FEDERAL COURT OF AUSTRALIA Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia Pty Ltd [2024] FCAFC 164 Appeal from: Tredders Investments Pty Ltd v Channel 9 South Australia (No 3) [2024] FCA 233 Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 4) [2024] FCA 453 File number(s): SAD 49 of 2024 SAD 66 of 2024 Judgment of: PERRY, MCEVOY AND MCDONALD JJ Date of judgment: 11 December 2024 CONTRACTS – appeal from dismissal of application for damages for breach or repudiation of contract – where respondent issued direction to all employees and contractors to provide evidence of COVID-19 vaccination status or valid medical exemptions – where second appellant did not comply with direction and respondent terminated Services Agreement – whether appellants disobeyed lawful direction given by respondent – whether directions given lawful – whether directions given reasonable Catchwords: PRACTICE AND PROCEDURE – where new grounds raised on appeal – where no issue taken with pleading before primary judge – whether adequate explanation provided for failure to raise new grounds before primary judge – whether proposed grounds have sufficient merit – whether grounds of appeal raise new or additional findings of fact COSTS – where primary judge held that s 17 of the Independent Contractors Act 2006 (Cth) required that there be no order as to costs – whether rejection of offers to settle the proceeding constituted an unreasonable act or omission – whether the question of whether s 17(2) of the Independent Contractors Act 2006 (Cth) is engaged is capable of only one uniquely right or legally permissible answer Federal Court of Australia Act 1976 (Cth) s 37M Legislation: Independent Contractors Act 2006 (Cth) ss 5, 12(3), 16, 17 Federal Court Rules 2011 (Cth) pt 25 Bird v DP [2024] HCA 41 Celand v Skycity Adelaide Pty Ltd [2017] FCAFC 222; (2017) 256 FCR 306 Coulton v Holcombe (1986) 162 CLR 1 CPE15 v Minister for Immigration and Border Protection [2017] FCA 591 Dovuro Pty Ltd v Wilkins [2003] HCA 51; (2003) 215 CLR 317 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; (2023) 97 ALJR 857 H v Minister for Immigration and Multicultural Affairs [2000] FCA 1348; (2000) 63 ALD 43 Han v Minister for Home Affairs [2019] FCA 331 House v The King [1936] HCA 40; (1936) 55 CLR 499 Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; (2012) 207 FCR 298 Cases cited: MBJY v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 11; (2021) 284 FCR 152 Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541 NAJT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 134; (2005) 147 FCR 51 O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 Steven Moore (a pseudonym) v The King [2024] HCA 30; (2024) 98 ALJR 1119 Stratton Finance Pty Ltd v Webb [2014] FCAFC 110; (2014) 314 ALR 166 Tohi v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 125; (2021) 285 FCR 187 Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 3) [2024] FCA 233 Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 4) [2024] FCA 453 Tyson v Brisbane Market Freight Brokers Pty Ltd [1994] HCA 67; (1994) 68 ALJR 304 University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481 Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 50 Date of last submission/s: 6 November 2024 Date of hearing: 14 November 2024 Counsel for the Appellants in SAD 49 of 2024 and the Respondents in SAD 66 of 2024: SD Ower KC Solicitor for the Appellants in SAD 49 of 2024 and the Respondents in SAD 66 of 2024: Woodburn & Co Solicitors Counsel for the Respondent in SAD 49 of 2024 and the Applicant in SAD 66 of 2024: BC Roberts KC with HM Doyle Solicitor for the Respondent in SAD 49 of 2024 and the Applicant in SAD 66 of 2024: Finlaysons ORDERS SAD 49 of 2024 TREDDERS INVESTMENTS PTY LTD AS TRUSTEE FOR WARREN TREDREA TRUST BETWEEN: First Appellant WARREN TREDREA Second Appellant AND: CHANNEL 9 SOUTH AUSTRALIA PTY LTD Respondent SAD 66 of 2024 BETWEEN: CHANNEL 9 SOUTH AUSTRALIA PTY LTD Applicant TREDDERS INVESTMENTS PTY LTD AS TRUSTEE FOR WARREN TREDREA TRUST AND: First Respondent WARREN TREDREA Second Respondent order made by: PERRY, MCEVOY and MCDONALD JJ DATE OF ORDER: 11 December 2024 THE COURT ORDERS THAT: 1. Leave to raise grounds 1A, 1B, 5, 5B.2 and 5C.2 of the amended notice of appeal dated 5 June 2024 for the first time on the appeal in SAD 49 of 2024 is refused. 2. The appeal in SAD 49 of 2024 is dismissed. 3. The application for leave to appeal in SAD 66 of 2024 is dismissed. 4. In the event that the parties are unable to reach agreement as to the appropriate orders as to the costs of the appeal in SAD 49 of 2024 and the application for leave to appeal in SAD 66 of 2024: (a) on or before 4:00pm on 31 January 2025, the respondent in SAD 49 of 2024 is to file and serve submissions in support of the orders as to costs which they seek; (b) on or before 4:00pm on 7 February 2025, the appellants in SAD 49 of 2024 are to file and serve submissions in response; (c) on or before 4:00pm on 12 February 2025, the respondent in SAD 49 of 2024 is to file and serve any submissions in reply. 5. The submissions referred to in orders 4(a) and (b) are not to exceed 5 pages in length, and those referred to in order 4(c) are not to exceed 3 pages in length. 