Traverse Alpine Operations Pty Ltd v Simpson

IS S 570 OF THE FW ACT SATISFIED? 87 Although legally distinct, whether I am satisfied that this proceeding was commenced without reasonable cause by Traverse (for the purposes of the Simpson parties' costs application); or, whether for the purposes of each application I am satisfied that a party's unreasonable act or omission caused the other party to incur costs, is closely related to some of the factors that are usually considered in the exercise of the discretion to make an award of indemnity costs. The difference, of course, is that the indemnity costs cases are concerned with how the power should be exercised and not with whether there is power. That difference aside, the focus of the jurisprudence that has developed in the exercise of that discretion, which is upon identification of relevant conduct that is deserving of sufficient criticism such that objective unreasonableness is established to warrant the making of an indemnity costs order, is sufficiently analogous to the application of s 570 of the FW Act as to provide useful guidance. Where offers of settlement are centrally relevant, the usual inquiry is whether a party acted unreasonably in not accepting one or more offers based on what was known or ought reasonably have been apparent at the time. It is not a retrospective inquiry. 88 Those principles were recently and comprehensively set out by the Full Court in Zibara v Ultra Management (Sports) Pty Ltd (2021) 283 FCR 18; [2021] FCAFC 4 at [176]-[177], McKerracher, Derrington and Anderson JJ: In Clifton v Kerry J Investment Pty Ltd (No 2) (2020) 277 FCR 382, Besanko, Markovic and Banks-Smith JJ addressed briefly the relevant principles in relation to an award of indemnity costs at [30]-[31]: In Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy (No 2) [2020] FCAFC 112, Besanko, Markovic and Banks-Smith JJ addressed briefly the relevant principles in relation to an award of indemnity costs at [30]-[31]: In Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225, Sheppard J said (at 233-234): 4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. ... Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at p 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at p 6) similar views in Ragata (supra). 5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (supra)); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Keng (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records (supra)). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis. ... We also refer to the discussion by Kenny J in Morad v El-Ashey (No 2) [2017] FCA 1612 at [6]-[10] and the detailed discussion of the relevant principles in Dal Pont at 16.46 and following. The point which we wish to emphasise is that to justify a special costs order, there must be conduct deserving of criticism and resulting in greater expense to the innocent party ... (Emphasis added.) Their Honours referred to the discussion by Kenny J in Morad v El-Ashey (No 2) [2017] FCA 1612 at [6]-[10]. Kenny J stated at [9]-[11]: The principles relevant to an award of indemnity costs are well-established. In broad terms costs will be payable on a party and party basis, unless the circumstances of the case justify a departure from the normal course: see Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 (Colgate-Palmolive) at 233 (Sheppard J). The question is always whether the facts and circumstances of a particular case justify the making of an order for the payment of costs other than on a party and party basis. Plainly enough, the categories in which indemnity costs may be ordered are not closed. Reference to some of the circumstances in which costs on an indemnity basis have been ordered is illustrative, however, of the occasions that have been thought capable of attracting such an award of costs. It has been held, for example, that indemnity costs may be awarded where "the applicant, properly advised, should have known that he had no chance of success" (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 (Fountain Selected Meats) at 401; where an application is wholly untenable and misconceived (Henke v Carter [2002] FCA 492 at [22] (Goldberg J)); and where there is "evidence of particular misconduct on the part of a party that causes loss of time to the Court and to other parties" (Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd [1991] FCA 225 at [22] (French J)). The purpose of indemnity costs was explained in Hamod v State of New South Wales [2002] FCAFC 97; 188 ALR 659 (Hamod) at [20] by Gray J (with whom Carr and Goldberg JJ agreed) as follows: Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. (Emphasis added.) (Original emphasis.) 