Weisser v Spur Group Pty Limited

APPELLANT Mr M G Gibian of counsel Solicitors: Inner City Legal Centre (Ms N Ross) LEGAL REPRESENTATIVES: Mr S R Coleman of counsel Solicitors: Morgan Lewis Alter (Mr A McKeough)

CORAM: Wright J, President Walton J, Vice-President Ritchie C

Matter No IRC 3744 of 2002 GABRIEL WEISSER v SPUR GROUP PTY LIMITED Application by Gabriel Weisser for leave to appeal and appeal against a decision of Deputy President Sams given on 30 May 2002 in Matter No IRC 5380 of 2001

DECISION OF THE COMMISSION [2003] NSWIRComm 79

1 These proceedings involve an application for leave to appeal by Gabriel Weisser and, subject to leave being granted, an appeal from the decision of Sams DP of 30 May 2002 when the Deputy President made an order for costs against the appellant pursuant to s 181(2)(c) of the Industrial Relations Act 1996 in respect of the unfair dismissal proceedings brought by him pursuant to s 84 of the Industrial Relations Act against the respondent, his former employer.

2 The appellant was employed as a maintenance manager for the respondent's restaurants. On 14 March 2001, he attended a meeting with the Managing Director and General Manager of the respondent where he was given notice of his dismissal to take effect on 30 June 2001. The appellant filed an application under s 84 of the Industrial Relations Act 1996 on 10 August 2001, 20 days out of time.

3 The hearing of the application for an extension of time for filing of the application and the merits were, by consent, heard together on 14 and 15 November 2001. By decision dated 14 February 2002, the Deputy President declined to exercise the discretion under s 85(3) of the Industrial Relations Act to accept the application "out of time" and dismissed the application.

4 The respondent filed a notice of motion seeking costs on 28 February 2002 and the motion was heard on 7 May 2002. On 30 May 2002, the Deputy President ordered that the appellant pay the respondent's costs of and incidental to the proceedings after 23 August 2001 and the costs of the motion for costs.

5 On 2 September 2002, the Vice President granted the appellant's application to extend time to appeal.

6 The Deputy President summarised the chronology of events leading to the arbitral hearing at first instance as follows: 14 March 2001 - Respondent is given 3.5 months notice of dismissal. 30 June 2001 - Respondent ceased employment. 20 July 2001 - Respondent claims entitlements to annual leave, pro rata long service leave and redundancy pay totalling $49,483. 10 August 2001 - Respondent files unfair dismissal claim. 23 August 2001 - Directions and Conciliation proceedings were held before the Commission. Appellant makes an offer of $25,000 and retention of the vehicle (estimated value $7500) to settle all claims. Offer was rejected. 29 August 2001 - Appellant's offer not renewed at second conciliation. Directions issued for hearing. 9 November 2001 - Respondent makes an offer of $39,000 14 and 15 November 2001 - Arbitration hearing 14 February 2002 - Decision of the Commission

7 Following a review of the authorities, the Deputy President said as to the basis upon which he would determine the matter: [27] The Commission does not believe it necessary for the purposes of this notice of motion, to make findings as to whether the application for unfair dismissal was 'vexatious'. I am satisfied that the notice of motion for costs can be decided on whether the respondent unreasonably refused to settle the claim. [28] However, in my opinion, this matter raises an important consideration in costs applications in Pt 6 ch 2 proceedings. If a rejected offer of settlement is close to, or exceeds, the maximum amount of compensation the Commission could award in an arbitral proceeding, it would almost certainly meet the test of an unreasonable refusal to settle the claim, if the Commission subsequently finds against the applicant.

