Centre Staffing Sydney v Scott [2001] NSWIRComm 165 (24 July 2001)

Last Updated: 11 September 2001

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Centre Staffing Sydney v Scott [2001] NSWIRComm 165 revised - 10/09/2001

FILE NUMBER(S): IRC4920

HEARING DATE(S): 31/05/2001

DECISION DATE: 24/07/2001

PARTIES:

Centre Staffing Sydney Pty Ltd

Elissa Scott

JUDGMENT OF: Harrison DP

LEGAL REPRESENTATIVES

APPLICANT

Mr J Anthony, Solicitor

Braye Cragg Solicitors

RESPONDENT

Mr A Duc

Independent IR

CASES CITED: Bankstown City Council v Paris (1999) 93 IR 209

Copperart Ltd v Martin (1995) 68 IR 58

Talbot v Rostcom Pty Ltd [2000] NSWIRComm 500

Sparks v Fred Hoskings Pty Ltd [1999] NSWIRComm 69

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

- 7 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: HARRISON DP

Tuesday, 24 July 2001

Matter No IRC 4920 of 2000

Elissa Scott & Centre Staffing Sydney Pty Ltd

Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

DECISION RE COSTS

1    The substantive issues in this is matter were determined in favour of the respondent in a decision published on 10 April 2001. A subsequent application for an award of costs pursuant to s181(2)(c) of the Industrial Relations Act 1996 (`the Act') was made by Braye Cragg Solicitors, acting on behalf of Centre Staffing Sydney Pty Ltd, the respondent.

2    Mr A Duc of Independent I.R., acting on behalf of the applicant, Mrs Scott, opposed an order of costs.

3    In proceedings on 31 May 2001 the parties proposed an arrangement whereby Mr J Anthony, solicitor of Braye Cragg Solicitors, was allowed 21 days to make written submissions in respect to costs and Mr Duc a further 21 days to reply; the issue of costs to be then determined on the basis of those submissions. This arrangement was accepted and directions issued.

4    The written submissions of Mr Anthony were received on 19 June 2001.

5    Mr Anthony seeks an order of costs on the grounds that the applicant unreasonably failed to agree to settlement of the claim.

6    The written submissions of Mr Anthony set out the history of negotiations between the parties in which negotiations, commencing with an offer of three weeks pay by the respondent met by a proposal by the applicant of settlement on the basis of three months pay, developed to an offer by the respondent of payment of $2,500.00, being in addition to an amount of $961.53 previously paid to the applicant on termination, met by a counter offer from the applicant that full and final settlement could be achieved for $3,000.00. Mr Anthony submitted that the settlement proposition of $3,000.00 was not accepted and the offer by the respondent of $2,500.00 in addition to payment made on termination was held open and available up to commencement of arbitration proceedings.

7    Mr Anthony further submitted that in making this offer the respondent was mindful of the legal costs to be incurred in preparing and conducting arbitration proceedings.

8    An order of costs is sought in the amount of $2,352.63 inclusive of GST.

9    In his written submission filed on 12 July 2001 Mr Duc describes the negotiation process in the following terms:

· On 13 November 2000 the Applicant offered to settle for three months pay. The Respondent's offer was three weeks pay. A later offer of four weeks with a reference was also made.

· On 14 November 2000 the Applicant contacted the Respondent and offered to settle for two and a half month's pay.

· At the conciliation conference on 15 November 2000 lengthy negotiations took place at the conciliation. The Applicant's final position was $5,000.00. The Respondent's final offer was $2,800.00.

· The Applicant wrote to the Respondent on 25 November 2000 offering to settle the matter for $3,000.00 net.

· Prior to the hearing on 12 February 2001 conciliation again took place. At this time the Applicant offered to settle the matter for $2,400.00 net. The Respondent offered $2,500.00 gross, equivalent to about $1,750.00 net.

10    In his written submissions Mr Anthony notes that the matter was subsequently decided against the applicant, the Commission declining to intervene.

11    Mr Anthony concludes his submissions with the argument that the decision not to intervene on behalf of the applicant reveals the offer of $2,500.00 in addition to previous benefits paid as a reasonable offer of settlement.

12    Both Mr Anthony and Mr Duc relied upon the judgement of a Full Bench of this Commission in Bankstown City Council v Paris (1999) 93 IR 209 where at 218 the Bench states:

Section 181(2)(c) on its face is a provision which is designed to apply only

to unfair dismissal proceedings. It is the only provision designed to be applied specifically in that context. Also, when read in terms of the other provisions the Act as to costs, it is one of only three provisions which may have application to unfair dismissal proceedings. The other provisions are paras (a) and (b) of s181(2). However, those provisions apply to many other proceedings before the Commission and, unlike the particular limb of s181(2)(c) relied on in this application, they are designed to operate where the Commission considers either the application itself, or the institution of the proceedings, was affected by considerations which made it manifestly inappropriate for the proceedings to have been commenced. The relevant part of s181(2)(c), on the other hand, does not require the Commission to focus upon the circumstances of the commencement of the proceedings, or to consider only the situation of the applicant. Instead the Commission is required to consider in a more general way, the conduct of the party in respect of which an application for costs is made; and, in that regard, to consider the conduct of the party in relation to the question of settlement of the claim.

