Federal Court of Australia

Salama v Sydney Trains (No 2) [2021] FCA 1200

ORDERS

THE COURT ORDERS THAT:

1.    The Applicant pay the Respondents’ costs incurred from 14 September 2019 on a party/party basis, to be assessed on a lump sum basis in an amount to be determined by a Registrar of the Court.

2.    The Applicant pay the Respondents’ costs pursuant to order 2 of the orders dated 28 June 2019 on a party/party basis, to be assessed on a lump sum basis in an amount to be determined by a Registrar of the Court.

3.    The Registrar be directed pursuant to r 1.37 of the Federal Court Rules 2011 (Cth) to determine the quantum of the lump sum for costs payable pursuant to orders 1 and 2 above in such manner as he or she deems fit including, if thought appropriate, on the papers.

4.    The Registrar be directed pursuant to r 1.37 of the Federal Court Rules 2011 (Cth), at the conclusion of the quantification process, to order that the Applicant is to pay whatever sum has been quantified pursuant to order 3 above within 28 days from the date of the Registrar’s order.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BURLEY J:

1.    INTRODUCTION

1    The respondents (collectively, Sydney Trains) seek costs orders against the applicant, Joseph Salama, pursuant to s 570 of the Fair Work Act 2009 (Cth) (FW Act) following the dismissal of his proceedings in Salama v Sydney Trains [2021] FCA 251 (judgment). These reasons assume familiarity with the judgment and adopt the abbreviations used in it.

2    On 29 April 2021, Sydney Trains filed an interlocutory application seeking orders to the following effect:

(1)    that Mr Salama pay, in accordance with order 2 of the orders made on 28 June 2019, Sydney Trains’ costs in a lump sum calculated at the rate of 70% of actual costs thrown away; and

(2)    that Mr Salama pay Sydney Trains’ costs pursuant to s 570(2)(b) of the FW Act from the date of 12 alternative settlement offers either on an indemnity basis (calculated as 90% of Sydney Trains’ costs or otherwise as agreed or assessed), on a party/party basis (calculated as 70% of Sydney Trains’ costs or otherwise as agreed or assessed) or on such other basis as the Court considers fit.

3    In support of its application, Sydney Trains relies on an affidavit affirmed by Amber Sharp, a partner of McCullough Robertson Lawyers. Mr Salama opposes the orders sought and relies on an affidavit that he has sworn in answer. Both parties filed written submissions in support of their respective positions. Although invited to do so, neither party requested an oral hearing on the question of costs and, accordingly, the application falls to be determined on the papers.

4    I note that whilst Mr Salama was represented by solicitors and counsel at the hearing of the main proceedings, since the delivery of the judgment they have ceased to act on his behalf and he represented himself on the current application. In the judgment, at [18], I note that Mr Salama presented as an intelligent and articulate witness who had a detailed understanding of his case and the forensic issues involved. The content of his affidavit and written submissions persuades me that although he now represents himself, he is astute to the issues relevant in the determination of the question of costs.

5    Sydney Trains relies on s 570(2)(b) of the FW Act. It relies on the affidavit of Ms Sharp to demonstrate that from the commencement of the proceedings, initially in the Fair Work Commission on 23 August 2017, until they were heard over five days commencing on 2 March 2020, it made a total of eight settlement offers to resolve the proceedings, seven of which were detailed Calderbank offers. It emphasises that Mr Salama’s gross annual earnings whilst employed by Sydney Trains were $79,990. Some of the offers were for substantially more than that sum. It submits that Mr Salama’s conduct in: (a) refusing to participate in mediations on two separate occasions; (b) allowing Calderbank offers to lapse without response or counter offer; and (c) failing to accept its settlement offers is sufficient to warrant the exercise of the Court’s discretion to award indemnity or, alternatively, party/party costs in its favour.

6    Mr Salama accepts that eight offers were made and that seven were Calderbank offers but submits:

For the most part, I was either unaware of the Respondents’ settlement offers, or my legal team failed to respond to the Respondents’ settlement offers against my explicit instructions or failed to make a counter offer against my explicit instructions.

7    In this respect, Mr Salama relies upon his affidavit which includes selected extracts of communications between Mr Salama and the solicitors retained by him. Perhaps inconsistently with the position stated in his submissions, Mr Salama also says in his affidavit:

The offers made by the Respondents were unreasonable as they did not take into account the position I would be left in as far as trying to secure gainful employment.

