained on “numerous” occasions was ultimately demonstrated to be untrue during cross-examination of the applicant before the Tribunal.

12 Moreover, the respondent submitted that of the ten allegations (or groups of allegations) of sexual harassment by the applicant, only two were ultimately upheld by the Tribunal. Both these incidents occurred on 10 May 2007.

13 The respondent also referred to the applicant’s complaint that she was affected by trauma and stress, and loss of income seeking compensation for her losses. The respondent submitted that in any genuine settlement negotiation the respondent would expect to be provided with some evidence of the bases upon which the applicant was claiming compensation but none was provided.

14 The claim in relation to economic loss was said to be refuted by the fact that the applicant had left her job to do a course in aged care nursing, which was confirmed by the applicant [T17/03/08 p8 I17-25]. With respect to the claim for compensation for any mental injury, depression and anxiety the respondent maintained it was incumbent on the applicant to provide some evidence of such injury so that the respondent could give proper consideration to it. The respondent submitted that it received no evidence until the applicant filed her witness statement on 23 November 2007. The letter from Canterbury Mental Health was said to be deceptive in that the clearly intended inference was that her depression was caused by the ongoing sexual harassment. The clinical notes of the mental health professionals assisting the applicant, demonstrated that the cause of any mental condition suffered by the applicant lay in her relationships with her family and others rather than her employment with the respondent. Despite initially attempting to suggest that she had told the clinical nurse specialist about the “leg pulling” incident on the day it happened, when confronted with clinical notes, the applicant recanted and agreed she had not spoken to the nurse until 10 July 2007.

15 The respondent submitted that it could not be criticised for failing to embrace this aspect of the applicant’s claim in settlement negotiations when there was no evidence presented to support it. Ultimately the only piece of “evidence regarding the impact of the discrimination” the applicant had was a letter from a social worker, recording that the applicant had discussed the stress that the proceedings were causing. However, the respondent submitted that this evidence was not obtained until 5 March 2008, just days before the commencement of the hearing and was not provided to the respondent until after the hearing had started.

Unreasonably prolonging proceedings

16 The matter was allocated a three day hearing for 17, 18 and 19 March 2008. On 7 February 2008 the respondent wrote to the Tribunal requesting that the hearing dates be vacated because one of its witnesses, its employee Steven Kenny, would be overseas. On 22 February 2008, the Tribunal retained the original hearing dates but set down a further date to deal with the evidence of Steven Kenny.

17 During the hearing, the Tribunal requested that the Human Resources Manager of the respondent produce a record from its telephone supplier which confirmed that the applicant was telephoned by the store manager. Time to produce was extended at the respondent’s request until 14 May 2008. The respondent advised the Tribunal on 14 May 2008 that it was unable to provide such record, but its telephone provider was hoping to provide it in the next few weeks. However, this information was never tendered to the Tribunal and the applicant submitted that she was disadvantaged by the lengthy delay caused by the failed attempt by the respondent to produce the telephone record.

18 The respondent submitted that the applicant’s assertion is without substance because the substitution of 3 April for 19 March 2008 as the third day of the hearing was not opposed by the applicant and did not add, in any significant way, to the length of the hearing.

19 On 21 May 2008 the respondent sought another listing of the matter in order to submit further evidence. The application to admit further evidence was heard by the Tribunal on 30 July 2008. That application was dismissed by the Tribunal in its decision of 30 June 2009. The applicant submitted that the application to admit further evidence led the applicant to incur further costs and delay.

20 In the respondent’s submission the production of the respondent’s telephone records only became an issue because the applicant disputed Mr Chandra’s and Ms Sinden’s evidence that Mr Chandra had telephoned the applicant on 17 May 2007 to arrange for her to attend a meeting on 21 May 2007. It was the applicant’s solicitor who first asked that the telephone records be produced [T18/03/08 p 35 I41-44].

21 The initial advice from the respondent’s telephone service provider was that it would take six to eight weeks to produce the records. Ultimately, the respondent, through circumstances beyond its control, was unable to produce the records and the Tribunal nevertheless accepted the evidence of Mr Chandra and Ms Sinden on the disputed telephone call.

22 In relation to the respondent’s application to put further evidence before the Tribunal, the respondent submitted that it had a legitimate right to seek to place evidence of the applicant’s behaviour towards employees of the respondent during an incident that occurred on the respondent’s premises. The application took less than one hour to complete on 30 June 2008. The respondent submitted that no further significant delay or cost was incurred by the application.

23 The respondent submitted that the real cause of the length of time taken to complete the proceedings was the manner in which the litigation was conducted on behalf of the applicant. The respondent says that the applicant particularised approximately 23 incidents of alleged sexual harassment, of which two of these incidents were proved. The vast bulk of the proceedings, in terms of the preparation of pleadings, witness statements and written submissions by both parties and the calling of oral evidence and oral submissions were concerned with the 21 unsubstantiated allegations.

