Exit Distraction Free Reading Mode
- Unreported Judgment
 QIRC 187
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
Watpac Construction Pty Ltd v The Regulator under the Work Health and Safety Act 2011  QIRC 187
Watpac Construction Pty Ltd
The Regulator under the Work Health and Safety Act 2011
Applications for costs
30 October 2020
23 July 2020
WORK HEALTH AND SAFETY - EXTERNAL REVIEW - APPLICATION IN EXISTING PROCEEDINGS FOR COSTS - where applications filed for external review - where respondent conceded WHS/2019/48 prior to hearing the remaining applications - where applications WHS/2019/46, WHS/2019/47, WHS/2019/59 and WHS/2019/60 part heard then adjourned - where respondent subsequently conceded those matters - where applicant seeking full indemnity costs for all matters - whether Commission should award full indemnity costs.
Work Health and Safety Act 2011 (Qld) s 229B, s 229D, ss 229E
Industrial Relations Act 2016 (Qld) s 545
Industrial Relations Act 1999 (Qld) s 335
Work Health and Safety Regulation 2011 (Qld) s 225
Industrial Relations (Tribunals) Rules 2011 (Qld) r 70
Anderson v AON Risk Services Australia Ltd  QSC 180
Australand Corporation (Qld) Pty Ltd v Johnson & Ors  QSC 128
Bechara v Legal Services Commissioner (2010) 79 NSWLR 763
Boner v Anderson (No 2)  50 IR 470
(Bruce) Campbell Gordon AND Department of Corrective Services (B/2010/3) - Decision http://www.qirc.qld.gov.au
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225
Cosmos E-C Commerce Pty Ltd v Sue Bidwell & Associates Pty Ltd  NSWCA 81
Degiorgio v Dunn (No 2)  NSWSC 3; 62 NSWLR 284
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Dominic Burke v Simon Blackwood (Workers' Compensation Regulator) (C/2013/38) - Decision - http://www.qirc.qld.gov.au
Fick v Groves (No 2)  QSC 182
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) HCA 69; (1964) 112 CLR 125
Gersten v Cape York Land Council Aboriginal Corp (No 2)  QIC 42; 176 QGIG 153
Gold Coast City Council AND Natalia Bedran (B/2013/14) - Decision http://www.qir.qld.gov.au
Hughes v Western Australian Cricket Association Inc (1986) ATPR 40 – 748
Imogen Pty Ltd v Sangwin (1996) 70 IR 254
John Holland Pty Ltd v Adani Abbot Point Terminal Pty Ltd (No 2)  QSC 48
Kanan v Australian Postal and Telecommunications Union  FCA 539; (1992) 43 IR 257
Keddie & Ors v Stacks/Goudkamp Pty Ltd  NSWCA 254
Latoudis v Casey (1990) 170 CLR 534
Legal Services Commissioner v Bone  QCA 179
MIM Holdings Ltd v AMEPKU (2000) 164 QGIG 370
Newmont Pajingo Pty Ltd v Tomac Enterprises Pty Ltd (No. 2)  ICQ 23
Park Avenue Motor-Hotel Pty Ltd & Ors v Beck (No 2)  ICQ 63; 183 QGIG No 21
Park Avenue Motor-Hotel Pty Ltd and Ors v Juergen Willi Beck  ICQ 53;  187 QGIG, No. 1
Re Kirby Street (Holding) Pty Ltd  NSWSC 1536
Rosniak v Government Insurance Office (1997) 41 NSWLR 608
Rovera Scaffolding (ACT) Pty Ltd v Director-General of the Chief Minister, Treasury & Economic Development Directorate  ACAT 127.
State of Queensland (South West Hospital and Health Service) v Crews-Bradley  QIRC 93
Theseus Exploration NL v Foyster (1972) 126 CLR 507
Thiess Pty Ltd v FLSMIDTH Minerals Pty Ltd (No. 2)  QSC 120
Wanninayake v State of Queensland (Department of Natural Resources and Mines)  QIRC 079
Webster v Lampard (1993) 177 CLR 598
WorkCover Authority of NSW v Plastachem Pty Ltd (2001) 110 IR 351
Mr T.A. Spence, Counsel instructed by Mr D.J. Hegarty, DWF (Australia) for the applicant.
Mr S.P. Gray, Counsel instructed directly by Mr G. Clark, the Regulator for the respondent.
Reasons for Decision
- The following external review applications were filed by Watpac Construction Pty Ltd (the Applicant) pursuant to s 229B of the Work Health and Safety Act 2011 (WHS Act) in respect of: WHS/2019/46; WHS/2019/47; WHS/2019/48; WHS/2019/59; and WHS/2019/60.
- By consent, the parties agreed that each improvement notice the subject of an internal review decision be set aside and substituted with a decision that each improvement notice be withdrawn, ab initio. It was also agreed that the issue of costs be reserved with the Applicant at liberty to apply.
- On 24 January 2020 the Applicant filed an application seeking costs in respect of each matter.
- The Respondent opposes the costs application.
Power to award costs
- Section 229D of the WHS Act provides that the procedure for external reviews is governed by the rules provided by the Industrial Relations Act 2016 (the IR Act 2016). Section 229D provides:
229D Hearing procedures
- (1)The procedure for an application for a review is to be under the rules applying to applications for review by the commission under the Industrial Relations Act 2016 or, if the rules make no provision or insufficient provision, in accordance with directions of the commission.
- Section 229E of the WHS Act sets out the powers of the Commission when dealing with external review applications:
229E Powers of commission on application
- (1)In deciding an application for a review, the commission may –
- (a)confirm the decision; or
- (b)vary the decision; or
- (c)set aside the decision and make a decision in substitution for it; or
- (d)set aside the decision and return the issue to the decision-maker with directions the commission considers appropriate.
- Section 545 of the IR Act 2016 deals with the general powers to award costs and provides:
545 General power to award costs
- (1)A person must bear the person's own costs in relation to a proceeding before the court or commission.
