FEDERAL COURT OF AUSTRALIA Harpham v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (No 2) [2017] FCA 140 File number: TAD 8 of 2014 Judge: TRACEY J Date of judgment: 24 February 2017 Catchwords: COSTS – application by respondent for indemnity costs – where applicant recovered amount by way of contractual damages – where respondent had earlier made three Calderbank offers, none of which bettered by applicant – whether rejection of Calderbank offers was an "unreasonable act or omission" within the meaning of s 570(2)(b) of the Fair Work Act 2009 (Cth) – application by applicant for costs of resisting respondent's costs application – whether making of costs application by respondent enlivened s 570(2)(a) or (b) of the Fair Work Act 2009 (Cth) – each application refused – no order as to costs Legislation: Fair Work Act 2009 (Cth), s 570, 570(1), 570(2) Federal Court of Australia Act 1976 (Cth), s 43 Cases cited: Ashby v Slipper (No 2) (2014) 314 ALR 84 Australian Workers' Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428 Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166 Calderbank v Calderbank [1975] 3 All ER 333 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) (2015) 230 FCR 337 Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351 General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 Harpham v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCA 1473 Hartnett Legal Services Pty Ltd v Ballantyne (No 2) [2015] FCA 1027 McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221 Ryan v Primesafe (2015) 323 ALR 107 Shea v Energy Australia Services Pty Ltd (No 7) [2014] FCA 1091 Stratton Finance Pty Limited v Webb [2014] FCAFC 110 Veda Advantage Limited v Malouf Group Enterprises Pty Limited (No 2) [2016] FCA 470 Date of hearing: Determined on the papers Date of last submissions: 9 February 2017 Registry: Tasmania Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 45 Counsel for the Applicant: Mr M Rinaldi Solicitor for the Applicant: Leonard Fernandez Barristers & Solicitors Counsel for the Respondent: Mr C W Dowling Solicitor for the Respondent: Hall Payne Lawyers ORDERS TAD 8 of 2014 BETWEEN: DARREN HARPHAM Applicant AND: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA Respondent JUDGE: TRACEY J DATE OF ORDER: 24 February 2017 THE COURT ORDERS THAT: 1. There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT TRACEY J: 1 On 8 December 2016, I handed down judgment in Harpham v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCA 1473 ("the principal judgment"). I ordered that the Respondent ("CEPU") pay to the Applicant ("Mr Harpham") contractual damages calculated consistently with the Court's reasons fixed at a sum agreed between the parties plus interest. The parties reached agreement, and, on 16 January 2017, I ordered that the CEPU pay Mr Harpham $30,154.55. That amount comprised $18,175.39 in damages, and $11,979.16 in interest. 2 In the meantime, on 23 December 2016, the CEPU's lawyers emailed my Chambers, saying that they were "instructed to make application for costs pursuant to section 570(2) of the Fair Work Act 2009 (Cth) based on the grounds, and in the terms, set out in the attached affidavit …". The affidavit was affirmed by Mr William Ash, of the CEPU's solicitors, and was dated 23 December 2016. Annexed thereto were certain offers of settlement. 3 On 27 January 2017, Mr Harpham lodged submissions in respect of the CEPU's application. There followed an email exchange concerning whether further submissions were appropriate. On 31 January 2017, I directed that the CEPU have the opportunity to file short written submissions, of no more than three pages, and that Mr Harpham file any short submissions in reply, of no more than two pages. Each party took advantage of this opportunity. Section 570 of the Fair Work Act 2009 (Cth) and Calderbank offers 4 The Court's broad discretionary power to award costs, pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth), is expressly qualified by the provisions of s 570 of the Fair Work Act 2009 (Cth) ("the Act"). Relevantly, s 570 of the Act provides: "570 Costs only if proceedings instituted vexatiously etc. (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A. Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A. (2) The party may be ordered to pay the costs only if: (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or …" 5 No costs order can be made unless it is demonstrated that one or more of the exceptions provided for in s 570(2) has been established. Even then, the award of costs remains within the discretion of the Court: cf Ashby v Slipper (No 2) (2014) 314 ALR 84 at 88–90. 