Margaritte Joanne Colefax v Secretary, Department of Education

For the respondent

1. In her affidavit Ms Badajos deposed to the following: 1. the history of settlement offers made to the appellant in proceedings between the parties between 2010 and 2015. This included the appellant accepting an offer of $8,000 to settle discrimination proceedings in the Federal Circuit Court; 2. an offer of settlement made to the appellant in June 2017 in the context of the unfair dismissal proceedings that were then before Commissioner Murphy. That offer was $5,000 (as general damages) subject to the appellant executing a deed of release ("2017 Offer"). The deed is not in evidence; 3. the appellant's response to the 2017 Offer, contained in a letter dated 21 June 2017 which is annexed to the affidavit. In that letter the appellant stated as follows: "With regard to your offer of 13 June 2017, I will return it to you un-signed. If you wish to put forward an offer, please do so in accordance with established practice. Do so, after your evidence has been filed, and do so, clearly setting out the legal basis for your claim - that my Application has no prospects of success." 1. an offer of settlement made to the appellant on 23 October 2018 in the context of the appeal proceedings. The offer was contained in a letter from the Crown Solicitor's Office to the appellant dated the same day. The letter expressed the respondent's view that leave to appeal would not be granted to the appellant or, if leave were granted, the appeal would not succeed. The respondent stated briefly its reasons for holding this view. The offer made to the appellant was $5,000 as general damages and was subject to the execution of a deed of release ("2018 Offer"). The letter of 23 October 2019 and the proposed deed of release ("Deed") are annexed to the affidavit; 2. in broad overview, the time and costs incurred by the respondent in preparing for the appeal proceedings; and 3. the appellant's employment status and wage.
2. It is worth noting in particular the following terms of the Deed: 1. William Blunt, who was given leave to appear for the appellant before the Commissioner and the Full Bench, was included as a party to the deed; 2. the Deed commenced with 56 recitals that attempt to summarise the history of interactions between the parties since 2008; 3. from those recitals was derived a term "Matters in Dispute", which was defined to mean "each and every of the disputes and matters, whether jointly or severally, and described in the Recitals above including…"; 4. the Deed required the appellant to provide an undertaking "that she will never seek employment of any kind with the Department [of Education]"; 5. the Deed further required the appellant within 7 days to: 1. withdraw any complaints she may have lodged with any other court or tribunal; 2. withdraw any and all requests under the Government Information (Public Access) Act 2009 (NSW) ("GIPA"); 3. "withdraw any and all complaints about any employee, officer, delegate, appointee or agent of the Department of Education arising out of or in any way connected with the Matters in Dispute"; and 4. "cease for all time, correspondence to any entity or person in relation to the Matters in Dispute"; 1. both the appellant and Mr Blunt were required to release the Department from all "Claims" (as defined) with respect to or arising out of the Matters in Dispute; 2. both the appellant and Mr Blunt were required to agree not to "make any statement, comment or complaint to any person or entity regarding the Department, its officers, agents and employees (past, present and future) which is in any way disparaging or unfavourable" and to undertake not to cause or encourage a third person to do so; and 3. both the appellant and Mr Blunt were required to covenant to "keep confidential all issues that have been the subject of the Matters in Dispute, the negotiations, the fact of and the terms of the settlement the subject of this Deed".
3. The respondent submitted as follows: "FAILED TO AGREE TO A REASONABLE SETTLEMENT OFFER: s. 181(2)(c) of the Act … First limb: Rejecting a reasonable settlement offer 5. On 23 October 2018 the Respondent made an offer to the Appellant to settle the claim in the amount of $5,000 characterised as general damages (attracting no taxation). The offer required execution of a Deed of Release (as is usual) and the offer was open for 14 days. The Appellant did not respond to that offer, it lapsed, and she made no counter offer. 6. The letter put the Appellant on notice that the Respondent would rely on the offer in an application for costs (including indemnity costs) and also set out the main reasons that the Application for Leave would not succeed. Those reasons were ones found by the Full Bench in refusing leave to appeal. 7. The Respondent's offer was reasonable taking into account the following factors: (a) having lost at first instance, the Appellant was in a defensive position in terms of how she should have approached an offer of settlement; (b) for the reasons set out below in paragraphs 15 to 18, there were no substantial prospects of success of the application for leave to appeal or the appeal; (c) the offer was equivalent to about 5.5 weeks' net pay; (d) the Appellant is past retirement age and has not been entitled to any weekly payments of workers compensation for over four years; (e) the Appellant had not mitigated her economic loss in any meaningful way; and (f) the Appellant had already received $8,000 on 14 December 2015 in respect of her discrimination claim which was based on almost identical facts. As such, any compensatory orders would have taken that payment into account. 