6. The question of costs will be decided on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1. INTRODUCTION 1 This is an appeal from the orders of the court in Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 3) [2024] FCA 233 and an application for leave to appeal against associated orders as to costs: Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 4) [2024] FCA 453. 2 The second appellant in the substantive appeal, Mr Warren Tredrea, is a former Australian Football League player. Mr Tredrea provided services to the respondent in the appeal, Channel 9 South Australia Pty Ltd, from about 2005, relevantly as a sports presenter and reporter. Channel 9 is a company that provides news and entertainment broadcasting services primarily in South Australia. The first appellant in the appeal, Tredders Investments Pty Ltd, is the trustee of the "Warren Tredrea Trust" and the corporate entity controlled by Mr Tredrea through which he provided his services to Channel 9 from 2018. On 4 January 2022, however, Channel 9 terminated the relevant services agreement. Tredders Investments and Mr Tredrea are collectively referred to in these reasons as the Tredrea parties. 3 The primary judge held that Channel 9's termination of the services agreement was authorised by that agreement, and rejected the Tredrea parties' claims that the termination breached or repudiated the agreement, or in the alternative that Channel 9 was liable to compensate them for any loss or damage occasioned by the termination under the Independent Contractors Act 2006 (Cth) (IC Act). The primary judge subsequently ordered that there be no order as to costs on the basis that s 17(1) of the IC Act applied to deprive Channel 9, as the successful party, of its costs of the proceedings. 4 On the hearing of the appeal, the Tredrea parties accepted that they were seeking to rely upon new grounds not raised before the primary judge. For the reasons set out below and as foreshadowed by the Court at the hearing, leave to raise the new grounds should be refused and the appeal in SAD 49 of 2024 must therefore be dismissed. The application for leave to appeal by Channel 9 against orders as to costs in SAD 66 of 2024 should be dismissed for the reasons also explained below. 2. THE TREDREA PARTIES' APPEAL ON LIABILITY 2.1 Background 5 On 31 August 2020, Mr Tredrea, Tredders Investments and Channel 9 entered into the services agreement under which Mr Tredrea agreed to provide services as a sports presenter and reporter in exchange for a monthly fee calculated on the basis of $192,500 per annum. The services agreement was a services contract within the meaning of s 5 of the IC Act. The services agreement provided that Mr Tredrea must comply with all reasonable directions of Channel 9 (cl 3.11) and that Channel 9 may terminate the services agreement without notice or payment in lieu of notice in one of the circumstances prescribed in that clause (cl 9.1). 6 On 14 October 2021, Channel 9 gave a direction to staff and contractors by email to provide evidence of their vaccination status by entering their status in an online portal (the first direction). On 15 October 2021, Channel 9 advised by email that all staff, contractors and visitors would be required to be fully vaccinated in order to attend any Channel 9 premises (the second direction). This was followed by three subsequent communications including the recording of the policy of the second direction in a Condition of Entry Policy circulated by email to staff and contractors on 8 November 2021. This policy required employees and contractors to be "fully vaccinated" and provide proof of their vaccination status in order to enter Channel 9 workplaces or to work in the field from 1 December 2021. Mr Tredrea did not comply with the first direction and Channel 9 terminated the services agreement on 4 January 2022 in accordance with cl 9.1. While the Tredrea parties contended at trial that the second direction was unlawful because it was "not reasonable" for the purposes of the services agreement, it was not in issue that Mr Tredrea did not enter Channel 9's premises on or after 1 December 2021, nor was it in issue that he did not provide proof of his vaccination status to Channel 9. 7 Before the primary judge, the Tredrea parties sought damages for breach or repudiation of the contract constituted by the services agreement. Alternatively, the Tredrea parties sought an order under s 16 of the IC Act varying the services agreement to the effect that, if it was terminated on the ground that Mr Tredrea failed to comply with a direction requiring him to be vaccinated, Channel 9 is liable to compensate the Tredrea parties for any loss or damage thereby occasioned. 8 The primary judge held that there was no breach or repudiation of the services agreement and rejected the claim under the IC Act. Although the Tredrea parties' submissions at trial proceeded on the basis that there was only one direction (the second direction, as recorded in the Condition of Entry Policy), the primary judge held, first, that the first direction was reasonable and that the failure to comply with it was a lawful basis of termination. Secondly, and in any event, his Honour held that there was a reasonable basis for Channel 9's opinion that views expressed by Mr Tredrea on radio on the subject of vaccination could damage Channel 9's reputation and business interests, as well as Mr Tredrea's own public image and reputation. As a result, his Honour held that the grounds of termination in cl 9.1(h) and (k) were also engaged when Channel 9 decided to terminate the services agreement (the radio comments termination ground). Thirdly, the primary judge found, even if the termination had constituted a repudiation of the services agreement, any award of damages would have been the equivalent only of one month's remuneration under the services agreement plus interest, and not the sum of $1,481,104 which was claimed by the Tredrea parties. Finally, as has been mentioned, the primary judge subsequently applied s 17(1) of the IC Act to hold that there should be no order as to the costs of the proceeding. 