Stalinescu v Simon Blackwood (Workers' Compensation Regulator)
[2015] QIRC 140
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- Unreported Judgment
- Stalinescu v Simon Blackwood (Workers' Compensation Regulator)[2015] QIRC 140
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Stalinescu v Simon Blackwood (Workers' Compensation Regulator)[2015] QIRC 140
Stalinescu v Simon Blackwood (Workers' Compensation Regulator)[2015] QIRC 140
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
CITATION: | Stalinescu v Simon Blackwood (Workers' Compensation Regulator) [2015] QIRC 140 |
PARTIES: | Lidia Stalinescu (Appellant) v Simon Blackwood (Workers' Compensation Regulator) (Respondent) |
CASE NO: | WC/2015/33 |
PROCEEDING: | Application for costs |
DELIVERED ON: | 31 July 2015 |
HEARING DATES: | 3 June 2015 |
MEMBER: | Industrial Commissioner Black |
ORDERS: |
|
CATCHWORDS: | WORKERS' COMPENSATION - APPEAL AGAINST DECISION - |
CASES: | Workers' Compensation and Rehabilitation Act 2003; Industrial Relations Act 1999; The Beach Retreat Pty Ltd v Mooloolaba Yacht Club Marina & Ors |
APPEARANCES: | Blackwood v Egan [2014] ICQ 020 Latoudis v Casey (1990) 170 CLR 534 Mr B. Wright (Counsel) instructed by Parker Simmonds Lawyers for the Appellant. Mr J. Dwyer, Counsel directly instructed by Simon Blackwood (Workers' Compensation Regulator), the Respondent. |
Decision
Introduction
- [1]In accordance with directions published on 26 February 2015 this appeal was listed for substantive hearing on 3, 4 and 5 June 2015 and for mention on 20 May 2015. At the mention the respondent informed the Commission that they had received an email from the appellant's lawyers indicating that the appeal may be withdrawn pending an outcome of another application for compensation that the appellant had lodged with WorkCover.
- [2]As I understood it, the appellant had lodged two claims arising out of the same injury. The claim that was before me on appeal was an "over a period of time" claim while the other claim was a "specific incident" claim. It appeared that the specific incident claim had been subject to review by the regulator and the regulator had returned the matter to WorkCover for further consideration. While it amounted to speculation, it was anticipated that if the specific injury claim were accepted by WorkCover, the appellant might elect to withdraw the over a period of time claim.
- [3]The respondent also informed the Commission at the mention that it did not intend to call evidence in the proceedings. While the appellant was not represented at the hearing the expectation appeared to be that four medical witnesses might be called by the appellant. No request was made by either party to adjourn the substantive hearing or to reduce the number of days listed for hearing.
- [4]The appellant's lawyers informed the respondent on 29 May 2015 that the specific incident claim had been rejected. On 1 June 2015 the respondent was also informed that the appellant might seek an adjournment of the hearing of the appeal scheduled to commence on 3 June 2015. Notwithstanding this, on 2 June 2015 the respondent received an email from the appellant's lawyers conveying the impression that the appellant intended to proceed with the hearing. Accordingly, the respondent and their counsel continued to prepare for the hearing.
- [5]At the commencement of proceedings on 3 June 2015, the appellant asked that the appeal be adjourned on two grounds. The first ground related to the determination by WorkCover of the specific incident claim. This claim had been decided by WorkCover on Friday 29 May 2015 and a decision made to reject the appellant's claim. This outcome meant that the appellant needed to determine what action she wanted to take in respect to each of her claims. The second ground related to counsel unavailability with Mr Wright informing the Commission that he had not been briefed in the appeal and that he did not have carriage of the appeal. The questions of whether another counsel had been briefed and, if so, why this counsel was unable to attend the proceedings on 3 June 2015, were not addressed.
- [6]The appellant's request for an adjournment was granted principally on the basis of the unavailability of the appellant's counsel. As such the appellant was not in a position to prosecute the appeal. While the respondent opposed the adjournment and wanted the hearing to proceed as scheduled, it would have been unfair to the appellant's prospects to insist that the trial proceed in the absence of adequate representation. The decision to grant the adjournment was made however concurrent with a consequential decision that the respondent would be awarded costs. It is the quantum of those costs that is in dispute and requires determination.
