Court Denies Costs in Adverse Actions as Judge Deems Settlement Offers Unalluring
Background
In a recent legal development, a court has declined to order costs against a former sales representative who rejected multiple settlement offers before losing her adverse action case against tools manufacturer Makita (“the Company”). The court found “nothing especially alluring” about the settlement offers, ultimately leading to the dismissal of the respondents’ application for costs.
Facts
The former sales representative, based in Victoria, alleged that the Company terminated her employment in late 2020 following her complaint about the behaviour of the Company’s State manager. Seeking $3,480 in lost bonuses and super, along with $1,500 in damages and penalties, she targeted the Company, its Sydney-based HR advisor, the Victoria state manager, and the Brisbane-based national sales manager involved in her dismissal.
In an interim decision in February 2022, the court rejected her request for a face-to-face hearing, affirming the Company’s position that the dismissal was unrelated to her complaints and resulted from serious misconduct. In August, the court ruled in favour of the Company, satisfying the burden of proving that the dismissal decision wasn’t motivated by the sales representative’s exercise of a workplace right, thereby absolving the other respondents of accessory liability.
Following the court’s dismissal of the case, the respondents sought costs under section 570 of the Fair Work Act, arguing that the sales representative unreasonably rejected a series of reasonable settlement offers made before the trial.
Decision
In the recent ruling, Federal Circuit and Family Court Judge Catherine Symons revealed that the respondents had initiated settlement offers ranging from $10,120.10 to $25,000 before the trial commenced. Judge Symons acknowledged that each offer demonstrated a genuine compromise, progressively increasing based on the sales representative’s counteroffers.
However, the court rejected the application for costs, noting that the sales representative’s refusal of the settlement offers did not constitute an unreasonable act or omission. Judge Symons emphasised that there was “nothing especially alluring” about the offers when considering the stage of the proceeding, the extent of compromise, and the sales representative’s prospects of success.
Key Takeaways
- Assessment of Offers: The court scrutinised the timing, compromise extent, and the sales representative’s prospects when evaluating the settlement offers, deeming them unalluring.
- Rejection: The judge emphasised that the sales representative’s refusal was not unreasonable, considering the circumstances and the evolving nature of the case.
- Standard: The decision highlights the court’s reluctance to depart from the usual order on costs, emphasising the need for a clear case to justify such a departure in this jurisdiction.
In conclusion, the case underscores the nuanced evaluation of settlement dynamics in legal proceedings, with the court ultimately siding with the former sales representative in her decision to reject the offered settlements. If you have any questions about this case and what the decision could mean for you, please do not hesitate to contact Nick Stevens, Peter Hindeleh, Josh Hoggett or Evelyn Rivera.