89 Dealing first with the Traverse costs application, in my view the starting point of the inquiry as to whether I am satisfied that the conduct of the Simpson parties amounts to an unreasonable act or omission that caused Traverse to incur costs is the settlement proposal of 29 March 2021. There are three broad considerations: the terms of the offer and the scope of the settlement offered; whether it was unreasonable for the Simpson parties not to have accepted it; and the conduct of the Simpson parties in maintaining their position until the eve of the trial when the consent orders were agreed to, despite multiple subsequent offers. The first two considerations are properly informed, by analogy, with cases that have considered the cost consequences of not accepting a settlement offer and I have primarily considered Black v Lipovac (1998) 217 ALR 386; at 432-433, Miles, Heerey and Madgwick JJ and Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 (Hazeldene) at [23]-[29], Warren CJ, Maxwell P and Harper AJA. 90 It will be recalled that despite the scope of the various claims that were formulated in this proceeding to 29 March 2021, the offer made by Traverse was to resolve the entirety of it, approximately seven months after its commencement, by the making of consent orders to the effect that: the undertakings given to the Court on 3 July 2020 would continue; at the conclusion of the Adverse Action Proceeding the Simpson parties would deliver to Traverse the documents, photographic images and other material then admitted to being in their possession and as identified in Appendix A to the memorandum of consent; that the proceeding otherwise be dismissed without adjudication on the merits and that there be no order as to costs. 91 The offer was made after the issues were framed by the close of the pleadings and following admission by the Simpson parties that they had copied and continued to possess the Traverse information which they specified in their list of documents filed on 18 December 2020. At that point the Simpson parties could not have entertained any doubt as to the risks that they faced in continuing to possess and use the Traverse information. 92 The offer was open for acceptance until 5pm on 12 April 2021, a period of 14 days, which was in my opinion reasonable to allow for mature consideration. It was not responded to until after it had expired, when at 7.23 pm on that day Litton Legal in correspondence asserted that Traverse had "reinvented" the version of events and that, for detailed reasons, the offer was incapable of acceptance because: You are expecting our client to admit that the documents are confidential in circumstances where you concede that our client is justified in using those documents to substantiate the General Protections claim. Your client needs to pay the costs of these proceedings. Since you filed your Federal Court claim, we have consistently put you on notice as to the serious issues with your claim, in addition to how serious your claim is in respect to its allegation against our clients. Your client has attempted to cover up the issues within their organisation and must now come to terms with the fact that their continuous bullying behaviour has gone far beyond our clients' employ and that there are clearly other people, completely unknown to our clients, that take issue with your client's organisation. The time has come for you to accept this and to conclude these unmeritorious claims. We are instructed not to accept your client's offer. Our clients will however, consent to discontinue the proceedings VID 439 of 2020 should your client agree to pay our clients' costs as agreed or assessed. We refer you to rule 26.12 (7) of the Federal Court Rules, which provides that a party who files a notice of discontinuance is liable to pay the other party's costs in relation to the claim. We encourage your client to cease incurring unnecessary costs in circumstances where we intend to produce this correspondence on questions of costs. 93 That reasoning is wrong. The offer was made in clear terms and manifestly was capable of acceptance. It did not require the Simpson parties to make admissions to the effect that the Traverse information is confidential. It did not involve any attempt to "cover up the issues" that were said to exist within the business of Traverse. Despite the claims made by Traverse that the Simpson parties wrongly copied and possessed its information, Traverse was content for the Simpson parties to remain in possession of it and to use it for such purposes as they sought fit in the Adverse Action Proceeding. 94 The offer represented a significant compromise by Traverse of its position. Traverse offered to give up its claims for damages for breach of contract, breach of statutory duties and copyright infringement together with various claims for declaratory relief and injunctions (save for the undertakings that it secured on 3 July 2020), and in particular all claims relating to the anonymous and threatening correspondence that it had asserted the Simpson parties were responsible for. Traverse also offered to give up its consequential claim for costs. The offer viewed in the context of the litigation which had taken place was a genuine attempt to compromise this proceeding by Traverse. 