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Queensland Bulk Water Supply Authority v Workers' Compensation Regulator QIRC 54
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
Queensland Bulk Water Supply Authority v Workers' Compensation Regulator  QIRC 054
Queensland Bulk Water Supply Authority (trading as Seqwater)
Workers' Compensation Regulator
Application for costs
28 March 2019
14 March 2019
INDUSTRIAL LAW – APPLICATION FOR COSTS – Power to award costs – whether the correct costs scale has been applied – whether claim for instructions to sue can be awarded.
Justices Act 1886 s 158B
Uniform Civil Procedure Rules 1999 Schedule 3, Part 2, Scale E (Reprint 1 March 2017)
Uniform Civil Procedure Rules 1999 Schedule 3, Part 2, Scale E (Reprint 24 November 2017)
Uniform Civil Procedure Rules 1999 Schedule 2, Part 2, Scale C (Reprint 28 August 2018)
Workers' Compensation and Rehabilitation Act 2003 s 558
Workers' Compensation and Rehabilitation Regulation 2014 s 132
Blackwood v Egan  ICQ 020
Connolly and Connolly v Simon Blackwood (Workers' Compensation Regulator)  QIRC 104
Cullinane v McCahon  QDC 120
Edwards v Q-Comp  QIRC 17
House v The King (1936) 55 CLR 499
Latoudis v Casey (1990) 170 CLR
Maxwell v Murphy (1957) 96 CLR 261
Pritchard v Q-Comp  QIC 19
Schloss v Bell; Bell v Schloss  ICQ 017
Mr J Naughton, solicitor of Allens, for the Appellant.
Mr P O'Neil of Counsel, directly instructed by the Respondent.
Reasons for Decision
- The Queensland Bulk Water Supply Authority (trading as Seqwater) has made an application for costs arising from their successful appeal in matter WC/2017/190. On 28 August 2018 Vice President Linnane ordered that the Workers' Compensation Regulator pay the Appellant's costs of and incidental to the appeal.
- On 30 January 2019, the Respondent made an offer of $7,683 in satisfaction of the costs order. The Appellant contends that the costs offer made by the Respondent is inadequate. The application for costs attaches an affidavit of John Naughton, solicitor, and so far as is relevant I have extracted below:
- Subsequent to the issue of Vice-President Linnane's decision, I arranged, on behalf of the Appellant, for a costs assessment to be prepared by Adam Bloom of Bloom Costs.
- On 21 January 2019, I wrote, on behalf of the Appellant, to the Workers' Compensation Regulator, attaching the costs assessment prepared by Adam Bloom of Bloom Costs…which records Mr Bloom's assessment of the sum of $18,161.90.
- On 30 January 2019, the Workers' Compensation Regulator wrote to Allens, challenging aspects of the costs assessment prepared by Adam Bloom, and offering to settle the Appellant's costs for an amount significantly less than that set out in Mr Bloom's assessment ($7,863.00).
Quantum of costs
- The Appellant, per the assessor, claims the following costs:
- Instructions to Sue – Claims $1125.00
- Preparing for trial up to and including settlement conference, including Brief for Counsel to appear at conference $1654.00
- Balance of preparing for trial including trial brief if counsel engaged$1757.00
- Attendance by solicitor with Counsel on application for directions 29.5.18 $248.70
- Attendance by Solicitor with Counsel on hearing on day one 9.7.18 $621.80
- Attendance by Solicitor with Counsel hearing on day two 10.7.18 $621.80
- Solicitor receiving instructions for disclosure, preparing List of Documents and making inspection of copies of documents – allowance for party requesting disclosure$335.30
Allowance for party making disclosure $605.60
- Attendance by Solicitor on Application for Costs Assessment $502.80
- Paid - Counsel (Dr G Cross) to settle Claim and Statement of Claim (Appeal)$243.30
Carried forward $243.30$7472.00
Brought forward $243.30$7472.00
- Paid – Counsel to settle Special Affidavit / Particulars $156.90
- Paid – Counsel in conference; trial preparation including conferences with solicitor and witnesses (12 hours) $2919.60
- Paid – Counsel to advise on evidence / provide opinion $254.10
- Paid – Counsel to attend on hearing (on first day) $1545.00
- Paid – Counsel to appear on subsequent day of hearing $1032.00
- Paid – Queensland Independent Costing Services Pty Ltd –
fees for preparation of this Bill of Costs$803.00
Professional costs increased by 50%
pursuant to regulation 132(3) of the
Workers' Compensation Regulations 2018 $3736.00
Add outlays $6953.90
Total Amount claimed $18161.90
Scale of Costs
- The Appellant, through its costs assessor, calculated the costs pursuant to the Uniform Civil Procedure Rules 1999, Schedule 2, Part 2, Scale C. The scale of costs relied upon by the Appellant came into force on 24 August 2018. The decision of Vice President Linnane was delivered on 28 August 2018.