8 Sams DP then applied the approach stated, by concluding: [29] In this case, the respondent's salary was $58,800. The offer of settlement on 23 August 2001 was $25,000 and the value of a Toyota Hi Ace van ($7,500). It follows then, that even if the applicant had successfully contested his claim and been awarded the maximum compensation of six months, the amount so ordered would have been $29,400. In other words, less than the total value of the offer of 23 August 2001 of $32,500. [30] While I accept that Mr Weisser claimed $49,483 based on outstanding entitlement to pro rata long service leave, annual leave and redundancy pay, this claim must be understood in the following context: a) There was no legal entitlement to pro-rata long service leave. b) There was no basis for any claim of redundancy pay (see my decision of 14 February 2002). c) There was no application for alleged underpayments initiated prior to the arbitration of this matter for alleged underpayments. (An amount of $11,571.83 was later offered and accepted as an amount in settlement of the annual leave and long service leave claim.) d) The settlement offer was made early in the conciliation phase in order to avoid further protracted and expensive proceedings. e) The offer was made in addition to the respondent retaining a company owned motor vehicle, the value seemingly not disputed as $7,500. f) The respondent had secured alternative employment shortly after his dismissal. g) Arbitral proceedings involved both jurisdictional and merit arguments. h) The applicant had placed the respondent on notice at the conciliation conference on 23 August 2001, that should it be successful, it would be pursuing a costs application. [31] In this context, I am satisfied the offer on 23 August 2001 was more than reasonable. Viewed another way, it was unreasonable for the respondent to refuse to settle the claim on that basis. The applicant is entitled to its costs from this date and including the costs associated with this notice of motion

The appellant's case 9 The appellant submitted that, pursuant to s 188(2) of the Industrial Relations Act, it is in the public interest that leave to appeal should be granted for the following reasons:

· The orders of the Commission awarding costs in the proceedings to the respondent were affected by serious errors, including taking into account the basis of claims other than those before the Commission and the reasonableness of the appellant's conduct in refusing to accept an offer of settlement in relation to those claims. The appellant's submissions on the particulars of these errors are essentially the same as those raised in their substantive appeal.

· The appeal raises important issues as to the appropriate test to be applied and the approach to be adopted by the Commission in determining whether to award costs in unfair dismissal proceedings pursuant to section 181(2)(c). In particular, whether the rejection of a single offer of settlement is sufficient to warrant the conclusion that an applicant unreasonably failed to agree to settlement and where an offer of settlement is made which encompasses the settlement of claims other than those advanced in the unfair dismissal proceedings themselves.

· The orders of the Commission operated unjustly on the appellant by awarding costs in favour of the respondent in circumstances in which the appellant had not unreasonably failed to agree to settlement of the proceedings. It is submitted that the public interest favours the granting of leave where a substantial financial burden has been imposed on the appellant and his family who have limited financial means through a decision that is affected by a number of serious errors.

10 The respondent submitted that the Full Bench ought not to grant leave to appeal on the basis that the decision of the Deputy President was consistent with established law and principle in respect of costs awards. The respondent refers to the judgment of Moore J of the Federal Court in Blagoveocj v Australian Industrial Relations Commission (2000) 98 IR 32 at 39 in support of its submission and noted that, in the present case, the appellant failed to make a counter offer to "bring negotiations into the range the respondent thought was reasonable and that this failure, depending on the circumstances, could constitute acting unreasonably in failing to agree to terms of settlement".

11 The respondent further submitted that this failure, considered with the offer they made, which was not fanciful, suggested that the decision of the Deputy President to award costs did not operate harshly and unjustly.

12 The respondent submitted that the financial burden placed on the appellant and the amount of costs, as agreed or assessed, should not be considered by the Commission on the issue of leave to appeal. Further, the respondent contended that the appellant's submission, that the practice of combining extra-jurisdictional matters in a settlement of an alleged unfair dismissal somehow negates the ability to award costs, is an oversimplification of the issue and not in the public interest.

13 The appellant seeks leave to appeal and appeals pursuant to s 187 of the Industrial Relations Act. In cases of an appeal brought pursuant to s 187 of the Act, the nature of the appeal is governed by s 191 of the Act and leave to appeal is required by s 188.