- (2)However, the court or commission may, on application by a party to the proceeding, order –
- (a)a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied –
- (i)the party made the application or responded to the application vexatiously or without reasonable cause; or
- (ii)it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or
. . .
- Rule 70 of the Industrial Relations (Tribunals) Rules 2011 (Qld) (IR Rules) applies to the Commission when making an order for costs under s 545 of the IR Act 2016. Relevantly, rule 70(2) of the IR Rules provides:
- (2)The court or commission, in making the order, may have regard to –
- (a)for a proceeding before the commission - the costs payable on the scale of costs for Magistrates Courts under the Uniform Civil Procedure Rules 1999, schedule 2; or
- (b)for a proceeding before the court or the full bench - the costs payable on the scale of costs for the Supreme Court and District Court under the Uniform Civil Procedure Rules 1999, schedule 1; or
- (c)any other relevant factor.
The costs application
- The Applicant submits that the Commission should order costs against the Respondent in respect of each matter in accordance with s 545(2) of the IR Act 2016, on the basis that the Respondent:
- a.responded to the application vexatiously or without reasonable cause; and/or
- b.it would have been reasonably apparent to the party that the response to the application had no reasonable prospect of success.
- Further, it is submitted that the Respondent engaged in "something more than unreasonable conduct", and therefore the Commission should award full indemnity costs against the Respondent.
- In these circumstances, the Applicant contended that it is appropriate for the Commission to award costs beyond the Magistrates Courts scale by having regard to the following factors:
- a.The notices, which are individually addressed in detail below, consist of fundamentally incorrect interpretations of the WHS Act and Regulations. The "beliefs" formed by the Inspector were never open to him to form. In doing so, the Inspector acted in a way contrary to s 182 of the WHS Act.
- b.Requests for disclosure were denied by the Internal Review Office and/or Inspector Glendon Altoft for each matter, thereby denying the Applicant procedural fairness and natural justice. Had full and proper disclosure been made, it should have become apparent to the Respondent at an early stage that there were no reasonable prospects of success.
- c.The Respondent initially resisted the Applicant's stay application for matters WHS/2019/46, WHS/2019/47 and WHS/2019/48. The Applicant was therefore put to the expense of:
i. Drafting stay and substantive applications;
ii. Drafting correspondence on 26 April 2019 requesting the Regulator's consent to the stay applications;
- Drafting and providing further submissions to the Respondent on 10 May 2019;
- Attending a directions hearing on 15 May 2019 in the Commission where the Respondent maintained its opposition to the stay only to then consent to the stay applications later that day.
d. The Applicant was required to seek complete disclosure from the Regulator in circumstances where it was apparent that incomplete disclosure had been made;
e. The Applicant was required to file detailed outline of arguments and outlines of argument in reply, settled by Counsel, when it was clear from the outset that the Respondent did not have reasonable prospects of success;
f. The Applicant was required to conference witnesses in preparation for the hearing including drafting outlines of evidence and filing a list of witnesses;
g. In respect of the WHS/2019/48 matter, the Applicant engaged an expert witness to procure an expert report when the difference between a self-drilling and self-screwing bolt was apparent from any reasonable cursory review of the material;
h. The Applicant was required to prepare and attend two days of hearing in the Commission when ultimately the Respondent elected to adjourn mid-hearing and eventually conceded on all matters; and
- The Applicant was put to the expense of arranging witnesses Craig Hullick, Darren Jones and Simon Boyes to fly from Townsville to Brisbane to give evidence. In this regard we note Darren Jones did not complete his evidence and Simon Boyes was not required to give his evidence given the Respondent ultimately adjourned mid-hearing to reconsider their position.
Principles governing an award of costs in the Commission
- The ordinary rule is set out in s 545(1) of the IR Act; namely that each party is to bear its own costs in relation to a proceeding in the Commission. That rule need not be applied if s 545(2)(a) is satisfied. In other words, costs may be awarded if the Commission is satisfied that the Respondent responded to the application vexatiously or without reasonable cause; or it would have been reasonably apparent to the Respondent that the response to the application had no reasonable prospect of success.
The test for "vexatiously or without reasonable cause"
- The principles to be applied in applications such as this was considered by Martin J in Wanninayake v State of Queensland (Department of Natural Resources and Mines). The case concerned the predecessor of s 545 – s 335 of the Industrial Relations Act 1999. In that case his Honour wrote:
 An application has been made by the respondent for an order under s 335 of the Industrial Relations Act 1999. That Act permits the court to make an order that an unsuccessful applicant pay costs in circumstances where an application was made vexatiously or without reasonable cause.
 It is completely obvious that Ms Wanninayake is distraught as a result of what has occurred to her. Regrettably, a large part of what has occurred to her in the Commission and this court has been brought about by her own misunderstanding of the procedures and the orders that might be available to her, but that is not a reason to deny a successful party its costs. The appeal was never going to succeed. It was based on a misapprehension of the original application for a stay of the decision by Deputy President Kaufman.
 Neither the application for a stay, nor the appeal from the order dismissing that application could have succeeded. It follows that the application was made without reasonable cause, and so the jurisdiction is enlivened.
- The Applicant referred the Commission to the decision of State of Queensland (South West Hospital and Health Service) v Crews-Bradley, which considered s 335(1)(a) of the Industrial Relations Act 1999 (the IR Act 1999), the equivalent to s 545(2) of the IR Act 2016:
The phrase 'vexatiously or without reasonable cause' is to be read disjunctively and not in a composite way.
It is not my understanding of the submissions of the applicant that they contend the respondent, in bringing the application, has acted 'vexatiously'; that is, with the intention of annoying or embarrassing the applicant.
In determining the expression 'without reasonable cause' in s 335(1) of the IR Act, it cannot be said that a party has made an application 'without reasonable cause', within the meaning of s 335(1) of the IR Act simply because the applicant's argument proves unsuccessful.
In considering the phrase 'without reasonable cause' Wilcox J in Kanan v Australian Postal and Telecommunications Union, wrote:
'It seems to me that one way of testing whether a proceeding is instituted "'without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.'