24 The respondent criticised the evidence of one of the applicant’s witnesses, Mr Jones, as relating to allegations by the applicant upon which she failed. It submitted that his evidence was insulting to the Tribunal and should not have been led, referring the Tribunal’s substantive decision at [84] describing Mr Jones’ evidence as “unreliable” and “self serving”. The respondent argued that the suggestion that the applicant should be compensated for the legal costs incurred in placing this evidence before the Tribunal was ludicrous.

25 The respondent referred to Hughes v WA Cricket Assn (Inc) [1986] ATPR 48, and argued that if this matter had been litigated in a jurisdiction where costs follow the event, it would be highly likely that any costs order in favour of the applicant would be heavily discounted because the vast bulk of the costs of the hearing were incurred in the conduct of the case related to issues on which the applicant failed. The respondent submitted that only two of the 44 paragraphs in the applicant’s witness statement related to the allegations on which the applicant succeeded. Of the 57 pages of the transcript of the applicant’s oral evidence related to issues on which the applicant failed. Of the respondent’s witnesses, only Mr Kenny dealt with the “leg pulling incident” and the “Bondi” comment.

26 The respondent submitted that the vast bulk of the costs incurred by both parties to the litigation were incurred by reason of the applicant advancing, and the respondent defending, claims upon which the applicant was unsuccessful. It claims that if the applicant had confined her case to the two issues on which she succeeded, it is probable that the hearing of the matter could have been accommodated in half a day of hearing time.

27 The respondent also submitted that this was not a case where the applicant could demonstrate that she made any offer to settle the proceedings on terms more favourable to the respondent than the ultimate decision of the Tribunal.

The proceedings raised issues of importance to the respondent

28 The applicant referred to the Human Resources Manager’s statement that the respondent is the largest corporate franchisee in NSW of KFC Restaurants and the second largest in Australia, stating that it employs approximately 2000 people in 51 restaurants, 800 of those employees were under the age of 18 years.

29 It was submitted for the applicant that it is imperative that operators of fast food outlets such as KFC have in place proper and effective guidelines that are implemented to protect its workforce, many of whom are minors.

30 The respondent submitted that this is not a matter that can bear upon the question of costs. The Tribunal rejected at [100] the applicant’s evidence that her complaint was not taken seriously by the respondent. The Tribunal also found that the respondent’s Team Member Orientation Benefits Handbook “sets out a clear procedure if subjected to harassment and makes it clear that if subjected to such conduct the employee should speak to a manager”: [106]. The respondent argued that this is what the applicant did on the only occasion when she was subjected to sexual harassment, on the findings of the Tribunal. The Tribunal also accepted that the respondent provided training to Mr Matic, but suggested that the training and the monitoring by the respondent of Mr Matic’s conduct were not effective. However, the respondent submitted that the Tribunal had earlier found that this conduct did not constitute sexual harassment, referring to [109], [111]-[115]. The respondent contended that to the extent that the Tribunal found that the training and monitoring mechanisms were inadequate, the failure could only relate to the failure of those mechanisms to prevent Mr Matic from making the “Bondi” comment and engaging in the “leg pulling” incident, both of which occurred on either 9 or 10 May 2007. The respondent submitted that there was no evidence of any remotely similar conduct by Mr Matic which might have alerted the respondent to the possibility that Mr Matic might engage in the discriminatory conduct.

The proceedings tested guidelines in the respondent’s Handbook

31 The applicant submitted that it was insufficient for the respondent to have policies prohibiting sexual harassment and sex discrimination. If training is inadequate it must be reviewed and replaced with better training. There should be continual training of all managers and workers, particularly where there is a constant change in the workforce such as at a fast food restaurant.

32 The respondent contended that to the extent that the respondent’s training and policies failed to prevent Mr Matic from sexually harassing the applicant, on the Tribunal’s own findings, this failure manifested itself in relation to two incidents only, both of which were reported and immediately investigated by the respondent. The respondent rejected any assertion that the applicant was inadequately trained to deal with sexual harassment. Immediately after the only two occasions on which, on the Tribunal’s findings the applicant was sexually harassed, the applicant responded “swiftly and with an instantaneous determination to extract compensation from the respondent.” The respondent claims that these matters provide no basis for a departure from the usual position that each party bear their own costs.

Public policy considerations

33 The applicant submitted that the fast food industry employs a significant number of young people. It is important for parents and carers of these young people to know that there is effective protection from unlawful conduct.

34 The respondent submitted that the applicant has not made any attempt to explain how this assertion bears on the issue of costs. If the point is that costs orders are to be used as part of the Tribunal’s weaponry to punish unlawful conduct, then such a proposition is entirely misconceived.