8. Further, there were almost no prospects of obtaining an order for reinstatement on appeal. At that stage, the Appellant could only have realistically anticipated a compensation order because: (a) the Appellant led no evidence of any position to which she could be re-instated; (b) on her own case, the Appellant was only fit for 'suitable duties' and re-instatement would only have placed her back on leave without pay waiting for a vacant position at 0.6 FTE at one of her 35 schools;3 (c) the Appellant had not done any work for the Respondent for 6 years and had only done home tutoring and volunteer work in that period; and (d) the high level of antipathy that the Appellant holds for the Respondent and its officers contraindicated a reinstatement order. Second limb: conduct inconsistent with an intention to settle the proceedings on any reasonable basis 9. The Appellant did not even respond to the offer. Her conduct was wholly inconsistent with any intention to settle. The only remedy that the Appellant ever sought below and in these appeal Proceedings, was re-instatement to 'suitable duties'. … Exercise of the discretion 12. The Full Bench would be well satisfied that either or both limbs under Bankstown City Council have been met and the jurisdictional gateway is open. That being done, the Full Bench is required to exercise its discretion as to whether to award costs, including on an indemnity basis. ln so doing, the Full Bench would take into account the following factors: (a) By the time the Appellant received the offer of settlement, she was in possession of the Respondent's Narrative of the Question of Leave as well as the Respondent's Appeal Submissions and was therefore well aware of the arguments against her. The matters set out therein were matters found by the Full Bench in refusing leave; (b) The Appellant has been in almost continuous litigation against the Respondent since 2010. The substance of the litigation has been directed to the same issue - the Appellant's request to be given suitable duties at one of 35 schools on her list. A perusal of the materials filed in each of those claims illustrates reliance on the same or similar evidence utilised in these proceedings. The Respondent expended substantial sums meeting the Appellant's claims. Further, the Appellant turned down a number of offers of settlement throughout that litigation; (c) The Appellant has had legal representation in past litigation. However, the Appellant elected to have her partner, Mr Blunt appear on her behalf and he was granted leave to do so over the objection of the Respondent. As a result, the failure by the Appellant to direct herself to the key statutory elements of the application for leave to appeal did not occur as a result of a lack of opportunity or means to obtain legal advice; (d) The Appellant has substantial financial resources. The Appellant owns her home at Normanhurst and has a rental property at Umina Beach. As at October 2017, the Appellant had $614,709 in a term deposit plus other $103,960 in other cash accounts. On her 2016 tax return, the Appellant's spouse's taxable income was $194,287.7 (e) the Appellant filed thousands of pages of materials and submissions, most of which were irrelevant, being directed to issues outside the consideration of whether the Commissioner had erred in fact or law in determining that her dismissal was not unfair; (f) the Appellant failed to direct herself to the established principles and criteria going to the question of leave to appeal and despite suggestions from the Bench to do so, ran the hearing as if it were an appeal proper; and (g) the sheer volume of material filed required significant expenditure of time and cost for the Respondent, who is funded by the public purse and is therefore responsible to the taxpayers of New South Wales. PROCEEDINGS COMMENCED WITHOUT REASONABLE CAUSE: s.181(2)(b) of the Act 13. Further, or in the alternative, the Respondent submits that the Application for leave to Appeal and Appeal (Proceedings) were instituted pursuant to ss. 187 and 188 of the IR Act {Chapter 4, Part 7). As such, costs orders under s. 181(2)(b) of the IR Act are also available. The test is whether there were 'no substantial prospects of success'... … 15. The Appellant misconceived the nature of the Proceedings and approached the appeal as a re­run of the first instance claim or as a dissertation of disagreement with the Commissioner's Decision. The Appellant did not direct herself to the requirement of establishing error under House v R and the Full Bench made those findings in that regard in its Decision at [64] to [70]. … 17. Most significantly, the Appellant had no basis on which to satisfy the test under s. 188 of the Act going to the question of leave. The Appellant failed to appreciate that it is a stringent test and did not apply her submissions (either written or oral) to the established criteria. As the Full Bench found at [203] of its Decision, there were simply "no matters of principles at large...no substantial issues of principle or law and.... [no] issues having any wider application than to the parties themselves". Further, the Full Bench found that the factual scenario was almost unique: (at [204] - [205]). 18. This lack of any substantial prospects of success on the question of leave was obvious and apparent at the time the proceedings were instituted. It was a fundamental failure because without the grant of leave, the appeal proper had no prospects."
4. The respondent seeks costs of and incidental to the proceedings on an indemnity basis or, failing that, on a party-party basis as agreed or assessed.

