TAHI v Oxican Pty Ltd (No.3) - [2019] FCCA 426

FEDERAL CIRCUIT COURT OF AUSTRALIA

TAHI v OXICAN PTY LTD (No.3)

[2019] FCCA 426

Catchwords:
INDUSTRIAL LAW – Costs – Application for costs – Whether unreasonable act or omission caused the other party to incur costs – Whether failure to accept offer to compromise constituted unreasonable act.

Legislation:

Fair Work Act 2009 (Cth), ss.570, 570(2)(b)

Birner v Aircraft Turnaround Engineering Pty Ltd (No.2) [2018] FCCA 3576
Calderbank v Calderbank [1975] 3 All ER 333
Health Services Union v Jackson (No 5) [2015] FCA 1467
Hutchinson v Comcare (No.2) [2017] FCA 370

Applicant:

KERRY TAHI

Respondent:

OXICAN PTY LTD

File Number:

BRG 1125 of 2016

Judgment of:

Judge Jarrett

Hearing date:

By written submission

Date of Last Submission:

1 February 2019

Delivered at:

Brisbane

Delivered on:

1 March 2019

REPRESENTATION

The Applicant appeared in person.

Solicitors for the Respondent:

Carter Newell Lawyers

ORDERS

The application in a case filed on 19 December, 2019 is dismissed.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BRISBANE

