Industrial Relations Commission of New South Wales in Court Session CITATION: Shannongrove Pty Ltd and William Allan Cousins [2005] NSWIRComm 258 Appellant: Shannongrove Pty Ltd PARTIES: Respondent: William Allan Cousins FILE NUMBER(S): IRC5044 of 2004 CORAM: Kavanagh J CATCHWORDS: Unfair dismissal - Application for costs - orders LEGISLATION CITED: Industrial Relations Act 1996 s181(2)(c) Bankstown City Council v Paris (1999) 93 IR 209 CASES CITED: Orange Community Accommodation Service Incorporated and Carolyn Vivienne Roddenby [2004] NSWIRComm 333 HEARING DATES: 07/20/2005 EXTEMPORE JUDGMENT DATE: 07/20/2005 Appellant: Solicitors: Mr C. Bryett LEGAL REPRESENTATIVES: Bamford Associates Respondent in person with Mrs C. Cousins JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Kavanagh J 20 July 2005 Matter No IRC IRC5044 of 2004 SHANNONGROVE PTY LTD & WILLIAM ALLAN COUSINS Application by Shannongrove Pty Ltd to extend time to appeal and appeal against a decision of O'Neil C given on 27 July 2004 in Matter No. IRC6394 of 2003 EX TEMPORE JUDGMENT RE COSTS (on delegation) [2005] NSWIRComm 258 1 Mrs Christine Cousins, with leave, appears on behalf of her husband, William Allan Cousins, who was an applicant in an unfair dismissal claim. He makes application for a costs order related to the primary hearing and appeal. Mr Cousins' unfair dismissal claim was heard by O'Neill C who ordered a payment to Mr Cousins in the sum of $18,000. The Order of the learned Commissioner was appealed. The Full Bench on 6 May 2005 ([2005] NSWIRComm 150) did not grant leave to appeal. The Full Bench has delegated to me this application for consideration. 2 Mr Cousins now seeks a costs order in the sum of $13,934. A break-up of the details of the application is for the sum of $5,849 for the industrial agent representing Mr Cousins before O'Neill C, costs incurred in an application for extension of time to appeal made before Staff J in the sum of $4521.77 and the costs of the appeal for solicitors in the sum of $1954.48 and for counsel in the sum of $1,608.75. 3 At issue is whether Mr Cousins has a right to costs. 4 Of relevance is s181(2)(c) of the Industrial Relations Act 1996 which states: 181 Costs (1) Subject to the rules of the Commission and any other Act or law: . . . (2) However, the Commission when it is not in Court Session may award costs only in the following cases: (a) . . . (b) . . . (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals) who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious, or 5 In Orange Community Accommodation Service Incorporated and Carolyn Vivienne Roddenby [2004] NSWIRComm 333 (22 November 2004), Walton J, Vice-President noted an application for costs is: [16] . . . a two staged process. Firstly, the Commission is required to make a finding under the discrete provisions of s181(2)(c) of the Act. . . . [17] Secondly, if a positive finding is made under this section (the jurisdictional "gateway"), the Commission, may then move to the general discretionary powers to award costs. . . . 6 In Bankstown City Council v Paris (1999) 93 IR 209 (17 December 1999), the principle behind the provisions of s181(2)(c) was enunciated (at 219): Construing the relevant part of s 181(2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of that party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad powers and discretions under s 181(1) are available for exercise. 7 The court has placed upon it strict limits in the use of the power to award costs in unfair dismissal proceedings. The power is designed to be available in circumstances where there has been a failure on the part of a party to properly conciliate the matter or it a party conciliate a reasonable potential settlement. 8 The facts in this matter are as follows: · Mr Cousins in the primary proceedings originally filed claiming four weeks pay. The claim was only opened up late in the proceedings. · Mr Cousins filed his own claim and sought the assistance of the Industrial Agent only just before his hearing. · Evidence in the primary hearing was received on 6 April 2004. The proceedings were then adjourned to 21 April 2004 with a recommendation from the Commissioner in relation to settlement and to allow the preparation of submissions if a Decision was necessary. · Shannongrove Pty Ltd in the interim, on 19 April 2004, made an offer of settlement in the sum of $5,000 which was rejected. · The Commissioner gave a verdict for $18,000. 9 The offer from the company of $5,000 was in the circumstances of the dismissal unreasonable. 10 However, one must look back from that. It appears there were a number of offers prior to the hearing which are challenged. Mr Cousins before the primary hearing put two separate offers, one for $22,000 and one for $20,000. Both offers were rejected by Shannongrove Pty Ltd in circumstances where only four weeks' payment was claimed. 11 Sometime during the hearing there was conversation where Mr Cousins determined he would settle for the sum of $14,600. It is unclear, and Shannongrove Pty Ltd denies, that this offer was ever directly put to them. 12 The day before the appeal was argued, Mr Cousins put an offer to Shannongrove Pty Ltd of $17,000 plus costs in full settlement. 13 Shannongrove Pty Ltd argues as the offer was in excess of the learned Commissioner's orders in the circumstances it was not unreasonable that Shannongrove Pty Ltd failed to agree to a settlement of the claim in those terms. 14 Shannongrove Pty Ltd submits there was no order as to costs in the primary hearing so the offer of $17,000 costs was excessive. Mr Cousins always held a right to make a claim for costs in particular circumstances as recited in s181(2). Mr Cousins now makes his claim under s181(2). 15 I have considered this argument. The same submission was made in relation to the two offers, $22,000 and $20,000. However, it appears to me the offer the day before the appeal was more than reasonable in the circumstances of settlement of the claim. 16 I am satisfied there was plenty of time for Shannongrove Pty Ltd to consider the offer of $17,000 and costs in the circumstances of an active litigation and I find it was unreasonable for Shannongrove Pty Ltd to fail to agree to a settlement of the claim given the $17,000 plus costs offer put to them by Mr Cousins was reasonable. 17 I want to put on the record I have been greatly assisted in my consideration by the thorough documentation put to me by Mr Cousins as to the history of this matter. I have been even further assisted by the submissions of Shannongrove Pty Ltd which submissions guided me in the application of the law in this matter. 18 Given the Commission found Mr Cousins had succeeded in passing "the jurisdiction gateway" the parties then went into conciliation. The parties have determined an agreed settlement in the sum of $8,000 as payment for costs. That sum represents full and final settlement of all claims for costs for all proceedings arising from the unfair dismissal application. 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.