In practice, the test used to determine 'without reasonable cause' is not, in many ways, dissimilar to that applied in determining a summary judgment application. That test has been variously expressed, including that a case is 'manifestly groundless' or is 'so obviously untenable that it cannot possibly succeed'.
Martin J in Dominic Burke v Simon Blackwood (Workers' Compensation Regulator) in dealing with 'without reasonable cause' expressed the view that where an appeal is brought to the Commission on a footing which is misconceived and doomed to fail, costs should follow the event.
- In MIM Holdings Ltd v AMWU, Hall P explained the phrase "without reasonable cause" as "objectively recognisable as one which could not succeed at the time when the application was made".
- The test to be applied is not simply whether or not the application was unsuccessful. It is whether the application could not succeed at the time when it was made.
The test for reasonable prospects of success
- It is acknowledged that s 545 of the IR Act 2016 preserves s 335 of the IR Act 1999 by providing that a person must bear their own costs in relation to a proceeding unless the court or commission has ordered costs to another party. However, s 545 goes further than s 335 by giving the Commission a discretion in circumstances where a party to the proceeding made the application, or responded to the application, when there was no reasonable prospect of success.
- As a matter of ordinary expression, the words 'reasonable prospects of success' involves weighing up the circumstances of the case to determine whether they are reasonable in the sense that they provide a rational base for a decision to proceed with a matter or, as in this case, whether to respond to the application.
- In Keddie & Ors v Stacks/Goudkamp Pty Ltd the New South Wales Court of Appeal was called on to consider a costs application in the context of s 345 of the Legal Profession Act and the obligation of a law practice not to provide legal services unless the claim has reasonable prospects of success.
- In considering the phrase "reasonable prospects of success" the Court of Appeal had reference to the reasoning of Barrett J (as his Honour then was) in Degiorgio v Dunn (No 2), where his Honour observed:
... 'without reasonable prospects of success' ... equates its meaning with 'so lacking in merit or substance as to be not fairly arguable'. The concept is one that falls appreciably short of 'likely to succeed'.
- Beazley JA (with whom Barrett JA and Sackville AJA agreed) held that the phrase 'without reasonable prospects of success' means 'not fairly arguable' and as to establish 'on the basis of provable facts and a reasonably arguable view of the law that the claim has reasonable prospects of success'.
The circumstances in which indemnity costs should be awarded
- The Commission was referred to a number of authorities which consider the circumstances in which a court would be justified in making an order for indemnity costs.
- In the matter of (Bruce) Campbell Gordon v Department of Corrective Services, Fisher IC considered the awarding of indemnity costs in the Commission and wrote:
Both Counsel referred the Commission to the decision in Park Avenue Motor-Hotel Pty Ltd v Beck, where the President reaffirmed earlier decisions of the Court that "the discretion which arises under s 335 of the Industrial Relations Act 1999 extends to the award of indemnity costs". Consideration was given to when an award of indemnity costs might be triggered. Although the President's decision was made in the context of s 335(1)(a) of the Act it was accepted by both Counsel that something more than unreasonable conduct must be shown in order to trigger an award of indemnity costs under s 335(1)(b), otherwise the statutory discretion would be "swallowed up".
. . .
In determining whether the conduct meets the description of "something more" I have considered the decision of the Queensland Court of Appeal in Di Carlo v Dubois & Ors, and the decision of Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd, the circumstances in which a court will be justified in exercising discretion to award indemnity costs are outlined. One of the categories identified by Sheppard J is misconduct that causes loss of time to the court and the proceedings. (Citations omitted)
- The Applicant referred to Gold Coast City Council AND Natalia Bedran, where Shepherd J, in reviewing the authorities in Colgate-Palmolive Company v Cussons Pty Ltd as cited by the Queensland Court of Appeal in Legal Services Commissioner v Bone, identified some instances where a court would be justified in exercising a discretion to award indemnity costs:
- (a)the making of allegations of fraud knowing them to be false and the making of the irrelevant allegations of fraud;
- (b)evidence of a particular misconduct that causes a loss of time to the court and to other parties;
- (c)the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard to known facts or clearly established law;
- (d)the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and
- (e)an imprudent refusal to an offer of compromise.
- Applegarth J in Fick v Groves (No 2) identified the following factors to be considered in determining whether to award indemnity costs:
- the fact that proceedings were commenced or continued in wilful disregard of known facts;
- the making of allegations which ought never to have been made;
- the undue prolongation of a case by groundless contentions;
- evidence of particular misconduct that causes loss of time to the Court and to other parties;
- any imprudent refusal of an offer to compromise.
- In John Holland Pty Ltd v Adani Abbot Point Terminal Pty Ltd (No 2) (John Holland), Jackson J considered whether a warning ought to be given as a precondition to the making of an order for indemnity costs. John Holland involved an application for costs relating to an earlier application for leave to appeal under s 38 of the Commercial Arbitration Act 1990 between John Holland Pty Ltd and Adani Abbot Point Terminal Pty Ltd. The application took two days and involved in excess of 2,000 pages of affidavit material. The application for costs was commenced by the Respondent on the basis that the application for leave to appeal involved three special or unusual features that warranted an order for costs to be awarded on an indemnity basis. Jackson J concluded there was an oppression in the material filed in support of the application and therefore indemnity costs were awarded in favour of the Respondent. He wrote:
Next, a number of cases have considered whether a party who proposes to seek a special order that costs be assessed on the indemnity basis should give notice of an application for indemnity costs before the hearing of the matter. In Australia, that conception appears to have originated in the Court of Appeal of New South Wales in Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd where Kirby P said:
If such an order is to be made, it would be preferable that it should follow due and timely warning by the successful party to the unsuccessful that indemnity costs will be sought. In short, if the legal representatives of parties to an appeal (particularly perhaps in commercial litigation such as the present) consider that the appeal, or points in it, are obviously hopeless and doomed to fail, they would be well advised to warn their opponents that continued prosecution of the appeal, or of the hopeless points, will result in an application to the Court for a special costs order.
