4
[Extract from Queensland Government Industrial Gazette,
dated 25 August, 2006, Vol. 182, No 18, pages 736-740]
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
Industrial Relations Act 1999 - s.74 - application for reinstatement
s.335 - general power to award costs
Clarita Plep AND RWP Industries Pty Ltd (TD/2005/529)
COMMISSIONER THOMPSON 14 August 2006
Application for reinstatement - Decision released - Application for costs by applicant - Submissions - Case law - Costs awarded.
DECISION
Background
On 20April 2006 the Commission (as constituted) released a decision in the substantive application (reported at 182 QGIG 2) whereby it ordered RWP Industries Pty Ltd (Respondent) to pay to Ms Clarita Plep (Applicant) the collective sum of $14,719.22 gross as compensation for what was found to be a harsh, unjust and unreasonable termination of her employment.
On 4May 2006 correspondence was forwarded to the Industrial Registrar by the Electrical and Communications Association, Queensland Industrial Organisation of Employers (ECA) on behalf of the Respondent seeking that the matter be re-listed by the Commission to consider the incapacity of the Respondent to meet the payment of the compensation as ordered by the Commission.
The Applicant's representative filed with the Industrial Registrar on 9May 2006 an application in accordance with s.335 of the Industrial Relations Act 1999 (the Act) seeking costs in the matter.
Schedule 1 of the application identified an amount of $4,590.50 as being the quantum sought for the representation costs expended by the Applicant.
The Commission listed the matter for hearing on 25May 2006, however, did not proceed on that date due to a consent approach by the parties seeking an adjournment for reasons relating to settlement discussions that were to occur between the parties.
It is "history" that the parties failed to reach agreement.
The matter came on before the Commission on 3August 2006 where on the matter of costs, submissions were put by each of the parties.
Applicant's submissions
In seeking an award of costs Ms Nguyen (for the Applicant) provided to the Commission a chronology of offers made by the Applicant to settle the matter so as to save each of the parties the expense associated with a full hearing.
At the conciliation conference the Applicant put forward an offer of $8,000 to settle, to which the Respondent counter-offered with an amount of $2,000.
On 15March 2006, day one of the hearing, the Applicant offered to settle for a reduced amount of $7,000.
A document (Exhibit 11) was tendered in which the Applicant referred to 3 responses put by Mr Ryalls (of ECA) to proposals to settle the matter:
(A) $6,000 on 15 March 2006 contingent on family [law] matter also settling.
(B) $6,000 on 24 March 2006 at the commencement of the hearing day, separate to family [law] matter.
Applicant requested offer to be provided in writing which was [allegedly] refused by Mr Ryalls.
(C) $6,000 on 24March 2006 during lunch [break] but Mr Ryalls was not sure whether the offer was separate or contingent to the family [law] matter.
At no stage was any offer by the Respondent committed to in writing.
The Applicant had made a number of offers to settle and had the Respondent acknowledged that there had been an unfair dismissal and agreed to settle in reasonable terms the outlay of costs could have been avoided.
The Respondent had been responsible by their actions for the matter continuing and should, therefore, be ordered to pay the costs as claimed.
Respondent's submissions
Ms Quilty (ECA) on behalf of the Respondent firstly drew attention to the Commission not being a venue where costs generally followed the event as is the case with civil proceedings.
In the matter of Dennis Barry v The Irish Bar and Restaurant Company Limited trading as "Dicey Reilly's" (1998) 159 QGIG 162 Commissioner Blades made reference to the rationale behind offers to settle:
"It is in the public interest that parties to litigation of any description be encouraged to settle by negotiation and compromise. The Annotations in Supreme Court Practice Queensland state that the rationale behind the rule relating to offers to settle is that a party who rejects a reasonable offer and continues with the litigation should bear an increased liability for the costs of the action. The sanction for failure to enter into meaningful negotiations is an award of costs or a denial of costs. There is no provision in the Industrial Court Rules 1997 for 'payment into court' or 'offers to settle' as there is elsewhere but s.225(1)(b) has a similar design - see the Explanatory Notes where an example is given as 'failing to agree to terms of settlement'.".
The Respondent contended that the actions of the respondent in this matter had not been unreasonable or oppressive and had not sought to escalate the matter before the Commission.
The rejection of the Applicant's offer to settle was not unreasonable in that it was their [Respondent] intention to seek to finalise two different proceedings.
Commissioner Asbury in Chris Barsha v Motor Finance Wizard (Sales) Pty Ltd (2003) 173 QGIG 609 identified "the categories of unreasonable acts or omissions which might attract the exercise of the discretion to award costs or the refusal of the exercise of that discretion".
A number of various acts which could be identified as unreasonable or abusive were set out in dot points in the decision but they did not fit the circumstances of the Respondent's actions in this matter (see page 10 of the above decision).
The behaviour of the Applicant in seeking the initial payment of $8,000 or they would proceed to escalate the matter to hearing was unreasonable.
Ms Quilty questioned the quantum of costs being sought and compared with the Magistrates Court Scale of Costs would be considered excessive.
The calculation of such costs would indicate that the Applicant was seeking an amount approximately $930 greater than what would be available under the Scale of Costs.
In summary, it was the position of the Respondent that the application for costs should be denied on the basis that the appropriate section of the legislation had not been satisfied.
Applicant's submissions in reply
In reply Ms Nguyen disputed that the refusal to accept the $6,000 offered by the Respondent as unreasonable. It was refused on the basis that it had not been made in writing.