8    Mr Salama’s gives evidence that he made several requests to his own solicitors to respond to offers in a timely manner and to make offers and counter offers but that his requests were ignored. In this regard he refers to tabs 3, 7-26 and 28 of his affidavit. It will be seen that aspects of the documents exhibited to Mr Salama’s evidence are inconsistent with his evidence that “for the most part” he was unaware of Sydney Trains’ offers. Significantly, in his evidence he does not deny knowledge of offers made by Sydney Trains’ from the date of a mediation conducted on 5 May 2019.

9    For the reasons set out below, I find that Mr Salama should pay the costs incurred by Sydney Trains from 14 September 2019 on a party/party basis and that those costs, as well as the costs payable pursuant to the costs order made on 28 June 2019, should be assessed by a Registrar of the Court on a lump sum basis.

2.    RELEVANT LAW

10    Section 570 of the FW Act provides:

570    Costs only if proceedings instituted vexatiously etc.

(1)    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) or section 569 or 569A.

Note:    The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

(2)    The party may be ordered to pay the costs only if:

(a)    the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

(b)    the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

(c)    the court is satisfied of both of the following:

(i)    the party unreasonably refused to participate in a matter before the FWC;

(ii)    the matter arose from the same facts as the proceedings.

11    The policy behind s 570 reflects a choice on the part of the legislature that costs should not ordinarily follow the event, but rather that they should ordinarily be borne by the party incurring them: Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115; 129 FCR 271 at [10] (Black CJ, Tamberlin and Sundberg JJ); Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd [2020] FCAFC 194 at [102] (White J, with whom Middleton J agreed at [89]). It has been said that the policy ensures that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants (in particular) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings: Ryan v Primesafe [2015] FCA 8; 323 ALR 107 at [64] (Mortimer J); Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8] (Siopis, Collier and Katzmann JJ). The discretion must be exercised with caution because of the exceptional nature of the power in an otherwise no-costs jurisdiction, and a case for its exercise should be clearly demonstrated: Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] (Bromberg J). That is because, absent caution, there is a potential to discourage parties in the complete and robust pursuit of claims for contravention of the FW Act. Accordingly, a person will rarely be ordered to pay the costs of the proceedings. However, it is not necessary to prove that there are exceptional circumstances warranting the making of an order: Celand v Skycity Adelaide Pty Ltd [2017] FCAFC 222; 256 FCR 306 at [74] (Logan J, Bromberg J agreeing at [161], Charlesworth J in dissent on the question of costs); Australian workers Union v Leighton Contractors Pty Ltd (No 2) [2013] FCAFC 23; 232 FCR 428 at [7] (Dowsett, McKerracher and Katzmann JJ).

12    The discretion must be exercised judicially according to the terms defining it. Section 570(2)(b) confers discretion on the Court to order costs in proceedings arising under the FW Act where it is satisfied that a party’s unreasonable act or omission caused the other party to incur the costs.

13    In the present case, the focus of attention falls upon the intersection between these principles and those developed by reference to Calderbank v Calderbank [1975] 2 All ER 333. It is well established that a failure to accept a Calderbank offer may justify the exercise of the Court’s discretion to award costs on an indemnity basis. In Brosnan v Katke [2016] FCAFC 156, Gleeson J (with whom Dowsett and Edelman JJ agreed) set out the principles applicable to rejection of a Calderbank offer. Her Honour said at [6]:

… the relevant legal principles were not in dispute. Costs will usually be assessed on a party/party basis in the absence of an unusual feature warranting a different approach. In this case, the unusual feature relied upon by the respondents was the rejection of the Calderbank offer. Rejection of a Calderbank offer does not per se warrant an order for indemnity costs: it is necessary to consider whether the offeree’s rejection of the offer was unreasonable in the circumstances in which the rejection occurred: Black v Lipovic [1998] FCA 699; (1998) 217 ALR 386 at [217]-[218]; Szencorp Pty Ltd v Clean Energy Council Limited (No 2) [2009] FCA 196 at [7]; Carey v Freehills [2013] FCA 1258 at [16]; Veda Advantage Limited v Malouf Group Enterprises Pty Limited (No 2) [2016] FCA 470; 118 IPR 156 at [31].

14    It may be that the policy objectives underlying s 570(2)(b) require the rejection of a Calderbank offer to be sufficiently unreasonable to warrant the conclusion that indemnity costs are appropriate considered through the lens of the policy objectives under that section: see obiter dicta remarks of Bromberg J in Celand at [163]-[165]. I respectfully agree with those observations and, in particular, that all relevant circumstances need to be taken into account and that circumstances other than the character of the offer may have a bearing on whether its rejection was, or was not, unreasonable. This appears to have been the approach taken by the Full Court in MTGI at [23]-[24].