That approach has been consistently followed since. However, as the cases show, lack of warning is a relevant consideration to take into account but a warning is not a precondition to making an order for indemnity costs. (Citations omitted)
The issuing of the Improvement Notices
- The issue before the Commission is whether an order for costs should be made and, if so, whether the award should be in accordance with the Magistrates Courts scale pursuant to Rule 70 of the IR Rules or on an indemnity basis.
- Let me briefly address the issuing of each of the Improvement Notices the subject of this external review to ascertain whether there is basis upon which an order for costs can be granted and, if so, on what basis.
WHS/2019/46 - Improvement Notice I1049825
- Improvement Notice I1049825 was issued by Inspector Altoft for an alleged breach of regulation 225(2) of the Work Health and Safety Regulation 2011 (Qld) (WHS Regulations). The regulation relevantly provides:
- (2)The person with the management or control of a scaffold must ensure that the scaffold is not used unless the person receives written confirmation from a competent person that construction of the scaffold is complete.
- It is not in contention that on 4 March 2019 the scaffold access tower was erected at the southern corner of the grandstand by Benchmark Scaffolding; following the completion of the scaffold, a "scaff tag" was signed by Mr Ricky Toakotaua at 7:30am on 4 March 2019; Mr Toakotaua was the holder of a licence to perform high risk work; for the purposes of the regulation Mr Toakotaua was a "competent person"; and a scaffold handover certificate signed by Mr Toakotaua was accepted by Mr Craig Hullick, Watpac's Project Safety Coordinator at 10.50 am on 4 March 2019.
- Section 225(2) of the WHS Regulations requires that the Applicant obtain written confirmation from a competent person, that the construction of the scaffold has been completed. This requirement was complied with. Indeed, the improvement notice issued by Inspector Altoft records that the scaffolding had been signed off on the "scaff tag" on 4 March 2019.
- A photo of the Scaffold Tag and a copy of the Handover Certificate were provided to the internal review office upon application. These documents were also annexed to the Applicant's external review outline of argument.
- The Applicant argues that it was clear from the outset of the Application for External Review that Improvement Notice I1049825, alleging a breach of s 225(2) of the WHS Regulations, should not have been issued to the Applicant. I agree.
- Let me briefly deal with some of the other submissions made by the Respondent. The further submissions of the Respondent are premised on an erroneous view of what was alleged to have been breached.
- It is contended by the Respondent that the Improvement Notice was issued by Inspector Altoft after he felt lateral movement on the scaffold during the inspection. Enquires were made of the Applicant's representative and additions were made to the scaffold.
- The Respondent identifies the following facts which they submit are relevant:
- (a)On 6 March 2019, Inspector Altoft and others attended at the NQ Stadium where he and other inspectors were accompanied by Mr Darren Jones, also a Project Safety Coordinator for Watpac:
- (i)when they were on the South-West Grandstand scaffold, Inspector Altoft and the other inspectors, experienced excessive lateral movement in the scaffolding, which Inspector Altoft identified was because of a lack of lateral bracing;
- (ii)Mr Jones' evidence was that when he climbed up the scaffold during the inspection it was a little bit rocky, it had a little bit of a sway to it and there was some movement;
- (iv)Inspector Altoft did not give any direction to Mr Jones to have those additions made to the scaffolding; he did not have to because that was occurring immediately; and
- (v)Inspector Altoft did not need to give a direction for the party to move off the scaffold because everyone did that voluntarily.
- The Respondent submits, Inspector Altoft and other Inspectors "…experienced excessive lateral movement in the scaffolding."
- In respect of the level of movement experienced on the scaffold, Mr Darren Jones' evidence was:
MR SPENCE: Right. And how long were you on the south west corner scaffold stairs with him for?
MR JONES: The majority of that two hours.
MR SPENCE: Okay. And during that inspection, what issues did the inspector identify with that scaffold?
MR JONES: When we climbed up to, I think, around level 3, it was a little bit rocky, had a little bit of a sway to it, and he identified that he thought that there was some bracing missing.
MR SPENCE: Right. In terms of the rockiness, what did you feel?
MR JONES: It was a little bit – there was some movement there.
MR SPENCE: Yes. Okay. And with regards to the bracing issue, what was the concern that was raised by the inspector?
MR JONES: That bracing wasn't – sorry, I think he said there was bracing missing.
MR SPENCE: What kind of bracing?
MR JONES: The lateral bracing on the western elevation.
MR SPENCE: Right. And when you say lateral bracing, does that mean diagonal bracing?
MR JONES: Diagonal bracing, yeah.
MR SPENCE: Okay. What was your view – oh, sorry. What did you see on that scaffold in terms of existing diagonal bracing?
MR JONES: There was existing diagonal bracing on the scaffold.
- The Improvement Notice makes no reference to "excessive lateral movement". Indeed, the Improvement Notice makes no specific reference to movement at all. The notice records that:
I identified through observations, questions and photos that diagonal bracing was not provided on the access scaffold elevation. During a workplace inspection, I made enquiries into the lack of diagonal bracing as the bracing will provide lateral bracing to the scaffold access tower.
- The basis for the issuing of an improvement notice by an inspector is to require a contravention against the WHS Act or Regulations to be remedied within a certain period or a likely contravention to be prevented (that is, if there are circumstances that make it likely that a contravention will continue or be repeated). An inspector may issue an improvement notice requiring a person to remedy the contravention, prevent a likely contravention from happening or remedy the things or operations causing the contravention or likely contravention.
- The Improvement Notice must state the inspector's belief about the contravention or likely contravention, identify the provision the inspector believes is being or has been contravened, how the provision is being or has been contravened and a reasonable date by which to fix the contravention. An improvement notice may also include directions and/or recommendations about how to fix or prevent a contravention.
- The description of how the provision has been contravened is said to be the lack of diagonal bracing. The Improvement Notice issued by Inspector Altoft records:
The Watpac WHS Manager contacted the Scaffold Supervisor for the project who then proceeded to install the diagonal bracing. (Emphasis added)
- Inspector Altoft could never have formed a reasonable belief on 6 March 2019 at 15:00 that there was a contravention of the WHS Regulations when he already knew that rectification had been undertaken.