35 The applicant referred to Sloey v State Transit [1999] NSWADT 40, where the Tribunal said [at 16-17]:

The costs, prior to the 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.

This is a factor which the Tribunal considered.

36 The applicant also said that in Jordan v North Coast Area Health Service (No 3) [2005] NSWADT 296, the Tribunal based a costs order solely on the fact that the applicant’s legal costs exceeded the amount of damages awarded.

The applicant submitted that her legal costs in the substantive proceedings were in the vicinity of $30,000 and that her damages were $15,000. The respondent submitted that there was no evidence to support this proposition and that they, and the Tribunal, have no knowledge of any costs arrangement between the applicant and her solicitor. The respondent submitted that the Tribunal could not be satisfied that the applicant has been or will be, required to pay any amount towards her legal costs. In this matter the applicant was represented by a solicitor from the South West Sydney Legal Centre. The respondent relied on extracts from the website of the South West Sydney Legal Centre that indicated that the centre provided a free legal advice and representation for those living and working in South West Sydney who do not qualify for legal aid and could not afford a lawyer. According to the respondent the website noted that it was a free service but a contribution to legal expenses may be required.

37 The respondent argued that the applicant’s claim to a costs order in this matter was not assisted by the decision in Sloey. In that case the Tribunal considered a number of factors, none of which on their own provided justification for awarding costs but when taken together provided a basis for the complainant to rebut the usual presumption. Many of those factors are missing from this case. For instance, in Sloey the complainant was entirely successful in his complaint of disability discrimination; the respondent rejected an offer of settlement prior to the hearing and refused to participate in mediation. The respondent submitted that these factors are not present, having regard to the fact that there is no evidence of any offer from the applicant to settle the matter which was unreasonably rejected by the respondent. The respondent participated in a conciliation conference before the ADB, although this experience was by way of an experienced employment law solicitor.

38 The decision in Jordan v North Coast Area Health Service (No 3) [2005] NSWADT 296 was said by the respondent to have no application to the present case. In that matter the applicant, who had engaged private legal representation, supported her claim for a costs order by way of production of the actual tax invoices which had been rendered by her lawyers and which she was obliged to pay.

39 The applicant also referred to the following passages in Salon Today Pty Limited v MMIR Pty Limited [2009] NSWADT 71, [at 77-78]:

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 cle arly enjoin this Tribunal to look very c arefully 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).

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".

40 The respondent claimed that the factors relevant to the making of a costs order in Salon Today included that the respondent, prior to the commencement of the hearing should have been aware that the applicant’s claim was irresistible. Further, in that matter there was evidence of two offers from the applicant to settle the matter on terms which ultimately turned out to be less favourable to the applicant than the orders made in its favour. The respondent submitted that none of these factors arise for consideration in the present case.

Consideration and Decision

41 We do not consider the conduct in regard to conciliation and attempts to settle the matter while at the Anti-Discrimination Board relevant to the issues of costs before this Tribunal. Once the matter came before this Tribunal we accept that the applicant attempted to engage in settlement negotiations with the respondent and there is no evidence that the respondent made any serious attempt to resolve the matter. While that is certainly relevant, in this instance there is no specific evidence as to any actual offers of settlement that were made by the applicant and whether these were more or less than was ultimately awarded by the Tribunal. In addition, this was a case where the majority of the applicant’s allegations of sexual harassment and sex discrimination were not substantiated by the Tribunal. That is relevant when considering the relative strengths of each party’s claims and the parties’ attitudes to engaging in the mediation of a dispute.

42 Although the applicant submitted that her legal costs were in the vicinity of $30,000 and exceeded the $15,000 awarded in damages, we have no evidence as to her actual legal costs. We also accept the respondent’s submission that much of the hearing was devoted to evidence and submissions on issues that the applicant did not ultimately succeed on.

43 Although the respondent did delay the proceedings because one of their witnesses was not available the change in hearing dates did not extend the hearing beyond three days, the number of days it was initially set down for. Similarly we do not consider that the respondent’s application to put on additional evidence after the hearing had finished unreasonably delayed the proceedings. In addition, we have no evidence before us as to how this contributed to the applicant’s costs.

44 We do not consider the matters raised in this case were particularly complex or raised significant issues of public policy.

45 After carefully examining the conduct of the respondent we do not consider that they conducted the proceedings in a way that unfairly disadvantaged the applicant.

46 Although the respondent did not produce the telephone records requested by the Tribunal the respondent did provide an explanation relating to their change of supplier of telephone services.

47 After carefully considering the applicant’s submissions we are not persuaded that we should depart from the normal rule of each party paying their own costs and the application is dismissed.

Decision

Application dismissed.