- [7]The respondent claimed costs of $4382.50 which it said was the actual cost thrown away by the regulator as a consequence of the adjournment. In so claiming the respondent acknowledged that a cost award of this nature was only sustainable on the basis of indemnity costs, given that the amount claimed exceeded the standard scale provided for in the scale of fees prescribed under the Uniform Civil Procedure Rules 1999, schedule 3, part 2, scale E. The maximum amount of costs available under this scale was $2620.00. The respondent also sought that any costs awarded be met by the appellant's solicitors, Parker Simmonds Lawyers, nor by the appellant herself.
- [8]While the appellant conceded that standard costs covering costs thrown away for the first day of the trial might be awarded ($1120.00), it contested the award of costs beyond the first day and contested the award of indemnity costs. It also opposed the award of non-party costs. The appellant submitted that the adjournment arose out of the timing of WorkCover's decision to reject the specific incident claim and the resulting dilemma for the appellant that needed some time to be resolved. It was pointed out that the appellant needed to take advice in respect to the WorkCover decision released on Friday 29 May 2015 and that once the advice was taken the appellant moved quickly to conference with the respondent the following Monday, 1 June 2015. It was in this conference that the appellant flagged the prospect of an adjournment of the proceedings scheduled to commence on 3 June 2015.
- [9]While an application for adjournment may have been flagged on 1 June 2015 it was the respondent's version of events that the appellant did not confirm any intention to seek an adjournment until the morning of the hearing. The respondent said that normal exchanges about witness evidence were still occurring during the afternoon of 2 June 2015.
- [10]The proceedings on 3 June 2015 concluded on the basis that written submissions would be filed addressing the respondent's application for the award of costs on an indemnity basis and the award of costs via a non-party costs order.
Indemnity Costs
- [11]It was common ground that if the Commission were constrained by regulation 132 of the Workers Compensation Rehabilitation Regulations 2014, there was no power to award indemnity costs. The respondent however submitted that if the proceedings on 3 June 2015 could be deemed to be interlocutory proceedings as contemplated by s 326 of the Industrial Relations Act 1999, the constraints imposed by regulation 132 were lifted given that the Workers Compensation and Rehabilitation Act 2003 was silent on the question of costs of interlocutory proceedings. It was the submission of the respondent at paragraph 14 of its written submission that:
"While S 558(3) is fettered by R 132 of the regs in respect to the costs of “the hearing”, s 326 of the IR Act deals exclusively with interlocutory proceedings and affords the QIRC an unlimited discretion as to orders in respect of costs."
- [12]The respondent further submitted at paragraph 15 of its written submission that:
"S 326 of the IR Act is not subordinate to S 558 of the WC Act because S 326 deals specifically with orders that may be made in interlocutory proceedings as opposed to “the hearing” (which is the language of S 558 or the WC Act)."
- [13]The appellant however submitted that the respondent's argument was misconceived and that it was wrong to characterise the determination of the matter of costs, as distinguished from an application for an adjournment, as constituting an interlocutory proceeding. In terms of the application for adjournment, the significant aspect was that the application was successful. The appellant also contested the power of the Commission under s 326 of the Industrial Relations Act to award either indemnity costs or non-party costs.
- [14]The principles relevant to an award of indemnity costs were canvassed by Martin J in The Beach Retreat Pty Ltd v Mooloolaba Yacht Club Marina & Ors.[1] At paragraphs [84] to [87] of his judgment, in citing earlier authorities, his Honour noted that the prerequisites for ordering indemnity costs included:
- Where there has been misconduct or inappropriate conduct, by a party in the course of the litigation. This could include deliberately delaying the proceedings by putting a knowingly false defence, or bringing proceedings for an ulterior motive;
- Evidence of particular misconduct that causes loss of time to the Court and to other parties;
- Where there is evidence of unreasonable conduct, albeit that it need not rise as high as vexation;
- Where there is evidence of relevant delinquency or abuse of process or ulterior purpose or unreasonableness.
- [15]Martin J went on to say at paragraph [88] of his judgment:
"A continuing refrain in many of these cases is to the effect that an indemnity costs order is not to be made as a matter of cause, there are many of these warnings which should be applied, where there is no provision in the rules such as for unaccepted offers to the contrary. In general a court should not make such an order unless it is satisfied there is a “special case”, a “special reason” or a “clearly exceptional circumstances” and so on."