For the appellant

1. In her affidavit, the appellant deposed to various offers of settlement she had received from the respondent, and in one instance accepted, in divers proceedings between the parties between 2011 and 2015. She outlined the reasons for which she claims to have rejected certain of those offers.
2. The appellant also deposed at length to the 2017 Offer, and the reasons for which she claims to have rejected that offer. These may be summarised as follows: 1. the recitals were partisan and inaccurate; 2. the amount of $5,000 was inadequate when compared with the appellant's quantification of her losses, calculated apparently on the assumption that she had remained in employment as a Step 13 ESL teacher until age 73; 3. it was unreasonable to require that she never seek employment of any kind with the respondent; 4. it was unreasonable that any other actions, that may have been underway in other jurisdictions, should be impacted by her acceptance of the respondent's offer. As any such matters were unrelated to the proceedings in the Commission, she was entitled to have those matters conducted to judgement; 5. it was plainly wrong to have her rights to lodge an application under GIPA curtailed. Like any other member of the public, she is entitled to lodge any GIPA application to seek any information whether personal or otherwise; 6. she was, and is, entitled to lodge any complaint with regard to her employment or any other matters including to any statutory authority, and should not be constrained from doing so; 7. she was entitled to correspond with the respondent, and any other entity including statutory authorities and organisations, in relation to matters in dispute, and should not be prevented from doing so; 8. if the respondent's offer was a genuine offer to settle the matter, the only release required was for the withdrawal of the proceedings before the Commission. lt was entirely unreasonable to require her to release the respondent from any future action, for example "to an appropriate Court to enforce the Determination of the WCC, or to take action with regard to the five workplace injuries". 9. it was unreasonable for the respondent to require her to warrant that she had "sought and obtained legal advice", when the respondent was aware that she was self-represented; and 10. given the circumstances of her employment, and that she had been injured five times and has a disability of incomplete paraplegia, it would be unreasonable for her to be restricted by the terms of the non-disparagement clause from making statements, or making submissions with regard to her experiences, where those submissions may assist the parliament and/or authorities, or other persons to improve the outcomes for other injured and/or employees with disabilities.
3. The appellant concluded as follows: "53. It was my view when considering the Offer, the Deed of Release had no relationship to settling the proceedings, but as on previous occasions, was primarily concerned with bringing my employment to an end, and bringing to an end, any liability the Respondent owed to me, due to the Respondent's past actions."
4. In relation to her letter to the respondent of 21 June 2017, referred to at [9(3)] above, the appellant stated as follows: "66. The response set out by me, in my 21 June 2017 letter, was clear and intentional to invite the Respondent to lodge a new offer. There was no unwillingness on my part to receive a further Offer."
5. On the 2018 Offer the appellant deposed as follows: "68. On 23 October 2019 [sic] I received the current Offer. I read it and observed it was for the same amount of money and incorporated the same harsh and punitive terms as the previous Offer. 69. Given it was for the same amount of money and incorporated the same terms, and for the reasons set out above with regard to the previous Offer, I formed the view the current Offer was unreasonable."
6. In reply to the respondent's contention that she had unreasonably failed to agree to a settlement, the appellant submitted as follows: "16. On 13 June 2017, the Respondent submitted an Offer (the former Offer) to settle the s.84 Unfair Dismissal Application heard by Murphy C. The former Offer included the following terms; payment of a sum of $5,000 and that the Applicant and the Applicant's partner William Blunt would execute a Deed of Release that required, the abandonment of any current or future claim, proceedings or complaints against the Respondent; not make any statement in any way unfavourable to the Respondent; never seek any form of work with the Respondent (the abandonment provisions). 17. The Offer, the subject of this Application, (the Appeal Offer), was for the same sum of $5,000 and included that same abandonment provisions as the former Offer. 18. Prior to the termination of her employment, the Applicant had advised the Respondent that she planned to work till she was 73 on 8 January 2020. As a grade 13 ESL teacher with the Respondent, she would be able to earn an estimated income of $269,400 net after tax as set out in her Affidavit. 19. The Appeal Offer of $5,000 was considered and weighed against the estimated $269,400. The Applicant considered the $5,000 proposed payment to be unreasonable. … 21. The Applicant adopted the same approach with the Appeal Offer. The Applicant held the view that if the Appeal Offer was a genuine attempt to bring the proceedings to an end, there was no requirement for the Respondent to include the abandonment provisions. The Respondent was aware of the Applicant's view as a prior offer in the Federal Court of Australia, was accepted, because it did not contain the abandonment provisions. … 23. The Applicant formed the view that it was unreasonable to agree to an inaccurate statement of facts, where there was an inevitability that estoppel could later be claimed by the Respondent over those inaccurate facts, and a later claim could be made that the Applicant may have perjured herself in one or more of the proceedings prior to the date of the Deed. 24. In the absence of any determination that she was unable to perform any one of the many other positions with the Respondent (including non face to face roles with students, including administration, lesson preparation or mentoring positions etc), the Applicant formed the view it was unreasonable of the Respondent to ban her from seeking employment in other positions with the Respondent. 