Industrial Court of New South Wales CITATION: Murton v TD Preece and Co. Pty Ltd (No 2) [2007] NSWIRComm 67 This decision has been amended. Please see the end of the judgment for a list of the amendments. Applicant: Rick Murton PARTIES: Respondent: TD Preece and Co. Pty Ltd FILE NUMBER(S): IRC 6239 of 2002 CORAM: Backman J CATCHWORDS: Unfair contract - s 106 of the Industrial Relations Act 1996 - application for costs by applicant under rule 216(4) of the IRC Rules - judgment order includes order that interest should be payable on principal sum - issue as to relevant period during which interest to be considered - application of rule 216(8) - applicant's application dismissed. Industrial Relations Act 1996 LEGISLATION CITED: Industrial Relations Commission Rules 1996 Uniform Civil Procedure Rules 2005 CASES CITED: Bourke Air Charter v Easton (2001) 109 IR 443 Murton v TD Preece and Co. Pty Ltd [2006] NSWIRComm 367 HEARING DATES: 12/12/06 DATE OF JUDGMENT: 28 March 2007 Applicant: Mr D O'Sullivan Solicitors: Turner Freeman LEGAL REPRESENTATIVES: Respondent: Mr T Dixon of counsel Solicitors: Jones King Lawyers JUDGMENT: - 3 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Backman J Wednesday, 28 March 2007 Matter No IRC 6239 of 2002 RICK MURTON v T D PREECE AND CO. PTY LTD Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2007] NSWIRComm 67 1 The applicant has made an application for his costs following judgment in this matter on 23 November 2006: Murton v TD Preece and Co. Pty Ltd [2006] NSWIRComm 367. 2 The application for costs arises because the applicant sent an offer of compromise to the respondent prior to the hearing in an effort to settle the matter. The offer was rejected. The applicant now seeks costs on an indemnity basis in accordance with rule 216(4) of the Industrial Relations Commission Rules 1996 on the ground that he obtained an order for judgment "no less favourable" than the terms of the offer of compromise. 3 Rule 216(4) is extracted below: Where an offer is made by an applicant and not accepted by the respondent, and the applicant obtains an order on the claim to which the offer relates no less favourable than the terms of the offer, then, unless the Commission otherwise orders, the applicant shall be entitled to an order against the respondent for costs in respect of the claim from the day on which the offer was made, assessed on an indemnity basis in addition to costs incurred before and on that day, assessed on a party and party basis. 4 The offer of compromise was sent by letter of 26 February 2004. It provided for payment to the applicant by the respondent in the sum of $15,000 plus interest on that amount from 19 April 2003. According to the applicant's calculations, the principal sum of $15,000 taken together with interest at 9 per cent from 19 April 2003 until 26 February 2004 amounts to $16,161.37. 5 On 23 November 2006, and consequent upon findings of unfairness under s 106 of the Industrial Relations Act 1996, the respondent was ordered by the Court to pay the applicant a principal sum of $13,330 representing two months remuneration payable under the impugned contract. In addition, the respondent was ordered to pay interest on the principal sum in accordance with Schedule 5 of the Uniform Civil Procedure Rules 2005. The interest was ordered to be payable from 6 November 2002 (the date the summons for relief under s 106 was filed) until 23 November 2006 (the date of judgment). The principal sum together with interest payable during the period as specified was calculated by the applicant as a total amount in the sum of $18,191.25. This represents an amount "no less favourable" than the terms of the offer of compromise thereby facilitating the making of an order under rule 216(4), "...unless the Commission otherwise orders". 6 The respondent disputes the applicant's calculations on two bases, ultimately submitting that the orders made by the Court on 23 November 2006 do not achieve the result contended for by the applicant. According to the respondent the amount payable in accordance with the judgment orders falls outside r 216(4). Instead the respondent contends that the relevant amount is the principal sum of $13,330 excluding interest. In the alternative, if an amount for interest is included, then the period during which the interest falls to be calculated should run from 6 November 2002 until the date of the offer of compromise on 26 February 2004. If this latter proposed period during which interest should run is correct, then this produces an amount in the sum of $14,901.11. Neither set of figures however is representative of a judgment order which is "no less favourable" than the terms of the offer, as required by the Rules. 7 Although the Court's attention was directed to some authorities by both parties, none of those authorities addressed the issues presently under consideration. These are whether an amount for interest should be factored in to the total amount of the judgment order; and, if so the necessity to identify the relevant period during which the interest should be calculated, in order to assess whether rule 216(4) can or should be applied. One authority brought to the Court's attention by the respondent is the Full Bench judgment in Bourke Air Charter v Easton (2001) 109 IR 443 (at [17], [48]) which did take interest into account in considering the application of rule 216(6) of the IRC Rules. 8 The matter is however resolved by the application of rule 216(8). That rule provides: 216(8) Where an applicant obtains an order for the payment of a remuneration, compensation or damages and: (a) the amount payable under the order includes interest or damages in the nature of interest, or (b) by or under any Act the Commission awards the applicant interest or damages in the nature of interest in respect of the amount, then, for the purpose of determining the consequences as to costs referred to in subrules (4) and (6), the Commission shall disregard so much of the interest as relates to the period after the day the offer was made. 9 Under the rule, where the Court has ordered that interest should be payable on the principal sum, only that component of interest payable from the date the summons was filed until the date the offer of compromise was made, should be considered. On the respondent's figures, which were not challenged by the applicant, this results in an amount of $14,901.11. As this does not represent an amount "no less favourable" than the offer of compromise as required by the rule, the applicant's application must fail. 10 The respondent also sought an order that costs be apportioned. I decline to make this order. Although a number of allegations of unfairness were raised in the summons they were ultimately not expanded upon in any great detail in the evidence or in the respective submissions of the parties. The applicant succeeded in relation to the principal aspects of his claim. 11 The Court makes the following orders: (1) The applicant's application for costs under rule 216(4) of the IRC Rules is dismissed. (2) The respondent's application for an apportionment of costs is dismissed. (3) The respondent is to pay the applicant's costs of the proceedings as agreed or assessed. ____________________ AMENDMENTS HISTORY: 19/04/2007 - Further order (Order (3)) made on 19/04/2007. - Paragraph(s) 11 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.