- [16]The respondent asserted that the short notice given by the appellant of its intention to seek an adjournment had meant that both the respondent and the Commission did not have an opportunity of avoiding the commitment of resources and personnel to the proceeding and had suffered considerable expense as a result of the adjournment of the trial. It was the view of the respondent that, in the absence of any valid or plausible excuse, the award of indemnity costs would act as appropriate deterrent to the repetition of inappropriate conduct in the future.
- [17]In attacking the credibility of the grounds for the adjournment the respondent submitted at paragraphs 28 and 29 of its written submission that:
"It cannot be that the Appellant did not have some expectation as to the possible scenarios likely to arise in respect of the other claim before WorkCover Qld. The notice of rejection of that claim on or about 29 May 2015, while perhaps disappointing, must have always been a consideration for the Appellant and her lawyers.
Rather than refrain from setting the matter down until the path of both of her claims were clearly able to be determined, the Appellant and her lawyers engaged in what can only be described as a ‘game of chicken’ with the WCR and the QIRC – steadfastly proceeding to hearing on the current proceedings while all the while ‘hedging their bets’ that the other claim would be accepted, and they could withdraw this matter."
- [18]It was the appellant's position that the facts and circumstances associated with the adjournment did not support an "exceptional circumstances" finding. The appellant resisted the respondent's invitation of example setting by arguing that an award of indemnity costs should be considered compensatory not punitive. It was further submitted at paragraph 36 of their written submission that:
"The most common occasions where indemnity costs are ordered (but not an exhaustive list) are hopeless cases and abusive process, unreasonable conduct or relevant delinquency in the procedures, fraud and misconduct and offers of compromise and Calderbank letters."
Non-Party Costs Orders
- [19]The respondent seeks an order for costs in the first instance against the appellant's lawyers, Parker Simmonds Lawyers. If they are not successful in this regard, an indemnity costs order against the appellant is sought.
- [20]The respondent submitted that the power to make orders for costs against non-parties can be identified in either the Workers Compensation and Rehabilitation Act, the Industrial Relations Act or both. The respondent contrasted the costs powers found in s 335 of the Industrial Relations Act with the powers sanctioned by s 326 of the same act. While s 335 limited the order of costs to a party to the application, the respondent argued that the language of s 326 was markedly broader and could include a power to impose a costs order against a non-party. Alternatively it was submitted that there was "nothing about the language of S 558 (or 560) of the WC Act, or R 132 of the regs that would appear to limit the power of the QIRC as to whom such order is directed".
- [21]The respondent argued that an order for costs against Parker Simmonds was necessary to avoid the appellant being penalised for the unreasonable actions of her lawyers. At paragraph 42 of its written submission the respondent advanced the following reasons:
"On the facts of this matter, nothing about the explanation offered for the adjournment suggests that the Appellant herself was unready or unwilling to proceed. While she may have accepted advice to seek an adjournment and given instructions accordingly, the inappropriate, delinquent and unreasonable conduct giving rise to the adjournment was largely that of the Appellant’s lawyers."
- [22]The appellant's view was articulated in paragraphs 44 to 48 of its written submission which are reproduced hereunder:
"The courts have emphasised that the jurisdiction to order costs against a lawyer personally is exercised sparingly and not with a benefit of hindsight, especially where indemnity costs are sought.
Matters to be considered include recognition of time pressures to which lawyers are exposed and concern that the threats to seek the costs order can be used as a tactical device.
The Court may bear in mind the repercussions to making in order of this kind and will not make it solely on inference without evidence. But most importantly is whether there is an inherent jurisdiction to make an order.
Courts created a pursuant statute such as the Queensland Industrial Relations Commission lack inherent jurisdiction and therefore lack the power to order costs against lawyers, except where this is expressly prescribed by statute.
The QIRC constituting legislation makes no reference to such an order."
Decision
- [23]It is not necessary that I decide whether the Commission has the power to award indemnity costs nor whether it has the power to award costs against the appellant's lawyers. In my view, if it were correctly decided that I did have the power to so proceed, the facts and circumstances of this case do not warrant the making of the orders sought by the respondent.