6 It is well established that a failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of s 570(2) of the Act: McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 at 598–599 (Buchanan J); Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221 at 255 (Tracey, Gilmour, Jagot and Beach JJ). 7 The operation of Calderbank principles may, however, be modified in the context of the Act. As the Full Court observed in Stratton Finance Pty Limited v Webb [2014] FCAFC 110 at [80] (Allsop CJ, Siopis and Flick JJ): "Caution should be exercised as to how a Calderbank offer, even a generous one, is viewed in such circumstances. Calderbank letters presuppose what might be called a 'costs jurisdiction', in contrast to the usual rule in FW Act claims. To group together contractual and FW Act claims in an offer may permit the conclusion that the refusal of the offer was unwise, even unreasonable, but it does not follow that such is an unreasonable act or omission, for the purposes of s 570(2)." 8 With those principles in mind, I turn to the parties' submissions. The CEPU's application 9 The application, as it appears from [5] of Mr Ash's affidavit, is for costs on an indemnity basis, for the proceeding, or failing that from one of 13 November 2014, 18 February 2015, or 15 October 2015. Offers of settlement were made on those dates. 10 The essence of Mr Harpham's claim was set out in paragraph 17 of his Further Amended Fast Track Statement ("FAFTS"): "… the Respondent has: (a) taken adverse action (as defined in s 342(1) of the Act) in relation to the Applicant's workplace right to receive a retirement allowance in accordance with rule 24.5.4 of the Rules, in contravention of s 340(1) of the Act, from on or about 29 June 2009 until the end of the Applicant's employment, alternatively breached his contract of employment, by failing or refusing to provide that allowance for reasons including because the Applicant had the workplace right referred to in paragraph 10A hereof, and thereby: (i) injured the Applicant in his employment; (ii) altered the position of the Applicant to his prejudice; and/or (iii) discriminated between the Applicant and other employees, namely Mr Harkins and Ms Wells; and (b) taken adverse action (as defined in s 342(1) of the Act) in relation to the Applicant's workplace right to receive a salary in accordance with the determination of the Divisional Council under rule 24.1 of the Rules in contravention of s 340(1) of the Act, alternatively breached his contract of employment, by unilaterally reducing the salary of the Applicant without his consent from in or about November 2009 for reasons including because the Applicant had the workplace right referred to in paragraph 10A hereof, and thereby: (i) injured the Applicant in his employment; (ii) altered the position of the Applicant to his prejudice; and/or (iii) discriminated between the Applicant and other employees, namely Mr Harkins and Ms Wells." 11 Paragraphs 7, 9, and 10A provided, as far as is relevant, as follows: "7. There were terms and conditions of the Applicant's employment contract as at June 2009 to the effect that: (a) he was entitled to a salary of $90,724.23 per year (as determined by the Divisional Council of the Respondent), from which he was entitled to 'salary sacrifice' $15,600 per year into personal superannuation; (b) he was entitled to receive employer superannuation contributions equivalent to 11% of salary (rule 24.6) plus a retirement allowance of a further 5.8% of salary paid on a monthly basis into an approved superannuation scheme as a full-time officer with less than 8 years' service (rule 24.5.4), giving a total employer superannuation contributions entitlement equivalent of 16.8% of salary; and (c) the components of his remuneration package could be varied at any time in writing between the Applicant and the Respondent. PARTICULARS The terms and conditions in (a) and (c) were in writing and set out in a document entitled 'ETU Salary Package Document June 2008'. The salary provision in (a) was set out in the Schedule to that document. The variation provision in (c) was set out in clause 4 of that document. The term and condition in (b) was implied by the custom and usage of the Respondent in applying the Rules to its officers (including Kevin Harkins and Nicole Wells) in respect of the retirement allowance. 