- Moreover, the Improvement Notice was signed on 7 March 2019 but was not issued until the 14 March 2019, eight days after the inspection and rectification.
- It seems to me counter-intuitive to issue an Improvement Notice in circumstances where the apparent breach has already been rectified. The Improvement Notice records the diagonal bracing was installed and the evidence of Mr Brown makes it clear that the installation of the diagonal bracing was carried out before the notice was issued and took approximately 10 to 15 minutes to undertake.
- The Respondent asserts that the Applicant should have had cause for concern that the lateral movement felt on the scaffolding on 6 March 2019 called into question the safety and adequacy of the scaffold and critically, the competence of the person signing off on the certificate; and the obligations imposed by the Act and Regulation required the Applicant to take appropriate action, but it did not. The submissions in my view have no basis in fact or in law.
- In respect of WHS/2019/46 I accept that the Respondent did not have reasonable prospects of success in responding to the application.
WHS/2019/47 - Improvement Notice I1049827
- This Improvement Notice alleges a breach of s 225(4) of the WHS Regulations. As stated in the application for external review, the Inspector could not form a reasonable belief that the Applicant was contravening s 225(4) of the WHS Regulations at the same time the alleged issue with the tying of the scaffold was identified by him. To do so erroneously conflates the obligation to identify the risk and the obligation to ensure the issue giving rise to the risk is remedied after it is identified.
- The Applicant asserts that these submissions were made clearly on internal and external review. It follows that it must or ought to have been apparent to the Respondent there was no reasonable prospect of success.
- In Rovera Scaffolding (ACT) Pty Ltd v Director-General of the Chief Minister, Treasury & Economic Development Directorate Senior Member Anforth was called upon to consider the application of s 225(4) of the WHS Regulations. Senior Member Anforth said:
Regulation 225(4) permits a competent person, in this case Mr Mason, to 'indicate' to Rovera that repairs or rectifications are required and that there be subsequent inspections of the rectified work. It is an offence for Rovera to fail to comply with that 'indication' under this regulation. The indication of a scaffolding defect that creates a risk to public health and safety is a jurisdictional fact that must be shown to exist before the operation of the remainder of regulation 225(4) can operate. The existence of that jurisdictional fact is not itself a breach of regulation 225(4) or of the regulations. It is the trigger by which the power to require or order rectifications in regulation 225(4) come into operation. A breach of regulation 225(4) only arises where there is non compliance with an indication or order to carry out the rectification or repairs. (Emphasis added)
- The Improvement Notice was issued by Inspector Altoft on 12 March 2019 in apparent reliance on s 191(1)(b) of the WHS Act. Section 191(1)(b) requires that an inspector reasonably believes that a person has contravened a provision in circumstances that makes it likely that the contravention will continue or be repeated. It is not apparent on the material before the Commission on what basis the Inspector formed the reasonable belief that the alleged contravention of s 225(4) (if it was contravened) would continue or be repeated.
- Regulation 225(4) applies where an inspection indicates that there is a risk to health and safety. At that point the site manager 'must ensure' that any necessary repairs, alterations or additions are carried out. The 'inspection' is a reference to the inspection by the 'competent person' referred to in regulation 225(3). There is, in my view, a fundamental misunderstanding by Inspector Altoft as to how regulation 225 works. Irrespective, the evidence was that Inspector Altoft gave directions to the scaffolding supervisor on-site on 12 March 2019 and the apparent defects were addressed on the day.
- Further, the notice does not direct the Applicant with any degree of particularity to the measures to be taken to remedy the alleged contravention. Rather, the direction contained in the Improvement Notice merely recites, somewhat unhelpfully, the statutory provision.
- WHS/2019/47 was subsequently conceded as a consequence of Inspector Altoft attending the North Queensland Stadium Project, on or around 11 September 2019, approximately a week prior to the hearing, and using his compliance powers to obtain documents. The Respondent submitted that:
It is therefore entirely understandable that the questions asked by the Inspector and enquiries made by him on 11 September 2019 may have had a detrimental impact on his credibility. Rather than unduly prolonging the proceedings, as soon as the respondent became aware of those actions, it asked for an adjournment so that it could have the opportunity to assess that evidence.
- The conduct of the Inspector led the Respondent to concede the review, directly attributing to the Applicant incurring additional and unnecessary costs, which the Applicant submits it should be more than partially compensated for.
- For the reasons advanced, I accept that the Respondent did not have reasonable prospects of success in responding to the application.
WHS/2019/48 - Improvement Notice I1049828
- This notice alleges that the Applicant was using a self-drilling anchor which is prohibited under the Scaffolding Code of Practice 2009. It was not.
- The Inspector was incorrect in contending that the blue tip bolt used by the Applicant was "self-drilling".
- The Applicant provided correspondence from the subcontractor responsible for the relevant scaffolding at the project, Benchmark Scaffolding. Within the correspondence it was noted that:
The Inspector (Glendon Altoft) has noted that "he observed through observations, questions and photos that tying of the scaffolding uses self-drilling eye bolt anchors". This is incorrect and the anchors are not "self-drilling anchors", they are "mechanical anchors" as outlines (sic) in the documentation provided by the supplier.
- In addition to its own correspondence, Benchmark procured a response dated 15 March 2018 from RPEQ Engineer, Bill Hutton of FortisEM in relation to the notice. In his correspondence Mr Hutton expressly recommended the use of the Powers Blue-Tip Screw Bolt. The correspondence from Benchmark and Mr Hutton was provided upon lodging the internal review application.
- Notwithstanding the Respondent was made aware the inspector was incorrect in stating the blue tip bolt used by the Applicant was "self-drilling", it persisted with this aspect of the response until an expert report on 5 September 2019 from Robert Thiess was provided to the Respondent. It was at this time that the Respondent conceded the point and set aside the notice.
- It is clear that the Respondent persistent with the notice in WHS/2019/48 concerning the "self-drilling anchors" until September 2019 in circumstances where the basis for issuing the notice had already been contradicted through correspondence and supporting documentation.