9 The amended notice of appeal filed on 5 June 2024 (misdescribed as a supplementary notice of appeal) indicated that a number of grounds in the original notice of appeal were no longer to be pressed (namely, grounds 3, 4, 6 to 14 inclusive and 16) and inserted a number of grounds (namely, grounds 1A, 1B, 5A, 5B, 5C, together with ground 14A, which challenged the primary judge's findings on the radio comments termination ground, and grounds 17 to 19, which challenged the primary judge's findings as to damages). Ground 5 was also amended. However, in their submissions the Tredrea parties explained that they did not press grounds 1, 2, 5A, 5B.1, 5C.1, 14A.3 or 15, but made submissions in relation to ground 5B.2. We proceed therefore on the basis that on the appeal, the Tredrea parties did not press grounds 1, 2, 5A, 5B.1, 5C.1, 14A.3 and 15, but continued to press ground 5B.2 and also 5C.2. 10 Importantly, for present purposes: (1) ground 1A alleged that, with respect to the first direction, the primary judge erred in holding that Channel 9 was entitled to terminate the services agreement pursuant to cll 9.1(a), 9.1(b)(v), 9.1(c) (involving a breach of cl 3.11), and 9.1(f) on the grounds set out in grounds 1B to 5C of the amended notice of appeal; (2) ground 1B alleged that the primary judge: (a) erred in holding that the first direction was a direction, authoritative direction or instruction for the purposes of cll 9.1(a) and 9.1(b)(v) or that it otherwise enlivened cll 9.1(c) (involving a breach of cl 3.11) or 9.1(f) of the services agreement; and (b) ought to have held that the first direction "only constituted a request or advice to persons in the position of the appellants; such that the appellants' failure to act in accordance with the request did not give rise to the right to terminate under or within the meaning of those clauses"; (3) in the alternative, to the extent that the first direction engaged cll 9.1(a), 9.1(b)(v), 9.1(c) and 3.11, or 9.1(f): (a) ground 5 contended that the primary judge erred in finding that a lawful direction under cl 9(1) need not be a reasonable direction and ought to have found that it must be reasonable; (b) grounds 5B.2 and 5C.2 alleged that the primary judge erred in holding that the first direction was lawful and ought to have held that it was not reasonable. (The new grounds.) 11 The Tredrea parties properly accepted that none of these new grounds had been raised by them at trial and that it was necessary for them to obtain leave in order to raise them. 12 Furthermore, at the commencement of the hearing of the appeal, senior counsel for the Tredrea parties confirmed that, unless they succeeded on the new grounds (i.e. grounds 1A, 1B, 5, 5B.2 and 5C.2), the substantive appeal in SAD 49 of 2024 must be dismissed. This was an appropriate concession given that it was necessary for the Tredrea parties to challenge successfully both grounds on which the primary judge found that the services agreement had been lawfully terminated in order to succeed on the appeal. Channel 9 did not contend that it would have been likely to lead further evidence or alter its cross-examination if the new grounds had been raised at trial. It submitted, however, that it would nonetheless be prejudiced if leave were granted to raise the new grounds because it did not have the opportunity to make submissions on the issues raised by the Tredrea parties before the primary judge, and that it was not appropriate for the Court to now determine those issues on appeal. On that basis Channel 9 objected to the grant of leave to the Tredrea parties to raise the new grounds. 13 In addition, at [61], the primary judge held that the email containing the first direction was expressly directed only to employees "but no point was taken about this", before proceeding to accept that it was properly understood as a direction to all of those persons (employees and contractors) to provide the respondent with evidence of their vaccination status. Yet despite not having taken issue with the applicability of the direction to contractors at trial, the Tredrea parties also sought for the first time to do so in their written submissions on the appeal (with respect to ground 1B). 2.2 Principles where new issues are sought to be raised on appeal 14 As a general rule, new issues should not be raised on appeal. In Coulton v Holcombe (1986) 162 CLR 1, Gibbs CJ, Wilson, Brennan and Dawson JJ stated (at 7-8): It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards: see Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at p. 438; Bloemen v The Commonwealth (1975) 49 ALJR 219. 