32 The Full Bench emphasised the risks which a party runs if it adopts a firm position or inflexible approach towards the settlement of the case, observing (at 220):
Far from indicating any retreat from the inflexible approach adopted by the appellant, its approach in relation to settlement on this occasion, served only to emphasise the consistent position that had been adopted. We emphasise that there will be many circumstances in which parties to litigation, including unfair dismissal proceedings, may appropriately take firm position generally, including on the question of conciliation or settlement. Nevertheless, such a position runs significant risks in terms of the exercise of the power and discretion under section 181(2)(c). This is particularly so where such a position is assumed without due regard to the policy of the Act which requires parties to take seriously their obligation to attempt to settle the proceedings. That in turn involves an obligation to consider in an objective way the strengths or limits upon the case that they will be propounding should the matter proceed to arbitration. On the material before us, we consider that the appellant failed to give appropriate consideration to such matters before it adopted its inflexible position. We consider that, in the circumstances of this matter, the criterion in the relevant provision has been made out. It has been met as to the proceedings both at first instance and on appeal.
33 In Four Sons Pty Limited v Sakchai Limsiripothon (No. 2) the Full Bench considered the issue of 'nominal offers' of settlement and observed (at 403-404):
The obligations imposed on parties to proceedings under section 84 of the Act, as identified in the Full Bench judgment in Bankstown City Council v Paris , require parties to such proceedings to undertake a responsible and careful assessment of the prospects of the litigation, in the absence of which an unsuccessful party may realistically face the prospects of a costs order being made against it. In those circumstances, it may often be appropriate for a party to consider making an offer to settle, even if the offer could be seen, either with the benefit of hindsight or otherwise, to be at a rather low level. However, the making of such an offer on "the low side" does not exhaust the responsibilities of a party to reasonably attempt to settle the claim.
34 It was Mr. Ptolemy's submission on behalf of his daughter that his daughter's offers to settle her claim had been reasonable. Her offers in turn were $5000 (3 May2005), $4000 (17 May 2005) and then $6500 (8 July 2005). It is clear from the evidence that Ms. Ptolemy did not accept the first offer of $1000 or the final offer made by the Hospital on 8 July 2005 of $2500 due to her growing legal bill. As she commented in her statement that she would have accepted an amount in that vicinity ($2500) in the absence of those additional costs.
35 I note the comments made by a Full Bench in Orange Community Accommodation Service Incorporated and Carolyn Vivienne Roddenby[2004]NSWIRComm333 when it stated the following :
In our view, the test of whether a party has unreasonably failed to agree to a settlement of a claim should not be made by reference to the extent of costs expended by the other party. If that was so, a party could incur substantial legal expenses, and simply argue that any offer of settlement which failed to go close to meeting such expenses, demonstrated an unreasonable failure to agree to a settlement. That is not the appropriate test under s 181(2)(c ) of the Act. By focusing on such a comparison the Commissioner was deflected from the correct statutory instruction to determine whether a party had unreasonably failed to agree to a settlement of the claim.
36 It is my finding that Ms. Ptolemy, throughout the negotiation period took into account her mounting legal costs in rejecting the Hospital's reasonable offers of settlement.
37 I note also the evidence of Ms. Schmidt with respect to the comments made by Ms. Ptolemy with respect to her views on her success in her claim. It is clear that Ms. Ptolemy recognised that she did not have a strong case and that she will loose if a technical argument concerning her signed contract was run. Seeing the signed contract was pivotal to the case, it is my conclusion that Ms. Ptolemy did not undertake a responsible and careful assessment of the prospects of the litigation.
38 Taking into consideration all the facts in this case it is my finding that Ms. Ptolemy unreasonably failed to agree to a settlement of her claim and therefore breached s.181(2)( c) of the Act.
39 Mr. Harvey for the Hospital sought indemnity costs or in the alternative party and party costs. He stated that Ms. Ptolemy was offered $2500, a generous offer and its refusal invokes the powers or enlivens the opportunity to order costs against her for pursuing it past that point.
40 I have considered this submission of Mr. Harvey but in review of the facts of this case, I do not believe that special or unusual circumstances manifested themselves in improper or unmeritorious conduct by Ms. Ptolemy.
41 I do however order costs on a party/ party basis against Ms. Ptolemy as agreed or assessed to be payable to St. Vincent's Private Hospital within 28 days of this decision.