Federal Court of Australia Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 4) [2024] FCA 453 File number: SAD 147 of 2022 Judgment of: KENNETT J Date of judgment: 3 May 2024 Catchwords: COSTS – where application for damages for breach or repudiation of contract or orders varying that contract under s 16 of the Independent Contractors Act 2006 (Cth) (IC Act) dismissed – whether costs should be ordered against unsuccessful party – operation of s 17 of the IC Act – whether proceeding instituted without reasonable cause – whether applicants' rejection of settlement offers constituted unreasonable act or omission that caused the respondent to incur costs Legislation: Constitution ss 75, 76, 77 Fair Work Act 2009 (Cth) s 570 Federal Court of Australia Act 1976 (Cth) s 22, 43 Independent Contractors Act 2006 (Cth) ss 12, 17 Judiciary Act 1903 (Cth) s 39B Workplace Relations Act 1996 (Cth) (repealed) s 824 Federal Court Rules 2011 (Cth) pt 25 Uniform Civil Rules 2020 (SA) Cases cited: Australian Workers Union v Leighton Contractors Pty Ltd (No 2) [2013] FCAFC 23; 232 FCR 428 Brinsmead v Perfection Dairies Pty Ltd [2009] FMCA 1028 Calderbank v Calderbank [1975] 3 All ER 333 Celand v Skycity Adelaide Pty Ltd [2017] FCAFC 222; 256 FCR 306 Construction, Forestry, Mining and Energy Union and Others v Clark (2008) 170 FCR 574 Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120; 163 FCR 62 Hutchinson v Comcare (No 2) [2017] FCA 370 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Kerrisk v DC Holdings WA Pty Ltd (No 2) [2014] FCA 196 Maritime Union of Australia v Geraldton Port Authority [2000] FCA 16 Rizeq v Western Australia [2017] HCA 23; 262 CLR 1 Salama v Sydney Trains (No 2) [2021] FCA 1200 Saxena v PPF Asset Management Ltd [2011] FCA 395 Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 2) [2023] FCA 698 Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 3) [2024] FCA 233 Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190 Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 41 Date of last submissions: 11 April 2024 Date of hearing: Determined on the papers Counsel for the Applicants: SD Ower KC with D Blyth Solicitor for the Applicants: Woodburn & Co Solicitors Counsel for the Respondent: BC Roberts KC with HM Doyle Solicitor for the Respondent: Finlaysons ORDERS SAD 147 of 2022 BETWEEN: TREDDERS INVESTMENTS PTY LTD (ACN 089 10 958) AS TRUSTEE FOR WARREN TREDREA TRUST First Applicant WARREN TREDREA Second Applicant AND: CHANNEL 9 SOUTH AUSTRALIA (ACN 007 577 880) Respondent order made by: KENNETT J DATE OF ORDER: 3 MAY 2024 THE COURT ORDERS THAT: 1. There be no order as to the costs of the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT KENNETT J: 1 The applicants and the respondent were parties to a written contract dated 15 November 2018 (the Services Agreement), pursuant to which the second applicant (Mr Tredrea) provided services to the respondent (Channel 9). On 4 January 2022, Channel 9 terminated the Services Agreement pursuant to cl 9.1 thereof. The applicants commenced this proceeding on 27 September 2022 seeking damages for breach of contract or, in the alternative, orders under Part 4 of the Independent Contractors Act 2006 (Cth) (the IC Act) varying the Services Agreement. 2 I delivered judgment dismissing the application, with reasons (the reasons for judgment), on 14 March 2024: Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 3) [2024] FCA 233. 3 In relation to the costs of the proceeding, I made the following orders. 2. Subject to order 3 below, the applicants are to pay the respondent's costs of the proceeding as agreed or assessed. 3. If any party wishes to seek a different order as to costs: (a) that party is to file written submissions of no more than five pages in support of the order that it seeks, together with any evidence on which it wishes to rely, by 28 March 2024; (b) the other party is to file written submissions in response of no more than five pages, together with any evidence on which it wishes to rely, by 11 April 2024; and (c) the question of costs will be dealt with on the papers unless it appears that an oral hearing is necessary. 4 Both the applicants and Channel 9 filed written submissions as contemplated by order 3(a). Channel 9 sought an order for indemnity costs, relying on five offers which it had made to settle the proceeding. The applicant, relying on s 17 of the IC Act, contended that there should be no order as to costs. 