15 Thus, it is contrary to principle to allow a party to raise a new argument which, "whether deliberately or by inadvertence, [they] failed to put during the hearing when [they] had [an] opportunity to do so": University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481 at 483 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ). 16 The principle in Coulton serves the public interest in the fairness and expedition of the administration of justice. As McHugh J observed in Tyson v Brisbane Market Freight Brokers Pty Ltd [1994] HCA 67; (1994) 68 ALJR 304 (at 310-311): We live in an era where the cost of litigation is beyond the means of ordinary citizens and where awards of party and party — and even indemnity — costs cannot fully compensate a party for the cost and worry of litigation. Because that is so, it is as important as ever that the established principles concerning the raising of new points be strictly applied and that the parties be kept to the issues which, by their pleadings, they raised for determination at the trial. 17 Further, the "volume and complexity" of the cases before intermediate appellate courts "is such that it is increasingly important that such courts are able to devote their time to the genuine review of first instance decisions", rather than the original consideration of issues which ought to have been raised before the primary judge: H v Minister for Immigration and Multicultural Affairs [2000] FCA 1348; (2000) 63 ALD 43 at [8] (Branson and Katz JJ). 18 Nonetheless, the principle in Coulton is not absolute: Dovuro Pty Ltd v Wilkins [2003] HCA 51; (2003) 215 CLR 317 at [151] (Hayne and Callinan JJ). In some cases where a question of law is raised for the first time on appeal, "it is expedient in the interests of justice that the question should be argued and decided": O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 at 319 (Mason J); see also Tohi v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 125; (2021) 285 FCR 187 at [14] (Derrington J) and [110] (O'Bryan J); MBJY v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 11; (2021) 284 FCR 152 at [2] (Allsop CJ). In making an assessment as to where the interests of justice lie, the merits of the new point (generally assessed at a reasonably impressionistic level) will ordinarily be relevant, even though "merit alone is generally not enough for the grant of leave, and the weaker the point, the greater the need for other aspects to be favourable": Han v Minister for Home Affairs [2019] FCA 331 at [15] (Bromwich J). Further, a party may be permitted to rely upon a point not taken below "if the other party concedes that its case would not have been presented differently if the point had been taken below": Bird v DP [2024] HCA 41 at [39] (Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ). The fact that an appeal may arise in the context of the Court's supervisory jurisdiction over exercises of executive power which have a constitutional dimension is also relevant, as opposed to private law litigation (as here) where the parties are "equally armed and represented, and the adversarial system operates at its fullest": CPE15 v Minister for Immigration and Border Protection [2017] FCA 591 at [18] (Mortimer J). 19 Without being exhaustive, other considerations which may be relevant include: (1) whether the appellant has provided an adequate explanation for why the ground was not raised below: NAJT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 134; (2005) 147 FCR 51 at [166] (Madgwick J); (2) the prejudice to the respondent in permitting the ground to be agitated, noting that the denial of a practical right of appeal with respect to the ground is one such point of prejudice: Han at [20(5)] (Bromwich J); (3) the prejudice to the appellant if leave is not granted: Tohi at [13(5)] (Derrington J); and (4) whether resolution of the new issues sought to be raised have importance beyond the case at hand: NAJT at [166] (Madgwick J). 2.3 Leave to raise new grounds on the appeal should be refused 20 Leave to rely upon the new grounds should be refused. 21 First, the substantive case which the Tredrea parties wish to raise on the appeal (as opposed to the question of damages) is new. Indeed, it may fairly be said that the Tredrea parties' case as to liability has been entirely recast on the appeal with the benefit of the primary judge's reasons. The effect of that approach is, with respect, to treat the trial as a "practice run" for the appeal. It would be contrary to principle to permit this to occur. 22 Secondly, while senior counsel for the Tredrea parties accepted that Channel 9 expressly raised non-compliance with the first direction as a valid ground for terminating the services agreement in its defence, he also accepted that the Tredrea parties had not taken issue with that pleading in their reply or otherwise. The Tredrea parties also accepted in argument on the appeal that they had placed no evidence before the Court as to the reasons for the decision not to do so, and that the Court would proceed on the basis that this was a "forensic decision". However, an appeal is not an occasion to revisit and reverse forensic decisions made at trial. As the High Court observed in Metwally, leave is generally refused to raise a new argument which, "whether deliberately or by inadvertence, [the appellant] failed to put during the hearing when [they] had [an] opportunity to do so": at 483 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ). 