9. Further or alternatively to paragraph 7(b) above, pursuant to the Rules the Applicant was entitled to receive: (a) employer superannuation contributions equivalent to 11% of salary (rule 24.6) plus a retirement allowance of a further 5.8% of salary paid on a monthly basis into an approved superannuation scheme as a full-time officer with less than 8 years' service (rule 24.5.4), giving a total employer superannuation contributions entitlement equivalent to 16.8% of salary; and (b) such sum for his services as may be determined by the Divisional Council of the Respondent (rule 24.1). … 10A. By reason of the matters set out in paragraphs 7 and 9, the Applicant had a workplace right within the meaning of s 341(1)(a) of the Act in that he was entitled to the benefit of a workplace instrument, namely the Rules. 12 The 13 November 2014 offer was made by letter. The offer was said to be made under the principles propounded in Calderbank v Calderbank [1975] 3 All ER 333. The letter was sent by Mr Luke Tiley of the CEPU's solicitors to Mr Leonard Fernandez of Mr Harpham's solicitors. 13 Reference was made in the letter to [17(a)–(b)] of Mr Harpham's FAFTS. It was said that the CEPU denied that Mr Harpham had an entitlement to retirement allowance or salary under the Rules. It was further asserted that there was no implied term in Mr Harpham's contract of employment "that the respondent apply the rate of redundancy commonly applied in the union movement in the state of Victoria nor that it comply with its registered rules". Mr Tiley continued: "My client is willing to make a payment to the applicant of $30,000 to settle the proceedings. This settlement would be subject to a release agreement. … If we consider that your client has unreasonably rejected this offer, we will pursue costs against your client." 14 The offer was open for 28 days. Mr Ash's calculation was that damages and interest as at that date, based on the amount of damages ultimately agreed upon by the parties following publication of the principal judgment, would have been $26,866.89. 15 The 18 February 2015 letter, another Calderbank letter, was from Mr Ash to Mr Fernandez. It contained the following passages: "Paragraph 17(a) and paragraph l7(b) allege that the respondent did not pay the retirement allowance or salary to the applicant because he was entitled to it. The respondent denies that reason formed any part of the reason and says that it did not pay the retirement allowance and salary because it held the view that it was not obliged to pay the retirement allowance and salary. Further, it is our view that the Court will find that your client's employment was terminated for performance reasons and that his position was not redundant. Accordingly, on our instructions, the applicant's allegation that the respondent contravened section 117 and/or 119 of the Act in addition to application of the purported implied term in the applicant's employment contract that the respondent pay the 'rate of redundancy commonly applied in the union movement', are bound to fail." (Emphasis in original.) 16 The offer was that the CEPU would "make a payment to the applicant of $30,000 to settle the proceedings". Mr Harpham was again warned of the possibility of the CEPU relying on the letter in support of a costs application. The offer was open for 21 days. 17 Mr Ash's calculation was that damages and interest as at that date, based on the amount of damages agreed as between the parties, would have been $27,306.30. 18 The letter dated 15 October 2015 was again from Mr Ash to Mr Fernandez. It contained many of the same assertions as were contained in the February 2015 letter. Specific reference was made, on this occasion, to s 570(2) of the Act. The CEPU offered to pay $40,000. The offer was open for about a day: it expired at close of business on 16 October 2015. 19 Mr Ash's calculation was that damages and interest as at that date, based on the amount of damages agreed as between the parties, would have been $28,361.15. 20 I will refer to the offers dated 13 November 2014, 18 February 2015, and 15 October 2015, as "first offer", "second offer", and "third offer" respectively, and "offers" collectively. The CEPU's submissions 21 The CEPU's application was made by way of email with supporting affidavit. No submissions were lodged in support of that application at the time of its making. Accordingly, by the time that it made written submissions—on 8 February 2017—Mr Harpham had already lodged his own submissions. Although the first occasion upon which the CEPU articulated the basis for its application post-dated Mr Harpham's first submissions, it is appropriate first to summarise the CEPU's submissions. 