The offer by the Applicant to settle for $7,000 must be regarded as reasonable when one takes into account the amount awarded by the Commission was in excess of $14,000.
On the Scale of Costs put forward by Ms Quilty it was submitted that a miscalculation had occurred and it was accepted by both parties that the quantum sought was less than provided for in the Magistrates Court Scale of Costs.
Conclusion
The Commission, in accordance with the Act, has a somewhat limited authority in making an award of costs following the hearing of an application.
The submission of Ms Quilty is entirely correct in that costs do not automatically follow the event in this jurisdiction as is the case in civil matters in other jurisdictions.
The power to award costs comes under s.335 of the Act:
"335 General power to award costs
(1) The court or commission may order a party to an application to pay costs, including witness expenses and other expenses, incurred by another party only if satisfied -
(a) the party made the application vexatiously or without reasonable cause; or
(b) for an application for reinstatement - the party caused costs, including witness expenses and other expenses, to be incurred by the other party because of an unreasonable act or omission connected with the conduct of the application.
(2) In making an order, the court or commission may order a party to pay another party an amount reasonably payable to a person, who is not a lawyer, for representing the other party.".
The Applicant relied upon s.335(1)(b) of the Act claiming that the Respondent in failing to settle the matter based upon a number of financial proposals of compensation (put by the Applicant), significantly less in quantum than the amount awarded by the Commission, had therefore been responsible for an unreasonable act.
The first offer of $8,000 had been made by the Applicant and rejected at the conciliation conference on 24January 2006.
The Commission is of a view that an offer must be deemed to have been made on a "without prejudice" basis when made under the abovementioned circumstances.
This type of offer was the subject of lengthy consideration by Commissioner Asbury in Barsha (supra) where at page 7 of her decision it was stated:
"In this case, the offer of settlement which the applicant deposes that he made, was not in writing. The only evidence of it is an affidavit of the applicant which indicates that he made an offer of settlement of a certain amount at a conciliation conference and that the respondent made a counter offer of a lesser amount. There is nothing in the affidavit of the applicant to indicate that the offer of settlement was made on an open basis or repeated outside the conciliation conference. There is also nothing to indicate that the applicant put the respondent on notice, either at the conciliation conference or subsequently, that if the offer of settlement was not accepted, he reserved the right to raise the fact that the offer was made and rejected, on an application for costs.
There is a long established practice of this Commission that the positions taken by parties in conciliation conferences are generally 'without prejudice' to the positions to be taken in a hearing. While there is no specific provision in the Act prohibiting evidence of anything said or done in a conciliation proceeding from being given in subsequent proceedings, there is a strong presumption that this will not occur other than a narrow range of circumstances (cf. s. 104(5) of the Workplace Relations Act 1996). The Practice Note reflects this narrow range of circumstances. As was pointed out by a Full Bench of the Australian Industrial Relations Commission in McKenzie v Meran Rise Pty Ltd t/as Nu Force Security Services (375/00 M Print S4692) Giudice J; Watson SDP and WhelanC:
'An offer of settlement made in conciliation proceedings is by its nature made on a without prejudice basis. It is inappropriate that an offer made in those circumstances should be taken into account in a costs application unless the offer is subsequently repeated on an open basis. It has long been accepted that positions taken in conciliation are without prejudice to the position to be taken in arbitration. The protection afforded to participants by this principle is an essential feature of conciliation proceedings. This is so whether the conciliation takes place in relation to an industrial dispute, an application pursuant to s. 170CE [Application to Commission to deal with termination...] or any other proceeding.'
I respectfully agree with these views.
There is a strong presumption that in conciliation proceedings conducted by this Commission, that positions taken by parties, particularly in relation to offers and counter-offers of settlement, are taken on a 'without prejudice' basis and will not be raised in any subsequent proceedings. With respect to a matter that is not connected with an offer of settlement, admissibility will be limited to a narrow range of circumstances such as those which arise when a witness in a hearing of an application makes a statement which is inconsistent with a statement made in a conciliation conference, and if evidence of the inconsistency was not lead, the Commission may be mislead.".
Whilst the Commission is of a similar view to that of Commissioner Asbury in respect of the 24January 2006 offer, there is no doubt that "open offers" were made by the Applicant subsequent to the said conference and the Commission is within its right to consider the ramifications of such offers within the context of this application.
In respect of other considerations it was established in the course of the substantive hearing that for obvious reasons the issue of either reinstatement or re-employment was not an option to be entertained by either party so the Respondent, one would suspect, would have been reasonably aware of the likelihood that the Applicant would receive an award of monetary compensation if the Commission was to find the termination was harsh, unjust or unreasonable.
At the time of the offer to settle being made on 15March 2006 the Respondent had access to both the Applicant's material and their own defence of the allegations and as such in my view it would have been prudent for the Respondent to have formed an opinion as to their chances of success being somewhat limited.
The Commission in the released decision at page 5 stated:
"In the case of the evidence provided by both Mr Plep and Mr Wolfe, their affidavits were exact replicas of each others which would lead the Commission to believe that a high level of collusion had occurred in the preparation of the affidavits and leaves open to question such evidence.".
As Mr Plep and Mr Wolfe were the only witnesses for the Respondent this would strengthen the argument in respect of limited success in defending the Applicant.
Finding
The Respondent, by virtue of the offers to settle advanced by the Applicant on or around 15 March 2006 and 24March 2006, had the opportunity to accept an outcome that was significantly more beneficial to them than the final award of compensation ordered by the Commission.