See also Turkmani v Visvalingam (No 2) [2009] NSWCA 279.
20 In Twohill v Mental As Anything Touring Pty Ltd and ors (No 2) [2008] NSWIRComm 75, Marks J cited Elite Protection Personnel Pty Ltd v Salmon [2007] NSWCA 322, in support of his decision to refuse an application to apportion costs in respect of an application brought pursuant to s 106 of the Act. Although there were multiple allegations of unfairness with separate claims and money orders sought, his Honour observed that "the applicant sought findings of unfairness in the alternative directed to his contract of employment with the first respondent or his partnership with the second and third respondents" (at [28]). As here, the applicant in Twohill succeeded overall in the proceedings, although the award of monetary compensation was much less than that claimed in the proceedings because of the rejection of four of the five claims that the applicant argued should be payable to him as a matter of fairness. As Marks J observed, the authorities and principles referred to by Barrett J in Alamdo Holdings Pty Ltd, referred only to circumstances where multiple issues were involved in the proceedings (at [27]).
21 Mr Austin submitted that his Honour did not appear to give full weight to the meaning given in the various authorities referred to by Barrett J in Alamdo Holdings Pty Ltd, particularly to the notions of "discreet issues", "disputed questions of fact and law", and "heads of controversy". Counsel submitted that these decisions make plain that the fact there is only one course of action does not prevent the application of the principles and that therefore the decision of Marks J was of limited assistance to this Court in exercising the discretion provided for by Parliament in s 181 of the Act.
Consideration
22 I do not agree with the submissions of Mr Austin that it would be unjust and unreasonable to order the second respondent to pay the applicant's costs on the ordinary basis.
23 In my view, a substantial injustice would result if the general rule was not applied in respect of the applicant's costs. The proceedings were directed solely to a contract of employment with the first respondent. The applicant succeeded overall in the proceedings, although he did not succeed in respect of all claims of unfairness in respect of his contract of employment. In my view, the proceedings cannot be characterised as involving multiple issues as were the subject of consideration by Barrett J in Alamdo Holdings Pty Ltd and the authorities therein considered. In exercising the discretion conferred upon me by s 181 of the Act, I would allow the applicant to recover his costs of this action, as agreed, or, as assessed. There will be an order accordingly.
Costs - third and fourth respondents
24 Although the proceedings were dismissed against the third and fourth respondents, Mr Shoebridge submitted that there should be no order as to costs in their favour. Counsel observed that no evidence had been filed by those parties in the proceedings and that they had engaged the same counsel as was retained by the second respondent. In the alternative, Mr Shoebridge submitted that as Marks J had made an interlocutory order that the costs of a notice of motion seeking to join the third and fourth respondents be costs in the cause, that the Court may form the view that it is appropriate to revisit that matter and make an order that the third and fourth respondents have the benefit of the costs of the joinder motion: Domanko v Business Catalyst International Pty Ltd and anor [2008] NSWIRComm 120.
25 Mr Shoebridge submitted that it was reasonable for the applicant to bring proceedings against the third and fourth respondents where the first respondent was in liquidation and the second respondent was denying any liability. To the extent that there was any potential liability for costs as against the applicant in regard to the third and fourth respondents, counsel submitted, this would be an appropriate case for the unsuccessful second respondent to bear such costs by way of a "Bullock order": Patrick Stevedores No 1 Pty Ltd v Kilkelly [2004] NSWCA 237.
26 Mr Austin submitted that there was nothing concerning the conduct of the second respondent which would make it fair to impose upon him any costs for the third and fourth respondents pursuant to a Bullock order. Counsel submitted that the second respondent had neither sought to involve the third and fourth respondents, nor denied his authority as Chief Executive Officer of the first respondent, or had he, by his conduct, caused the applicant to believe he was a man of straw or a flight risk.
27 Applying the usual rule, a successful party should not be deprived of costs because of their association with an unsuccessful litigant, as opposed to their own conduct of the proceedings: Ruddock v Vadarlis at [14] - [15]. The mere fact that the third and fourth respondents shared the same legal representation as the second respondent, or, that the unsuccessful litigant was associated with these legal entities, does not, in my view, automatically disentitle them to costs.