14 The principles to be applied in appeals are well established. Leave to appeal will not be lightly or automatically be granted and will be restricted to the class of cases referred to in Knowles v Anglican Property Church Trust (No 2) (2000) 95 IR 380 at 381 - 382 (see also King v State Bank of New South Wales [2002] NSWIRComm 353 at [52] - [55]). The principles relevant where an appeal seeks to challenge findings of fact or the exercise of discretion at first instance are discussed subsequently.

15 The appeal is brought against the order of Sams DP on 30 May 2002. The grounds of appeal in summary are:

· The Commission erred in concluding that the appellant unreasonably failed to agree to settlement of the unfair dismissal claim;

· The Commission failed to have regard to the fact that the single offer of settlement which was made by the respondent in the proceedings purported to be an offer to settle claims by the appellant in addition to those which were before the Commission in the unfair dismissal proceedings;

· The Commission erred in drawing conclusions as to the validity or basis of claims made by the appellant against the respondent for entitlements deriving from his employment which were not before the Commission for determination in the unfair dismissal proceedings;

· The Commission adopted the wrong test when considering whether to exercise its discretion to award costs under section 181(2)(c) by taking into account its conclusion as to the validity of claims made by the appellant which were not before the Commission for determination in the proceedings and, in finding that the appellant unreasonably failed to settle the claim in circumstances in which a single offer of settlement had been made by the respondent which was subject to counter offers by the appellant;

· The Commission failed to give sufficient weight to the question of whether at the time the offer of settlement was made, the appellant had or may have had a reasonable claim which was for an amount in excess of the offer of settlement on his consistently held view of the evidence if proven;

· The Commission failed to give sufficient weight to the strict limits on the power of the Commission to award costs in unfair dismissal proceedings and the intention of the legislation that costs be awarded in such proceedings only in rare circumstances; and

· In the alternative, having found that the appellant unreasonably failed to agree to settlement of the claim in the proceedings, the Commission failed to properly exercise its discretion as to costs under section 181(1).

16 The appellant submitted that the Deputy President erred in his finding that the offer made on 23 August 2001 exceeded the maximum compensation which may be awarded by the Commission under s 89(5) of the Industrial Relations Act for the following reasons:

1. The amount of $25,000 was inclusive of, and not in addition to, the $7,500 attributed as the value of the company car;

2. The offer of $25,000 was for settlement of all claims made by the appellant arising from his employment, including the payment of statutory leave entitlements and this position was what was conveyed and understood by the appellant and his former legal representative, Mr Duc. Thus, the offer was below the sum claimed by the appellant in respect of his entitlements and the vast bulk of the offer represented the appellant's statutory entitlements rather than a settlement of the unfair dismissal claim.

3. The reasonableness of the offer must be assessed in light of the fact that the appellant claimed in excess of $27,000 in respect of long service leave and annual leave. The appellant notes that the respondent ultimately agreed that the appellant was entitled to $22, 168.21 for leave entitlements.

17 The appellant submitted that the Deputy President's finding that the offer exceeded the maximum compensation which could be awarded in the proceedings irrevocably tainted the decision, in that it led him to form the opinion that the appellant had rejected an offer that was simply too good to refuse.

18 The appellant submitted that the circumstances of the offer were not properly appreciated by the Deputy President and that the Full Bench was able to reach its own conclusion on the following evidence as to the reasonableness of the appellant's conduct and whether costs should be awarded against the appellant:

· A single offer of settlement was made by the respondent at a conciliation hearing on 23 August 2001. The offer was subject to negotiation and counter offers at the conciliation hearing. The offer was withdrawn and no further offer made at the further conciliation hearing held on 29 August 2001.

· The offer was expressed and understood to be a gross sum of $25,000 inclusive of all the appellant's statutory leave entitlements. At that time, the appellant was claiming a gross sum of over $27,000 in respect of pro rata long service leave and untaken annual leave.

· There appears to have been some dispute as to the quantum of the appellant's leave entitlements, but the appellant was ultimately paid a gross sum of $22,168.21 in respect of long service leave and annual leave. The Commission is not in a position to draw any conclusions as to the merits of this disagreement.

