Kennedy v Martinez

Industrial Relations Commission (NSW)|2010-07-01

The applicant did not accept the Offer. 4 Mr Diamond further deposed that on 27 July 2010 the respondents made an Offer to the applicant of $70,000 plus costs as agreed or assessed to resolve the proceedings. The offer remained open for acceptance until 29 July 2010. The applicant did not accept the Offer. 5 Mr Diamond further deposed that on 4 August 2010 the respondents made a third offer, one week before the hearing of the matter, of $100,000 to remain open until 6 August 2010, plus costs as agreed or assessed to resolve the proceedings. The applicant did not accept the Offer. 6 The respondents sought the following orders: (a) The Applicant to pay the Respondents' costs in the proceedings, assessed on the ordinary basis, up to and including 11 January 2010; and

(b) The Applicant to pay the Respondents' costs in the proceedings, assessed on an indemnity basis, from (and including) 12 January 2010 to the conclusion of the proceedings. 7 It is to be noted that the applicant made an Offer of Compromise on 17 June 2010 of $155,000 plus costs and restated that Offer on 6 August 2010, following the respondents' third Offer. Respondents' first Offer

(b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and

(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made. 13 In my opinion Pt 42.15A applies to the respondents' first Offer. 14 However, even if the UCPR did not apply, it is apparent that the respondents' first Offer could be regarded as a Calderbank offer: see Trustee for the Salvation Army (NSW) Property Trust t/as Salvation Army v Becker (No 2) [2007] NSWCA 194 at [27]-[28]; Kain v Mobbs (No 2) [2008] NSWSC 599 at [6]-[7]. The essential question to be answered is whether indemnity costs should be ordered because the applicant unreasonably failed to accept an offer of compromise: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [52]. 15 As it has already been pointed out, the respondents' first Offer was a genuine attempt at a compromise. The Offer was open for 28 days, allowing sufficient time for the applicant to give it proper consideration. Further, as the respondents submitted, the findings against the applicant included: (a) the applicant was an experienced lawyer well versed in employment law ( Kennedy at [72]);

(b) the applicant could not sustain an argument that he entered the contract with the respondents without understanding what was expected of him (at [61]);

(c) there was no proper basis for the applicant to believe that his claim regarding security of tenure to 30 June 2009 would succeed (at [63]-[69]);

(d) there was no evidence to support the applicant's belief that the respondents would recognise his years of service with Ebsworth & Ebsworth in respect of notice of termination (at [70]-[77]);

(e) the applicant's claims in respect of procedural fairness, or lack thereof, could not be supported given the evidence of the conversation the applicant had with Mr Martinez on 30 July 2008 and Mr Belling in late August 2008 (at [78]-[90]). 16 It is evident that the applicant always faced a substantial risk in pursuing the litigation that he would either lose or receive a judgment in his favour that did not better the respondents' offer. His assessment of the prospects of success was unrealistic. 17 The onus fell on the applicant to establish that it was reasonable for him not to accept the offer: see Cosmetic Suppliers Pty Ltd v Great Scott International Pty Ltd (No 2) [2008] NSWIRComm 15; (2008) 170 IR 348 at [8] and [9]; Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [4]; Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [99]; Noon v Bondi Beach Astra Retirement Village Pty Ltd (No 2) [2010] NSWCA 285 at [7]. The applicant chose to make no submissions on costs. In my view, the applicant's rejection of the first Offer was unreasonable. Accordingly, I propose to make the orders sought by the respondents. Orders

18 The Court makes the following orders: (1) the applicant shall pay the respondents' costs in the proceedings, assessed on the ordinary basis, up to and including 11 January 2010; and (2) the applicant shall pay the respondents' costs in the proceedings, assessed on an indemnity basis, from (and including) 12 January 2010 to the date of this judgment. ____________________________

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Cosmetic Suppliers Pty Ltd v Great Scott International Pty Ltd (No 2) [2008] NSWIRComm 15; (2008) 170 IR 348 Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 Kain v Mobbs (No 2) [2008] NSWSC 599 CASES CITED: Kennedy v Martinez [2010] NSWIRComm 134 Leichhardt Municipal Council v Green [2004] NSWCA 341 Noon v Bondi Beach Astra Retirement Village Pty Ltd (No 2) [2010] NSWCA 285 Trustee for the Salvation Army (NSW) Property Trust t/as Salvation Army v Becker (No 2) [2007] NSWCA 194 Wheelahan v North Coast Area Health Service (No 2) [2008] NSWIRComm 244

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Cases Cited (10)