28 As I have observed, Mr Shoebridge submitted that I should make a Bullock order, which would result in the unsuccessful second respondent bearing the costs of the third and fourth respondents. I do not propose to make such an order. There is nothing concerning the conduct of the second respondent which, in my view, would make it fair to impose upon him, the costs of the third and fourth respondents, pursuant to a Bullock order. The second respondent did not seek to involve the third and fourth respondents, deny his authority as CEO of the first respondent, or seek to deflect responsibility on the third or fourth respondents. The joinder of the third and fourth respondents was strongly resisted. Marks J observed at [14]:
The respondent parties also submitted that there was no utility in allowing the third and fourth respondents to be joined as additional respondents, particularly as the second respondent Mr Qureshi, who is associated with both of those corporations, is before the Court, albeit by reason of his association with the first respondent. Whether, pragmatically, and taking into account the cost effective prosecution of this matter, this submission is soundly based, it is not sufficient in my opinion, based upon the principles which apply to proceedings of this kind, to deny the applicant the ability to amend the proceedings as sought.
29 His Honour also observed at [3], [5]:
[3] The proposed amended summons asserts that on 7 February 2005, the first respondent, presumably through the liquidator, sold "the business, plant and equipment and intellectual property of the first respondent" to the fourth respondent. It is alleged that "from this time the fourth respondent became a beneficiary of, the making or operation of the said unfair contract." The second respondent is alleged to be a director of the fourth respondent which, as I have said, is a Hong Kong corporation. The proposed amended summons also alleges that "the third respondent carries on the business known as and holds itself out to be the business of 'Business Catalyst International'. The third respondent trades on the goodwill and reputation of the first respondent and accordingly became a beneficiary of the making or operation of the said unfair contract."
...
[5] In seeking to justify the addition of the third and fourth respondents, the applicant said that he was merely endeavouring to trace the assets of the first respondent which in fairness he should be entitled to do, based on the development of the Brown v Rezitis principles.
30 Ultimately, there was no evidence adduced by the applicant in respect of these assertions. The applicant joined the third and fourth respondents based on the principle in Brown v Rezitis (1970) 127 CLR 157, in circumstances where the third and fourth respondents came into existence after the applicant's termination.
31 As I have observed, the third and fourth respondents were represented by the same counsel who appeared for the second respondent. No additional evidence was called by them. In my view, the appropriate order in respect of the third and fourth respondents, is that the applicant pay the costs of the third and fourth respondents in relation to the joinder motion heard on 16 June 2008. There should be no other order for costs in respect of the third and fourth respondents.
Offers of compromise
32 Mr Austin submitted that it was appropriate to consider offers of compromise and any Calderbank offers after determining the question of costs. I accept this approach as appropriate in this matter. On 23 December 2008, the second respondent made an offer to pay $22,000 to the applicant, representing a payment in lieu of notice and redundancy, and $8,000 interest, and half of the applicant's costs, as agreed, or, as assessed, or in the alternative, the sum of $20,000. The offer of compromise was conditional upon the applicant agreeing to accept the respective offers made by the third and fourth respondents. The offer remained open until 5.00 pm on 9 January 2009 and was made in accordance with the principles laid down in Calderbank v Calderbank [1975] 3 All ER 333.
33 The third respondent also made an offer of compromise on 23 December 2008 that the matter be discontinued as against the third respondent, that each party bear their own costs and that the offer was conditional upon the applicant agreeing to accept the respective offers of the second and fourth respondents. This offer was said to be open until 5.00 pm on 9 January 2009.
34 Also on 23 December 2008, the fourth respondent made an offer of compromise that the matter be discontinued against the fourth respondent, that the applicant pay the fourth respondent's costs, as agreed, or, as assessed, or in the alternative, the sum of $2,500 and that the offer was conditional upon the applicant agreeing to accept the respective offers of the second and third respondents. The offer was said to remain open until 5.00 pm on 23 December 2008 (sic).
35 Mr Austin submitted that in terms of the substantive relief granted to the applicant, the second respondent's offer was more generous, in that it included interest, than the offers of compromise subsequently made by the applicant in 2008. The difficulty, presumably from December 2008, was the question of legal costs.
36 The applicant made a number of offers of compromise to the respondents over time. All were refused. The offers were as follows:
(a) on 17 January 2008 a Calderbank offer of $55,000 inclusive of costs;