95 The Simpson parties had very little prospect of success in maintaining the claim that they were entitled to reproduce, possess and use the Traverse information for the purposes of the Adverse Action Proceeding. Assessed as at 29 March 2021, their claimed entitlement was of no merit. The Traverse information was the property of Traverse, it enjoyed the rights of a copyright owner to that information, the Simpson parties as former employees had at best a limited right to access and use the information solely for the purposes of their employment which rights ceased upon termination of the respective employment contracts. If the Simpson parties required the Traverse information for use in the Adverse Action Proceeding, then the proper procedure was to apply for targeted discovery orders or to apply for the issue of a subpoena. Although it was not until 17 June 2021 that Anastassiou J described the claimed entitlements as "humbug", what ought to have been apparent to the Simpson parties during the period within which the offer was open for acceptance is that their claimed entitlement to possess and use the Traverse information had no prospect of ultimate success. 96 The offer was clear in its terms, and was supported by very detailed reasoning in the correspondence authored by Thomson Geer. 97 Another matter that usually falls for consideration is whether the offer foreshadowed that an application for indemnity costs would be made. That consideration is not directly relevant where there is no prima facie entitlement that a successful party has to receive its costs in a proceeding to which s 570 of the FW Act applies. Appreciating that point, the offer stated: This offer represents a genuine compromise, given the Traverse has already been successful in obtaining the Undertakings, it is entitled at law and in equity to delivery up of the Traverse Information, and, subject to whether this proceeding is subject to the limitation on costs provided in the Fair Work Act 2009 (Cth) (FW Act), section 570, Traverse will be entitled to costs, given the Traverse has incurred substantial costs in reaching the outcome of securing private and confidential information belonging to it, including information relating to its staff and guests. … This is an open offer, and Traverse reserves its rights to bring this communication to the attention of the Court at the next directions hearing or at any other appropriate time. Further, in the event that this open offer is rejected, our client will rely on such refusal in support of an order for indemnity costs against your clients, or, in the event that section 570 of the FW Act has application for this proceeding (and in respect of this question, see our letter to you dated 18 February 2021), will rely on such refusal of this offer as constituting an "unreasonable act or omission" under section 570 (2) (b), such conduct causing our client to incur costs, and thus warranting an order for indemnity costs to compensate for the incurring of such costs. 98 That warning could not have been more clearly expressed. The Simpson parties were manifestly on notice that if the offer was rejected, it would subsequently be relied upon in support of an application for costs as permitted by s 570(2)(b). 99 The next question is whether the Simpson parties acted unreasonably in not accepting the offer and whether that caused Traverse to incur costs? Again useful guidance is to be found in cases which have considered Calderbank offers. In Hazeldene the court at [23]-[24] reasoned that: In our view, these competing considerations can be sufficiently accommodated by applying a test of (un)reasonableness. The critical question is whether the rejection of the offer was unreasonable in the circumstances. We see no justification for a more stringent test such as "manifestly" or "plainly" unreasonable. Of course, deciding whether conduct is "reasonable" or "unreasonable" will always involve matters of judgment and impression. These are questions about which different judges might properly arrive at different conclusions. As Gleeson CJ said recently, "unreasonableness is a protean concept". But a test of reasonableness is, we think, entirely appropriate to the exercise of a discretion such as this. (Footnotes omitted.) 100 In this case, satisfaction as to whether the Simpson parties, by an unreasonable act or omission, thereby caused Traverse to incur costs must also be examined mindful of the caution expressed and the policy identified by the Full Court in Toma, that I have set out above. 101 Traverse in commencing this proceeding did not engage provisions of the FW Act to found any entitlement to relief. Section 570 of the FW Act subsequently became relevant when the Simpson parties pleaded reliance on various workplace protections by way of defence and in support of the claimed entitlement to possess and use the Traverse information. Despite that claim being misconceived, I do not find the defence to have been advanced in bad faith, or that it was an abuse of process. However, the bar at s 570 is not set that high. 102 Why did the Simpson parties reject the offer? Their detailed reasons are set out in the response from Litton Legal of 12 April 2021. Many contentions were advanced. First, that Traverse had asserted that the Simpson parties were responsible for the anonymous and threatening correspondence without supporting evidence. I was invited by Mr Bourke to infer that the Simpson parties must have been the responsible bad actors based on the circumstantial evidence relating to who had access to the Traverse information, the dates on which the email correspondence was sent and the preceding "trigger" events. I do not make that finding, particularly because the Simpson parties did not give evidence before me and these allegations were not directly put to them. It does not follow, however, that Traverse did not have a reasonable basis to plead that the Simpson parties were responsible for the correspondence based on the circumstantial evidence. It is not correct to contend that Traverse had "no evidence" in support of those components of this proceeding. 