23 Thirdly, the "errors" in the primary judge's reasons upon which the Tredrea parties rely are found in passages where his Honour sets out reasons for agreeing with relevant aspects of Channel 9's case at trial which the Tredrea parties did not put into issue. In particular, the primary judge (at [103]) explicitly held that "the applicants did not direct any pleading or argument specifically at the first direction. No case was articulated as to why it was not 'reasonable'". Thus, while the primary judge then explained briefly why, in his view, the first direction was clearly a reasonable one, his Honour did so without the benefit of argument from the parties. As Channel 9 points out, that gives rise to a prejudice to Channel 9 in that, if the primary judge had had the benefit of the parties' submissions on those issues, his Honour's reasons may well have been more extensive and traversed the arguments which the Tredrea parties now seek to raise. 24 Fourthly, there was no evidence as to why the Tredrea parties had failed to raise the new issues at trial. While senior counsel for the Tredrea parties explained that the reason was due to them "perhaps only focusing upon [their] own pleaded case, and not necessarily directly answering the respondent's pleaded case", that is not an adequate explanation. Accordingly, we have given significant weight to the fact that no adequate explanation has been given by the Tredrea parties for failing to raise the new grounds at trial, despite both parties being represented by senior counsel. As Mortimer J (as her Honour then was) observed in CPE15 at [18], the rule in Coulton has particular application to prevent new issues from being raised on appeal in private law litigation involving represented parties. The lack of an explanation is the more telling where the primary judge afforded the Tredrea parties considerable latitude over Channel 9's objections as to the grounds on which the Tredrea parties could rely to challenge the termination of the services agreement. Specifically, [16] of the statement of claim pleaded that: The respondent did not have any grounds or basis to terminate the Services Agreement, whether under clause 9.1 of the Services Agreement or at all. (Emphasis added.) 25 The statement of claim at [17], in turn, alleged that "[w]ithout limiting the plea in paragraph 16 above", Mr Tredrea "did not disobey a lawful direction within the meaning of clause 9.1(a) of the Services Agreement. A lawful direction for the purposes of that clause is a reasonable one. The Direction [referring to the second direction] was not reasonable" for a variety of reasons. Those reasons included an alleged increased risk of certain medical conditions and the availability of other measures and control mechanisms in the workplace said to be equally, if not more, effective than vaccination. 26 With respect to those pleadings, the primary judge found (at [57]) that: It is appropriate, however, to note a further point concerning SOC [16]. It is a completely general and unparticularised allegation that Channel 9 did not have any grounds or basis to terminate the Services Agreement. SOC [17]–[19], which make more specific allegations that particular aspects of cl 9.1 were not engaged, are expressed not to limit SOC [16]. No application was made to strike out SOC [16] or to require further and better particulars in order to narrow the applicants' case. Holding the applicants strictly to their pleaded case does not greatly assist Channel 9, in circumstances where the pleaded case in its terms encompasses any argument that might be thought of to the effect that the power to terminate in cl 9.1 did not arise. Consequently, where evidence adduced by the applicants was objected to at the hearing on the ground that it did not go to the issues raised by SOC [17], I have determined that that evidence should be admitted. (Emphasis added.) 27 The latitude afforded by the primary judge at [57] to the Tredrea parties as to the manner in which they could run their case at trial demonstrates that the Tredrea parties had an ample, indeed generous, opportunity to raise the new grounds at trial yet inexplicably failed to do so. 28 Fifthly, at a reasonably impressionistic level, the Tredrea parties' case is not strong or straightforward. Specifically, the Tredrea parties would have to overcome a series of adverse findings by the primary judge in order to succeed on the appeal as to liability, and with respect to the appeal grounds relating to damages. As Bromwich J stated in Han (at [15]), "the weaker the point, the greater the need for other aspects to be favourable". The fact that the Tredrea parties' case is not strong or straightforward should be read cumulatively with the other factors which weigh against the grant of leave. 29 Sixthly, the grounds of appeal which dispute the reasonableness of the first direction would require "new or additional findings of fact": Dovuro at [153] (Hayne and Callinan JJ). Thus, as Channel 9 submitted, the new grounds would require the Court to "traverse the bulk of the evidence in order to come up with factual findings afresh". In this regard, senior counsel for the Tredrea parties acknowledged that his argument for leave to raise the new grounds is weaker with respect to those grounds which raise the question of reasonableness because they are inherently more factual than the ground disputing the characterisation of the first direction. 