Thompson v Big Bert Pty Ltd

REASONS FOR JUDGMENT BUCHANAN J: 1 On 14 December 2007 I dismissed the applicant's claims under the Workplace Relations Act 1996 (Cth) ('the WR Act') and the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ('the HREOC Act'). I did not then deal with any issue of costs. The respondent has now sought costs of the proceedings under the HREOC Act. It does not seek any costs of proceedings under the WR Act. 2 The respondent relies upon an offer of compromise made on 3 January 2007 which was in the following terms: '1. The Respondent offers to compromise the claims of the Applicant in both proceedings 877 of 2006, and 1948 of 2006, on the terms outlined in this offer of compromise. This offer is only for the settlement of both proceedings, and the Respondent states that pursuant to the terms of this offer, the Applicant cannot elect to only compromise one proceeding. 2. The claim outlined in matter 1948 of 2006 be dismissed with no order as to costs. 3. In relation to the claim made in matter 877 of 2006, the Respondent offers to compromise that claim of the Applicant on payment to the Applicant of: (a) The sum of $4,000.00 (gross, and subject to the deduction of appropriate taxation); (b) Costs as agreed or assessed; and (c) Interest payable on and from the date of filing being 9 May, 2006. 4. This offer shall remain open for acceptance by the Applicant for a period of 21 days from the date hereof, at which time it will lapse. 5. This offer is made pursuant to part 23 of the Federal Court Rules.' 3 The costs order which is sought is as follows: '1. The Respondent seeks the following orders: 1. The Applicant pay the Respondent's costs of proceedings 1948 of 2006; (a) To the extent that such costs were incurred on or before 11.00 am on 4 January, 2007, on a party-party basis; and (b) From 11.00 am on 4 January, 2007, on an indemnity basis; 2. In the alternative to order 1 above, the Applicant pay the Respondent's costs of proceedings 1948 of 2006 on a party-party basis. 3. Where costs were incurred in the preparation for and Hearing of matter No. 1948 of 2006 together with matter 887 of 2006, including the preparation of Submissions, the Respondent shall be entitled to 75 percent of their costs of and incidental to those hearing days and submissions.' 4 There is no barrier to the award of costs in relation to the proceedings under the HREOC Act (see Bahonko v Sterjov [2008] FCAFC 30 at [30]-[33]). Counsel for Ms Thompson argued that Bahonko v Sterjov (and Seven Network v MEAA (2004) 148 FCR 145, which it approved) was wrongly decided. The argument was based on a passage in the judgment of Black CJ in Goldman Sachs JB Were Services Pty Limited v Nikolich (2007) 163 FCR 62 ('Nikolich') (at [93]-[94]). However, it is clear that his Honour's observations were concentrated upon the position concerning causes in the accrued jurisdiction. They were made in a context where his Honour had drawn attention to, and accepted, a submission that a distinction might be drawn between s 170CS of the Workplace Relations Act 1996 (Cth) (as it then stood), which limited costs in 'a proceeding under' that section and s 347 of that Act (as it then stood) which limited costs more generally in 'a proceeding in a matter' under the Act. His Honour did not refer to Seven Network v MEAA or discuss the position of independent statutory claims. In Nikolich the applicant did not succeed at trial on any statutory claim. He succeeded on a common law claim in the accrued jurisdiction. The point which arose in Bahonko v Sterjov, and in the present case, did not arise for consideration. 5 In Nikolich, Jessup J said (at [380]): '… I take the view that the prohibition on costs in s 170CS(1) extended to every part of a proceeding whose statutory basis was s 170CP of the WR Act, including claims in the accrued jurisdiction …' (Emphasis added.) 6 The qualification expressed in the passage I have emphasised is an important one. Jessup J was the trial judge in Bahonko v Sterjov. He applied Seven Network v MEAA. He was found to be correct to have done so. The restriction argued by counsel for Ms Thompson can not be accepted. 7 Because the applicant failed altogether, the question of whether indemnity costs should be awarded as a result of the offer of compromise is not dealt with by O 23 r 11 of the Federal Court Rules. The test to be applied is whether Ms Thompson was imprudent or unreasonable (or perhaps plainly unreasonable) to reject the offer of compromise (see McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 at [21] - [23]). The difficulty which the respondent faces in its application for indemnity costs is that the only offer it made with respect to the proceedings under the HREOC Act was that the claim be dismissed with no order as to costs. Although I was invited to consider the totality of the offer I think consideration should be confined to the offer made with respect to the proceedings in which the costs order is now sought. The substance of that offer related to protection from costs. Nothing was offered in compromise of the claim itself. I do not need to consider whether such an offer is a real offer of compromise (cf. Williams v Commonwealth Bank of Australia [1995] FCA 992). I do not think it can be said that Ms Thompson was obliged to abandon the case to protect herself against a possible costs order or that she acted unreasonably by not doing so. Accordingly I reject the claim for indemnity costs. 8 However the respondent is, in my view, entitled to have its costs in the HREOC proceedings upon a conventional party-party basis. The claim for costs has been reduced to 75% where costs were incurred in respect of the HREOC proceedings and the WR Act proceedings at the same time. Counsel for Ms Thompson argued that no part of the costs of the proceedings should be regarded as arising from the HREOC Act claim. She contended, effectively, that all of the costs should be attributed to the WR Act claim. In my view that is not a realistic approach to the issue. 9 There is little point discussing again the matters dealt with in the earlier judgment. It should be clear that the substantial proportion of the case related first and foremost to the claim under the HREOC Act. I accept that there was some overlap. The respondent's submission accepts that also. As appears from the first judgment the WR Act proceedings were concentrated upon events which occurred on 4 January 2006 while the HREOC Act proceedings dealt with events which occurred over a period of some months before that date. Most of the evidence was directed to the factual circumstances relied upon in support of the HREOC Act claim. 10 Any apportionment must necessarily be somewhat arbitrary and based upon impression. In my view a fair apportionment, allowing there was a degree of overlap, would be to require Ms Thompson to pay 60% of the costs referrable to both proceedings jointly. Those costs and any costs which relate only to the HREOC proceedings are to be paid on a party/party basis. 11 I will order therefore that the applicant pay the respondent's costs in matter NSD 1948 of 2006 on a party/party basis, provided that where costs were incurred with respect to those proceedings and matter NSD 877 of 2006 together 60% only of the respondent's costs be paid. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.