103 Secondly, that the claims formulated by reference to the Privacy Act lacked a proper basis and were misconstrued from the outset. That is not so. Traverse pleaded that it was an organisation subject to the provisions of the Act, that the Australian Privacy Principles were binding upon it and that certain components of the Traverse information were subject to privacy obligations. On its face, that claim was one of merit. 104 Thirdly, that Traverse had correctly conceded that the Traverse information was able to be used by the Simpson parties in the Adverse Action Proceeding. No such concession to that effect was ever made by Traverse. Rather, its position was that despite its view that no such right existed, it was prepared to significantly compromise its position by permitting the Simpson parties to possess and use the information for the purposes of the Adverse Action Proceeding. 105 Fourthly, that Traverse had acted in a confusing and contradictory manner in relation to the claimed entitlement of the Simpson parties to possess and use the Traverse information. Specifically, it was said that the Simpson parties could possess and use that information in the Adverse Action Proceeding and that the claim to confidentiality "is unfounded". That contention is wrong. No confusion is evident from the manner in which this proceeding was commenced and prosecuted or from the course of correspondence that I have summarised. And the claim that the Traverse information was subject to an equitable obligation of confidence was prima facie open on the facts. 106 Fifthly, that the Simpson parties were "astounded" that apparently the only option open to Traverse was to commence this proceeding in order to prevent the continued misuse of a particular photograph taken from the CCTV system together with other material accessed by the Simpson parties during their employment. That contention does not make sense. As these reasons have summarised, various steps were taken by Traverse in order to secure the integrity of the Traverse information and to have it returned to its possession before this proceeding was commenced. It was the failure of the Simpson parties to return the information which necessitated the commencement of the proceeding. 107 Sixthly, that the observations of Murphy J at the case management hearing on 3 July 2020 were made "in the early stages of this matter" and "immaterial." That contention is plainly wrong. 108 Seventhly, in multiple ways it was contended that the primary (or only) reason for the commencement of this proceeding was the misconceived allegation that the Simpson parties were responsible for the anonymous and threatening communications. That is not so. This claim was a discrete component of Traverse's claim, but was clearly not the primary or sole basis which led to its commencement. 109 Eighthly, it was said that Traverse did not have a valid claim to confidentiality in respect of all, or components, of the Traverse information and that in any event for public interest reasons the claim was not open. The public interest relied on was said to be related to an attempt by Traverse to "cover up" misconduct categorised as "unlawful", "unethical" or "bullying". That broad assertion is of no merit. Australian common law does not recognise a public interest defence as an answer to a breach of confidence claim: Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 451-456, Gummow J. 110 Ninthly, that the Simpson parties had incurred considerable costs in the conduct of the defence of the proceeding. That may be accepted. But what it overlooks is that objectively considered, each party must have incurred considerable legal costs to the date of the making of the offer and had it been accepted, they would not have continued to incur legal costs thereafter. The focus on unreasonable conduct that in my view engages the power to make a costs order is not upon what was done, or omitted to be done, before 29 March 2021, but rather whether the unreasonable failure to accept the offer unreasonably caused Traverse to incur further legal costs from that date. 111 The final point made is the contention that the offer as framed was incapable of being accepted which, for the reasons that I have set out, was clearly not so. 112 Acting reasonably, the Simpson parties by 29 March 2021 and certainly by no later than 12 April 2021 when the offer lapsed, ought to have appreciated that their position was untenable. Why, if further explanation was necessary, it was set out in considerable detail in the letter of offer from Thomson Geer, where in part it was said: Traverse's entitlement to delivery up Traverse has always maintained that its primary concern is to protect the Traverse Information and