30 Seventhly, there is no matter of general public importance which could be said to be served by permitting the new issues to be raised on appeal. Those issues are relevant only to the construction of the services agreement in this case (on the characterisation question) or to the particular direction given to Mr Tredrea (on the reasonableness of the direction): see NAJT at [166] (Madgwick J). 31 Finally, while we acknowledge that the Tredrea parties face some prejudice because of the primary judge's focus on the first direction, that prejudice is outweighed by the fact that the Tredrea parties knew of Channel 9's intention to rely on the first direction from the time that it filed its defence. Furthermore, granting leave to raise the new grounds would prejudice Channel 9 by denying it a practical right to appeal: Han at [20(5)] (Bromwich J). 32 For these reasons it would be contrary to the interests of justice to grant leave to the Tredrea parties to raise the new grounds. In reaching this view, we have also taken into account that the grant of leave would not advance the overarching principle of s 37M of the Federal Court of Australia Act 1976 (Cth). In short, as Gibbs CJ, Wilson, Brennan and Dawson JJ said in Coulton (at 7): "[i]t is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial". 33 It follows from the refusal of leave to raise the new grounds that the substantive appeal in SAD 49 of 2024 must be dismissed, as the Tredrea parties accepted in the event that the Court reached that view. Timetabling orders will be made for the filing of any submissions as to costs of the appeal in the event that agreement is unable to be reached. 3. CHANNEL 9'S APPLICATION FOR LEAVE TO APPEAL IN RELATION TO COSTS 34 In dismissing the application which was the subject of the judgment below, the primary judge initially made orders that the Tredrea parties were to pay Channel 9's costs of the proceeding as agreed or assessed. His Honour's orders contemplated, however, that the parties may wish to seek a different order as to costs, and a regime was put in place to accommodate that eventuality. 35 As matters transpired Channel 9 sought an order for indemnity costs, relying on five offers which it had made to settle the proceeding. The Tredrea parties, relying on s 17 of the IC Act, contended that there should be no order as to costs. The primary judge considered the parties' submissions and resolved the question of costs on the papers. For reasons published on 3 May 2024, his Honour determined that there should be no order as to the costs of the proceeding. In essence the primary judge accepted the submission of the Tredrea parties that s 17 of the IC Act required that there be no order as to costs. Although his Honour considered that it may have been conceptually unsatisfying, he concluded that it was appropriate to make an order to confirm the completion of the proceeding and he therefore made an order that there be no order as to the costs of the proceeding. 36 By an application dated 17 May 2024, Channel 9 sought leave to appeal from the order of the primary judge on 3 May 2024 in relation to costs, relying on the grounds set out in a draft notice of appeal which was exhibited to an affidavit sworn by its legal representative on 17 May 2024. 37 On 26 July 2024, Wheelahan J ordered that the application for leave to appeal should be referred to the Full Court hearing the substantive appeal. Channel 9 accepted that leave to appeal was required, but submitted that ultimately little turned on the interlocutory nature of the application having regard to Wheelahan J's order that the application for leave proceed instanter with the hearing of the substantive appeal. The Tredrea parties adopted much the same position, submitting that in the particular circumstances here the question of whether leave should be granted was effectively the same question as whether the appeal should be allowed, and there was little point drawing a distinction between the two stages of the process. 38 In any event, Channel 9 advances the following grounds of appeal from the orders of the primary judge in relation to costs: 1. The primary judge erred in finding that the [Tredrea parties] had not, by unreasonable act or omission, caused [Channel 9] to incur costs in connection with the proceeding, by reason of the [Tredrea parties]' refusal of the 7 and 21 July 2023 offers and in thereby finding that pre-condition for the enlivening of the costs power did not exist. 2. In reaching this conclusion (at [38]), the primary judge evaluated the unreasonableness of the [Tredrea parties]' refusal to accept the offers by comparison with the [Tredrea parties]' own legal costs, and thereby erred: a. in failing to have regard to the fact that the [Tredrea parties] could not have recovered such costs even if they had been successful, having regard to the terms of s 17 of the Independent Contracts [sic] Act 2006 (Cth); b. thereby failing to assess the imprudence of the refusal of the offers based upon a prospective assessment of the [Tredrea parties] prospects of achieving a result greater than the sums offered disregarding the legal costs that had been incurred by the [Tredrea parties]. 