· The offer in respect of the unfair dismissal application was less than the amount claimed by the appellant in respect of his leave entitlements and only $2,830 more than the amount the appellant ultimately received. Even on the view most favourable to the respondent, the amount of the offer that was referrable to the unfair dismissal claim was less than $3,000. Consideration of matters other than the unfair dismissal claim

19 The appellant submitted that the Deputy President erroneously drew conclusions as to the validity and merits of claims which were not before him for consideration in the unfair dismissal proceedings and took these conclusions into account in making his determination under s 181(2)(c) of the Industrial Relations Act as to whether the appellant had unreasonably failed to agree to a settlement. For example, the Deputy President observed that there was no legal entitlement to pro rata long service leave. The appellant contends that under s 4(2)(a)(iii) of the Long Service Leave Act 1955, this observation would be valid only if the appellant had been dismissed for "any reason other than serious or wilful misconduct", a finding that was not made in the proceedings.

20 Irrespective of the correctness of the Deputy President's findings, the appellant submitted the reference to 'the claim' in s 181(2)(c), must be read as a reference to the claim in the unfair dismissal proceedings. Accordingly, when forming the opinion that a party has rejected a reasonable offer of settlement, the Commission may only properly have regard to that part of an offer which purports to be in settlement of the unfair dismissal proceedings. The situation is complicated by the fact that the offer of settlement by the respondent was for a lump sum to settle a number of different claims. As such, it is submitted, that if the respondent wished to seek costs upon the determination of the proceedings, it was incumbent upon it to identify at the time the offer was made what part of the offer was referrable to the unfair dismissal proceedings, something which it failed to do.

21 The appellant also raised an issue as to an alleged denial of procedural fairness as to the manner in which the issue of alleged underpayment of leave entitlements was dealt with at first instance. In view of the conclusions we have reached, it is not necessary to deal with that matter.

22 The appellant submitted that in light of the circumstances of the offer as described above, this is not a case in which it can be said that the appellant unreasonably failed to agree to a settlement of the claim in his unfair dismissal proceedings and accordingly, the Full Bench should quash the Deputy President's decision dated 30 May 2002 and that an order for costs on appeal and costs of the hearing of the notice of motion at first instance be made in favour of the appellant.

23 The respondent accepted that the Deputy President made a factual mistake in adding the allowance for the vehicle in his calculation of the offer figure. The respondent submitted that, irrespective of the error in the Deputy President's calculations, the second limb test as articulated in Bankstown City Council v Paris (1999) 93 IR 209 at 219 and Van Huistedde v Commissioner of Police (2001) 106 IR 56 at [40] was met in the present case on the following grounds:

1. The offer of $25,000 included the net amount of the outstanding entitlements, finalised at $11, 571.83 leaving an amount of over $13,000 for the unfair dismissal element of the matter.

2. The net entitlements of $11,571.83 actually cost the respondent $22, 168.21 and on this basis it is reasonable to infer that the $13,000 amount would in fact have cost the respondent approximately $26,000, or nearly the entire amount of 26 weeks at the applicant's rate of pay ($58,000).

3. Therefore, although the Deputy President made a factual mistake or mathematical error in adding the allowance for the vehicle, the actual monetary offer in respect of the unfair dismissal was arguable close to the jurisdictional limit.

24 The respondent submitted that the factual mistake was not material to the result and no error of the kind contemplated by House v King (1936) 55 CLR 499 was disclosed. Alternatively, if the error in calculation was taken into account, the offer resulted in an actual offer of approximately $3,000 in respect of the s 84 claim. In the context of the case, the amount still constitutes a reasonable offer. In particular, the offer was reasonable considering the lack of cogent reasons for extension of time based on the findings made by the Deputy President, namely that the applicant did not establish a sufficient reason for his failure to lodge an unfair dismissal and that the applicant was well aware of the reasons he was terminated.

