Industrial Court of New South Wales CITATION: Gordon Meggatt v Australian Business Limited [2007] NSWIRComm 247 Applicant: Gordon Meggatt PARTIES: Respondent: Australian Business Limited FILE NUMBER(S): IRC6648 of 2004 CORAM: Kavanagh J CATCHWORDS: Section 106 - costs - alternative applications including application for indemnity costs - Calderbank letter - order for costs as agreed or assessed LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: Burgess & Ors v Mount Thorley Operations Pty Ltd [2003] NSWIRComm 22 Meggatt v Australian Business Ltd [2007] NSWIRComm 182 HEARING DATES: 19/09/07 EXTEMPORE JUDGMENT DATE: 19 September 2007 No appearance for the applicant LEGAL REPRESENTATIVES: Mr A. Vernier, Solicitor Australian Business Lawyers JUDGMENT: - 3 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Kavanagh J Wednesday 19 September 2007 Matter No IRC 6648 of 2004 GORDON MEGGATT v AUSTRALIAN BUSINESS LIMITED Application under s106 of the Industrial Relations Act 1996 EX TEMPORE JUDGMENT (Costs) [2007] NSWIRComm 247 1 By way of Summons for Relief, Gordon Meggatt (the applicant) brought proceedings against his former employer Australian Business Limited (ABL) (the respondent), under s106 of the Industrial Relations Act 1996 (the Act), pleading his contract of employment was unfair, harsh or unconscionable in its terms and through its operation. On 16 August 2007, judgment was given and the applicant's Summons for Relief was dismissed (Meggatt v Australian Business Ltd [2007] NSWIRComm 182). The Court made the following orders: 1. I declare the contract of employment between the parties was not an unfair contract within the meaning of s105 of the Act. 2. The application brought under s106 is dismissed. 3. Leave to relist as to costs. 2 The respondent now seeks a determination as to costs. There is no appearance on behalf of the applicant. The solicitor on the record who represented the applicant has filed a notice of ceasing to act. 3 The respondent successfully defended the claim brought by the applicant under section 106 of the Act. The respondent tenders an affidavit of Mr Antonio Vernier, sworn 19 September 2007, solicitor, who has carriage of this matter for the respondent. 4 The respondent in seeking costs proposes three alternative cost orders: 1. The court order the applicant pay the respondent's costs on an indemnity basis from the date of filing of the summons (which was 12 November 2004). Reliance is placed by the respondent on a document tendered through Mr Vernier's affidavit, which document is correspondence to the applicant dated 9 March 2004. The letter makes an offer of settlement to the applicant. or, 2. The court order costs on an indemnity basis from 13 December 2005. Reliance is placed by the respondent on correspondence dated 13 December 2005. This letter followed after the conciliation process before the Court which took place on 10 November 2005. The letter makes an offer of settlement. or, 3. The court order indemnity costs from 16 April 2007 (which date reflects the first day of hearing of this matter). Reliance is placed by the respondent on hearsay evidence given by Mr Vernier that another solicitor (it should be said representing his firm) made a further oral offer of settlement before the hearing began. 5 This matter presents me with some difficulties because the applicant is not before the court and is therefore unable to meet the claim. Solicitors for the applicant notified the court on 31 August 2007 of ceasing to act. 6 Given the respondent's application, the onus is generally on an applicant to establish that it was not unreasonable for him or her to have rejected the offers of settlement. Those offers were in the form of Calderbank letters, except for the latter offer. In Burgess & Ors v Mount Thorley Operations Pty Ltd [2003] NSWIRComm 22 (13 February 2003), Schmidt J considered the question of reasonableness in rejecting offers of settlement. The question for consideration by the court is whether it was reasonable for the applicant to have rejected these offers. First Offer 7 As to the first offer, this letter is used in support of the application for costs on an indemnity basis from the date of the filing of the summons on 12 November 2004. The respondent's letter to the applicant is dated 9 March 2004. There was an issue before the court about when the applicant was terminated. The applicant was paid up until 12 March 2004. The respondent's letter of offer was made to him while he was still in the employ of the respondent and the offer was conditional upon requiring the applicant to resign. The respondent asserts it was unreasonable for the applicant to reject that offer. The applicant was still an employee of the respondent at the time of the offer. It was not unreasonable, in my view, in the circumstances, for the applicant to refuse to resign. The applicant was therefore entitled to reject the offer. I accept this was not an unreasonable decision by the applicant. 8 I reject this application for costs. Second Offer 9 As to the second offer, the respondent relies on a letter of offer and asserts there should be an indemnity order for costs from 13 December 2005, following the letter of 13 December 2005 constituting a further offer. The letter of the respondent relates to its view of the facts in the case which it asserts would be generally proven at a hearing and the letter then asserts such litigation would be a further threat to the applicant's reputation. 10 On the facts before me (as traversed in the judgment) the applicant claimed he had no recollection of the event. The explanation for this offence by the applicant was that alcohol was involved. Nonetheless he denied the incident. In such circumstances I do not accept that it was unreasonable for the applicant to put to the test the respondent's witnesses. There was evidence before me that the respondent held statements from the witnesses. There was clear evidence of a dispute between the parties about whether the applicant would be given access to those statements. I accept the applicant knew the names of the asserted witnesses. While there is no ownership of independent witnesses, I accept in the circumstances of this termination of employment the first time the applicant had an opportunity to assess the veracity of the witness recollections of the event was when they were in the witness box. If I accept the applicant had no recollection of the event then the first opportunity to test the witnesses was at the hearing. That being the case, I do not find it was unreasonable for the applicant to have rejected the offer of 13 December 2005 and for him to proceed to hearing. Third Offer 11 The third alternative offer was made when a solicitor for the respondent verbally renewed the second offer on 16 April 2007 (the first day of the hearing). For the reasons I have recited above, I also reject the application for indemnity costs from 16 April 2007. I accept it was not unreasonable given the applicant had no recollection of events for him to test the respondent's witnesses in a hearing. 12 Therefore I make the following order. Order The applicant shall pay the respondent's costs as agreed or assessed. 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.