25. Taking all of the above into consideration and in the context of the matters set out in her attached Affidavit, the Applicant formed the view that the Appeal Offer was unreasonable, especially given it was no different to the former Offer. 26. In addition and critically, given the Appeal Offer was the same as the former Offer, the Applicant relied on the Judgement of Murphy C in Colefax v Secretary, Department of Education (No. 2) 16 July 2018 at paragraph 13 where, having considered the issue cf the reasonableness of the former Offer he said: 'Whilst $5,000 is not an inconsiderable amount of money, in the context of the applicant attempting to regain her career as a teacher, which began in 1989, I do not regard her refusal to abandon that attempt in exchange for $5,000 as unreasonable.' 27. In the circumstance, where the Appeal Offer was the same as the former Offer, the Applicant submits the Respondent is now seeking to reagitate the same matter that was dealt with to finality by Murphy C. The Respondent was able to Appeal that finding, but did not. Given the offers were the same, the Respondent should not now be allowed to set aside the judgement of Murphy C and claim the Appeal Offer was reasonable. The Respondent's submissions regarding s 181(2)(c) should be rejected."
7. The appellant's submissions on the question of whether she commenced the appeal proceedings without reasonable cause are in large part a reiteration of the grounds of appeal before the Full Bench. The effect of the submissions is that as the appellant had "formed a reasonable view" that the Commissioner's decision contained errors, the application for leave to appeal and appeal should not be "stigmatised as having been instituted without reasonable cause".
8. The appellant submitted that the Full Bench should not exercise its discretion to award costs to the respondent. Her submissions on this point included the following: "28. In exercising its discretion to award any costs and in particular indemnity cost, the Applicant submits that if the principles developed at common law are to be applied, the onus rests on the Respondent to show that it was unreasonable for the Applicant to refuse the Offer. … 29. The Applicant submits those principles apply in this matter and that the Respondent as the 'offeror' has not discharged this onus. … 30. It does not automatically follow that costs will be ordered on an indemnity basis after an offer has been rejected. The Court must consider all the surrounding circumstances, including: the genuineness of the offer, whether the offer was realistic when the offer was made, whether in all the circumstances it was such a reasonable offer that it required the Applicant to give careful consideration to it. 31. It is consistent with the overarching purposes of civil procedure provisions that any decision in relation to the award of indemnity costs needs to be just. For such an award to be just, it cannot be based on an offer that is not genuine, not realistic, or not reasonable in all of the circumstances. Given the nature of the application to the IRC, the circumstances to be considered include the Applicant's goal to return to employment in public education and the career she has passionately embraced and loved since 1989. In addition, the circumstances include, that she wants to return to that employment with the Respondent over which she holds no antipathy (as demonstrated by her positive actions since 2008 which include her consistent attempts to return to work, and not speaking to the media or publicly about her ongoing circumstances). 32. In addition, the analysis should be made at the time the offer was made, and should not be made with the benefit of hindsight. 33. In addition, a distinction has been drawn, by the authorities, between a genuine offer of realistic compromise, and a demand to capitulate. A question posed is whether the offer advanced by the Respondent was designed merely to trigger costs sanctions, (in which case it would not be treated as a genuine offer of compromise), or whether it was an offer of a "significant" benefit. … 35. In addition, if as the Respondent claimed in the letter accompanying the Appeal Offer, the Applicant's claim 'has no merit', it was open for the Respondent to make an application to strike out the Applicant's case. The omission to make a strike out, is a relevant consideration, because if it had been the true intention of the Respondent to reduce the cost burden on the Respondent, and the case was considered to have no merit, then the logical course would have been to make a strike out application. The Respondent did not do so. 36. In addition, there is no presumption in favour of indemnity costs in s.181 of the IR Act, and the burden is on the Respondent who is seeking a special cost order, to show in support of its application, that a 'rejection' of an offer was unreasonable 'in all the circumstances'. The Applicant submits that burden has not been discharged, and the Respondent has not established that the Offer had been rejected unreasonably by the Applicant "in all of the circumstances'. The Applicant submits the Full Bench should not make an order for indemnity costs." (Footnotes omitted)

