Troy Nunan v Beach Building & Civil Group Pty Ltd

[2010] FWA 9761

[2010] FWA 9761

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Troy Nunan
v
Beach Building & Civil Group Pty Ltd
(U2010/6870)

COMMISSIONER ROBERTS SYDNEY, 17 DECEMBER 2010

Unfair termination - application for costs.

[1] This decision concerns an application made by Mr Nunan on 2 September 2010 pursuant to s.611 of the Fair Work Act 2009 (the Act). Mr Nunan’s application seeks the making of an order for costs against Beach Building & Civil Group Pty Ltd (Beach).

[2] Section 611 of the Act provides:

“611 Costs

(1) A person must bear the person’s own costs in relation to a matter before FWA.

(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) FWA is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

Note: FWA can also order costs under sections 376, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4-1).”

[3] The application for costs was the subject of directions issued on 3 September 2010 and the parties agreed to the application being decided ‘on the papers’. Both sides complied with directions. Mr Nunan was represented by Aitken Wilson Lawyers and Beach by Worcester & Co, Solicitors.

Background

[4] Mr Nunan made an application for relief pursuant to s.394 of the Act on 9 March 2010 alleging that the termination of his employment by Beach on or about 23 February 2010 was harsh, unjust or unreasonable. The application for relief was the subject of both unsuccessful conciliation and a jurisdictional motion from Beach, which was later withdrawn. The application then came to me for arbitration and this was conducted in Brisbane on 20 August 2010 and an ex tempore decision was issued on that day with a finding that there was no valid reason for the termination of Mr Nunan’s employment and awarding him the sum of $7,829 (less tax according to law). Beach did not contest that the termination of employment was harsh, unjust or unreasonable. Beach did contest the question of valid reason and the quantum of compensation being sought by Mr Nunan.

Submissions

Mr Nunan

[5] Written submissions filed on behalf of Mr Nunan argued that Beach maintained its opposition to Mr Nunan’s application in a situation where it knew it had no reasonable prospect of success: “… the Respondent has delayed proceedings and allowed the matter to proceed to a hearing to the detriment and expense of the Applicant.” It was further argued that the Respondent had failed to comply with directions. Mr Nunan: “submits that he should be awarded costs on a party to party basis from 3 March 2010 (the date that the Applicant first caused Aitken Wilson Lawyers to send a letter of demand) to 4 May 2010 (The date that the Applicant caused Aitken Wilson Lawyers to send the Respondent a Calderbank letter). From 4 May 2010 to 20 August 2010 (the date of the hearing) the Applicant submits that he should be awarded costs on an indemnity basis.”

Beach

[6] In written submissions on behalf of Beach, it was argued that: “The respondent’s opposition to the Application for Unfair Dismissal Remedy was pressed principally on the basis that the quantum of damages sought by the applicant was excessive and unable to be properly justified. This is borne out in the respondents submissions filed on 2 August 2010 and the respondent’s supplementary submissions filed on 20 August 2010.”

[7] Beach further argued that the sum of $7,829.00 (less tax) awarded by me to Mr Nunan on 20 August 2010 was only some $906.00 above the Respondent’s lowest settlement offer and was some $6,017.00 lower than the Respondent’s highest settlement offer.

[8] “… it is clear that the respondent was properly entitled to resist the application and test the applicant’s claim for damages. This is particularly so when the award of $7,829.00 is some $14,671.00 less than the lowest offer made by the applicant.”

Conclusions and Finding

[9] The materials set out above is a bare summary of the positions of each side and of the written materials available to me, including the transcript of the 20 August 2010 hearing and associated documents. However, I have paid full regard to all materials filed by both parties. In particular, I have paid regard to correspondence between the two parties prior to the 20 August hearing and to the chronology submitted by Beach at that hearing. 1

[10] It is apparent from the chronology (which concerns matters occurring between 3 March 2010 and 18 August 2010) that the parties remained in frequent contact during that period concerning the possibility of a financial settlement. The first offer of settlement from Nr Nunan was made on 3 March 2010 in the sum of some $50,287.00 (comprised of some $46,237.00 in compensation for lost wages plus $4,050.00 in superannuation payments). This was rejected by Beach on 9 March 2010. On 4 May 2010, Mr Nunan made a further offer of settlement of the equivalent of three months wages, which I have quantified as being some $22,500.00. That further offer of settlement was apparently ignored by Beach. However, on 3 August 2010 Beach offered Mr Nunan a sum of $6,923.00, which was quantified by Beach as four weeks pay. The offer was rejected by Mr Nunan who restated his previous offer of $22,500.00 as a settlement figure. On 4 August 2010, Beach made a counter offer of some $13,846.00, which it quantified as representing eight weeks pay. The offer was rejected by Mr Nunan who restated his previous settlement offer of $22,500.00. Around this date, Mr Nunan threatened a costs application if Beach did not accept the settlement offer made. On 16 August 2010, Beach restated its offer of some $13,846.00. This was rejected by Mr Nunan on the same day and he restated his claim of $22.500.00. On 18 August 2010, Beach re-opened its offer of eight weeks pay. That offer was not taken up by Mr Nunan. The matter then went to hearing.

[11] In its written submissions filed on 2 August 2010 prior to the substantive hearing, Beach explicitly conceded that the termination of Mr Nunan had been harsh, unjust and unreasonable. In earlier correspondence with Mr Nunan’s solicitors, Beach had already conceded that there were procedural flaws in the termination. Beach did not concede on the valid reason question. However, at the substantive hearing valid reason was not pressed with any vigour. In further submissions at the substantive hearing, Beach concentrated on attempting to limit the amount of compensation to be granted to Mr Nunan.

[12] The question to be answered by me is whether Beach acted vexatiously or unreasonably in refusing to settle Mr Nunan’s claim by negotiation with him during the months leading up to the hearing on 20 August 2010. I have concluded that it did not. Beach appears to have been somewhat dilatory in complying with Tribunal directions and also in not responding to Mr Nunan’s offer of settlement made on 4 May 2010. However, the simple fact is that the amount I awarded to Mr Nunan was significantly lower than Beach’s final offer and only marginally above its offer made on 3 August 2010. In my view, Beach cannot be held to have acted unreasonably in not agreeing to a claim by Mr Nunan which was so far in excess of the amount finally awarded to him. Beach was entitled to pursue the issues of valid reason and the quantum of any award to Mr Nunan by way of the 20 August 2010 hearing. Likewise, Mr Nunan was entitled to pursue the same issues at hearing. Beach’s concessions as to ‘harsh, unjust or unreasonable’ should not be held against it in a costs application. Those concessions considerably shortened the original hearing.

[13] All in all, I find that this is not a case where I should exercise my discretion to award costs to either Mr Nunan or to Beach. An order reflecting this decision is in PR505191.

COMMISSIONER

 1   Exhibit Beach 4 (20 August 2010).

Printed by authority of the Commonwealth Government Printer

<Price code A, PR505190>