3. The primary judge erred (at [39]) in failing to take into account in the evaluation of whether the precondition to an order for costs was enlivened the primary judge's assessment that by the time of trial the IC Act claim had become little more than an afterthought. 39 The terms of s 17 of the IC Act are, relevantly, as follows: 17 Costs only where proceeding instituted vexatiously (1) A party (the first party) to a proceeding (including an appeal) in a matter arising under this Part must not be ordered to pay costs incurred by any other party to the proceeding unless the first party instituted the proceeding vexatiously or without reasonable cause. (2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Part is satisfied that a party (the first party) to the proceeding has, by unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first party to pay some or all of those costs. 40 Channel 9 does not contend that the Tredrea parties instituted the proceeding vexatiously or without reasonable cause. Rather, the issue arising from the decision of the primary judge in relation to costs is whether the Tredrea parties' rejection of Channel 9's offers to settle the proceeding (pursuant to Part 25 of the Federal Court Rules 2011 (Cth) and as Calderbank offers) constituted an "unreasonable act or omission" that "caused [Channel 9] to incur costs in connection with the proceeding" for the purpose of s 17(2) of the IC Act. 41 Although Channel 9 concedes that leave to appeal a costs order will not readily be granted by reason, in particular, of the discretionary nature of such judgments, it submits that the point here is one of principle. That is to say, that the question of whether s 17(2) of the IC Act was engaged was one which was capable of only "one uniquely right answer" ("unreasonable act or omission") and therefore does not involve the exercise of discretion: see GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; (2023) 97 ALJR 857 at [16]-[17] (Kiefel CJ, Gageler and Jagot JJ). It is the correctness standard of appellate review (as articulated in Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541 at [41], [43], [46] and [48]-[49] (Gageler J)) rather than a House v The King [1936] HCA 40; (1936) 55 CLR 499 standard involving judicial restraint affording latitude to a trial judge (see SZVFW at [150]-[151] (Edelman J)) that applies. Under the correctness standard, so Channel 9 contends, the appellate court determines for itself the correct outcome while making due allowance for such "advantages" as may have been enjoyed by the judge who conducted the trial or hearing: see Steven Moore (a pseudonym) v The King [2024] HCA 30; (2024) 98 ALJR 1119 at [14] (Gageler CJ, Edelman, Steward, Gleeson and Beech-Jones JJ); Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 552 (Gibbs ACJ, Jacobs and Murphy JJ); Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [23]-[24] (Gleeson CJ, Gummow and Kirby JJ). 42 Channel 9's argument is in substance that it was unreasonable for the Tredrea parties not to accept two offers to settle the proceeding which were described by the primary judge at [28] and [29] of his reasons – an offer for a payment of $50,000 and then a later offer for a payment of $120,000. Channel 9 challenges the decision of the primary judge (at [38]) that he did not consider that pursuit of the Tredrea parties' claims through to judgment was made unreasonable by them having rejected the offers of settlement which (with the benefit of hindsight) would have been advantageous. 43 In rejecting the submission that it was unreasonable for the Tredrea parties not to have accepted the two offers, the primary judge observed (at [38]) that acceptance of either offer would have produced for the Tredrea parties a sum that was less than their legal costs, and that their prospects were not so poor as to make it unreasonable for them not to accept these offers. Channel 9 criticises his Honour's reasoning in this respect, submitting that by the operation of s 17 of the IC Act the Tredrea parties, like Channel 9, should have expected that they would be denied their costs absent a s 17 exception being established. This meant that the Tredrea parties' costs were necessarily a sunk cost. Channel 9 submits that in those circumstances the evaluation of whether the refusal to accept the offers of compromise was unreasonable needed to be assessed prospectively, having regard to the prospective outcome of the proceedings, and in a context where all past legal costs were unrecoverable (referring in this regard to the observations of Charlesworth J in Celand v Skycity Adelaide Pty Ltd [2017] FCAFC 222; (2017) 256 FCR 306 at [174]). 