ensure its return, whether that be by agreement or through obtaining orders that include delivery up of Traverse Information. Effectively, Traverse was successful at the hearing before Murphy J in obtaining the Undertakings, which are in substantially the same form as the interlocutory orders sought. Accordingly, Traverse should be entitled to its costs of this application now. This is especially so given that it is known that the Simpson Parties, and their agent, had obtained and retained Traverse Information. Although it is trite that Courts in their exercise of their equitable jurisdiction have discretionary powers to order delivery up of confidential information and information the subject of statutory intellectual property rights, principles Murphy J clearly confirmed when observing that any Traverse information your clients' had needed to be returned, your clients regrettably continue to refuse to return any information taken, despite being requested in writing on the following occasions: (a) 12 February 2019; (b) 18 June 2020; (c) 22 June 2020; (d) 13 February 2021. There is now no dispute that the Simpson Parties were contractually obliged to: (a) maintain the confidence of "Confidential Information", which was broadly defined under clause 1 of the Simpson Parties' employment agreements dated 1 November 2015 (Employment Agreements) (Confidential Information); (b) not to use the Confidential Information for any purpose other than for the benefit of Traverse both during and after the employment; (c) on termination of employment, were required to return to Traverse all property, documents and items of or relating to the business of Traverse, including any Confidential Information. There are now admissions that the Simpson Parties used information that fell within the contractual definition of Confidential Information for purposes other than for the benefit of Traverse; and therefore that the Simpson Parties have not maintained the confidence of that Confidential Information. Further, the Simpson Parties did not return all property, documents and items of or relating to the business of Traverse, including any Confidential Information on the termination of their employment. Putting aside any argument of whether the Traverse Information is being used by your clients for a legitimate purpose, for the reasons outlined above, it is clear that orders will be obtained for the delivery up of any Traverse Information, as was foreshadowed by Murphy J. (Footnotes omitted.) 113 Those arguments were repeated subsequently in the course of the various settlement offers made by Traverse to the Simpson parties. But the Simpson parties persisted in, what in my view, was an unreasonable failure to accept that retention of the Traverse information was untenable. Their argument that it was necessary to do so to advance the Adverse Action Proceeding was misconceived. It was most certainly unreasonable. And more so, from 29 March 2021 when the offer was put that, despite the obligation to deliver up the Traverse information, Traverse was content not to insist upon immediate delivery, but rather delivery would occur upon conclusion of the Adverse Action Proceeding. If that offer had then been accepted, significant costs in preparing this proceeding would have been avoided and each party would have borne their own costs to date, reflecting that success by Traverse was only partial. 114 The unreasonable conduct of the Simpson parties is not simply limited to their failure to accept the offer of 29 March 2021. As summarised in these reasons, variations of that offer were put on multiple occasions until the eve of the trial, when the position of the Simpson parties changed. I have considered the whole of the conduct of the Simpson parties within that period. Each subsequent offer was in my assessment a reasonable attempt by Traverse to resolve this proceeding, viewed in light of the facts to the date of each. There is nothing within the course of correspondence that I have summarised that ameliorates their unreasonable conduct in refusing to accept the offer of 29 March 2021, or any subsequent offer. Indeed, the Simpson parties compounded their unreasonable conduct when they even refused to accept offers that were formulated on the basis that the question of costs would be reserved for determination upon finalisation of the Adverse Action Proceeding. 115 In my view, the failure to accept the offer of 29 March 2021; maintenance of the misconceived right to possess contention until the eve of the trial, when it was abandoned; and the failure to accept any of the modified settlement offers made by Traverse throughout that period was conduct by the Simpson parties that was so unreasonable that I am satisfied that it was an unreasonable act or omission that caused Traverse to incur costs in this proceeding, which were entirely avoidable if the Simpson parties had acted reasonably, within the meaning of s 570 of the FW Act. 116 I may therefore exercise the discretion of the Court to make a costs order confined to the period from 5 pm on 12 April 2021, being the time the offer lapsed, and limited to the costs of the Traverse information claim. Traverse should have its costs to the conclusion of the costs submissions on 27 September 2022, to compensate it for the considerable work that was obviously undertaken to achieve success on its costs application. 