15    In Stratton Finance Pty Ltd v Webb [2014] FCAFC 110; 314 ALR 166 the Full Court said at [80] (Allsop CJ, Siopis and Flick JJ):

Caution should be exercised as to how a Calderbank offer, even a generous one, is viewed in such circumstances. Calderbank letters presuppose what might be a called a “costs jurisdiction”, in contrast to the usual rule in FW Act claims. To group together contractual and FW Act claims in an offer may permit the conclusion that the refusal of the offer was unwise, even unreasonable, but it does not follow that such is an unreasonable act or omission, for the purposes of s 570(2).

3.    THE EVIDENCE

16    Mr Salama filed a general protections application in the Fair Work Commission on 23 August 2017.

17    On 4 October 2017 the parties attended a conciliation in the Fair Work Commission. Sydney Trains made an offer to pay Mr Salama $10,000 in damages, which was rejected. Mr Salama sought either: (a) reinstatement and the payment of $200,000 in damages; or (b) $500,000 in damages. Sydney Trains contends that Mr Salama unreasonably refused to participate in a further conciliation a short while later. Mr Salama gives evidence that he was not made aware of an offer for a further conciliation by his then solicitors. He was not challenged on that evidence in cross-examination and no documents were produced to gainsay it. In those circumstances, I am not prepared to find that Mr Salama was aware of the proposal for a further conciliation.

18    The annexure to these reasons is a summary of the offers made in the proceedings as identified in, or exhibited to, the affidavit of Ms Sharp. It will be seen that on 2 May 2018, 14 August 2018, 17 September 2018, 12 October 2018 and 14 December 2018, Sydney Trains made various offers to resolve part or the whole of the proceedings. However, it was not until 20 February 2019 that Sydney Trains had filed and served its evidence in response to the statement of claim (Sydney Trains later filed and served further evidence following the amendment of Mr Salama’s statement of claim). In particular, the significant affidavits of Ms Francisco, Mr New, Mr Walsh and Mr Kable had not been served before then. The broad effect of those affidavits is summarised in the judgment in section 2.2. The judgment demonstrates that the case advanced by Mr Salama was factually complex and necessarily involved assumptions on the part of Mr Salama as to the motivation of Sydney Trains in terminating his employment, which assumptions could not be considered in their entirety until the weight of the evidence brought to bear on the issue by Sydney Trains was made available.

19    I do not consider that Mr Salama’s refusal of offers received prior to the service of these affidavits should factor heavily in the consideration of his conduct for the purposes of s 570(2)(b), even assuming that his solicitors communicated Sydney Trains’ offers to him. I make this observation particularly in circumstances where the offers made were for the payment to Mr Salama of substantially less than his annual wage and included no offer of reinstatement.

20    Sydney Trains relies also on evidence that Mr Salama declined to attend a mediation on 28 May 2018. Mr Salama gives evidence that he did not refuse to attend the mediation. In his affidavit he says that he was not in Sydney at the time and that his solicitors had, contrary to his instructions, refused to find a more suitable date. The email correspondence upon which Mr Salama relies is dated 22 May 2018 and supports his submission. Accordingly, and in the absence of cross-examination of Mr Salama on the subject, I do not find that the failure of Mr Salama to be available for a mediation on 28 May 2018 weighs against him on the question of costs.

21    It is appropriate to set out a little more detail concerning the evidence served on or around 20 February 2019. Ms Francisco gave evidence that she has never had to work with or manage a more combative or argumentative colleague or employee than Mr Salama and that if he were reinstated as an employee and she were required to work with him again, she would feel let down, and strongly consider leaving Sydney Trains. Mr New said that if Mr Salama were to be reinstated he would either request an immediate transfer so that he would not have any interaction with him, or resign from Sydney Trains. He gave evidence that Mr Salama’s conduct took an emotional toll on him and that he had never come across anyone like Mr Salama, whom he considered impossible to reason with, in his working life. Mr Walsh gave evidence that Mr Salama was the most difficult employee he had ever had to manage. He found him to be extraordinarily stubborn and unrelenting in his unfair and disrespectful behaviour. It was his belief that Mr Salama caused significant risk to the safety and wellbeing of those he worked with.