Consideration

1. The Commission's jurisdiction to award costs is contained in s 181 of the Act, which is relevantly in these terms: 181 Costs (1) Subject to the rules of the Commission and any other Act or law: (a) the Commission may award costs, and (b) costs are in the discretion of the Commission, and (c) the Commission may determine by whom and to what extent costs are to be paid, and (d) the Commission may order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (2) However, the Commission may award costs only in the following cases: (a) the Commission may award costs against an applicant if it considers that the application to it was frivolous or vexatious, or (b) the Commission may award costs against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause, or (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals) who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious, or (c1) the Commission may award costs against an industrial agent representing an applicant or employer in proceedings under Part 6 of Chapter 2 if: (i) the industrial agent fails to file a certificate as required by section 90A, or (ii) the Commission finds that the industrial agent has filed a certificate under that section certifying that the agent has reasonable grounds for believing, on the basis of provable facts, that the applicant's claim or employer's response to the claim had reasonable prospects of success when the agent did not have reasonable grounds for believing, on the basis of provable facts, that it had reasonable prospects of success, or (d) the Commission may award costs in proceedings for a breach of an industrial instrument or the recovery of money under Chapter 7, as provided by sections 357 and 373. … (4) In this section, costs includes: (a) costs of or incidental to proceedings in the Commission, and (b) in the case of an appeal to the Commission, the costs of or incidental to the proceedings giving rise to the appeal, as well as the costs of or incidental to the appeal.
2. The approach to be taken by the Commission to s 181 was described by the Full Bench in Re Operational Ambulance Officers (State) Award (No 2) [2011] NSWIRComm 85 as follows: "[28] The exercise of the Commission's discretion to award costs involves a two stage process: see Bankstown City Council v Paris [1999] NSWIRComm 585; (1999) 93 IR 209 and Four Sons Pty Ltd v Sakchai Limsiripothong (No 2) [2000] NSWIRComm 131; (2000) 100 IR 400. The first stage requires a determination as to whether s 181(2) of the Act is enlivened. The second stage of the process requires the Commission to exercise its discretion whether to award costs under s 181(1) of the Act."
3. In Dr A v Health District (No 4) [2014] NSWIRComm 56 Boland JA, with whom Stanton and Newall CC agreed, made the following findings: "[8] The Commission's jurisdiction (as distinct from the Commission in Court Session) is essentially a non-costs jurisdiction. There are limited exceptions, which are prescribed in s 181(2) of the IR Act. If one or more of the tests required by s 181(2) are met in any particular case it then becomes a matter for the Commission's discretion whether to award costs: s 181(1)(b)."

Unreasonable failure to agree to a settlement of the claim

1. Section 181(2)(c) of the Act was considered by the Full Bench in Bankstown City Council v Paris (1999) 93 IR 209. The Full Bench made the following observations at pp 218-219: "Section 181(2)(c) on its face is a provision which is designed to apply only to unfair dismissal proceedings. It is the only provision designed to be applied specifically in that context. Also, when read in terms of the other provisions in the Act as to costs, it is one of only three provisions which may have application to unfair dismissal proceedings. The other provisions are paragraphs (a) and (b) of s 181(2). However, those provisions apply to many other proceedings before the Commission and, unlike the particular limb of s 181(2)(c) relied on in this application, they are designed to operate where the Commission considers either the application itself, or the institution of the proceedings, was affected by considerations which made it manifestly inappropriate for the proceedings to have been commenced. The relevant part of s 181(2)(c), on the other hand, does not require the Commission to focus upon the circumstances of the commencement of the proceedings, or to consider only the situation of the applicant. Instead the Commission is required to consider in a more general way, the conduct of the party in respect of which an application for costs is made; and, in that regard, to consider the conduct of the party in relation to the question of settlement of the claim. An understanding of the meaning and purpose of s 181(2)(c) is assisted by reference to the particular provisions in Part 6, Unfair Dismissals, of Chapter 2 of the Act, which relate to conciliation or settlement of unfair dismissal applications. Section 86 for example, provides: The Commission must endeavour, by all means it considers properly necessary, to settle the applicant's claim by conciliation. Section 87(1) is also relevant. Its effect is to preclude the Commission from proceeding to determine the claim by arbitration until 'all reasonable attempts to settle the applicant's claim by conciliation have been made but have been unsuccessful'. Section 87(2) continues the statutory emphasis upon conciliation by specifying that the earlier provisions do not prevent further conciliation from being attempted at any time before the Commission makes an order in the proceeding. Construing the relevant part of s 181(2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of that party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad powers and discretions under s 181(1) are available for exercise." (Emphasis added)
2. We respectfully agree with the reasoning of the Full Bench in Paris.
3. Before applying the approach laid out in Paris, we wish to address one matter in particular arising from the appellant's submissions. The application for costs currently before the Full Bench is not a "reagitation" of a matter that was "dealt with to finality" by Commissioner Murphy in the decision referred to at [3] above. While there may be a close similarity in the terms of the 2017 Offer and the 2018 Offer, the Full Bench is required to decide whether in refusing the 2018 Offer the appellant unreasonably failed to agree to a settlement of the claim. To submit that the current application for costs is simply a continuation of the claim for costs rejected by the Commissioner is to fail to apprehend the nature of these proceedings.
4. To return to Paris, a party may be found on one of two limbs to have unreasonably failed to agree to a settlement of the claim: firstly, by not accepting a reasonable settlement offer put by the other party; or, secondly, by engaging in conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable.