25 The respondent submitted that the conduct of the appellant met the criteria identified by the Full Bench in Bankstown City Council v Paris, in particular the appellant's failure to agree to the settlement offer which, it submitted, was a reasonable offer (citing Schmidt J's comments in Bell and Berg v Macquarie Bank Limited [2003] NSWIRComm 21), and the absence of an intention to settle by the appellant on any basis which could be considered reasonable. The respondent contended that there was no mere failure of negotiations, as was submitted by the appellant.

26 The respondent submitted that the amount of the offer is not insignificant, particularly having regard to the result of the hearing. Even taking out the actual underpayment of $11,000, the remainder to settle the claim for unfair dismissal still amounted to was more than $13,000.

Consideration of matters other than the unfair dismissal claim

27 The respondent submitted that merely because the offer encompassed matters other than the unfair dismissal did not invalidate the Deputy President's observation that an amount near or close to the jurisdictional limit of compensation "would almost certainly" meet the test of unreasonable refusal and that it was an important factor in determining whether the jurisdictional gateway to costs had been satisfied. In any event, the Deputy President did consider other factors in making his decision including the appellant's failure to make a counter offer (Blagoveocj v Australian Industrial Relations Commission), the fact that $25,000 was almost 6 months compensation, that it was rare to find offers of this magnitude where the appellant had to overcome merit and serious jurisdictional arguments and that the claim was made in the knowledge that outstanding entitlements were not within the purview of the Commission.

28 Further, the respondent submitted that the appellant must, by virtue of his conduct, be estopped from arguing that the Deputy President cannot take account of extra jurisdictional matters given that the claim argued before the Commission at conciliation was for the amount of all employment entitlements, including extra-justiciable matters.

29 In any case, the respondent submitted that the Commission's ability to award costs under s 181(2)(c) is not vitiated by the consideration of matters which are outside the jurisdiction of the Commission, or which may be fanciful in scope, or even the result of a mistaken understanding.

30 The respondent submitted that there was no error in the Deputy President's observation that there was no application for alleged underpayments, it was merely an observation. The Full Bench should not disturb the decision of the Deputy President. If the Full Bench was of the view that the statutory test has not been met, the Full Bench might then determine the question of costs on the grounds of vexatiousness, even though the Deputy President did not consider it necessary to proceed to a decision in that regard.

31 In making his decision, the Deputy President relied on the following calculation of the settlement figure: [29] In this case, the respondent's salary was $58,800. The offer of settlement on 23 August 2001 was $25,000 and the value of a Toyota Hi Ace van ($7,500). It follows then, that even if the applicant had successfully contested his claim and been awarded the maximum compensation of six months, the amount so ordered would have been $29,400. In other words, less than the total value of the offer of 23 August 2001 of $32,500.

32 On 2 September 2002, Walton J, Vice-President, granted the application to extend time in the appeal proceedings. In the extempore decision, his Honour referred to the calculations by Sams DP as to of the settlement figure, and observed: (at [6] - [7]) [6] It should be noted at the outset that there are components of that finding which are either conceded to be erroneous or do not conform with the respondent's submissions at first instance. Firstly, the respondent conceded that the value of the Toyota Hi-ace van (valued at $7,500) was included in its offer of $25,000 thereby making the total amount of the offer $25,000. The second such aspect concerns the component of the settlement offer relating to statutory entitlements. His Honour refers to an amount of $11,571.83 being offered and accepted by the appellant in settlement of his claims for annual leave and long service leave. The amount of $25,000 referred to in paragraph 29 concerns an offer of settlement in settlement of all claims, namely, in settlement of the application brought under section 84 and claims brought for the non-payment of statutory entitlements. The reference by his Honour to an amount of $25,000 is not explicable other than in terms of the statutory limit for unfair dismissal claims referred to in the decision at first instance. [7] In these circumstances, albeit the subject of a later offer and acceptance as between the parties, the amount of $25,000 needs to be viewed as to its value against the moneys offered in settlement of the statutory entitlements. There is some difficulty arising in the submissions of the parties as to the precise basis upon which the value of the sum offered in settlement should be judged. It is sufficient for present purposes that his Honour would appear to have not given consideration in paragraph 29 of the decision to the amounts for statutory entitlements which are, in fact, set out in paragraph 30 of the judgement.