44 Thus, Channel 9 contends, viewed in the correct light an offer of $120,000 was generous and its non-acceptance was unreasonable when weighed against the difficulties which attended the Tredrea parties' case. Channel 9 submits that the primary judge erred by assessing reasonableness retrospectively, weighing the offer against past costs that were always going to be unrecoverable having regard to the operation of s 17 of the IC Act. 45 Channel 9 also contends that the primary judge erred (at [39]) in failing to take into account, in the evaluation of whether the precondition to an order for costs was enlivened, his Honour's assessment that by the time of the trial the IC Act claim had become little more than an afterthought. Channel 9 relies on Stratton Finance Pty Ltd v Webb [2014] FCAFC 110; (2014) 314 ALR 166 at [82] (Allsop CJ, Siopis and Flick JJ) in support of an argument that the existence of both the IC Act claims and the contact claims was a matter to be considered in the application of s 17 of the IC Act, and contends that the primary judge did not properly account for s 12(3) of the IC Act which confines consideration under that Act to matters known at the time of entry into the relevant agreement (as to which see Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; (2012) 207 FCR 298 at [143] and [170] (Besanko, Jagot and Bromberg JJ)). Channel 9 also contends that the primary judge was mistaken in concluding that it was unsafe to assume that the case would have been significantly shorter had it been run solely as a claim under the IC Act. 46 Notwithstanding the submissions of Channel 9, we have come to the view that in the circumstances of this case it is not correct that the question of whether s 17(2) of the IC Act was engaged was one that is capable of only "one uniquely right answer" or, to use the language of GLJ at [16], "one legally permissible answer". The language of s 17(2) of the IC Act requires the court hearing a proceeding under Part 3 of the IC Act to be satisfied that there has been an unreasonable act or omission by a party causing another party to incur costs in connection with the proceeding before an order could be made with respect to the payment of some or all of those costs. The relevant question, then, is whether the primary judge erred in not being satisfied that there had been an unreasonable act or omission. 47 We accept the Tredrea parties' submission that the finding of the primary judge that it was not unreasonable for them not to have accepted the 7 and 21 July 2023 offers was a finding which it was open to his Honour to make and which he was uniquely placed to make. As Charlesworth J observed in Celand (at [171]), the question of whether there had been an unreasonable act in not accepting the offers of settlement required an evaluative assessment of all of the circumstances, turning on matters of judgment and degree. 48 In our view it is clear when the primary judge's reasons are read as a whole that his Honour undertook an orthodox weighing exercise in considering whether it was unreasonable for the Tredrea parties to have rejected the settlement offers. The primary judge accepted that a range of considerations were relevant in making a decision in this regard at the relevant time, which was prior to the commencement and conduct of the trial. The last two sentences of [38] of his Honour's reasons must be read in the context of the entirety of his Honour's analysis. The amount that a party that settles litigation will be required to pay its lawyers will always be a factor which will inform a decision to settle. The conclusion that it was not unreasonable for the applicants to have rejected the relevant offers was open to the primary judge in all the circumstances, accepting that different people will have different levels of tolerance for risk. That the Tredrea parties' costs to the point of the offers may have been unrecoverable is not a factor which should properly be attributed the significance that Channel 9 contends. At the stage the offers were made the Tredrea parties had at least a chance that they might have succeeded in obtaining an award of damages to defray (at least to some extent) whatever legal costs they had so far incurred. We also note that the largest offer that was rejected ($120,000) was for less than the damages the Tredrea parties might have expected to recover if they were successful on the issue of liability and if (contrary to the view taken by the primary judge as to the effect of cl 14.4 of the services agreement) damages were to be calculated on the basis of loss of payments up to the expiry of the services agreement (which the primary judge quantified at $176,458.32 plus GST). 49 It is not necessary to decide whether the conclusion of the primary judge that it was unsafe to assume that the case would have been significantly shorter if it had been run solely as a claim under the IC Act was one that was open to his Honour. That is because the primary judge was correct to hold, at [39(a)], that the fact that the IC Act claim itself ultimately was not a focus of the Tredrea parties' case did not, in principle, affect the approach to the assessment of the reasonableness of their conduct in rejecting the offers made by Channel 9. Once s 17 of the IC Act was engaged, the costs protection it provided applied to any and all claims that were part of the "matter", and the reasonableness of the rejection of an offer did not depend upon the prospects of the IC Act claim considered separately. 50 For these reasons we do not consider that the reasoning of the primary in relation to the application of s 17 of the IC Act has been shown to be affected by any error warranting appellate intervention. We would, accordingly, dismiss the application for leave to appeal in SAD 66 of 2024. The parties can make further submissions if they are unable to reach agreement in relation to costs, and we will make provision for this in our orders. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Perry, McEvoy and McDonald. Associate: Dated: 11 December 2024