117 The next question is whether I should exercise the discretion in favour of Traverse, and if so, should the costs be on a party and party or indemnity basis? 118 The usual rule is that costs follow the event and that piecemeal, issue by issue, orders should not be made except in clear cases. By confining the order to the period commencing on 12 April 2021 costs should follow the event. The event is that Traverse ultimately obtained the relief by consent that it had long sought and the scope of the costs order in that period must be confined to the unreasonable conduct of the Simpson parties being the failure to accede to the Traverse information claim. 119 As the authorities which I have referenced make clear, ordinarily costs are awarded on a party and party basis. In my view, the satisfaction that I have reached as to unreasonable conduct by the Simpson parties for the purposes of s 570 of the FW Act is of central importance in the exercise of my discretion as to whether costs should be awarded on an indemnity basis. I have identified the conduct in this case that in my mind is deserving of criticism as unreasonable and which caused Traverse to incur the costs of preparing and prosecuting the Traverse information claim within the period 12 April 2021 until 27 September 2022. The prosecution of the claim was prolonged by the imprudent failure of the Simpson parties to accept the offer of 29 March 2021, or any of the subsequent offers, and maintenance of the meritless contention that they were entitled to remain in possession of the Traverse information and to use it for the purposes of the Adverse Action Proceeding, even when Traverse only insisted upon return of the information upon finalisation of the Adverse Action Proceeding. 120 I have concluded that in the circumstances of this particular case there is a proper justification for the award of costs within that period, and limited to the Traverse information claim, to be assessed and determined on an indemnity basis. 121 I deal next with the costs claim by the Simpson parties. Ms Serpell submits that the Simpson parties should have their costs of the entire proceeding, but did not make clear whether that order is sought on a party and party or indemnity basis. I will assume therefore that the application is put in the alternative. It does not simply follow that because I have made an order that the Simpson parties must pay costs, that their application falls away. The order for costs that I have made in favour of Traverse is limited to a particular period and relates only to the costs that are identifiable as relating to the Traverse information claim. 122 The matters relied upon in support of the Simpson parties' costs application are comprehensively addressed in the written submissions of Ms Serpell, and as supplemented orally. I treat with caution the written submissions as they are in part framed on the basis that s 570 of the FW Act does not apply. First, primary attention is directed to various offers made by the Simpson parties to Traverse. I have set out the course of those offers above, and in this portion of my reasons I focus on those emphasised by Ms Serpell. On 25 September 2020, the Simpson parties offered to resolve this proceeding together with the Adverse Action Proceeding on the terms that Traverse pays Sally Simpson $250,000 in settlement of the Adverse Action Proceeding, withdraws this proceeding and pays her costs of it. That offer was not, in my opinion, a reasonable compromise proposal by the Simpson parties to resolve this proceeding in that it required settlement of the Adverse Action Proceeding to the significant detriment of Traverse, it made no provision for return of the Traverse information, it required Traverse to abandon all of its claims and required it to pay the costs of the Simpson parties. The effect of that offer was to require Traverse to capitulate, and in doing so to compromise what should have been understood by the Simpson parties to be a strong case for the return of the Traverse information. 123 Reliance is next placed on correspondence dated 7 May 2021 in which Litton Legal, in response to advice from Thomson Geer of the intention of Traverse to apply to amend the statement of claim so as to restrict it to the confidential information claims said: Our client has no interest in retaining the documents you identified and (as you know) are relevant to the GP claim made by Ms Sally Simpson. In any event, we deny that these documents are confidential. We remind you that our client identified these documents through the expert/investigator Mr Caldwell on 21 February 2019. Further, on your own admission, your claim is one that contains no loss or damage. We ask for you to consider how that impacts your allegations in respect to these documents. Our client provided undertakings in respect to documents it was using in the associated proceeding. … 124 Self-evidently that was not an offer to compromise this proceeding. And what the reliance on it overlooks is the response provided by Thomson Geer