33 The general principles to be applied at appellate level in reviewing findings of fact made at trial are clearly established: see, for example, Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32 at 42 - 43 and the cases there cited. Generally, where an appeal seeks merely to challenge findings of fact, leave to appeal will rarely be granted. In Box Valley Pty Ltd v Price (2000) 97 IR 484, the Full Bench stated at [4]: In any event, we think it should be emphasised, as clearly as we may, that appellate review is not available under this statute as of right, but requires the requisite degree of importance to attract leave to appeal. Mere contest as to findings of fact which might otherwise remain open on the evidence will generally, in the absence of other considerations, not attract leave. See also King v State Bank of New South Wales at [54], Al-Shennag v Bankstown City Council Civic Services Group (2002) 118 IR 138 , Nguyen v Swan Services Pty Limited [2002] NSWIRComm 322 and Ward v Mobile Innovations Limited [2002] NSWIRComm 287.

34 It is well established that where the appeal is from a discretionary decision, the appellate court must not interfere with the decision unless "it reaches the clear conclusion that by reason of some error, whether of fact or of law, the primary judge not only has taken a different view but has failed properly to exercise the discretion conferred": Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420 at 428. The locus classicus for the principle is the judgment of the High Court in House v King at 504 - 505. See also Mace v Murray (1955) 92 CLR 370 at 378; Port Macquarie Golf Club Ltd v Stead (1996) 64 IR 53 at 58 - 60; Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 446 and Abboud v The State of New South Wales (Department of School Education) at 42 - 43.

35 The principles for determining an application for costs pursuant to s 181(2)(c) were considered in Bankstown City Council v Paris and Four Sons Pty Limited v Sakchai Limsiripothong (No 2) (2000) 100 IR 400; see also Van Huisstede v Commissioner of Police (No 2).

36 It is now well established that the approach to be adopted in s 181(2)(c) cases is for the Commission to determine whether the statutory criteria has been met or, using the terminology in Four Sons v Sakchai Limsiripothong (No 2), the jurisdictional gateway has been satisfied, before the exercise of the Commission's discretion powers under s 181(1) is considered: see Bankstown City Council v Paris at 219. The approach to be adopted to the construction and application of s 181(2)(c) was explained by the Full Bench in the latter case as follows: 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.

37 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 a 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 s 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.

38 In Four Sons Pty Limited v Sakchai Limsiripothong (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 s 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. It is conceivable that if the respondent had responded to those offers in a more timely way, the proceedings may have settled. We doubt, however, that that is the appropriate finding on the evidence before us. Rather, the evidence as to further negotiations makes plain that the appellant had no realistic intention to make an offer which was likely to settle the proceedings before McKenna C. However, it would be inappropriate not to take into account the lack of a timely response from the respondent to the nominal offers of settlement which were made by the appellant in August and September 1999.

39 Although there is now Full Bench authority on the construction and application of s 181(2)(c) and several single member decisions which have considered and applied the relevant principles, the present appeal appears to be the first occasion where an appeal is brought against a decision to order costs under s 181(2)(c).

40 We consider that this matter, notwithstanding the detailed assistance provided by counsel in their respective comprehensive submissions, may be dealt with relatively shortly. It will be noted that the conclusion of Sams DP is to be found in paragraph [31] of his decision and the particular aspects of the reasoning which led to that conclusion are to be found in the preceding two paragraphs: that is, paragraphs [29] and [30]. We have come to the conclusion that the decision made by the Deputy President involves appealable error because of certain errors of fact, of assessment and of principle, revealed on examination of the reasoning process and the conclusions therein. It will be observed (see paragraph [29]) that the offer of settlement made on 23 August 2001 by the respondent was described as $25,000 and the value of the Toyota van, said to be $7,500. That is, the Deputy President took the view that the offer made was in the order of $32,500. The parties, however, have agreed that the $25,000 offer was inclusive of a number of aspects of the applicant's claims, including his claim for unfair dismissal and the value of the Toyota van. In other words, the respondent's offer was for $17,500 in money and $7,500 in kind (that is, the Toyota van). The overall consideration represented by that combination was in final settlement of all his claims; that is, his claim for unfair dismissal, redundancy, long service leave and annual leave.