BRG 1125 of 2016

KERRY TAHI

Applicant

And

OXICAN PTY LTD

Respondent

REASONS FOR JUDGMENT

By these proceedings, the applicant sought compensation for certain contraventions of the Fair Work Act 2009 (Cth) by the respondent. She also sought that a pecuniary penalty be imposed on the respondent and that it be paid to her. By her case outline, she sought $20,000 for non-economic loss and a total of $42,980.45 for economic loss.
For the reasons that I delivered on 13 December, 2018 the applicant was partially successful in her claims. I ordered that the respondent pay her $4,223.75 by way of compensation and on 21 December, 2018 I ordered that the respondent pay to the applicant a pecuniary penalty of $10,800.
By this application the respondent seeks an order that the applicant pay its costs of and incidental to the proceedings. The applicant opposes that application. For the reasons that follow, the application will be dismissed.
Initially, the respondent sought an order for costs fixed in the sum of $16,953.50. However, it foreshadowed that it would seek a different order as to costs. Accordingly, on 21 December, 2018 I made an order that:
In the event that the respondent seeks a costs order on a different basis to that of costs fixed in the sum of $16,953.50 then it must notify the applicant of its intention to seek a different order by no later than 4:00pm on 11 January, 2019.
The respondent sent a letter to the applicant on 11 January, 2019 notifying her that it now seeks a costs order in the sum of $25,008.75. Particulars of how that sum is calculated are included in the respondent’s material.
The respondent identified s.570(2)(b) as the source of the power it sought to invoke in this costs application. Section 570 of the Fair Work Act 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:
…
(b)    the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; …
In Birner v Aircraft Turnaround Engineering Pty Ltd (No.2) [2018] FCCA 3576 I set out the relevant principles as follows:
[6] In Ryan v Primesafe (2015) 323 ALR 107, Mortimer J dealt with an application for costs arising from proceedings under the Fair Work Act. In relation to the provisions in s.570 of the Fair Work Act generally her Honour noted:
64. I accept the general import of the authorities relied on by the applicant and Mr McDonald in their written submissions about the significance of the threshold set by s570(2) of the Fair Work Act. Although some of the authorities relied on dealt with the predecessor provisions to s570, there is no difference in substance in the way the threshold is expressed. The discretion conferred by the confined terms of s570(2) should be exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Asset Management Ltd [2011] FCA 395at [6] per Bromberg J. The reason for caution is the potential for discouraging parties’ pursuit in a complete and robust way of the claims for contravention which they seek to make under the Fair Work Act, or the defence of such claims. The policy behind s570 is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants (in particular, in my opinion) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision. Insofar as it operates to the benefit of respondents, it is designed to ensure respondents feel free to pursue arguable legal and factual responses to the claims made against them. There is an almost identical provision in s611 of the Fair Work Act, giving the Fair Work Commission a similar costs power, conditioned by similarly-worded considerations. The predecessor provisions, and the conscious broadening of the statutory terms used in s570, are traced by the Full Court in Australasian Meat Industry Employees’ Union v Fair Work Australia (No 2) (2012) 203 FCR 430; [2012] FCAFC 103 at [3]- [4] per Jessup and Tracey JJ.
65. None of those propositions deny the Court’s ability to find that one or both of the two preconditions expressed in ss570(2)(a) and (b) exist where the factual circumstances warrant it. The legislative policy behind a provision such as s570(1) is not inconsistent with the requirements for proceedings to be conducted reasonably, fairly and efficiently. As an access to justice provision, it contemplates parties and their legal representatives will access the Court responsibly.
[7] That approach was also emphasised by Bromberg J in Hutchinson v Comcare (No.2) [2017] FCA 370 at [7] where his Honour reiterated that the purpose of s.570 of the Fair Work Act is to ensure that fear of a costs order does not discourage genuine litigants from pursuing cases with reasonable cause. The provision is concerned with access to justice. His Honour commented at [8]:
With this in mind, the occasions upon which costs will be awarded under s.570 are likely to be exceptional: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199; 156 FCR 275 at [60] (Black CJ, North and Mansfield JJ). The fact that a party has conducted litigation inefficiently, made late concessions, or adopted a misguided approach will be relevant to, but not conclusive of, the party having acted unreasonably in a sense relevant to s 570(2)(b): Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; 170 FCR 574 at [29] (Tamberlin, Gyles and Gilmour JJ).
…
[11] It is clear from the authorities that determining whether a party has engaged in an unreasonable act or omission requires an objective analysis of the particular circumstances of the case. This includes circumstances occurring after the institution of the proceedings.
The failure of a party to accept a reasonable settlement offer might well qualify as ‘an unreasonable act or omission’ within the meaning and for the purposes of s.570(2)(b) of the Fair Work Act: Cugura v Frankston City Council (No 2) [2012] FMCA 530 however, a deliberate decision to refuse a reasonable offer of settlement is a factor which would normally weigh more heavily in favour of a finding of unreasonable action than would a mere failure to respond by an unrepresented litigant: Cugara v Frankston City Council [2012] FCA 1299 at [31].
The respondent here contends that the applicant’s failure to accept several offers to compromise over the course of the proceedings were sufficiently unreasonable to attract the jurisdiction and power in s.570(2)(b) of the Act.
The offers to compromise were:
a)on 3 May, 2017 an offer of $4,800;
b)on 22 August, 2017 an offer of $10,000 to expire on 29 August, 2017;
c)on 8 September, 2017 an offer of $10,000 to expire on 22 September, 2017;
d)on 29 September, 2017 an offer of $20,000 to expire 6:00pm that day; and
e)on 3 October, 2017 an offer of $15,000 orally communicated during the luncheon adjournment on the day of trial.
The respondent’s written submissions refer to the following passage from Health Services Union v Jackson (No 5) [2015] FCA 1467:
[46] Once a viable offer is made and it is not accepted by the offeree, the offeror who seeks indemnity costs bears the onus of establishing that the offeree’s refusal or non-acceptance was unreasonable or imprudent. The reasonableness of the refusal or non-acceptance must be determined in the light of the circumstances that existed at the time that the rejection or failure to accept occurred.
The respondent submits that in determining whether or not the applicant’s failure to accept any of the offers of compromise was an unreasonable act or omission that caused the respondent to incur costs, the following circumstances should be taken into account:
a)the applicant received six offers throughout the course of the proceedings;
b)the applicant was afforded sufficient time to consider each offer;
c)the offers made were to compromise the entire action;
d)the applicant was successful on only two of four incidents which she alleged the respondent contravened the Act. If the applicant alleged eight contraventions in total, then she was successful on only three of those counts;
e)the offers were expressed in clear terms and made reference to the prospect of an application for costs;
f)the applicant was unwilling to disclose the fact of her employment history subsequent to her dismissal from the respondent. She should have understood that she could not be compensated for loss of earnings for periods of time during which she was earning income.
The first four offers were made pursuant to the principles enunciated in Calderbank v Calderbank [1975] 3 All ER 333, or designated as an offer without prejudice save as to costs. Those first four offers each contained a statement in the following terms:
If you reject this offer and your application is dismissed, or you are otherwise awarded an amount of compensation that is less than our client’s offer, our client will rely on this offer to see an appropriate order for costs against you personally.
None of the offers differentiate between an amount for compensation and an amount for penalty. None of them carry with them an admission of the contraventions alleged against the respondent or any acknowledgement of any wrongdoing.
The respondent argues that had the applicant accepted any of the offers then she would have been better off than she is now. The problem with that submission is that it ignores the imposition of a penalty, the entire benefit of which was received by the applicant. Including the penalty, the applicant was awarded a total of over $15,000.
It is only the offer of 29 September, 2017 that would have provided the applicant with an amount in excess of that for which she received judgment. In addition, the Court made findings of contravention against the respondent, although no declarations about those contraventions were made. She did better under the judgment than any of the first three offers. The applicant was awarded a total of $15,023.75. In those circumstances, I am not satisfied that the applicant acted unreasonably in refusing, or ignoring, offers to compromise that would have seen her in a worse position than had she proceeded to trial. She represented herself in the proceedings and so did not have any of her own legal costs to take into account.
As to the fourth offer made on 29 September, 2017 the applicant responded to the offer made on that date stating “It will require a longer or window or i will have to decline. My advisor is unavailable at this time”. The legal representative for the respondent extended that time to 6:00pm the following day. The applicant subsequently declined the offer. She said:
After having reviewed the evidence on hand and submissions made by your client, taking into account the details you mentioned in our telephone conversation yesterday I respectfully and humbly decline the counter offer.
Had the applicant accepted this offer, she would have received more than she stands to receive under the judgment. In that sense she would have been better off, but she would not have had the benefit of any findings by the Court that vindicated her sense of injustice at the respondent’s actions.
The respondent’s written submissions allude to the applicant’s failure to disclose earlier in the proceedings her employment history since her dismissal from the respondent. It might be inferred that her failure caused the respondent to incur costs, or perhaps had the respondent otherwise been aware of her employment history then a revised offer to compromise might have been made. But the respondent makes no such submission. Nor does the evidence suggest that is the case.
Whilst the applicant’s claim did not succeed to the extent that she claimed and she only received compensation for the period of time from her dismissal until the earliest time that I found that she may have re-entered the workforce, I am not satisfied that the applicant’s failure to disclose her employment circumstances post her dismissal by the respondent constitutes an unreasonable act or omission for the purposes of s.570(2)(b) of the Act.
Although the respondent’s submission that the applicant would have been better off had she accepted the offer of 29 September, 2017 is perhaps factually accurate having regard to the monetary benefits under that offer, the applicant was an unrepresented litigant who was partially successful in prosecuting her proceedings. She was not entirely unsuccessful. Moreover, the offer contained no admissions of the contraventions and there is a particular purpose served by proceedings for pecuniary penalty for contraventions of industrial legislation.
Mindful that this is not ordinarily a costs jurisdiction and heeding the words of Bromberg J in Hutchinson vComcare (No.2) [2017] FCA 370 extracted above, I do not conclude that the applicant’s rejection of the offer made on 29 September, 2017 was an unreasonable act or omission for the purposes of s.570(2)(b) of the Act.
The applicant’s failure to accept the final offer made during the course of the trial cannot be properly said to be so unreasonable as to engage s.570(2)(b). That offer was made after the respondent had incurred all of its costs for preparation of the trial and the costs of the trial. It cannot be said that the applicant’s failure to accept that offer led to the respondent incurring the costs that it now claims.
The application in a case filed on 19 December, 2018 should be dismissed.

Other matters

The applicant’s submissions seek to alter the amount of judgment and introduce “a further contravention of section s344”. The respondent submits that “those matters are the subject of a judgement of the Federal Circuit Court and, as such, are final”. I accept the respondent’s submissions. I have no power to entertain further allegations of contravention having dealt with the application to judgment, save for this present issue of costs.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 1 March, 2019.

Date: 1 March, 2019