WHS/2019/59 - Improvement Notice I1049842
- This notice alleges a breach of s 225(2) of the WHS Regulations. This section of the WHS Regulations requires the Applicant to obtain written confirmation from a competent person, nothing further. Within the notice the Inspector identified that the relevant scaffold had been signed off on the Scaffold Tag at 9.00 am on Wednesday 17 April 2019. This was the same time the Inspector alleged he formed the reasonable belief that s 225(2) of the WHS Regulations had been contravened.
- The evidence is that Mr Darren Jones, on behalf of the Applicant, completed a handover certificate for the relevant scaffold on 11 March 2019. The Inspector re-attended the Applicant's workplace a week before the hearing commenced to request this handover certificate. Those enquiries should have been made by the Inspector prior to issuing the notice.
- The Respondent relied on its outline of argument filed on 12 August 2019 that the factual matters addressed in this notice were of the same type which had been identified in Improvement Notice number I1049827, and that the evidence available at the time the external application for review was initiated demonstrated there was reasonable prospect of success.
- However, for the same reasons as outlined in WHS/2019/47 the additional facts which became known to the Respondent during the course of the hearing led it to take steps to concede the appeal.
- The Applicant states that in addition to issuing the entirely misconceived Improvement Notice on 17 April 2019, it was highly inappropriate for Inspector Altoft to attend the project on 11 September 2019, exercising compliance powers on behalf of the Regulator, and seeking documents relating to Improvement Notices that were stayed. This conduct was "something more than" unreasonable.
- This conduct, ultimately led to the Respondent conceding the review, directly attributing to the Applicant incurring additional and unnecessary costs, which the Applicant submits it should be more than partially compensated for.
WHS/2019/60 - Improvement Notice I1049843
- The Applicant submitted that on internal and external review, the Scaffolding Code of Practice relied on within the notice did not, in the circumstances, apply to the Applicant. There is not an obligation for a Principal Contractor of a workplace to prepare a scaffold plan within the WHS Regulations or Australian Standards. At no stage did the Respondent particularise how it was alleged that a scaffold plan was required.
- The Applicant submits that had proper consideration been given by the Respondent, it would have been apparent that the Scaffolding Code of Practice did not require the Applicant to hold a handover certificate for the bone yard scaffold (as it was less than four metres high).
- Further, the Applicant argued that the obligation relied upon by the Inspector for the bone yard scaffold clearly sits with the PCBU "doing the scaffold work", and not the Principal Contractor.
- The video exchange of the interactions between Mr Hullick and Inspector Altoft regarding the scaffold erected by Yellow Block Road (YBR) at the bone yard shows that at no point does the Inspector:
- enquire about the height of the scaffold; and
- take any measurements to determine the height.
- As the interaction in the video exchange demonstrates, despite the Inspector making no enquiries about the scaffold's height and taking no measurements himself, he incorrectly asserts that YBR needed a scaffold plan in accordance with the Scaffold Code of Practice.
- The Applicant further submits that if Inspector Altoft had made reasonable enquiries prior to issuing the Improvement Notice, the Applicant would not have been put to the unnecessary cost of making an application for external review. I agree.
Apportionment of costs
- The Respondent submitted that the quantum of any costs allowance made for the Applicant must take into account the fact that whilst there were five separate applications for external review, all of those arose from the same events and the evidence to be given by most of the witnesses related to all the applications.
- On this point, the Respondent referred the Commission to the decision of Bechara v Legal Services Commissioner (Bechara). In that case, a solicitor had simultaneously conducted three personal injury actions on behalf of three members of the same family against the same defendant. The proceedings were all heard together with the same barrister representing each of the three family members. The solicitor charged fees to each client as if each of the matters had been conducted separately. That solicitor was charged with having engaged in professional misconduct because of deliberate charging of grossly excessive amounts.
- The Respondent submits the principles as found by the New South Wales Court of Appeal in Bechara that "one unit of time could not be charged more than once" apply to these applications and any order the Commission makes will only be in respect to the costs of the particular proceeding that the Commission believes an order should be made.
- In Australand Corporation (Qld) Pty Ltd v Johnson & Ors, McMurdo J expressed the view that ordinarily the fact that a successful plaintiff fails on particular issues does not mean that the plaintiff should be deprived of some of its costs, although it may be appropriate to award costs of a particular question or part of a proceeding where that matter is definable and severable, and has occupied a significant part of the trial.
- It should be accepted that unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful, and those on which it failed.
- The starting point for a consideration of this application is the statutory presumption contained in s 545(1) of the IR Act that a party must bear their own costs of a proceeding before the Commission.
- It is readily accepted by the parties that s 545(2)(a) of the IR Act authorises the Commission to order an unsuccessful party to the proceeding to pay costs in circumstances where an application is made vexatiously or without reasonable cause, or that it would be reasonably apparent to a party that the application or response to the application had no reasonable prospect of success.
- Once enlivened, the Commission's discretion to award costs, including the awarding of indemnity costs, is unfetted. As Hall P observed in Park Avenue Motor-Hotel Pty Ltd and Ors v Beck, "[t]his Court has, on other occasions, held that the discretion which arises under s 335 of the Industrial Relations Act 1999 extends to the award of indemnity costs." A similar view was adopted by the Industrial Court of NSW in WorkCover Authority of NSW v Plastachem Pty Ltd, where a Full Court endorsed the approach taken by Hill J in Boner v Anderson (No 2), who held that indemnity costs could be awarded in exceptional cases:
It is fair to say that generally speaking an order for costs on an indemnity basis is justified in a case in which there are special or unusual features of an unmeritorious or improper nature surrounding the case of one party (usually the loser) which make it unreasonable and unfair that the successful party should be out of pocket as a result of the proceedings.
- Rule 70(2) of the IR Rules relevantly provides that in making an order for costs, the Commission "may have regard to" the scale of costs for Magistrates Courts under the Uniform Civil Procedure Rules 1999, schedule 2 or any other relevant matter.