41 The reasoning of Sams DP in paragraph [30] indicates that his Honour regarded as irrelevant to the issues before him that the offer made by the respondent was also an offer for the appellant's claims as to, inter alia, long service leave and annual leave. The issue or relevance of the fact that the appellant was also making a claim for redundancy pay may be conveniently placed to one side. However, we consider that Sams DP erred in the approach taken as to the leave.

42 Parties should not be discouraged, when attempting to seeking to settle claims for unfair dismissal, from attempting to settle any or all other claims they might have in respect of the employment relationship or as the termination of the employment. This observation is not intended to suggest that extraneous matters should be permitted to buttress an otherwise flimsy s 84 application, or to distract unduly the Commission from its statutory obligation to attempt to conciliate such applications or, in circumstances where the proceedings do not settle, to divert the Commission from dealing only with matters relating to the primary issues in the s 84 application. The material differentiating factor in this matter, however, is that the offer made by the respondent, which is at the heart of the issues on appeal, was an all-inclusive offer (presumably to facilitate an overall release of obligations under the contract of employment in the event the s 84 proceedings settled). It was then inevitable that consideration of an offer in those terms, in the context of a s 181(2) application, would involve regard to the full extent of the nature of the offer. This could have been done in various ways; for example, deducting the leave components from the amount offered by the respondent in assessing the reasonableness of the appellant in the settlement process.

43 His Honour apparently considered the two kinds of leave as irrelevant for two reasons. First, there was no legal entitlement to pro rata long service leave. Second, there was no application initiated for alleged underpayment of the leave prior to the arbitration of the unfair dismissal proceedings. We consider that the approach taken was incorrect. As to the first aspect, the appellant had more than five years employment and he was therefore entitled to payment of pro rata long service leave, pursuant to s 4(2)(a)(iii) of the Long Service Leave Act, where his employment was terminated for any reason other than for serious and wilful misconduct. Although there were questions of performance and conduct raised as the basis for the termination of the appellant's employment, there was no available basis for a finding of serious and wilful misconduct. In any event, the Deputy President did not deal with that issue which would have been necessary for any determination of the long service leave claim adverse to the appellant.

44 As for the second aspect, we consider it irrelevant that no application for alleged underpayments of long service leave and annual leave had been taken or commenced prior to the arbitration. There could be no question of estoppel, either Anshun estoppel (Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589) or otherwise, as to those matters because the Commission had no jurisdiction to consider claims for them in the context of the unfair dismissal proceedings. The limitation periods for such proceedings did not expire for some years. Those claims could have been commenced before either the Commission in Court Session or an industrial magistrate well after the conclusion of the s 84 proceedings.

45 In any event, the relevant offer by the respondent required the extinguishing of all claims arising from the employment. This fact alone required consideration of the long service and annual leave components of the offer in any determination under s 181(2)(c). Any decision as to issues in the s 181(2) application required regard to, and evaluation of, the substance of any negotiations to settle the s 84 proceedings and to give due weight to the particular elements of any settlement proposals, settlement offers etc. The failure to have regard to the long service leave and annual leave aspects of the offer was a failure to have regard to a relevant consideration in the sense of the principles in House v King. The finding by the Deputy President that the $7,500 amount for the vehicle was an addition, or additional, to the "offer" of $25,000, in a similar way, involved factual error warranting appellate correction.

