Industrial Relations Commission of New South Wales CITATION : Hogbin v Leviathan Maintenance Services [2002] NSWIRComm 37 PARTIES : Amanda Hogbin Leviathan Maintenance Services FILE NUMBER: IRC 2692 of 2001 CORAM: Harrison DP CATCHWORDS : Application for costs - evidence of offer and response - parties four weeks apart prior to arbitration - uncertainty in negotiations - differing versions of offer and response Application for costs refused - conduct of respondent not unreasonable - neither party held to be unreasonable LEGISLATION CITED : Industrial Relations Act 1996 Mandell v Earle (IRC 674 of 1994, Harrison CC 12/9/94, unreported) CASES CITED : Copperart Pty Ltd v Martin [1996] 68 IR 58 Luke v Handicapped Children's Centre (IRC 2586 of 1993, Connor CC 4/5/94, unreported) Sparks v Fred Hoskings Pty Ltd NSWIRComm69 HEARING DATES: 02/15/2002 DATE OF JUDGMENT: 03/07/2002 APPLICANT Mr J Wormington of Counsel LEGAL REPRESENTATIVES: RESPONDENT Mr G Colston JUDGMENT: - 6 - INDUSTRIAL RELATIONS COMMI/*SSION OF NEW SOUTH WALES CORAM: HARRISON DP Thursday, 7 March 2002 Matter No IRC 2692 of 2001 AMANDA HOGBIN AND LEVIATHAN MAINTENANCE SERVICES Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION RE COSTS [2002]NSWIRComm 37 1 The substantive proceedings in this matter resulted in a decision issued on 9 November 2001 finding in favour of Ms Amanda Hogbin, the applicant. Orders issued for payment of compensation. The applicant now seeks an order for costs pursuant to s 181(2)(c) of the Industrial Relations Act 1996 ('the Act') to the amount of $2,750. 2 Hearing of the application for costs took place on 15 February 2002. Mr J Wormington of Counsel appeared on behalf of Ms Hogbin, the applicant. Mr Gary Colston, Managing Director of Leviathan Maintenance Services (the respondent) appeared on behalf of the respondent. 3 Mr Wormington put that at the first conciliation proceedings in this matter held on 17 May 2001 an offer of settlement, representing six weeks pay, was made on behalf of the applicant. This offer, he put, was not taken up by the respondent who requested that the matter be adjourned to allow them to seek legal advice. 4 The matter was then subject to further conciliation proceedings on 1 June 2000. It is Mr Wormington's submission that immediately prior to the commencement of those proceedings he was informed by the respondent that the offer of six weeks pay in settlement of the matter was rejected and that there was no counter offer. 5 In the absence of settlement by agreement between the parties the matter was programmed for arbitration proceedings on 5 September 2001. 6 Mr Wormington put that prior to drafting the applicant's affidavit he contacted the respondent to canvass the issue of settlement in the terms previously offered. In Mr Wormington's submission the offer was again rejected by the respondent who indicated a lack of interest in further negotiations. 7 Mr Wormington tendered a series of correspondence (ex C1) exchanged between himself and Mr Colston prior to arbitration going to the issue of settlement. 8 Mr Wormington put that the only offer of settlement made by the respondent was contained in a draft deed of release accompanying the respondent's affidavits, received by Mr Wormington on 28 August 2001. The offer was for payment in the amount of $1,320 less tax, being two weeks pay. 9 It was Mr Wormington's submission that the applicant's offer of settlement, which was made at the outset of proceedings, was extremely reasonable, particularly in light of the Order issued for payment of compensation. He further put that had the applicant's offer been accepted there would have been no need for proceedings beyond the initial Conciliation. 10 Mr Wormington put that the respondent was given numerous opportunities to accept the applicant's offer of settlement and that the only offer made by the respondent for settlement of the matter came late in proceedings, being made seven days prior to arbitration, and was unreasonable as it would not have covered legal costs incurred up to that point. 11 Mr Wormington referred me to the decision in Mandell v Earle (IRC 674 of 1994, Harrison CC as I then was, 12 September 1994, unreported) in which costs were awarded on the basis that the respondent steadfastly refused to contemplate conciliation in the matter, despite reasonable offers from the applicant to conclude the proceedings by agreement. 12 It was Mr Wormington's submission that the finding in Mandell also applies in the circumstances in this matter as reasonable offers were made very early in the proceedings which the respondent failed to properly consider. 13 Mr Colston took issue in respect to the details of settlement negotiations at the initial conciliation proceedings, putting that at that particular time there was dispute over the applicant's weekly rate of pay. It was Mr Colston's submission that a request was made that Mr Wormington forward the applicant's offer of settlement in writing, which he would then refer to his legal adviser. Mr Colston put that no offer in writing was forthcoming, leaving him unable to seek advice, and accordingly he attended further conciliation proceedings in the belief that the offer no longer applied. 14 Mr Colston also referred to the series of correspondence tendered by Mr Wormington (ex C1), wherein Mr Wormington reiterated the applicant's offer of six week's pay in settlement of the matter. Mr Colston put that on receipt of this correspondence he was unsure whether this was a new offer or the previous offer committed to writing, as requested. 15 Mr Colston put that the timing of the correspondence, being only a matter of days prior to commencement of arbitration, left him unable to seek legal advice prior to proceedings. 16 Mr Colston referred me to the Judgment of a Full Bench of the Commission in Copperart Pty Ltd v Martin [1996] 68 IR 58, which he put provides clear authority for the appropriate consideration upon which any finding of unreasonable failure to settle is to be established. It was Mr Colston's submission that in Copperart there was a formal offer of settlement made by an applicant and rejected by the respondent, yet the Full Bench was not satisfied that unreasonableness existed. 17 Mr Colston put that in the circumstances of this matter, there was no evidence of a formal offer or rejection thereof, and that the matter was defended in the absence of any formal offer to settle from the applicant. Further, he put that, as in Copperart, the refusal of one offer does not amount to unreasonable failure to agree to a settlement. 18 Mr Colston further referred me to the decision of Mr Commissioner Connor in Luke v Handicapped Children's Centre (IRC 2586 of 1993, 4 May 1994, unreported); and the decision of Sams DP in Sparks v Fred Hoskings Pty Ltd (NSWIRComm 69, 5 March 1999). 19 In reply, Mr Wormington put that to his recollection there was no request for confirmation of the applicant's settlement offer in writing; and further that there was no discussion concerning the correct weekly rate of pay. Mr Wormington put that the discussions concerning settlement were predicated on the rate of pay contained in the application for relief from alleged unfair dismissal. 20 Mr Wormington put that the offer of settlement in the amount of two weeks pay contained in the Deed of Release prepared by the respondent was based on the rate of pay contained in the application and was not an opening for discussion, but rather a "take it or leave it" proposition. CONSIDERATION 21 The relevant test is whether a party has unreasonably failed to agree to a settlement. The facts of this matter do not support a conclusion that the respondent failed or refused to contemplate settlement and is so distinguished from Mandell. 22 The fact that the respondent could have settled the matter by accepting the applicant's offer at the outset for an amount significantly less than awarded by the Commission is not conclusive of unreasonableness in itself. 23 There is an apparent lack of certainty in the negotiations between the parties and an evidentiary gap between versions of events. 24 It is preferable that where offers are made and the issue of costs is likely to arise that such offers are put in writing with an advice that the offer may be relied upon in proceedings pursuant to s 181 of the Act. 25 I accept Mr Wormington's submission that an offer coming late in the proceedings after costs of preparation have been incurred can be less than helpful, the alternative may also apply. I regard this offer made by the respondent to be a genuine response to the applicant's proposal. 26 There is evidence of offer and counter offer up to the time of commencement of arbitration, the difference between the parties being four weeks pay, which while not able to be bridged was not so significant a difference that either party could be held to be unreasonable. 27 The application for an order of costs pursuant to s 181 (c) of the Act is refused. 28 Matter No IRC 2692 of 2001 is so concluded. oo0oo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.