- [24]While the respondent considered the appellant's lawyers' conduct to amount to delinquency or unreasonable conduct, I am unable to distinguish between the lawyers' conduct and the choices or preferences of the appellant herself. While the respondent speculated that the appellant may have been wrongly advised and that she was ready and willing to give her evidence and have the appeal prosecuted on the scheduled hearing days, the appellant was not called to give evidence and there is no basis upon which I could conclude that her intentions were consistent with those speculated upon by the respondent.
- [25]Nor am I able to put myself in the place of the appellant's lawyers and make determinations about how the appellant's two WorkCover claims could be best prosecuted in the interests of the appellant, including whether the prosecution of one claim should be resourced while the other claim was withdrawn, or whether, if two appeals were likely, both appeals should be prosecuted concurrently. The appellant's lawyers were not called to give evidence and I am not sufficiently well informed to make determinations about these matters which might have a bearing on the existence of inappropriate or unreasonable conduct, delinquency, or abuse of process.
- [26]In this matter I accept that the appellant may have preferred to know WorkCover's decision on the single incident claim before it made a final decision about whether to proceed with the subject appeal or whether it should, as a matter of convenience, seek to have both appeals, if there were to be a second appeal, heard together. While these dilemmas must have been apparent to the appellant's lawyers at the time that the decision was made to lodge two claims, as would have matters related to any independency between the two claims, I am disinclined to make a finding of misconduct.
- [27]In the circumstances I have decided to apply the standard scale of costs. In this regard regulation 132 of Workers' Compensation and Rehabilitation Regulations provides:
- (1)A decision to award costs of a proceeding heard by an industrial magistrate or the industrial commission is at the discretion of the magistrate or commission.
- (2)If the magistrate or commission awards costs-
- (a)costs in relation to counsel's or solicitor's fees are as under the Uniform Civil Procedure Rules 1999, schedule 3, part 2, scale E; and
…
- (3)The magistrate or commission may allow costs up to 1.5 times the amounts provided for under subsection (2)(a), in total or in relation to any item, if the magistrate or commission is satisfied the amounts are inadequate having regard to -
- (a)the work involved; or
- (b)the importance, difficulty or complexity of the matter to which the proceeding relates.
- [28]While the appellant concedes the award of the first days costs, it opposes the award of costs in respect to the second and third days on the following grounds:
- (i)The respondent had been put on notice on 20 May 2015 that the appeal may be withdrawn;
- (ii)The respondent was advised on 1 June 2015 that an adjournment would be sought;
- (iii)The trial may not have extended beyond one day because of the small number of witnesses and the nature of the appeal;
- (iv)The adjournment of the proceedings did not mean that the respondent's counsel might not productively use the time otherwise committed to the trial; and
- (v)The work already done by counsel in preparation for trial would not be wasted because the trial is still likely to proceed at some future time.
- [29]In his decision in Blackwood v Egan [2014] ICQ 020, Martin J enunciated the relevant principles including those stated by the High Court in Latoudis v Casey (1990) 170 CLR 534. In the High Court decision McHugh J stated:
"The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory."
- [30]In his decision Martin J said:
"Costs of an adjournment will generally be the costs thrown away by the fact of the adjournment. These costs will usually be confined to the lawyer’s costs for the first day of the sitting which has been adjourned. In addition, those costs may include the expenses lost through witness arrangements which have to be remade. Costs incurred for preparation are usually not available, because that work will be relevant to the hearing of the matter when it finally commences."
- [31]In seems to me that particularly short notice, including the absence of adequate reasoning in support of the need for an adjournment, support the exercise of a discretion to require counsel's costs to be paid in respect to the first and second days of the scheduled hearing. I accept that counsel for the respondent proceeded in good faith on the basis that the trial would commence on 3 June 2012 and prepared accordingly. While the appellant flagged the probability of an adjournment on 1 June 2015, the intention was not confirmed until the morning of the hearing and the respondent proceeded on the basis that trial would commence as scheduled. The respondent's counsel was clearly disadvantaged in mitigating against the late cancellation of the trial.
- [32]Beyond this, while the information before me was lacking in precision, there is a basis to conclude that, had the hearing commenced, it may not have required the full three days and could, on balance, have concluded within two days.
- [33]Having regard to all the circumstances I have decided to allow the respondents counsel's costs for the first two days of the trial. In accordance with the relevant scale, costs of $1870 are awarded to the respondent. I so order.
Footnotes
[1] [2009] QSC 84 at 84-87