·   · 496 posts
  •  · 611 friends

Applicant Seeks Payment from Respondent

Lees v Asaleo Personal Care Pty Ltd (No 3) [2022] FedCFamC2G 488 (21 June 2022)

Mr. Lees had made a Calderbank offer, seeking payment of $61,788.46 and a letter stating that his employment ended for reasons of redundancy. Asaleo did not accept that offer. The Court, in making its orders, assessed whether the offer made by the respondent caused the applicant to incur costs.  

Facts:

Mr Lees had made a Calderbank offer, seeking payment of $61,788.46 and a letter stating that his employment ended for reasons of redundancy. Asaleo did not accept that offer within the time limit or at all.

The total amount that Asaleo was required to pay Mr Lees was $98,872.06. The specific circumstances that Mr Lees relied upon were two allegedly unreasonable acts or omissions of the respondent, Asaleo, that caused Mr Lees to incur costs.

Mr Lees said that Asaleo’s unreasonable acts or omissions were: (a) refusing to accept Mr Lees’ reasonable Calderbank offer; and, in the alternative (b) offering to settle the case on a walk-away basis. Asaleo argued that the costs application should be dismissed. 

The costs orders proposed by the applicant in his application in a proceeding filed on 11 May 2022 are as follows: the Respondent pay the Applicant’s costs in the proceeding on an indemnity basis from 17 September 2021; and alternatively, the Respondent pay the Applicant’s costs in the proceeding from 17 September 2021 in accordance with Schedule 1 of the Rules at the time that the proceeding commenced.

The respondent proposed in its written submissions filed on 27 May 2022 that the applicant’s costs application be dismissed. The Calderbank offer outlined the strength of Mr. Lees’ claims and then said that Mr. Lees was prepared to settle the matter on the following basis: (a) [Mr. Lees] requests a statement of service detailing the duration of his employment, corresponding position titles, and workplace achievements, confirming his employment ended by reason of redundancy; (b) that he receive payment equal to $61,788.46, to be paid as a genuine redundancy; (c) if requested to do so, our client will execute a deed of release in the usual terms; and (d) payment is made within 7 business days following the Respondent's receipt of an executed deed of release.

The Calderbank offer stated that it remained open for seven days, until close of business on 24 September 2021. It also stated that, if the offer were not accepted, Mr Lees would seek an order for any costs incurred after the expiry of the order. Asaleo did not accept the Calderbank offer by close of business on 24 September 2021. The Calderbank offer therefore expired at close of business on 24 September 2021. 

Issue:

Whether or not the offer made by the respondent caused the applicant to incur costs. 

Applicable law:

Fair Work Act 2009 s 570 - provides that a party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2). 

Federal Circuit and Family Court of Australia Act 2021 s.190 - says that the overarching purpose of the civil practice and procedure provisions is to resolve matters as quickly, inexpensively and efficiently as possible. 

Cutts v Head [1983] EWCA Civ 8; [1984] Ch 290; [1984] 1 All ER 597; [1984] 2 WLR 349 [1984] 1 All ER 597 - relied upon in holding that if the offer were not accepted, Mr Lees would seek an order for any costs incurred after the expiry of the order.

 Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665; (2015) 229 FCR 221; [2015] FCAFC 20 - provides that it is well established that a failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of subsection 570(2)(b) and its predecessors. 

Stuart Lees v Asaleo Personal Care Pty Ltd (No 2) [2022] FedCFamC2G 264 - where the respondent was made to pay the applicant compensation in the amount of $22,552.80 for economic loss.

Stuart Lees v Asaleo Personal Care Pty Ltd [2021] FedCFamC2G 347 - where it was declared that the respondent contravened s.340 of the Fair Work Act 2009 (“the Act”), by taking adverse action against the applicant for a prohibited reason.

Tucker v State of Victoria [No 2] [2021] VSCA 182 - provides that unreasonableness is to be determined objectively.  It is a question of impression and degree, to be assessed by reference to the particular circumstances of a given case.

Analysis:

Asaleo acknowledged that Mr Lees was awarded more money than he offered in his Calderbank letter to settle for, being $98,872.06 as opposed to $61,788.46. However, Asaleo noted that the terms of the Calderbank offer included that Mr Lees be given a letter stating that his employment ended by reason of redundancy. 

Mr Lees’ employment did not end by reason of redundancy.  Asaleo submitted, without challenge, that it would have been contrary to Australia’s taxation laws for Asaleo to provide a letter stating that Mr Lees’ employment had ended for reasons of redundancy when it did not.

Redundancy payments are treated favourably under taxation law. It would have been a fraud on the Commonwealth for Asaleo to provide a letter stating that Mr Lees’ employment had terminated for reasons of redundancy.

Although Mr Lees bettered the amount of money that he offered to settle for, he did not secure one of the terms of his settlement offer. On 29 September 2021, five days after Mr Lees’ Calderbank offer expired, Asaleo made its own Calderbank offer to Mr Lees. 

Asaleo said that its offer remained open until 12 October 2021, being about two weeks. Mr Lees did not accept that offer by the specified date or at all. Mr Lees argued that Asaleo’s walk away offer was not reasonable, as evidenced by Mr Lees being awarded $98,872.06.

Asaleo making an unreasonable offer did not cause Mr Lees to incur costs. On the other hand, Asaleo refusing a reasonable offer would have caused Mr Lees to incur costs.

Conclusion:

The applicant’s costs application, being the application in a proceeding filed on 11 May 2022, is dismissed.  

 

0 0 0 0 0 0
Comments (0)
    Info
    Category:
    Created:
    Updated:
    SSL Certificates