22 Although Mr Harpham anticipated reliance on s 570(2)(a) in his 27 January 2017 submissions, it appears from the CEPU's submissions that it relies only on s 570(2)(b). The CEPU alleges that the rejection of the first offer was an unreasonable act or omission within the meaning of that paragraph. In the alternative, it relies upon the rejection of each of the second and third offers as unreasonable acts. 23 In each instance, the CEPU relies on two points: first, that Mr Harpham's claim was bound to fail and that he knew or perhaps ought to have known that; and, second, that each offer exceeded the amount that Mr Harpham was ultimately awarded (adjusting for differences in interest accrual, as Mr Ash did in his affidavit). 24 As to the first point, the main thrust of the CEPU's written submission is to be found in [10] and [13]: "10. The likely success of the s 340 claim (adverted to in the offer) is relevant to the reasonableness of the offer. The Court ultimately determined with respect to the s 340 claim: a) 'It is somewhat difficult to conceptualise a person refusing or failing to pay another's salary precisely because the latter is entitled to that salary, or to prevent the exercise of a right thereto"; and b) '… it is difficult to imagine Mr Harkin or any other person taking action against Mr Harpham because he had the benefit of such a determination …'; and c) The Branch was in difficult financial circumstances at the time and an overall reduction in staff salaries was required. Mr Harpham was not singled out to bear the burden of austerity. … 13. The other unsuccessful claims made by the applicant … are also relevant to the reasonableness of the offer. The likely success of those claims was known to the applicant at the time of the offer. Relevantly: a) As to the redundancy claim, the applicant accepted by his evidence that someone would have to do his duties and that he suggested Mr Anderson (his replacement) to do the duties that he was doing. Further, the applicant made no challenge to the allegation that performance issues had been raised against him. These matters were known to the applicant at the time of the offer; b) As to the notice claim, the applicant, amongst other matters, was informed on 29 June 2012 that his employment would end 'no later than 31 December 2012'. This was confirmed in writing on 17 July 2012 and in a later meeting on 3 September 2012. All of this was known to the applicant at the time of the offer; c) As to the retirement allowance claim, it was also (like the s 340 claim referred to above) put on the misconceived basis that the applicant did not receive the allowance because he was entitled to that allowance. Further, it was an amount that the applicant had never before sought or received." (Emphasis in original; citations omitted.) 25 As to the second point, the CEPU submitted that the amount offered to Mr Harpham in the first, second, and third offers exceeded the quantum of the amount ultimately awarded to him by 12 per cent, 10 per cent, and 41 per cent respectively. Mr Harpham's submissions 26 Before the CEPU articulated the basis for its application in its submissions dated 8 February 2017, Mr Harpham had already made submissions concerning s 570(2)(a). The CEPU did not, in the event, rely on that paragraph. Mr Harpham's submissions on this point can therefore be summarised at a level of some generality. He submitted that the test established by s 570(2)(a) was a "high test", which required that the party against whom costs are sought should have known that his or her action had no reasonable prospect of success when instituted, and that it was not sufficient, by itself, that the proceeding ultimately failed. 27 Mr Harpham submitted that he had not failed, and that, in fact, he had succeeded: an order was made requiring the payment of a sum of money to him. The causes of action in respect of which he was unsuccessful were "not inarguable in prospect, were not the subject of any strike out or summary dismissal application, and were the subject of detailed evidence and submissions advanced by both parties at the trial, and the subject of a reserved judgment of the Court." 28 In respect of s 570(2)(b), Mr Harpham submitted that the three offers of compromise were all "only marginally higher than the amount ultimately recovered by the Applicant at trial", and that it was, therefore, not an unreasonable act or omission for him to fail to accept any of the offers. 