22    This evidence, coming from three of his line managers, demonstrates that Mr Salama should at least have, in considering offers of compromise, adverted to the fact that the prospect of achieving an outcome in the litigation that included reinstatement to a position at Sydney Trains was remote: see Perkins v Grace Worldwide (AUST) Pty Ltd [1997] IRCA 15; 72 IR 186 at 191 (Wilcox CJ, Marshall and North JJ) and Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 242 IR 1 at [858] and [862]-[866] (Dodds-Streeton J).

23    On 15 March 2019 Mr Salama filed his affidavit in reply. On 20 March 2019 his solicitors foreshadowed an amendment to his originating application and statement of claim. The amendments were initially opposed, but on 28 June 2019 the parties agreed to the filing of the amended pleadings on the basis that Mr Salama pay the costs thrown away by reason of the amendment. It is unnecessary to address the detail of the amendments other than to note that they were significant and caused Sydney Trains to file additional affidavits in answer to the fresh allegations made.

24    On 22 May 2019 Sydney Trains sent a detailed Calderbank offer to Mr Salama. In it, Sydney Trains:

(a)    noted that Mr Salama’s employment had been terminated effective from 14 August 2017;

(b)    noted that his earnings in the prior year had been $79,990;

(c)    offered to pay a total sum of $80,000 to Mr Salama on the basis that the parties enter into a deed of release including terms going to confidentiality and non-disparagement; and

(d)    left the offer open for seven days, after which it would lapse.

25    Sydney Trains received no response to this letter. When asked for a confirmation that the offer had been received, the solicitors for Mr Salama confirmed that it had been, and noted that it had been allowed to lapse. Whilst in his affidavit Mr Salama specifically denies knowledge of some communications that were provided to his solicitors, he does not do so in relation to this offer. Indeed, the correspondence exhibited to his affidavit demonstrates that he was a client who maintained a keen involvement in the proceedings and frequently sought updates as to its status. I find that his solicitors, in accordance with their professional obligations, provided the 22 May 2019 offer to Mr Salama and that he instructed them to reject it.

26    On 5 August 2019 the parties attended a mediation at which various offers were made. Sydney Trains’ final position was that it would make a payment to Mr Salama of $100,000 gross.

27    Mr Salama exhibits an email to his affidavit addressed to his solicitors dated 9 August 2019. In it he instructs them to reject Sydney Trains’ offer and to make a Calderbank offer in response, setting out certain terms that he required.

28    On 16 August 2019 Sydney Trains made the following Calderbank offer to Mr Salama, apparently repeating an offer made at the 5 August 2019 mediation:

(a)    Sydney Trains to pay Mr Salama the sum of $100,000 gross (without deduction for tax) with the discretion for him to elect to treat a portion as general damages and a portion as reimbursement for legal fees; and

(e)    Sydney Trains to treat the termination as a resignation rather than a termination, however with his file marked “not suitable for re-hire”.

29    The letter referred to s 570 of the FW Act and noted that whilst Mr Salama has insisted that any settlement would involve a payment of his legal costs, no circumstances set out in s 570 would provide a basis upon which he could obtain such an order. Moreover, the letter noted that the quantum of $170,000 sought by Mr Salama in payment of his legal fees was “grossly disproportionate” to the value of Mr Salama’s claim in circumstances where his total earnings in the employ of Sydney Trains in the year to 30 June 2017 were $79,990. It noted that to recover costs to date in the proceedings, Mr Salama would need to be successful in the proceedings and achieve a damages award in his favour in excess of two years’ salary. The letter went on noting that, in circumstances where Mr Salama had already submitted to an order for costs thrown away by reason of amendments to his pleadings (estimated to be in the order of $20,000) and the likelihood that he would continue to incur costs, such an expectation of costs recovery was unrealistic. The letter submitted that to make settlement conditional on the recovery by Mr Salama of his legal costs amounted to an unreasonable act which caused Sydney Trains to incur costs in defending proceedings where it had made reasonable attempts to resolve the proceedings.

30    The letter also pointed out that even if Mr Salama were successful in the proceedings, any judgment in his favour was unlikely to exceed either the $80,000 offer made on 22 May 2019 or the $100,000 offer made at the 5 August 2019 mediation. Accordingly, Sydney Trains noted that it would be entitled to recover its costs to the conclusion of the proceedings following his rejection of these offers.

31    On 13 September 2019, the solicitors for Mr Salama made a Calderbank offer to Sydney Trains containing the following terms:

(a)    on the basis that Sydney Trains was not prepared to reinstate Mr Salama, Sydney Trains to pay $350,000 by way of settlement;

(b)    Mr Salama enters a deed of release; and

(c)    both parties pay their own costs and all prior costs orders be vacated.

The letter did not provide any details regarding why the sum of $350,000 was chosen, or respond to any of the detailed points made by the solicitors for Sydney Trains in its 16 August 2019 letter. It is apparent from the email correspondence exhibited by Mr Salama to his affidavit that he was involved in and instructed his solicitors to reject the offer made by Sydney Trains and advance the offer set out above. Sydney Trains allowed the offer to lapse.

32    On 18 November 2019, Sydney Trains made a further Calderbank offer. By reference to the Full Court decision in Western Union Business Solutions (Australia) Pty Ltd v Robinson [2019] FCAFC 181; 272 FCR 547 (Kerr, O’Callaghan and Thawley JJ) it set out, in some detail, why, even were Mr Salama successful in his litigation, it was unrealistic for him to consider that he might receive an award in the amount that he had earlier sought. It pointed out that since its last settlement offer, Sydney Trains had incurred additional costs occasioned by the amended pleadings. It offered, as a “final” attempt to resolve the dispute, to:

(a)    make a payment to Mr Salama of $80,000 gross;

(b)    treat the termination as a resignation as per the earlier offer; and

(c)    waive its rights to recover costs thrown away by reason of the pleading amendments.

The offer was stated to remain open for acceptance for 14 days. It was rejected by Mr Salama on 28 November 2019. Email correspondence exhibited to Mr Salama’s affidavit makes plain that he was aware of this offer and that he gave instructions for it to be rejected.

33    On 28 November 2019, Mr Salama made a counter offer in the following terms:

(a)    that Sydney Trains pay him the sum of $500,000;

(b)    both parties pay their own costs; and

(c)    prior costs orders be vacated.

The offer was expressed to be open for acceptance for 14 days.

34    On 13 December 2019, Sydney Trains rejected Mr Salama’s offer of 28 November 2019. The letter cited a further authority, recently decided, in support of its position that Mr Salama’s expectations in the litigation were unreasonable, as was his refusal to accept the offers made. Nevertheless, Sydney Trains made a further offer in the same terms as its offer of 18 November 2019 and provided Mr Salama with seven days within which to accept it. Sydney Trains received no answer to the offer.

35    Ms Sharp deposes that towards the end of the second day of the hearing on 3 March 2020, the solicitor for Mr Salama conveyed an oral offer to her to settle the proceeding. The terms of the offer were that a verdict be entered for Sydney Trains and that each party walk away bearing their own costs. She exhibits an email from Mr Salama’s solicitor the following day, advising that the offer had been withdrawn.

4.    CONSIDERATION

36    In the result, all of Mr Salama’s claims against Sydney Trains were dismissed. Mr Salama would have fared better had he accepted any of the offers made by Sydney Trains from the commencement of the litigation. However, as I have noted in section 2 above, not every failure to accept a settlement offer will constitute an unreasonable act for the purposes of s 570(2)(b) of the FW Act. The factual matrix of the case advanced by Mr Salama was complicated and there was a possibility that Mr Salama may have succeeded in establishing that the adverse action pleaded was taken for a prohibited reason, particularly having regard to the reverse-onus under s 361 of the FW Act. I do not consider that it was unreasonable in the sense required under s 570(2)(b) for Mr Salama to refuse the offers made prior to the service of the Sydney Trains evidence in February 2019.

37    However, after that evidence was served, it must have become apparent that there was a real prospect that Mr Salama would not be reinstated, regardless of the outcome of the proceedings overall. Furthermore, from 22 May 2019, Sydney Trains commenced making offers that were, in my view, very realistic and reasonable offers to settle the proceedings even on the premise that Mr Salama might have succeeded in some or all of his claims. He had by then had an opportunity to consider the evidence and conclude that there was indeed a basis upon which he might not succeed in his claim. Indeed, it is difficult to contemplate how Mr Salama could have done much better than the offer made on 22 May 2019. By the date of the mediation on 5 August 2019, Sydney Trains had increased that offer yet further to $100,000 and that offer was repeated in a Calderbank letter served on 16 August 2019, which Mr Salama did not respond to, and let lapse on 14 September 2019, after he made his counter offer on 13 September 2019. Mr Salama had ample time by then to consider his position and reflect on the offer in the light of the evidence served. Mr Salama was at that point in time, no doubt, the recipient of advice from solicitors and experienced counsel.

38    A person in the position of Mr Salama could not reasonably have considered that he would achieve an outcome in the litigation that would improve upon these offers. Indeed, subsequent events indicate that he harboured a completely unrealistic expectation that the outcome of the proceedings would involve the repayment of the legal fees that he had incurred in circumstances where, given the provisions of s 570 of the FW Act and the way in which Sydney Trains conducted itself in the proceedings, such a result would be unlikely.

39    Whilst the ordinary principles of Calderbank v Calderbank might suggest that Mr Salama’s refusal to accept the offer of 22 May 2019 was unreasonable, having regard to the considerations arising under s 570(2)(b), I find that it was Mr Salama’s failure to accept the later offer of 16 August 2019 that amounted to unreasonable conduct within the meaning of that provision. I consider that Mr Salama should be ordered to pay Sydney Trains’ costs from 14 September 2019, the day upon which the 16 August 2019 offer expired.

40    Sydney Trains contends that Mr Salama should be required to pay indemnity costs from that date. It submits that whilst the default rule is that costs, if awarded, are given on a party/party basis, the Court nonetheless has a discretion to order them to be paid on an indemnity basis. Sydney Trains submits that such costs should be awarded because its Calderbank offers were open for a reasonable amount of time, were reasonable and clearly articulated the basis for the offer, and amounted to genuine compromises. Accordingly, Sydney Trains submits that Mr Salama’s rejection of each offer was so unreasonable as to justify the making of an order for indemnity costs.

41    There can be no doubt that a discretion resides in the Court to award indemnity costs under the regime established by s 570 of the FW Act: see, for instance, Sabapathy v Jetstar Airways (No 2) [2021] FCAFC 68 at [15] (Logan, Flick and Katzmann JJ). The principles relevant to the award of indemnity costs are well established. These principles were recently summarised by Wigney J in Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246 at [6]-[10], which I respectfully adopt. It might fairly be said that the repeated failure of Mr Salama to face up to the fact that Sydney Trains had made numerous reasonable offers to settle the proceedings was a bad lapse in judgment. The frequency of the offers and the detailed reasons for them would perhaps, in a case not governed by the FW Act, warrant a conclusion that Mr Salama ought to pay indemnity costs from 5 August 2019, or perhaps 18 November 2019 when Sydney Trains gave him chapter and verse on why his position in rejecting the offer was untenable. However, I am not persuaded that, having regard to the terms of s 570 of the FW Act, it is appropriate to do so. The failure on the part of Mr Salama arises from his unreasonable act of letting Sydney Trains’ reasonable offer of 16 August 2019 lapse on 14 September 2019. In this statutory context, and in all the circumstances of the case, I do not consider that this failure was so unreasonable as to justify the award of indemnity costs. The later offers made by Sydney Trains were not substantively different to that offer, and Mr Salama’s refusal to accept them was not qualitatively different.

42    Accordingly, I find that Mr Salama must pay Sydney Trains’ costs of the proceedings on a party/party basis from 14 September 2019. He must also pay costs in accordance with order 2 of the orders made by the Court on 28 June 2019.

43    It is appropriate that those costs be assessed on a lump sum basis in accordance with the Court’s Costs Practice Note (GPN-COSTS). The Costs Practice Note applies to all proceedings in this Court, although its application is subject to s 570 of the FW Act: Costs Practice Note at [2.2]. Part 4 is titled “Costs Obtained by a Lump-sum Costs Order”. It provides that the Court’s preference, wherever practicable and appropriate to do so, is for the making of a lump sum costs order. Although no formal application for a lump sum costs order is required, the Costs Practice Note prescribes the material that should be filed in support of such an application, referred to as a “Costs Summary”, as well as the material that may be filed by a respondent to such a claim, referred to as a “Costs Response”. Although Sydney Trains’ evidence addresses, at a high level, matters such as the total costs it has occurred in the proceedings, it does not descend to the level of detail required by the Costs Practice Note, and should do so.

44    Accordingly, I will make orders that Mr Salama pay Sydney Trains’ costs of the proceedings on a party/party basis from 14 September 2019. On 28 June 2019 I made consent orders that Mr Salama pay the costs thrown away by reason of the amendments that he made to his originating application and statement of claim. I will order that the quantum of those orders be determined by a Registrar of the Court pursuant to r 1.37 of the Federal Court Rules 2011.

Associate:

Dated:    6 October 2021

ANNEXURE