- In Re Kirby Street (Holding) Pty Ltd, Barrett J considered the interpretation to be given to the phrase "have regard to" in the Corporations Act 2001 (Cth):
The direction to 'have regard to' the specified matters requires that the court 'give weight to' those matters 'as a fundamental element' in coming to a conclusion. The inquiry in the course of which the specified matters must be given that weight is as to what is 'just and equitable'.
- The circumstance that a proceeding is wholly unsuccessful does not in itself demonstrate it was launched without "reasonable cause" or that it was "reasonably apparent" the response to the application had no reasonable prospect of success.
- A proceeding should not be characterised as having no objective prospect of success unless, at the time when the proceeding was commenced, it was readily recognisable as doomed to failure. As Hall P said in Newmont Pajingo Pty Ltd v Tomac Enterprises Pty Ltd (No. 2) "… one must not be deceived by the clarity of vision which comes with the advantage of hindsight".
- Equally, a party should not be penalised for eventually confining their case by abandoning unmeritorious aspects of their claim. Indeed, parties should be encouraged to abandon factual and legal contentions that they come to appreciate have poor prospects of success. They should not be placed in peril of an award of indemnity costs against them on the basis that abandoning such contentions indicates that the claim was always known to be hopeless.
- The accepted rationale for making a costs order is that a measure of indemnity should be conferred upon a party for the costs it has been obliged to incur in responding to a proceeding which is "objectively recognisable as one which could not succeed at the time when the application was made".
- In these proceedings, I am satisfied that the award of costs is appropriate. I have formed the view the discretion contained in s 545, in particular s 545(2)(a)(ii), has been enlivened.
- In Hughes v Western Australian Cricket Association Inc Toohey J after setting out the well-known principles governing the awarding of costs added:
There is no difficulty in stating the principles; their application to the facts of the particular case is not always easy.
- Without again rehearsing the merits of each matter let me set out in short form the following summary:
- in matter WHS/2019/46 a breach of regulation 225(2) was not established on the evidence;
- in matter WHS/2019/47 a breach of regulation 225(4) only arises where there is non-compliance with an indication or order to carry out the rectification or repairs, and in any event the material before the Commission did not provide a basis upon which it could be satisfied that a reasonable belief could have been formed that the contravention would continue or be repeated;
- in matter WHS/2019/48 the notice alleged that the Applicant was using a self-drilling anchor which is prohibited under the Scaffolding Code of Practice 2009, it was not;
- in matter WHS/2019/59 the evidence did not support a conclusion that s 225(2) of the WHS Regulations had been breached; and,
- in matter WHS/2019/60 the Scaffolding Code of Practice did not require the Applicant to hold a handover certificate for the bone yard scaffold as the scaffold the subject of the notice was less than four metres high and in issuing the notice the inspector was in error.
- It would have been reasonably apparent to the Respondent that their response to the application had no reasonable prospects of success. In my view, this is not a proceeding in which the Respondent has adopted an arguable view of the law and its application to the facts, only to fail to persuade the Commission to adopt that view.
- I have been referred to numerous authorities which discuss the circumstances in which a court will be justified in making an order for indemnity costs.
- The principle contention of the Applicant is that the Respondent engaged in "something more than unreasonable conduct" and, as a consequence was entitled to an order for costs on an indemnity basis.
- In Anderson v AON Risk Services Australia Ltd, and repeated in Thiess Pty Ltd v FLSMIDTH Minerals Pty Ltd (No. 2), McMurdo J said that there must be something about the facts and circumstances beyond the demerit of a party's case, as reflected in the outcome, before an order for costs on an indemnity basis is warranted.
- In Rosniak v Government Insurance Office, Mason P wrote:
Later cases have emphasised that the discretion to depart from the usual 'party and party' basis for costs is not confined to the situation of what Gummow J described as the 'ethically or morally delinquent party' ... Nevertheless the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity.
- In formulating a considered view about whether grounds exist to award indemnity costs, the Commission is to some degree hampered by the fact that it was deprived of the opportunity to hear the entirety of the evidence. In particular, Inspector Altoft did not give evidence and, in turn that evidence could not be tested. It will be recalled that the hearing came to an abrupt end when Mr Jones gave certain evidence concerning the attendance of Inspector Altoft at the site on 11 September 2019. The matter was adjourned and ultimately the Respondent made the forensic judgement to subsequently concede all matters before the Commission.
- Whilst I am willing to conclude that the proceeding was responded to by the Respondent in circumstances where they had limited prospects of success, I am not prepared to accept the view there is sufficient evidence of unreasonable conduct by the Respondent to make the orders sought.
- The purpose of an order for costs is to compensate the person in whose favour it is made, not to punish the person against whom the order is made.
- As was determined by the majority of the High Court in Latoudis v Casey:
It will be seen from what I have already said that, in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings: Cilli v Abbott (1981) 53 FLR 108 at 111. Most of the arguments which seek to counter an award of costs against an informant fail to recognize this principle and treat an order for costs against an informant as if it amounted to the imposition of a penalty or punishment. But these arguments only have force if costs are awarded by reason of misconduct or default on the part of the prosecutor. Once the principle is established that costs are generally awarded by way of indemnity to a successful defendant, the making of an order for costs against a prosecutor is no more a mark of disapproval of the prosecution than the dismissal of the proceedings.
- In the present case, I see no discretionary reason to withhold the making of an order for costs in favour of the Applicant. However, in doing so, I have not been persuaded that it should be on an indemnity basis.
- I make the following orders:
- The application for costs is granted.
- The Respondent pay the Applicant's costs of and incidental to the proceedings and this application for costs.
- Costs are payable on the relevant scale of costs for the Magistrates Court in accordance with Rule 70(2)(a) of the Industrial Relations (Tribunals) Rules 2011.
- The Applicant is to file in the Industrial Registry and serve on the Respondent, its schedule of costs within 14 days from the release of this decision.
- That costs be agreed or failing agreement, be assessed within 14 days of the Applicant filing its schedule of costs.