Not accepting a reasonable settlement offer put by the other party

1. On the first limb identified in Paris, the respondent relies on the 2018 Offer.
2. As we stated at [32] of the Appeal Decision, the relationship between the parties since 2008 has been one of intractable conflict over whether the appellant could be returned to the workforce and, if so, in which position and on what terms. Not including the proceedings before the Commissioner and the Full Bench, the evidence discloses sixteen separate proceedings between the parties, all bar one (an appeal by the respondent) having been commenced by the appellant.
3. In light of that history, it was reasonable for the respondent, as a condition to any settlement, to seek an outcome that would resolve all issues between the parties once and for all. Put another way, it was at best unrealistic for the appellant to expect that a settlement could be reached that would allow her to pursue additional or alternative relief through other avenues. The respondent had been down that road before, having had to defend further litigation despite a settlement of proceedings in the Federal Circuit Court in 2015.
4. In that context, there are many features of the Deed which are neither exceptional nor unreasonable. This includes the nature and extent of the releases sought from the appellant, and the non-disparagement and confidentiality obligations imposed on her.
5. However, there are three features of the Deed which are unusual. Firstly, the Deed contained an extensive recitation of the history between the parties since 2008, extending over almost 6 pages. The recitals were necessary to an extent to place the Deed into context and to provide some clarity as to the covenants that the Deed required of the parties. However, history had demonstrated that consensus on a narrative of the relevant history was unlikely to be achieved.
6. Secondly, the Deed required the appellant to undertake never to seek employment in any capacity with the Department of Education. The respondent's case was only that the appellant was permanently incapacitated from being employed as a school teacher, so the clause can be regarded as precluding any possibility of the resumption of any employment relationship between the parties.
7. In light of the history between the parties, and the nature of their relationship, it is not altogether unreasonable that the respondent would seek such an undertaking from the appellant. Equally, it certainly went beyond the evidence in the proceedings and the basis on which the appellant had been medically retired by the respondent.
8. Thirdly, and most particularly, the Deed extended to Mr Blunt, who is not a party to these proceedings. The Deed required him to commit to ongoing obligations regarding confidentiality and non-disparagement. More particularly, he was obliged to provide the same releases to the Department as the appellant.
9. The 2018 Offer was conditional on the appellant and Mr Blunt accepting the Deed. In our view, the features highlighted above provided a legitimate basis on which the appellant might object to the Deed, and in doing so effectively reject the 2018 Offer.
10. We are reinforced in this view by the quantum of the 2018 Offer. We accept that $5,000 is not an insignificant amount of money. We also do not consider the appellant's estimates of her financial loss to be of particular relevance, especially given the Commission's limited jurisdiction to award compensation under s 89(5) of the Act. That said, the amount offered by the respondent was not of such magnitude that it should have outweighed the concerns that the appellant had with, or be regarded as providing adequate consideration for, the terms of the Deed highlighted above.
11. In all of the circumstances of this case we are not persuaded that in rejecting the 2018 Offer the appellant unreasonably failed to agree to a settlement.