on 19 May 2021, which in part was: Given that your clients have no interest in retaining the documents we seek, it appears as though the parties are in agreement, other than in relation to the question of costs. We consider that the question of costs can only be appropriately dealt with at the conclusion of proceeding VID654/2020. Accordingly, in order to find a resolution of this matter, we seek your clients' agreement to the attached minute of proposed consent orders. In the event that your clients wish to argue that the costs of the Confidential Information Proceeding should be determined prior to the conclusion of proceeding VID654/2020, could you please remove order 3 of the minute of proposed consent orders and return same. The timing for the hearing of any costs' argument could then be a matter for argument at a later time. 125 The attached minute preserved the undertakings given by the Simpson parties on 3 July 2020, which required the Simpson parties to deliver up the Traverse information at the conclusion of the Adverse Action Proceeding, provided for dismissal of this proceeding and reserved all questions of costs until conclusion of the Adverse Action Proceeding. That proposal was met with argumentative correspondence from Litton Legal of 19 May 2021 which asserted that: We dispute that the documents which you allege are confidential are in fact confidential. The fact that our clients do not have an interest in maintaining the documents after the conclusion of the General Protection claim is not the same as agreeing to provide those documents on the basis that they are confidential. 126 The logic of that argument is not apparent: the consent memorandum as provided by Thomson Geer did not require the Simpson parties to accept or acknowledge the confidentiality claim. 127 Secondly, the Simpson parties next rely upon submissions that were made and filed in this proceeding on 4 June 2021, which drew attention to a statement made by junior counsel for Traverse at a case management hearing on 11 August 2020 that: We're not asking for delivery up. That preserves the rights of the respondent to actually argue that they're entitled to retain them. All we're asking for is identification in relation to those documents. 128 That submission is taken out of context. Counsel was then concerned with identification of what information belonging to Traverse had been copied and possessed by the Simpson parties. Further reliance is placed upon many paragraphs as extracted from the Simpson parties' submissions of 4 June 2021, without any attempt to explain why those submissions remain presently relevant to the question whether Traverse engaged in unreasonable conduct which then caused the Simpson parties to incur costs. And, as correctly submitted by Mr Bourke for Traverse, those submissions were rejected by the Court at the case management hearing before Anastassiou J on 17 June 2021. Those submissions were made in support of a costs order in favour of the Simpson parties at that time. That order was not made. His Honour reserved all questions of costs until the conclusion of each proceeding. 129 Thirdly, much emphasis is placed on the fact that Traverse included in its claims the contention that the Simpson parties were responsible for the anonymous and threatening communications. Whilst that contention was ultimately abandoned when the FASOC was delivered on 25 June 2021, it does not follow that Traverse unreasonably agitated that claim or that it did not have a reasonable basis for it, a point that I have addressed above. The fact that the claim was made, pressed and ultimately abandoned does not, in the entire context of the procedural history that I have set out, require or inform a finding that Traverse engaged in unreasonable conduct that is sufficient to attract the operation of s 570(2) of the FW Act. 130 Fourthly, my attention is drawn to the procedural history and the amendments made at the instigation of Traverse, which inevitably caused certain costs of the Simpson parties to be thrown away. That is not an indicator of unreasonable conduct: making amendments in the course of a proceeding is commonplace. There is nothing unreasonable in the way amendments were proposed and ultimately made in this proceeding. 131 Finally, there is a matter that is not addressed on behalf of the Simpson parties. This proceeding was not ultimately dismissed. Rather, orders were made on 29 August 2022 for the delivery up of the Traverse information. Traverse was, to that extent, successful. Traverse did not maintain its other claims beyond 25 June 2021. By proceeding in that way, the conduct of Traverse narrowed the scope of the issues to be decided in this proceeding. That point is illustrated by the fact that when each matter was listed for trial, counsel agreed that of the 10 day estimate only one day would be taken up with this proceeding. 132 For these reasons, I have concluded that the Simpson parties have failed to satisfy me that there was any unreasonable relevant act or omission of Traverse in this proceeding that caused the Simpson parties to incur costs. Accordingly, their application for costs is refused.

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