46 Once that conclusion is reached as to the factual circumstances of the present matter, it is difficult to conclude that the necessary "gateway" (to use an expression from the authorities) in s 181(2)(c) had been accessed or opened. Any comparison as to amounts offered or declined in that context does not necessarily require arithmetic precision. The particular way the matter is approached is within the discretion of the Member of the Commission seized of the matter. If the discretion is exercised with regard to the relevant factual circumstances, it is unlikely to be subject to appellate review. However, factual errors of some significance may result in both an unfair and an incorrect outcome and may invoke the public interest elements in terms of the leave criteria in s 188(2) of the Act, leading to appellate review. That is the situation on the particular facts and circumstances of this matter. In any event leave should be granted to deal with the particular issue as to costs raised by the appellant. The issue is of general importance in the unfair dismissal jurisdiction of the Commission.

47 The parties' submissions contain detailed arithmetic comparisons of the various claims, offers etc referred to in evidence, including whether certain of them should be considered as involving gross amounts or amounts net of taxation. We note incidentally that Sams DP dealt with the matter on the basis that the offers were in terms of gross amounts. However, it is not necessary for the Full Bench to deal expressly with the matter at that level of detail. Identification of the two key errors sufficiently shows the difficulties with the decision under appeal and that the factors relied on by the respondent to open the costs "gateway" did not exist.

48 The respondent's alternative basis for justifying the costs order at first instance, in deference to counsel for the respondent, should be said to have been raised somewhat faintly. For example, at paragraph 39 of the submissions, the respondent argued: [I]f the Full Bench is of the view that the statutory test is not met, then on the basis of the submissions of the appellant at paragraph 14 and 15 of his submissions, and on the basis of the findings of the Deputy President in respect of the nature of the claim pressed by the appellant, I submit that the full Bench might determine the question on the grounds of vexatiousness even though the Deputy President did not consider it necessary to proceed to a decision in that regard.

49 The respondent's alternative approach raises two issues. The first is whether it is open to a respondent to an appeal to raise an issue on appeal in this way. The second is whether the respondent has successfully done so in these proceedings.

50 It is clear that, absent a contrary statutory provision or similar provision in the rules, a respondent at the hearing of the appeal is entitled to rely on any ground to support the decision appealed from without itself filing a notice of appeal: David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416 at 420 - 421. However, procedures for the filing of a notice of contention were introduced, as Kirby P said in that case: ... to control what was presumably considered to be the too ample entitlement of a respondent at common law and to ensure that the court and the parties to the appeal had due notice of any alternative basis upon which it was contended that the judgment under appeal could be sustained.

51 Part 51 rule 21 of the Supreme Court Rules requires a respondent which wishes to argue the appeal in that way, to file a notice of contention specifically raising the grounds relied on within 14 days of receipt of the notice of appeal. Rule 89(5) of the Industrial Relations Commission Rules relevantly provides that, in the absence of relevant provisions in the Industrial Relations Act or Rules or where there is no established practice, procedure or usage, the Court of Appeal's practice and procedure is to regulate, as far as practicable, the practice and procedure in appeals to the Full Bench of the Commission.

52 The respondent should, therefore, have filed a notice of contention and it did not. Although the Full Bench would ordinarily approach such matters on the basis of broad fairness without requiring painstaking compliance with the rules, fairness in a particular case may require at least substantial compliance with them, even if not strict compliance. We do not consider the respondent's approach does either. The respondent is not permitted to raise the contention, although we have severe doubts whether there is in fact any substance in it: see, for example, Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257, Foxcroft v The Ink Group Pty Ltd (1994) 57 IR 65 at 68 - 69 and Andrews v Uniting Church in Australia Frontier Services t/a Old Timers (1995) 60 IR 437 at 445. In any event, there is a substantial onus required to demonstrate that proceedings were brought on the particular ground relied on by the respondent, that is vexatiously: Attorney General v Wentworth (1998) 14 NSWLR 481 at 491. It could not be argued that ground was satisfied in the proceedings under appeal.

53 The decision at first instance should be set aside. We do not consider there has been any basis demonstrated to find s 181(2)(c) should be invoked for different reasons to those identified by Sams DP or that it would be appropriate on appeal to attempt to do so.

54 The Full Bench therefore determines that leave to appeal should be granted, the appeal upheld and the costs order made by Sams DP on 30 May 2002 be set aside. Orders are made accordingly.

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