Conduct inconsistent with an intention to settle the proceedings

1. This leads us to the second limb in Paris, namely whether the appellant engaged in conduct which was inconsistent with an intention to settle.
2. In Four Sons Pty Limited v Sakchai Limsiripothong (No 2) [2000] NSWIRComm 131 the Full Bench, relying on Paris, stated at [11] that the obligation imposed on parties is "to undertake a responsible and careful assessment of the prospects of the litigation".
3. The 2017 Offer was made before the various contentions raised by the appellant in the proceedings below had been tested. It was to be expected that the appellant would assess the 2017 Offer against her views as to the strengths of her case and her desired outcome of reinstatement, at the time the 2017 Offer was made (and rejected).
4. The 2018 Offer was made in a significantly different context to that of the 2017 Offer. The unfair dismissal proceedings had been conducted and finalised. The Commissioner had succinctly summarised the issues requiring determination by him, and in dismissing the unfair dismissal claim he rejected all of the arguments advanced by the appellant. From that point, to be entitled to any remedy under the Act, the appellant would need to demonstrate appealable error in the Commissioner's decision in accordance with the well-established principles set out in the Appeal Decision.
5. By assessing the 2018 Offer on the same basis, and rejecting it for the same reasons, as she had done with the 2017 Offer, the appellant failed to undertake a responsible and careful assessment of the prospects of her appeal proceedings. Moreover, in doing so the appellant demonstrated an unwillingness to countenance any perspectives, whether on factual or legal matters, but her own.
6. There is no evidence that the appellant responded to the 2018 Offer. She did not raise with the respondent her concerns with the Deed, being the same as those she had held in relation to the 2017 Offer and summarised at [14] above. She certainly did not make a counter offer. Rather, she left it with the respondent to make a further offer. As the appellant deposed in her affidavit: "72. In addition, I considered that in the absence of a response, if the Respondent wished to truly resolve the proceedings and avoid costs, the Respondent would contact me to ascertain if I would consider a further Offer. The Respondent did not contact me, which reinforced my view the current Offer was not a genuine Offer and it would not be unreasonable not to accept it."
7. It is noteworthy that in response to the 2017 Offer the appellant had taken a similar approach, as outlined at [9(3)] and [16] above.
8. It is appropriate that the Full Bench takes into consideration the lack of a response by the appellant to the 2018 Offer: Four Sons at [11].
9. The lack of any response to the 2018 Offer is inconsistent with an intention to settle. It is unreasonable for her to leave it to the respondent to effectively "bargain against itself". Looked at another way, it was reasonable for the respondent to conclude that in the absence of a response from her, the appellant had no interest in negotiating a settlement.
10. The evidence discloses that the appellant was only ever interested in one outcome, namely her "reinstatement" to a "position of suitable duties" with the Department of Education, at one of the 34 schools that she had identified as being appropriate for her. This was the remedy sought both before the Commissioner and before the Full Bench. The appellant assessed the quantum of the 2018 Offer by comparing it to her estimate as to the monetary value of reinstatement and continued employment to age 73 (leaving aside the limitations on the Commission's jurisdiction under s 89(5) of the Act). Even in the context of the application before us, the appellant submitted: "31. …Given the nature of the application to the IRC, the circumstances to be considered include the Applicant's goal to return to employment in public education and the career she has passionately embraced and loved since 1989. In addition, the circumstances include, that she wants to return to that employment with the Respondent over which she holds no antipathy (as demonstrated by her positive actions since 2008 which include her consistent attempts to return to work, and not speaking to the media or publicly about her ongoing circumstances)." (Emphasis added)
11. The appellant is in a situation analogous to that of Mr Phillips in Cooma Rural Lands Protection Board v Phillips and Greenwood [2005] NSWIRComm 313, about whom the Full Bench made the following observations at [52]: "We consider that Mr Phillips' steadfast insistence on reinstatement to the exclusion of other negotiated outcomes disclosed a failure on his part to properly evaluate the strengths and limitations upon the case he was to propound and in such circumstances there can be little doubt on a proper application of the principles, that an order for costs against Mr Phillips was available and should have been made."
12. We are satisfied that in connection with the proceedings before the Full Bench the appellant unreasonably failed to agree to a settlement of the claim.