 Applicant's submissions filed on 17 March 2020, para 9.
 (Bruce) Campbell Gordon AND Department of Corrective Services (B/2010/3) - Decision http://www.qirc.qld.gov.au  Fisher C citing Hall P in Park Avenue Motor-Hotel Pty Ltd and Ors v Juergen Willi Beck  ICQ 53; [2008) 187 QGIG No. 1, p 2.
 Affidavit of Damian John Hegarty filed 24 January 2020, Annexures DH-1, DH-2, DH-3, DH-7 and DH-8.
 Affidavit of Damian John Hegarty filed on 24 January 2020, Annexures DH-1, DH-2, DH-3, DH-7 and DH-8.
 Affidavit of Damian John Hegarty filed on 24 January 2020, Annexure DH-9.
 Affidavit of Damian John Hegarty filed on 24 January 2020, Annexure DH-10.
 Affidavit of Damian John Hegarty filed on 24 January 2020, Annexure DH-12.
 Affidavit of Damian John Hegarty filed on 24 January 2020, Annexure DH-16.
 Applicant's submissions filed on 17 March 2020, para 17.
  QIRC 079.
  QIRC 93  – .
 MIM Holdings Ltd v AMWU (2000) 164 QGIG 370, 371.
 Gersten v Cape York Land Council Aboriginal Corp (No 2)  176 QGIG 153.
  FCA 539; (1992) 43 IR 257.
 See also: Imogen Pty Ltd v Sangwin (1996) 70 IR 254 per Wilcox CJ (with whom Madgwick J agreed).
 See: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 128-129 per Barwick CJ. See also Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 91 per Dixon J; Theseus Exploration NL v Foyster (1972) 126 CLR 507, 514; Webster v Lampard (1993) 177 CLR 598, 602-603; Cosmos E-C Commerce Pty Ltd v Sue Bidwell & Associates Pty Ltd  NSWCA 81, -.
 (C/2013/38) - Decision - http://www.qirc.qld.gov.au.
 MIM Holdings Ltd v AMEPKU (2000) 164 QGIG 370.
 See: Explanatory Notes to the Industrial Relations Bill 2016.
  NSWCA 254 (17 August 2012).
  NSWSC 3; 62 NSWLR 284.
 See also: Lemoto v Able Technical Pty Ltd & Ors  NSWCA 153; 63 NSWLR 300.
 (Bruce) Campbell Gordon AND Department of Corrective Services,  QIRC 20, , .
 Gold Coast City Council AND Natalia Bedran (B/2013/14) - Decision http://www.qir.qld.gov.au, .
 (1993) 46 FCR 225 (cited in (Bruce) Campbell Gordon v Department of Corrective Services (2010) QIRC 54.
  QCA 179.
  QSC 182, .
  QSC 48, , .
 Exhibit 2.
 Exhibit 3.
 Exhibit 3.
 Exhibit 1.
 Affidavit Damian John Hegarty dated 24 January 2020, Annexure DH-2.
 Affidavit Damian John Hegarty dated 24 January 2020, Annexure DH-2.
 TR2-7, LL20-25.
 TR2-7, LL44-47; TR2-8, L1.
 TR2-8, L4-6.
 TR2-8, L9.
 Exhibit 7.
 TR1-2, LL37-40.
 TR2-8, L16.
 Respondent's submissions on costs filed 6 April 2020, para 38.
 Affidavit of Damian John Hegarty dated 24 January 2020, Annexures DH-1 and DH-5.
  ACAT 127.
 Rovera Scaffolding (ACT) Pty Ltd v Director-General of the Chief Minister, Treasury & Economic Development Directorate  ACAT 127 at 20.
 T1-17, LL17-34.
 See: WHS Act 2011 s 191(2).
 Park Avenue Motor-Hotel Pty Ltd and Ors v Beck (No 2)  ICQ 63; 183 QGIG No 21, 971.
 Affidavit of Damian John Hegarty dated 24 January 2020, Annexure DH-3.
 Exhibit 15.
 TR2-10, LL34-45.
 Those issues being considered in Matter No WHS/2019/47.
 Park Avenue Motor-Hotel Pty Ltd and Ors v Beck  ICQ 53;  187 QGIG No 1, 2.
 Park Avenue Motor-Hotel Pty Ltd and Ors v Beck  ICQ 63; 183 QGIG No 21, 971.
 Office of Industrial Relations, Scaffolding Code of Practice 2009 (2018), Appendix 4 - Scaffold handover certificate: Scaffold over 4 metres.
 Person Conducting a Business or Undertaking.
 Exhibit 11, commencing at 2:05:59 pm.
 (2010) 79 NSWLR 763.
  QSC 128 .
 Adopting the words of Brereton J in Waterman v Gerling Australia Insurance Co Pty Ltd (No. 2)  NSWSC 1066.
 Waters v P C Henderson (Aust) Pty Ltd (unreported CA (NSW) Kirby P, Mahoney and Priestley JJA, 6 July 1994) per Mahoney JA.
  ICQ 63; 183 QGIG 971.
 (2001) 110 IR 351 .
  50 IR 470, 475.
  NSWSC 1536.
 Newport Pajingo Pty Ltd v Tomac Enterprises Pty Ltd (No. 2) (2005) 179 QGIG 145.
 C/2005/1. 10 June, 2005, Vol. 179, No.6, 145.
 Flick op cit. .
 QGIG 2005, Vol. 179, No.6, 145.
 (1986) ATPR 40 – 748, 48, 136.
 See: Otto v Boxgrove Pastoral Co Pty Ltd (No. 2)  ICQ 45.
  QSC 180 at .
  QSC 120 at .
 (1997) 41 NSWLR 608, 616.
 (1990) 170 CLR 534, per Mason CJ, 542.
- Published Case Name:
Watpac Construction Pty Ltd v The Regulator under the Work Health and Safety Act 2011
- Shortened Case Name:
Watpac Construction Pty Ltd v The Regulator under the Work Health and Safety Act 2011
 QIRC 187
Member O'Connor VP
30 Oct 2020