5 Each party has responded in writing to the other party's submissions pursuant to order 3(b). I consider that these submissions are sufficient for me to resolve the question of costs on the papers and I have proceeded to do so. Section 17 of the IC Act 6 Section 17 provides 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. (3) In this section: costs includes all legal and professional costs and disbursements, and expenses of witnesses. 7 The applicants submit that the present proceeding is a "proceeding in a matter arising under this Part", for the purpose of s 17(1). Channel 9 does not expressly resist this proposition, and it is correct. 8 In a provision of a Commonwealth enactment dealing with the determination of claims in federal jurisdiction, "matter" should be understood to be used in the sense in which it is used in ss 75–77 of the Constitution: ie, to denote the justiciable controversy that forms the subject-matter of a proceeding. A "matter", in this sense, encompasses all claims for relief arising out of the same factual substratum; it is not limited to the particular claims that engage federal jurisdiction or the jurisdiction of a particular federal court. It is for that reason that all aspects of the present case are within the Court's jurisdiction under s 39B(1A)(c) of the Judiciary Act 1903 (Cth): all of those aspects comprise a "matter arising under" the IC Act (there being a claim that arises squarely under that Act), even though most of the issues in the case involved contractual rights with no "federal" character in themselves. The contract claims in the present case came within what is sometimes referred to as the Court's "accrued jurisdiction". Use of that terminology was said in Rizeq v Western Australia [2017] HCA 23; 262 CLR 1 at [55] (Bell, Gageler, Keane, Nettle and Gordon JJ) to involve "no harm", provided it is borne in mind that there is "but one 'matter'". Hence, the "matter" before the Court in this proceeding is one which both: (a) "arises under" the IC Act; and (b) includes the contract claim as well as the claim under the IC Act. 9 Even if that were not so, there is a single "proceeding"; and that proceeding is "in a matter arising under this Part", on the footing that part of its subject-matter is a controversy concerning a claim for relief under Part 4 of the IC Act. 10 Section 17(1) is thus engaged in relation to the "proceeding". On its face, it prevents one party to the proceeding being ordered to pay costs to another party "unless the first party instituted the proceeding vexatiously or without reasonable cause". Section 17(1) thus applies to the costs of the entire proceeding, not only the aspect relating directly to Part 4 of the IC Act. 11 This understanding of s 17(1) is supported by decisions on the construction of similarly worded provisions in industrial relations legislation. Relevant authorities are referred to in Maritime Union of Australia v Geraldton Port Authority [2000] FCA 16 at [65]-[70] (RD Nicholson J) and Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120; 163 FCR 62 at [83]-[94] (Black CJ), [164]-[165] (Marshall J), [373]-[379] (Jessup J). In these two cases it was held that provisions in very similar form to s 17(1) precluded an award of costs in relation to an entire proceeding, where the proceeding involved both claims arising under specified legislative provisions and claims in the accrued jurisdiction. 12 Being a provision that deals specifically with a particular category of cases, s 17(1) overrides the broad discretion as to costs that arises under ss 22 and 43 of the Federal Court of Australia Act 1976 (Cth). Section 43 contains an express qualification to that effect. Section 17(1) also overrides, to the extent of inconsistency, provisions in Part 25 of the Federal Court Rules 2011 (Cth) (the Rules) as to offers of compromise and general principles in relation to Calderbank offers. 13 The default position, by force of s 17(1), is therefore that there should be no order as to the costs of the proceeding. Each of the applicants' rejections of offers to settle the proceeding is capable of affecting that position only if it: (a) has the result that the applicants "instituted the proceeding vexatiously or without reasonable cause" (s 17(1)); or (b) constituted an "unreasonable act or omission" that "caused [the respondent] to incur costs in connection with the proceeding" (s 17(2)). Proceeding instituted vexatiously or without reasonable cause? 14 The first of the offers relied on by Channel 9 was conveyed by a letter to the applicants' solicitor dated 17 May 2022, approximately four months before the proceeding was commenced. The other offers were made while the proceeding was on foot, and their rejection therefore does not go in any direct way to whether the proceeding was instituted vexatiously or without reasonable cause. 15 The letter of 17 May 2022 was sent in the following context. (a) The Services Agreement was terminated by Channel 9 on 4 January 2022. (b) On 19 January 2022 the applicants' solicitor sent Chanel 9 a letter which sought payment of the "balance of all sums" said to be due under the Services Agreement, together with a "significant" (but unquantified) amount in relation to damage to Mr Tredrea's reputation. This letter was framed as a "Pre-Action letter" under the Uniform Civil Rules 2020 (SA) and was thus a precursor to the commencement of proceedings in the South Australian courts. (c) A revised claim was sent by the applicants' solicitor to Channel 9 on 2 March 2022. Damages were now quantified at $3,600,000, leading to a total amount claimed (including costs) of around $3.8 million. However, the applicants said that they would accept $2 million on account of reputational loss. (d) Channel 9's solicitors responded on 23 March 2022, declining to settle the dispute on the basis proposed on 2 March and setting out in some detail the basis on which the respondents denied liability. Channel 9 said that it had lawfully terminated the Services Agreement, on grounds which broadly reflect the case advanced by it in this proceeding. 16 The 17 May letter referred to a report by Professor Petrovsky (who was called as a witness in this proceeding) which had been supplied by the applicants, but adhered to the position taken on 23 March. It also noted that, if the applicants were to succeed on a contract claim, their damages would be limited by cl 14.4(b) of the Services Agreement (the effect of which is discussed in the reasons for judgment at [185]-[187]). The letter continued: In a genuine attempt to resolve the matter, we are instructed to make this offer: • Our client to pay your client the amount of $16,041.00, being the value of one month's payment under the Services Agreement pursuant clause [sic] 9.2(a) and is the maximum amount payable pursuant to clause 14.4(b) of the Services Agreement; • The parties execute a Deed of Settlement with terms of mutual release and confidentiality; • Payment to be made by our client within 14 days of provision of the Deed signed by your client. This offer is made on a without prejudice save as to costs basis and we reserve the right to bring this letter to the attention of the Court with respect to costs in accordance with the decision of Calderbank v Calderbank [1975] 3 All ER 333. This offer is open for acceptance until 5.00pm, Friday 3 June 2022 after which date it will lapse. 17 Channel 9 does not submit that the refusal to accept this offer rendered the commencement of the proceeding "vexatious". It does submit that the proceeding was instituted "without reasonable cause". However, the submission is not developed beyond the assertion that refusal of the offer was "imprudent". 18 The meaning of "without reasonable cause" has not been explored to any significant extent in cases involving s 17. In Kerrisk v DC Holdings WA Pty Ltd (No 2) [2014] FCA 196 at [22], Barker J framed the issue in terms of whether the application in question was "plainly not open". Earlier, in Brinsmead v Perfection Dairies Pty Ltd [2009] FMCA 1028 at [16]-[20], Barnes FM approached the issue by reference to cases on provisions of industrial relations legislation using the same phrase. Her Honour referred to Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264–265, where Wilcox J said: It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. 19 The location of the phrase next to "vexatious", and the statutory context, indicate that these approaches are broadly correct. The evident purpose of s 17 is to establish a no-costs jurisdiction so that claims in an identified class (which will often be relatively small in monetary terms) are not curtailed or discouraged by the threat of adverse costs orders. Absence of "reasonable cause", as the trigger for that protection to be lost, should be understood to refer to cases that are unarguable or whose prospects of success can be seen at the outset to be minimal. (I put to one side whether a proceeding that constitutes an abuse of process for other reasons is for that reason "vexatious", instituted "without reasonable cause" or both.) 20 The presence of an offer to settle the underlying dispute between the parties before the proceeding is commenced adds a further layer to the issue. Where the prospective respondent offers to settle the dispute for $x, and there is no prospect that the applicant would obtain more than $x by litigating the matter, it might be said that proceedings are instituted "without reasonable cause" even though there is a prospect that some relief will be obtained. 21 The position that Channel 9 took in the letter of 17 May 2022 was vindicated by the reasons for judgment at two levels: first, that Channel 9 was within its rights to terminate the Services Agreement; and secondly that, even if the applicants had a good claim in contract, their damages would be limited to one month's remuneration. Channel 9's offer involved some degree of compromise of the dispute between the parties in that it was offering to proceed as if the termination of the Services Agreement had not been authorised. However, this is not sufficient in itself to lead to the conclusion that the proceeding was instituted "without reasonable cause". There are three points to be noted. 22 First, Channel 9 does not submit that the applicant's case was bound to fail altogether. A submission pitched at that level would not succeed. Although Channel 9 was ultimately found to have had several grounds available to it to terminate the Services Agreement, some of these involved arguable questions of law, while others turned on evidence which the applicants had not seen at the time they commenced the proceeding. Channel 9's argument therefore depends squarely on the fact that the applicants had rejected what was (with hindsight) an advantageous settlement offer. 23 Secondly, the amount offered was subsequently established by the reasons for judgment to be the most that the applicants could possibly receive on their contract claim. It is not outlandish to suggest that instituting proceedings in a superior court (with pleadings raising complicated issues of law and fact), in order to obtain an amount that could have been received by acceptance of a settlement offer, constitutes instituting a proceeding "without reasonable cause". However, in the reasons for judgment at [186]-[187] I observed that cl 14.4(b) of the Services Agreement could not be given effect according to its literal terms. While I concluded that the clause had the effect contended for by Channel 9, that involved reading in some words to give it business efficacy. That that result would be reached was not beyond question. It was therefore not improper for the applicants to proceed, at that very early stage, on the basis that arguments could be put either way as to whether cl 14.4(b) limited their potential damages in the manner contended for. 24 Thirdly, in May 2022 the parties had in contemplation a contract case to be commenced in a State court. That was what Channel 9 was offering to settle. By the time the proceeding was commenced in this Court, the case involved a claim under the IC Act as well. The IC Act claim invited the Court, if the Services Agreement had the effect contended for by Channel 9, to vary that Agreement so that it would provide compensation for the termination by Channel 9. Necessarily, this expanded case had better prospects than the purely contractual case that was in contemplation in May 2022. The claim under the IC Act invoked a broad remedial power and some measure of success could not be ruled out. An unreasonable act or omission causing Channel 9 to incur costs? 25 Channel 9 relies on offers that it made through its solicitors on 7 June 2023, 29 June 2023, 7 July 2023 and 21 July 2023. 26 By 7 June 2023 the parties had filed their affidavits and expert reports. Channel 9's letter of that date responded to an inquiry concerning the potential for mediation by observing that the parties' positions appeared to be too far apart. It annexed an offer of compromise, intended to comply with r 25.01 of the Rules. The offer was that the applicants discontinue the proceedings and there be no order as to costs. It was open to be accepted for 14 days after service. 27 Channel 9's letter dated 29 June 2023 followed an interlocutory hearing at which the appropriate manner of dealing with the expert evidence had been canvassed. The applicants had filed an interlocutory application seeking directions for the experts to give their evidence concurrently. On 26 June 2023 I made orders standing that application over to the trial and suggested that the parties should consider ways of narrowing the areas of factual dispute, given that much of what was pleaded in paragraph [17] of the Statement of Claim (and traversed by the experts) appeared to be irrelevant to any issue concerning the reasonableness of Channel 9's conduct: Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 2) [2023] FCA 698 (see also the reasons for judgment at [124]-[129]). Channel 9 took this as an opportunity to make another attempt to settle the case. Its letter offered to resolve the matter on the basis that the application be dismissed and there be no order as to costs. The offer was expressed to be open for acceptance for seven days. 28 The trial was due to begin on 31 July 2023 and estimated to run for five days. A meeting occurred between the parties' legal representatives on 5 July 2023. The applicants' solicitor wrote to Channel 9's solicitor the following day proposing a settlement on the basis that Channel 9 would pay her clients $450,000 inclusive of costs. Channel 9's solicitors responded on 7 July, rejecting that offer and putting a counter-offer as follows. Accordingly, on a purely commercial basis and without any admissions, we are instructed that our client is willing to settle these proceedings on the following basis: 1. Nine will pay your clients $50,000 as a contribution to their legal costs in full and final settlement of your clients' claim. 2. Your clients will consent to an order that these proceedings (being the proceedings identified as Federal Court Case SAD147/2022) be dismissed with no order as to costs. 3. The terms of settlement are to be strictly confidential between the parties. If either of your clients are asked to comment on the proceedings, they will only be able to indicate that the matter has resolved and they can make no further comment. 29 On 20 July 2023 the applicants' solicitors sent an offer of compromise to Channel 9's solicitors offering to settle the proceeding for $176,458.33, representing the payments due for the remainder of the term of the Services Agreement, plus interest and costs. Channel 9's solicitors responded on 21 July 2023. They rejected the applicants' offer. They offered to settle the proceeding on similar terms to those proposed on 7 July 2023, but with a larger "contribution"—now $120,000—towards the applicants' costs. 30 Clearly enough, the applicants did not accept any of the offers made by Channel 9. The case went to trial, extended over seven hearing days and generated lengthy written submissions. Each non-acceptance was thus an "act or omission" that can be taken to have "caused [the respondent] to incur costs in connection with the proceeding", by causing the litigation to be prolonged. The question that arises is whether one or more of them was "unreasonable" within the meaning of s 17(2). 31 Questions as to the reasonableness of refusing offers of settlement have arisen in connection with provisions of industrial relations legislation that were and are similar to s 17. Section 570(2) of the Fair Work Act 2009 (Cth) (the FWA), which was considered in Celand v Skycity Adelaide Pty Ltd [2017] FCAFC 222; 256 FCR 306 (Celand), relevantly provided: (2) The party may be ordered to pay costs only if: (a) … (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or (c) … 32 In Celand at [71] Logan J set out the following passage from Australian Workers Union v Leighton Contractors Pty Ltd (No 2) [2013] FCAFC 23; 232 FCR 428 at [7] (Dowsett, McKerracher and Katzmann JJ). In our view the authorities establish the following principles: (1) The purpose or policy of the section is to free parties from the risk of having to pay their opponents' costs in matters arising under the Act, while at the same time protecting those parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause. (2) It follows from the protection offered by s 570(2) that a person will rarely be ordered to pay the costs of a proceeding. But it is not necessary to prove that there are exceptional circumstances warranting the making of an order. (3) The relevant question is whether the proceeding had reasonable prospects of success at the time it was instituted, not whether it ultimately failed. In Kanan v Australian Postal and Telecommunications Union Wilcox J said: If success depends on the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding, as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. (Citations omitted.) 33 His Honour continued (at [72]-[74]): In substance, s 570 of the FWA provides for like restrictions on the power to award costs to those found in its predecessor, s 824 of the now repealed Workplace Relations Act 1996 (Cth). Of that predecessor provision, the Full Court observed in Construction, Forestry, Mining and Energy Union and Others v Clark (2008) 170 FCR 574 at [29]: Indeed, while courts should use the discretion in section 824(2) to ensure that parties to litigation arising from the WR Act do not engage in unreasonable acts and omissions which put the other party to undue expense, they should also be careful not to exercise the discretion with too much haste, given that such haste may discourage parties, for fear of an adverse costs order, from pursuing litigation under the WR Act in the manner which they deem best. Referring to those observations, Bromberg J, in Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6], remarked of that provision that, "The limited discretion conferred on the Court by that subsection ought not become the basis for arguments about costs in relation to any and every transgression in the conduct of a case". Any exposition in respect of the meaning and effect of a statutory provision can be fraught with the possibility, unintended though it may be, of placing a gloss on the language employed by Parliament. So I respectfully agree with the statement made by the Full Court in Australian Workers Union v Leighton Contractors (No 2) that it is not necessary to establish "exceptional circumstances" in order to award costs in a matter arising under the FWA. What it is necessary to do is to engender satisfaction that a pre-condition for the enlivening of the costs power exists and, even then, the exercise of a judicial discretion is required; there is no as of right entitlement to costs. Each of the pre-conditions for which s 570 of the FWA provides entails the reaching of satisfaction as to a pejorative. 34 Bromberg J agreed with Logan J on the question of costs (at [161]) and made some further observations. At [165] Bromberg J referred to the common situation where indemnity costs are sought following the rejection of a Calderbank offer, noting that in such cases an especially high standard of unreasonableness was not to be adopted. His Honour then contrasted the situation under s 570(2)(b) of the FWA, as follows. In the context of the use of the word "unreasonable" in s 570(2)(b), taking into account the underlying purpose of that provision which includes the promotion of access to justice (Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8] (Siopis, Collier and Katzmann JJ)), a higher standard of unreasonableness is to be adopted. It has been said that the fact that a party has conducted litigation inefficiently or adopted a misguided approach will be relevant to, but not conclusive of, the party having acted unreasonably in a sense relevant to s 570(2)(b): Hutchinson v Comcare (No 2) [2017] FCA 370 at [8] (Bromberg J); Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 at [29] (Tamberlin, Gyles and Gilmour JJ). The difference in the standards of unreasonableness which are applicable in the two contexts in question needs to be appreciated before the rejection of a reasonable offer of settlement is characterised as an "unreasonable act or omission". 35 Burley J expressed agreement with these observations in another case on s 570: Salama v Sydney Trains (No 2) [2021] FCA 1200 at [14]. 36 Like the provision discussed in Celand, s 17(2) confers a discretion to award costs, but provides that that discretion arises only when the court is satisfied of (i) an "unreasonable act or omission" having occurred and (ii) that act or omission having caused the other party to incur costs. If the precondition is satisfied, and the discretion thereby enlivened, it would appear that the Court has power to frame a costs order appropriate to meet the circumstances of the case (which might or might not include an element of indemnity costs). As to the nature of the precondition, the following may be said in the light of Celand and the authorities discussed there. (a) The test is evaluative. Whether an act or omission is "unreasonable" depends on the circumstances in which it occurred. (b) It is not necessary to identify "exceptional circumstances" or overcome any comparable terminological hurdle. The statutory language, rather than a judicial gloss, must be applied. (c) However, the context indicates a legislative intention that costs will rarely be awarded. Whereas Calderbank principles aim to encourage settlement (and properly look to how a rational and well advised party should behave), s 17(2) operates as a qualification on a rule aimed at promoting access to justice. An inefficient or misguided approach to the litigation may therefore not be sufficient in itself to amount to an "unreasonable" act or omission justifying departure from the rule. 37 As explained in the reasons for judgment, there were several reasons why the applicants did not succeed in their contract claim. Further, even if the applicants' submission as to where the onus of proof lay had been accepted, Channel 9 was in (at least) a strong position to prove (i) non-compliance by Mr Tredrea with at least one lawful direction (to confirm his vaccination status) and (ii) an opinion formed by Channel 9 that comments he made on Radio 5AA had harmed his public standing and its business interests. Each of those was a ground on which Channel 9 was entitled to terminate the Services Agreement. Although the IC Act claim had some potential to rescue the applicants' position, that claim in the end was barely developed in the submissions and was rejected. However, the fact that claims have failed does not mean that the pursuit of them was unreasonable. While the applicants had to succeed on several fronts (in that Channel 9 asserted several grounds for termination, one of which was enough), resolution of their claims turned on either legal points which were arguable or factual issues where cross-examination of witnesses had some potential to bear fruit. 38 I do not consider that pursuit of the applicants' claims through to judgment was made unreasonable by the applicants having rejected four offers of settlement which (with hindsight) would have been advantageous. The offers made on 7 and 29 June 2023 were that the proceedings be dismissed or discontinued with no order as to costs. They did not involve a significant degree of compromise. Acceptance of either of the last two offers, made on 7 and 21 July 2023, would have obtained for the applicants a sum that was less than their legal costs. The applicants' prospects were not so poor as to make it unreasonable not to accept these offers. 39 I have also considered whether the application of s 17(2) is affected by the consideration that, by the time of the trial, the IC Act claim had become little more than an afterthought. As noted earlier, it received almost no attention in the applicants' submissions. I have come to the view that this does not make a difference, either in principle or in the circumstances of this case. (a) The Parliament has chosen to designate, as a category of litigation in which parties are generally not exposed to costs orders, proceedings "in a matter arising under" Part 4 of the IC Act. Parliament should be taken to have used that language with knowledge of how similarly worded provisions had been construed, and with a general understanding of the constitutional concept of a "matter". The policy choice made by the legislature was therefore to facilitate not only claims advanced under Part 4 itself, but litigation in which such claims play a part: ie, broadly, claims by independent contractors against other parties to services contracts. Section 17(1) thus attaches, as explained above, to the entire proceeding. So too do the exceptions to the general rule contained in s 17(1) itself and in s 17(2). There is no textual or contextual foundation for a view that the extent of protection against adverse costs orders is somehow reduced by the relative importance or complexity of other claims that form part of the same "matter". (b) It is unsafe to assume that the present case would have been significantly shorter if it had been run solely as a claim under the IC Act. To demonstrate that the Services Agreement was harsh or unfair within the meaning of s 12 of the IC Act, it would have been necessary to establish the factual context in which the power to terminate had been exercised and the matters that made such termination unfair. That would have given rise to a significant evidentiary contest, involving much of the same material as was traversed for the purposes of the contract claim. It would also have been necessary to give some attention to how the Services Agreement operated. The IC Act claim was not abandoned, and it was not said to be so weak as to be a mere device to bring the case into this Court's jurisdiction (or to bring it within s 17). The circumstances of the case would not justify giving s 17(2) a more relaxed operation because of the importance of the contract claim, even if that approach were available in principle. Disposition 40 For these reasons, s 17(1) of the IC Act requires that there be no order as to costs. This makes it unnecessary to decide whether, under the principles that would otherwise apply, the applicants' rejection of the various offers to settlement would justify an order for indemnity costs. 41 I regard the provisional costs order that I made on 14 March 2024 (order 2, set out at [3] above) as having ceased to operate when the procedure set out in order 3 was commenced. As things stand, therefore, there is no order as to the costs of the proceeding. Nothing more is needed to achieve that result. However, it is appropriate (even if conceptually unsatisfying) to make some order to confirm the completion of the proceeding. I will therefore order that there be no order as to costs I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kennett. Associate: Dated: 3 May 2024