Institution of proceedings without reasonable cause

1. In Dr A v Health District Boland JA made the following observations: "[14] In Re Operational Ambulance Officers, the Full Bench, at [31]-[32], also referred with approval to what Wilcox J said in Kanan v Australian Postal & Telecommunications Union [1992] FCA 366; (1992) 43 IR 257 at 264-265 in respect of the phrase 'without reasonable cause': [29] It seems to me that one way of testing whether a proceeding is instituted 'without reasonable cause' is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceedings, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being 'without reasonable cause'. But where it appears that, on the applicant's own version of the facts, it is clear that the proceedings must fail, it may properly be said that the proceedings lacks a reasonable cause. [15] The mere fact that an applicant was unsuccessful in its application does not, of itself, make the application frivolous or vexatious or one that is pursued without reasonable cause. Additionally, it is to be noted that s 181(2)(b) requires that in considering the applicability of the phrase 'without reasonable cause', as Wilcox J pointed out in Kanan, it is to be done 'upon the facts apparent to the applicant at the time of instituting the proceedings'."
2. To a large degree, the appellant failed to tailor her case to the proceedings in which she was involved. The case before the Commissioner was whether the appellant's medical retirement under s 76 of the Teaching Service Act 1980 (NSW) was harsh, unreasonable or unjust within the meaning of Ch 2 Pt 6 of the Act. The question for the Full Bench was whether, in finding that it was not, the Commissioner had fallen into error.
3. Rather than concentrate on the questions appropriate to the case to be determined by the Commissioner, and subsequently that by the Full Bench, the appellant insisted on adducing evidence and making submissions that were tantamount to asking the Commission to conduct a "royal commission" type of enquiry into her employment with the respondent since 2008 (see Appeal Decision at [19]).
4. In the present application for costs the appellant continued to take a similar approach. Her submissions concentrated on the basis for her forming the view that there were errors in the Commissioner's decision. She submitted that having formed these views "reasonably", she should not be regarded as having commenced proceedings without reasonable cause.
5. The appellant failed to apprehend that the test to be applied by the Full Bench on the respondent's application for costs is an objective one. The question is not how genuinely the appellant believed in the merits of her appeal, but whether objectively there were one or more arguable points of law on which she could rely on the appeal.
6. There is some force to the respondent's submissions as to the appellant having lacked substantial prospects of success on the question of leave. However, as Dr A v Health District made clear, it is not the outcome of the proceedings that determines whether they were instituted without reasonable cause, but rather whether at the time the appellant instituted the proceedings, on the facts then known to her, there was no substantial prospect of success.
7. In this regard, there is one matter which precludes a finding that the proceedings were instituted without reasonable case. In the course of dealing with the appellant's appeal submissions as to the legal effect or significance of the determination of the Workers Compensation Commission made on 9 August 2012, we expressed at [77] of the Appeal Decision doubts as to the correctness of the Commissioner's conclusion that for the purposes of exercising its jurisdiction under the Act this Commission has no jurisdiction to make factual findings about an alleged contravention of a determination made by the Workers Compensation Commission.
8. The appellant submitted that the Full bench did nothing about those doubts. We said in the Appeal Decision at [78] and [79], however, that the appellant's claims arising under the workers compensation legislation could be resolved on other grounds. As a result we determined that this was not an appropriate case in which that issue ought be tested. In another case, it may have provided a legitimate basis on which to claim error.
9. It follows that at the time she commenced proceedings there was at least one arguable point of law on which the appellant may have been able to rely even if there were other factors which rendered that point unnecessary to determine and those were known before the appeal was commenced. While it is very much in the balance, because there was this arguable point we are not persuaded that the proceedings were instituted without reasonable cause.

Exercise of discretion

1. As a consequence of our finding at [50], s 181(2)(c) of the Act is enlivened. The question becomes whether the Full Bench should exercise its discretion to award costs against the appellant.
2. We have considered the submissions of the appellant on the question of discretion. In large part they are addressed in our discussion above at [28]-[50]. Otherwise, we are not persuaded by them.
3. As the Full Bench stated in Paris, the legislature has evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. This case falls within that category.
4. We consider that this is an appropriate case in which to make an order for costs.
5. The respondent seeks costs for both the application for leave to appeal and for the costs of preparing the appeal. The appellant did not in any meaningful way attempt to differentiate between her application for leave to appeal and her appeal. At the hearing on 12 November 2018 Mr Blunt for the appellant largely attempted to run the appeal proper. For this reason, costs should be awarded for the appeal, including the application for leave to appeal.
6. The respondent further seeks costs on an indemnity basis.
7. To award indemnity costs in relation to the failure by the appellant to accept the respondent's offer of settlement, the Full Bench would need to be satisfied that the respondent had made a genuine offer of compromise and that it was unreasonable for the appellant to reject it: Deng v Lieu (No 2) [2009] NSWIRComm 85 at [14] and [18].
8. In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers, Western Australian Branch and Anor (No 2) (1992) 46 IR 301, French J made the following observations at p 303: "The BTA has moved for indemnity costs. It is not necessary for me now to recite the principles upon which such costs are ordered in the Federal Court. I had occasion to consider them in some detail in Tetijo Holdings Pty Ltd v. Keeprite Australia Pty Ltd (unrep Fed Ct 3 May 1991 No. WA G55 of 1988). In substance such costs may be ordered whenever it appears that an action has been commenced in circumstances where the applicant properly advised should have known it had no chance of success - Fountain Selected Meats (Sales) Pty Ltd v. International Produce Merchants Pty Ltd (1988) 81 ALR 397. Although there is said to be a presumption in such cases that the action was commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law, it is not a necessary condition of the power to award such costs that a collateral purpose or some species of fraud be established. It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case." (Emphasis added)
9. For the reasons set out at [28]-[38] and [51]-[59] respectively, we are not satisfied that the thresholds in Deng and J-Corp are met in the present case. We decline to award costs on an indemnity basis.

Order

1. We order that the appellant is to pay the respondent's costs of the appeal proceedings on a party and party basis as agreed or assessed.

Amendments 07 March 2019 - In Paragraph 17 Inserted after 23 October 2019 [sic] 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. Decision last updated: 07 March 2019