29 In submissions in reply, Mr Harpham submitted that the CEPU's approach was akin to that which would be applied in a jurisdiction in which costs ordinarily followed the event. In a proceeding under the Act, on the other hand, "[t]he only relevant basis to consider awarding costs … is if [Mr Harpham] unreasonably … failed to accept a reasonable offer of compromise" (emphasis in original). This is not, it was submitted, a matter of "calculating the arithmetical amount by which the offer exceeded the amount recovered including interest calculated to the date of the offer". And, Mr Harpham continued, "[i]t is not enough to say … that the offers … exceeded the amount recovered including interest". 30 Mr Harpham submitted that his rejection of the CEPU's offers was not unreasonable: "[3] … It is respectfully submitted that it was not [unreasonable], having regard to their quantum and, in the case of the last offer, its extremely short duration for acceptance and the fact that it was made late in the week before the trial of the proceeding was heard (commencing on 19 October 2015), when the Applicant had trial preparation commitments. … [4] As noted previously, the Applicant succeeded in obtaining an order for the payment to him of the sum of $30,154.55. The unsuccessful causes of action relied on by the Applicant were not inarguable in prospect, were not the subject of any strike out or summary dismissal application, and were the subject of detailed evidence and submissions advanced by both parties at the trial, and the subject of a reserved judgment of the Court. 31 Mr Harpham further submitted that, for the CEPU to have made an application for costs was itself an unreasonable act, and sought his costs of resisting the application. Consideration 32 Although Mr Harpham's submissions were directed in part to s 570(2)(a), I have already noted that the CEPU did not ultimately rely on that paragraph. Rather, the CEPU relied entirely on three allegedly-unreasonable acts, namely the rejection of each of its offers. 33 There is some conceptual overlap with s 570(2)(a), however, in that part of the CEPU's contention was that rejection of its offers was unreasonable because Mr Harpham's claims were bound to fail. This is similar to the question that arises in relation to s 570(2)(a): see, e.g., Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351 at [8]; Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166 at [9]; Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) (2015) 230 FCR 337; Australian Workers' Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428 at [7]. 34 More directly relevant, however, are the considerations which guide determinations of whether rejections of a Calderbank offer are unreasonable. These considerations were collected by Katzmann J in Veda Advantage Limited v Malouf Group Enterprises Pty Limited (No 2) [2016] FCA 470 at [31]: "… [R]efusal to accept an offer not made in compliance with the rules (a Calderbank offer, see Calderbank v Calderbank [1975] 3 All ER 333) does not give rise to any presumption in favour of the offeror. The offeror needs to show that there was a genuine offer of compromise, and that it was unreasonable for the offeree not to accept it: Black v Lipovac at [217]–[218]. In deciding whether it is unreasonable for an offer to be rejected, the following matters should ordinarily be considered: • the stage of the proceeding when the offer was made; • the time afforded to the offeree to consider the offer; • the extent of compromise involved; • the offeree's prospects of success, assessed as at the date of the offer; • the clarity with which the terms of the offer were expressed; • whether the offer foreshadowed an application for indemnity costs in the event of refusal. See Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 at [25]." 35 I accept that some of Mr Harpham's claims were stronger than others. The pleading in paragraphs 7, 9, 10A, and 17 included the assertion that Mr Harpham was denied a retirement benefit and denied his proper salary because he had the benefit of a workplace right entitling him to that retirement benefit or salary. There did not seem to be any obvious basis for suspecting that this was the reason for any denial of benefits. I expressed my reservations about the underlying reasoning at [68] of the principal judgment. That said, the possibility that someone may have acted for such a reason cannot summarily be discounted. This is particularly so given that Mr Harpham had the benefit of the reverse onus provision in s 361 of the Act: see Shea v Energy Australia Services Pty Ltd (No 7) [2014] FCA 1091 at [30] (Jessup J). It will often be the case that an applicant is required to make assumptions about the reason for another's action, that being a matter "peculiarly within the knowledge" of the decision-maker: cf. General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 617 (Mason J). 36 I accept that the prohibited reason which Mr Harpham attributed to the CEPU for denying what he said were entitlements was unpersuasive and speculative. His claims which were founded on this allegation were not, however, doomed to fail, and were not unarguable. 37 The CEPU was correct in predicting, as it did in the February 2015 letter and the October 2015 letter, that the Court would not find that Mr Harpham had been made redundant. Again, I think this claim by Mr Harpham was weak, for the reasons identified by the CEPU in its submissions at [13(a)]. A failure to make good this claim was not, however, inevitable. There were some matters that would have favoured a finding of redundancy (see, e.g., [32], [40], and [46] in the principal judgment). 38 Assuming the correctness of Mr Ash's calculations—which were not disputed—I accept that Mr Harpham failed to better the offers made by the CEPU. 39 Despite these findings I do not consider that Mr Harpham's rejection of the offers made to him by the CEPU was an unreasonable act or omission. No part of his claim was so weak as to be unarguable. He succeeded on the contractual aspect of his claim. He was awarded damages in an amount that, in dollar terms, was not very much less than that offered to him by the CEPU in its first and second offers. Although the third offer was for a significantly higher sum, in both dollar and percentage terms, than the amount that Mr Harpham was ultimately awarded, it is to be borne in mind (as Mr Harpham submitted) that it was only open for about 24 hours and Mr Harpham had little time to take advice and respond to it. 40 Overall, I am not persuaded that the rejections of the various offers were unreasonable acts. In this proceeding, Mr Harpham pursued a genuine grievance with an arguable evidential and legal basis (albeit not a strongly arguable basis, or at least not on all claims). The bringing or continuing of proceedings such as the present in which allegations of contraventions of the Act are made, ought not to be discouraged: see Ryan v Primesafe (2015) 323 ALR 107 at 122 [64] (Mortimer J). I would, more readily, accept, in an ordinary "costs jurisdiction" context, that the rejection of the offers was "unwise [and] even unreasonable" (cf. Stratton at [80]). But, the present context is different. In the case of the first two offers, while they were each reasonable and involved compromise on the part of the CEPU, it was not unreasonable of Mr Harpham to prefer the course of pursuing what were arguable claims of contravention of the Act which, if established, would have entitled him to significantly more than what was offered. The same is true in relation to the last offer. While that offer was more generous, it was only open for a very short time. 41 The CEPU's application for costs must be refused. The costs of the costs application 42 As noted above, Mr Harpham sought his costs of resisting the CEPU's costs application. 43 In Hartnett Legal Services Pty Ltd v Ballantyne (No 2) [2015] FCA 1027 it was held that the word "proceeding" in s 570 of the Act encompasses interlocutory applications (see [7]–[11] (Rangiah J)). I would, therefore, be prepared to accept that, if the CEPU's institution of its costs application was vexatious or lacked reasonable cause, Mr Harpham could, possibly, have his costs of defending it. I would be prepared to accept, also, that, if the institution of the costs application was an "unreasonable act" within the meaning of s 570(2)(b), Mr Harpham could, possibly, be awarded his costs thereby incurred. 44 I do not, however, accept that the costs application was instituted vexatiously or without reasonable cause, nor that its institution was an unreasonable act. Three Calderbank offers were made to Mr Harpham, who rejected them and then failed to better them. In the case of the third such offer, its acceptance would have seen Mr Harpham with around $12,000 more in his pocket than what he in fact received, adjusted for interest. While I have held that Mr Harpham's rejections of the offers were not unreasonable acts, the CEPU's costs application was far from unarguable. It was made with reasonable cause. There is no basis for saying that its making was vexatious. Mr Harpham's application for his costs of defending the CEPU's costs application must be refused. Conclusion 45 Neither the CEPU nor Mr Harpham has established a relevant exception to the proscription provided for by s 570(1) of the Act. Neither party may be ordered to pay costs incurred by the other. There will be an order that there be no order as to costs. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 24 February 2017