The costs of the cross-appeal
9 Mr Enkel's claim for the costs of the cross-appeal is based on a Calderbank offer. On 9 April 2020, by which time the cross-appeal had been instituted and the appeal discontinued, Mr Enkel's lawyer wrote to the lawyer for the cross-respondents offering to accept $20,000, comprised of $15,000 in lieu of additional penalties against WRF and $5,000 in lieu of imposition of civil penalties on Mr Ross. There were other standard and unobjectionable terms in the offer, the effect of which would have been that WRF and Mr Ross would have paid Mr Enkel that additional $20,000 in full and final settlement of all further claims without admission of liability, that is, all claims in addition to the amounts that had already been awarded by the WAIMC in its primary judgment.
10 The letter set out concise reasons as to why Mr Enkel was likely to be successful on appeal and why it was in the cross-respondents' interests to accept the offer. Those reasons largely reflect what was decided in the Appeal Judgment. The offer was open for acceptance until Monday 27 April 2020 and was expressly stated to be made in reliance on Calderbank principles.
11 Three days later the lawyer for the cross-respondents emailed Mr Enkel's lawyer saying only 'Your client's attached offer is rejected'.
12 Generally, in order to obtain an order for indemnity costs on the basis of a Calderbank offer, it is necessary for the offeror to show that there was a genuine offer of compromise, and that it was unreasonable for the offeree not to accept it. This reflects the policy of the court to encourage litigating parties to undertake genuine settlement negotiations: see Black v Tomislav Lipova BHNF Maria Lipovac (1998) 217 ALR 386 at [218]; Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2011] FCAFC 141 at [19].
13 However, the approach to assessing what is reasonable in a normal costs jurisdiction is not necessarily the approach which should be taken under the FWA. In Stratton Finance Pty Ltd v Webb [2014] FCAFC 110; (2014) 314 ALR 166 at [80], Allsop CJ, Siopis and Flick JJ said:
Caution should be exercised as to how a Calderbank offer, even a generous one, is viewed in such circumstances. Calderbank letters presuppose what might be called a 'costs jurisdiction', in contrast to the usual rule in FW Act claims. To group together contractual and FW Act claims in an offer may permit the conclusion that the refusal of the offer was unwise, even unreasonable, but it does not follow that such is an unreasonable act or omission, for the purposes of s 570(2).
14 So a standard of unreasonableness must be adopted which is higher than mere imprudence, or acting unguided by good sense or sound judgement: Celand v Skycity Adelaide Pty Ltd [2017] FCAFC 222; (2017) 256 FCR 306 at [165] (Bromberg J).
15 Here, it would have been in the cross-respondent's interests to have accepted the offer. Mr Ross ended up being found to be liable for involvement in contraventions of civil penalty provisions of the FWA and to be liable to pay a penalty of $8,800. If the cross-respondents had accepted the offer, he could have paid (jointly and severally with his company) $5,000 without any finding of liability. On remitter to the WAIMC, WRF was ordered to pay additional penalties of $24,300 on top of its previously found liability of $20,500 in penalty and, in this court, WRF was ordered to pay further additional amounts of $3,482.91, on top of its previously found liability to pay $13,826.89 in respect of unpaid ordinary pay, overtime and annual leave. WRF could have paid an additional $15,000 only (jointly and severally with Mr Ross) had it accepted the offer.
16 The offer was a reasonable one, although the above figures show it cannot be described as a particularly generous one. The terms were unexceptionable and there was sufficient time allowed for consideration and response. I infer from the alacrity with which the cross-respondents' lawyer replied and the peremptory nature of the reply that he and his clients in truth gave it little consideration. That reflects adversely on the reasonableness of their conduct.
17 Nevertheless, on balance I am not persuaded that the offer was so clearly attractive, or the ultimate outcome so substantially worse for the cross-respondents, that their rejection of the offer should be characterised as unreasonable by the higher standard imposed by s 570(2)(b). The discretion conferred by the confined terms of s 570(2) should be exercised cautiously and the case for its exercise should be clear: Ryan v Primesafe [2015] FCA 8; (2015) 323 ALR 107 at [64] (Mortimer J). The case for exercising it does not emerge with sufficient clarity here.
18 Apart from the legislative context given by s 570, it is also necessary to acknowledge that the offer concerned the costs of an appeal. WRF and Mr Ross already had the benefit of the findings of a court, which the cross-appeal sought to overturn. In my view, the fact that Mr Ross, in particular, already had a verdict in his favour is a factor relevant to the reasonableness or otherwise of his rejection of the offer. There may be cases where the findings challenged are so clearly wrong that this consideration should be given no weight, but with respect to the industrial magistrate, this was not one of those cases. The end result of the cross-appeal against Mr Ross turned on a point concerning his state of mind where there were different lines of authority (see Appeal Judgment [29], [43]). More broadly, the discretionary nature of the findings on penalty made them harder to challenge, and WRF was entitled to choose to seek to defend the lower penalties.
19 Mr Enkel has not succeeded in clearing the relatively high bar for establishing unreasonableness in rejecting a Calderbank offer which s 570 of the FWA imposes. There will be no order as to the costs of the cross-appeal.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson.