Roohizadegan v Technology One Limited (No 7) [2026] FCA 187

This judgment was not the main decision about whether the applicant had succeeded on his workplace claims. It was a later costs ruling after the applicant's proceeding had been dismissed in December 2025. The parties were Behnam Roohizadegan, Technology One Limited and Adrian Di Marco. By this stage, the dispute had already been through an earlier trial before Kerr J, an appeal to the Full Court, and then a retrial before McElwaine J.

The Court recorded that the applicant had previously achieved substantial success before Kerr J and had been awarded about $5.2 million. That earlier result did not stand because the Full Court ordered a retrial. The respondents did not ask for costs of the first trial. Their application was narrower. They said that during the retrial the applicant had acted unreasonably in the way he ran the case and had also unreasonably failed to accept a substantial Calderbank offer made on 6 April 2025.

For business readers, the commercial story is that a long-running employment case became even more expensive because the issues remained broad, the damages case remained very large, and a serious settlement opportunity was not taken when the Court later considered it should have been.

The extract shows that the retrial involved adverse action claims, discrimination claims and a contract claim. The judge's concern was not simply that the applicant pressed hard. It was that the case was not kept within reasonable bounds. McElwaine J said the applicant failed to focus the scope of the case on his core complaints.

The judgment gives a concrete example of that breadth. In the first trial, the applicant had pleaded 96 forms of proscribed adverse action, later reduced to 10 by closing submissions. In the retrial, the statement of claim read with the reply asserted more than 350 combinations of adverse action allegations. That happened because the applicant alleged that 10 individuals in addition to Adrian Di Marco either made the termination decision or materially influenced it, across more than 19 pleaded complaints or acts of discrimination. For one section 340 claim alone, the respondents' written opening exposed 13 pleaded events said to constitute 39 different forms of adverse action taken for 15 different reasons.

The Court said this breadth had practical consequences. It increased the scope and length of the trial. It also required the respondents to meet allegations involving many alleged decision-makers or influencers. The judge noted that in several case management hearings he had raised with the applicant's principal solicitor the desirability of focusing the claim on the strongest points consistently with the overarching purpose. A dedicated case management hearing was held on 28 February 2023 to expose the real issues for determination and support efficient conduct of the trial. Despite those discussions, the applicant maintained the expansive list of contentions and later widened the scope further in the reply filed on 15 June 2023.

The respondents' solicitors had also written in detail on 15 February 2023 explaining why many allegations should be reconsidered as having no proper basis in the evidence. The Court said many of those claims were inherently weak and some were later abandoned in closing submissions. In the judge's view, maintaining them considerably extended the scope and length of the trial and caused consequential costs impacts for the respondents.

The judgment links the costs order to specific conduct, not to a general impression that the applicant had overreached. First, the Court focused on the allegations about who made the termination decision. The applicant's reply alleged that many individuals apart from Adrian Di Marco made the decision or materially influenced it. The respondents then had to put on affidavit evidence from each of those individuals. The affidavits were said to be unanimous to the effect that Adrian Di Marco was the decision-maker and that some named individuals had nothing to do with the decision. McElwaine J held that, acting reasonably and with the benefit of that evidence, the applicant should not have pursued all of those reply contentions and should at least have abandoned some before trial. Because he did not, the respondents unnecessarily incurred costs.

Second, the Court was strongly critical of the quantum case. The applicant pursued a total claim exceeding $55 million. That claim depended on assumptions that he would have remained employed with Technology One until retirement or would have secured alternative employment in the industry with equivalent remuneration until retirement. The judge described those assumptions as objectively large, unreasonable and ultimately untenable. The result was that the parties had to engage remuneration, accounting and lost opportunity experts, prepare joint expert reports and spend extensive trial time on those issues.

The Court said the evidence available to the applicant, at the latest by day one of the trial, objectively exposed what the judge called the fatal flaw in those assumptions. The judgment refers to findings in the primary reasons that the applicant's tenure as Victorian regional manager was already in peril after the Rebecca Gibbons email of 24 April 2016, that his health had led to a marked deterioration in work performance, and that he was unable to accept management cultural changes after Martin Harwood became his direct superior in October 2014. The Court also said the attempt to undermine Rebecca Gibbons' truthfulness and to allege manipulation of her report was baseless.

Third, the Court looked at attempts to narrow quantum issues during the trial. On 3 March 2025, the respondents' solicitor wrote in considerable detail proposing agreement on parts of the applicant's quantum claims, including unpaid base salary, unpaid incentives, unpaid retained incentives, loss of opportunity to sell shares acquired through options, lost income from alternative employment and the contract claim. The applicant's response was that he could not agree with any of the proposals. Follow-up correspondence in late March 2025 did not produce sensible agreement, except that the applicant agreed the quantum figure for the contract claim. The judge accepted there had been many meetings and exchanges, but considered it telling that the applicant's solicitor wrote on 13 March 2025 that the parties did not appear to be in a position to agree and that the respondents should proceed on the assumption there would be live quantum issues at the hearing because many of the respondents' proposed figures were said to be unrealistic and unduly low.

The Court then connected that stance to actual trial costs. The applicant's accounting expert gave evidence on 3 April 2025, and cross-examination exposed flaws in the assumptions he had been asked to make. The remuneration experts also gave evidence on 3 April 2025 and largely agreed on alternative remuneration calculations that the respondents had earlier offered to agree. McElwaine J said the costs of preparing for those aspects of the case and conducting cross-examination could have been avoided if the applicant had engaged more usefully with the respondents' proposals.

Overall, the judge found these aspects of the applicant's conduct very considerably increased the length and complexity of the trial. The applicant's cross-examination alone extended over 11 days because of the multiple allegations pressed and the vast quantum of the claims. That inevitably caused the respondents to incur considerable additional costs.

The Court made clear that the conduct issues by themselves would not have been enough to justify a costs order. This is an important part of the reasoning. McElwaine J said that standing alone those matters would not have satisfied him that it was appropriate to exercise the discretion under section 570. The applicant had enjoyed very substantial success before Kerr J, the Full Court had not concluded that his claims lacked merit, and caution is required in Fair Work costs decisions so that parties are not discouraged from pursuing or defending claims under the Act.

What changed the position was the 6 April 2025 Calderbank offer, viewed together with the applicant's antecedent conduct. On 4 April 2025, the applicant made a written Calderbank offer seeking $30 million and a mutual deed of release containing mutual releases, non-disparagement obligations and confidentiality obligations. The respondents rejected that offer on 6 April 2025, describing it as completely divorced from the state of the evidence. They then made a counter-offer to resolve the proceeding by payment of $2.2 million inclusive of all costs, and said they would not pursue the applicant for costs, including in respect of identified unreasonable conduct relating to a late amendment. The offer was expressly made without prejudice as to costs and in accordance with Calderbank principles. It remained open until 10am on 7 April 2025. There was no reply.

The Court said a failure to accept a Calderbank offer may amount to an unreasonable act or omission for the purposes of section 570. The question is objective and must be assessed in the circumstances as they were then known. The judge treated the timing of the offer as especially important. It was made well after the applicant's cross-examination had concluded and after the end-of-year holiday period and Court vacation. The trial had sat until 23 October 2024, then adjourned to resume on 31 March 2025. The applicant therefore had a considerable period to reflect with his legal advisers on the progress of the case before the offer arrived.

McElwaine J said it was objectively correct for the respondents' solicitor to characterise the applicant's cross-examination as disastrous, referring to the primary reasons and especially the passages dealing with credibility. The applicant had been repeatedly challenged that his evidence was false, implausible, made up and otherwise unsatisfactory. The judge said it was manifestly clear to any observer that adverse credibility findings were highly likely. Acting reasonably, the applicant and his legal representatives should have reflected very carefully on the prospects of succeeding on the multiple claims well before receiving the 6 April 2025 offer.

The Court accepted that the respondents' primary witnesses on the adverse action issues had not yet entered the witness box, but said that did not answer the point. The applicant already had all of their affidavit evidence. The offer was made at a time when the inherent weakness of the applicant's claims was objectively clear. The judge said that, acting reasonably on what was then known, the applicant should have concluded that his prospects were dim on the termination and non-termination adverse action claims and the discrimination claims, which formed the bulk of the proceeding. That effectively left the contract claim, with a best-case quantum significantly less than the offer.

The Court also rejected an argument that the applicant could assess the offer by reference to what he might have achieved if all his contentions were accepted. The proper question was whether a more beneficial result was realistically possible. McElwaine J held that, acting reasonably at the time of the offer, the applicant ought to have understood that a better result was not a realistic possibility.

As to the short deadline, the Court held it was not unreasonable in the circumstances. The trial was continuing, the applicant had already reflected on his case before making his own 4 April 2025 offer, and he had the benefit of 6 April 2025 as a non-sitting day to consider the respondents' offer before the hearing resumed on 7 April 2025.

The extent of the compromise also mattered. The judgment records a history of offers, including a respondents' offer of $2.6 million in February 2022 and the later $2.2 million offer on 6 April 2025. Evidence from the respondents was that the lower figure reflected significant legal costs already incurred, the fact that the retrial had already proceeded for 22 days, and their assessment that the applicant's prospects had reduced. The Court held that the applicant, with legal representation, ought reasonably to have understood that the respondents had incurred significant legal costs since 2022 and that the offer reflected a genuine attempt at compromise on commercial terms that favoured the applicant at that time.

McElwaine J concluded that this was a clear case for a partial party-and-party costs order. The order made was that the applicant pay the respondents' costs of the proceeding from 6 April 2025, to be determined by a Registrar on a lump sum basis under rule 40.02 of the Federal Court Rules 2011 (Cth). The Registrar was then to make an order fixing the amount, payable within 14 days of that order.

The reasoning is important. The Court did not simply say the applicant lost and therefore should pay. Nor did it say that the broad pleadings and quantum case alone justified costs. Instead, the judge expressly said those matters standing alone would not have been enough. The costs order arose because the applicant's antecedent conduct had already increased the length and complexity of the retrial, and then, against that background, he unreasonably failed to accept the 6 April 2025 settlement offer.

The Court also linked this to the overarching purpose in sections 37M and 37N of the Federal Court of Australia Act 1976 (Cth). The judge said the applicant was duty bound to conduct the proceeding, including his assessment of the settlement offer, consistently with that overarching purpose. Objectively, acting consistently and reasonably with that duty, he ought to have accepted the offer.

The extract is truncated near the end of the reasons, including discussion of affidavit evidence about the applicant's health during the trial. Because the available text cuts off, this page does not go beyond the findings clearly stated before the truncation. The key public point remains clear from the published orders and reasons: the Court found the rejection of the 6 April 2025 offer unreasonable in light of the state of the evidence and the way the retrial had been conducted, and it therefore ordered costs from that date.

For employers and other business respondents, this case is a practical reminder that litigation discipline matters. If the real decision-maker in a termination or disciplinary process is clear and documented, that can help resist broad allegations that many people made or influenced the decision. Contemporaneous documents also matter. In this judgment, the Court referred to affidavit evidence, contemporaneous records and the Rebecca Gibbons email as part of the objective picture that should have informed settlement assessment.

For any business involved in Fair Work litigation, the case also shows the cost of allowing pleadings and damages theories to outrun the evidence. Broad allegations can force the other side to call more witnesses, prepare more affidavits and spend more hearing time. Large future loss claims can trigger expensive expert evidence and cross-examination. If those allegations or assumptions later prove weak, they may become part of a costs application.

The judgment is also a strong reminder to treat Calderbank offers seriously. The Court looked at the objective attractiveness of the offer, whether a better result was realistically possible, and whether the effort required to pursue a better result was proportionate. Businesses should assess offers against the evidence as it stands at the time, not against optimism built on earlier procedural wins or best-case theories. A realistic offer made after evidence has crystallised can become the trigger point for costs.

Finally, this case shows that section 570 is protective but not absolute. Courts remain cautious because costs orders can discourage parties from bringing or defending Fair Work claims. But where a party runs the case unreasonably and then rejects a genuine commercial compromise when the weakness of the case is objectively apparent, costs can still follow from that point.

Business owners often ask whether Fair Work cases are effectively risk-free on costs. This judgment shows they are not. The Court still needs a statutory basis under section 570, but unreasonable acts or omissions can provide that basis, and rejection of a reasonable Calderbank offer can be one of them.

Another common question is whether a party can safely wait to hear all witnesses before deciding on settlement. This case suggests the answer is no. The Court looked at the evidence already available when the offer was made, including completed cross-examination, affidavit material, expert evidence and contemporaneous documents. The fact that some witnesses had not yet entered the witness box did not stop the Court from finding that the weakness of the case was already objectively clear.

Businesses also ask whether broad pleadings are just part of hard-fought litigation. The Court accepted that Fair Work cases can be strongly contested, but still found that claims must be kept within reasonable bounds and aligned with the overarching purpose. Breadth for its own sake can become expensive and can later support a costs order.

This page explains the costs decision in Roohizadegan v Technology One Limited (No 7) [2026] FCA 187, delivered by McElwaine J on 4 March 2026. The published extract identifies the matter as an application for costs orders under section 570 of the Fair Work Act 2009 (Cth), following dismissal of the proceeding in Roohizadegan v Technology One Ltd (No 6) [2025] 1619.

The available judgment text is truncated near the end. The orders and the key reasoning for the costs order are clear in the published extract, but this page does not add detail beyond what is clearly stated there about the underlying employment dispute or the final parts of the costs reasons.