An understanding of the meaning and purpose of s181(2)(c) is assisted by reference to the particular provisions in Pt 6, Unfair Dismissals, of Ch 2 of the Act, which relate to conciliation or settlement of unfair dismissal applications. Section 86 for example, provides: "The Commission must endeavour, by all means it considers properly necessary, to settle the applicant's claim by conciliation."

Section 87(1) is also relevant. Its effect is to preclude the Commission from proceeding to determine the claim by arbitration until "all reasonable attempts to settle the applicant's claim by conciliation have been made but have been unsuccessful". Section 87(2) continues the statutory emphasis upon conciliation by specifying that the earlier provisions do not prevent further conciliation from being attempted at any time before the Commission makes an order in the proceeding.

Construing the relevant part of s181(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(l) are available for exercise.

13    Mr Duc further referred to the following passage found at p220 of Paris:

"We emphasise that there will be many circumstances in which parties to litigation, including unfair dismissal proceedings, may appropriately take a firm position generally, including on the question of conciliation or settlement."

14    Mr Duc also referred to a judgment of the Full Bench in Copperart Ltd v Martin (1995) 68 IR 58 wherein it is stated at p64:

"It is clear that, in a scheme where costs are not the usual regime, the part of the Act contemplates and apprehends two distinct propositions:

· that costs are not the automatic outcome of a refusal to settle;

· that under certain circumstance costs are appropriate

... ... settlement is a dynamic question which must be pressed on the opposing party if the submission that there has been an unreasonable failure to settle is to be used to ground an application for costs."

15    Mr Duc submitted that the applicant did not unreasonably reject an offer of settlement when considered objectively in the circumstances known or reasonably known to the applicant at the relevant time.

16    Mr Duc submitted that the applicant's perception of her case prior to arbitration substantiated her attitude to settlement discussions, putting that there was no deliberate intent on behalf of the applicant to frustrate settlement.

17    Mr Duc referred me to recent decisions of Deputy President Sams in Talbot v Rostcom Pty Ltd [2000] NSWIRComm 500 and in Sparks v Fred Hoskings Pty Ltd [1999] NSWIRComm 69, putting his submission in respect to those matters in the following terms:

"Sams DP has recently held (Talbot v Rostcom Pty Ltd [2000] NSWIRComm 500) that an applicant unreasonably failed to settle where there was `incontrovertible evidence' that the applicant was over the jurisdictional monetary limit of section 83 to make an application. His Honour said:

The conclusion of Stanley J in Krajewska and University of Adelaide are appropriate to apply in these circumstances:

`The question of whether a person clearly acts unreasonably in failing to discontinue or settle the matter before trail must be judged in the light of all the circumstances known, or which reasonably should have been known, before the trial commences.'

In Barbara Sparks v Fred Hoskings Pty Ltd [1999] NSWIRComm 69 Sams DP stated the following:

I am of the opinion that an unreasonable failure to agree to a settlement would usually be accompanied with a deliberate intent to frustrate a settlement. From the material before me, I cannot find any evidence of a deliberate attempt to frustrate a settlement."

18    Mr Duc submitted that the circumstances of this matter differ from that found in Paris in that the applicant did not take an inflexible position in respect to settlement negotiations, the attitude of the applicant being properly described, in Mr Duc's submission, as firm in respect to minimum quantum.

19    Mr Duc put that the argument advanced in support of costs by the respondent that because the applicant was unsuccessful in the case costs should be awarded is not the appropriate test in matters such as this.

CONSIDERATION

20    The information presented by both Mr Anthony and Mr Duc reveals a process of robust and direct negotiations between the parties with movement by both towards a common point which was not in the circumstances reached.

21    The applicant was motivated in negotiations by her perception of the success of her case; the respondent motivated by commercial considerations attendant upon proceedings.

22    The mere failure of negotiations is not evidence that a party was unreasonable; nor can it be taken that failure in the arbitration proceedings leads automatically to the conclusion that a party was unreasonable in the conciliation process.

23    As contended by Mr Duc, the scheme of the legislation is not one in which costs follow the event, but one in which costs may be awarded as a matter of discretion having regard to the conduct of the parties. It is not contended here that the application was frivolous or vexatious.

24    A party to properly instituted proceedings is entitled to approach settlement negotiations on the basis that there is at the very least an arguable case. This is the approach Mr Duc contends was taken to these negotiations by the applicant.

25    While it may be regrettable that agreement was not reached, it cannot be said in the circumstances of this matter that either party approached the conciliation process in an inflexible manner or were unreasonable in their propositions for settlement.

26    I am not satisfied that the applicant unreasonably failed to settle the matter within the meaning of unreasonable found in s181(2)(c) of the Act as applied in Paris and Copperart.

27    I determine that an award of costs is not appropriate.

28    Matter No IRC 4920 of 2000 is so concluded.

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LAST UPDATED: 10/09/2001