- The Respondent contends that for costs incurred prior to the filing of the Notice of Appeal (Appeal was filed on 9 October 2017) should be assessed using the reprint of the UCPR current from 1 March 2017 to 23 November 2017, Schedule 3, Part 2, Scale E. In respect of the balance of the costs incurred up to and including 10 July 2018, the Respondent submits that the costs should be assessed using the reprint of the UCPR current from 24 November 2017 to 23 August 2018, Schedule 3, Part 2, Scale E. Relevantly, there were no material changes to the amounts provided for in the schedule between 1 March 2017 and 24 November 2017 reprints.
- The general rule is that legislation should not be construed to have retrospective operation unless such a construction appears very clearly in the terms of the Act. The Appellant submits that rule 691(8) of the UCPR has no application. Rule 691(8) provides that unless the court otherwise orders, the costs are in accordance with the scale of costs in force when the costs are incurred. Irrespective of whether rule 691(8) has application, the costs should, in my view, be assessed against the scale that was in force when the costs were incurred.
- I do not accept the Respondent's overall view of the assessment of costs. However, I accept that the Appellant’s costs incurred prior to the filing of the notice of appeal ought to be assessed in accordance with Scale E of the UCPR current from 1 March 2017 to 23 November 2017. The Appellant’s costs incurred up to and including 10 July 2018 ought to be assessed in accordance with the appropriate UCPR scale in force from 24 November 2017 to 23 August 2018. The Appellant’s application of the incorrect scale means that the costs claimed by the Appellant, as reflected in the costs assessment, are higher than they would ordinarily be entitled to claim.
Power to award costs
- It is not in contention that the Commission has the discretion to award costs pursuant to s 558(3) of the Workers' Compensation and Rehabilitation Act 2003 and s 132 of the Workers' Compensation and Rehabilitation Regulation 2014. The Commission has a broad discretion to determine whether to award costs in particular proceedings. If it decides to exercise its discretion to award costs that discretion is constrained by, or by reference to, the amounts specified in the scale.
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.
His Honour the Chief Justice further stated:
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.
McHugh J said:
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.
- The Respondent's primary contention is that the Appellant’s assessment of costs is excessive. The Respondent claims that the Appellant was put on notice as early as 19 September 2018 that the Respondent did not agree that a costs assessor was required and would not pay the costs associated with engaging an assessor. On 30 January 2019 the Respondent wrote to the Appellant stating that in its view the Uniform Civil Procedures Rules 1999 (UCPR) had limited application to the present appeal and that the Respondent differed on the applicable scale for assessment.
Item 1 – Instructions to Sue
- The Respondent contends that the Appellant is not entitled to an award of costs under this provision because the scale contemplates the preparation of a Claim and Statement of Claim which are more complex and involve more work than the preparation of a Notice of Appeal. To support this argument the Respondent relies on the reasoning in Edwards v Q-Comp and Connolly and Connolly v Simon Blackwood (Workers' Compensation Regulator).
- In Edwards, Linnane VP appears to have adopted the Regulator’s position by refusing to award costs for "instructions to sue". The difficulty however is that her Honour did not provide any reasons for her finding. In Connolly Thompson IC adopted the submissions of the Regulator and refused to award costs relating to "instructions to sue". Thompson IC’s reasons for doing so were because "the input of Solicitors acting for the Appellant was 'scant' " and "there was certainly no level of complexity associated with undertaking such a task". However, an award of costs under Item 1 of Schedule 3 Part 2 of the UCPR, is not conditioned on some requisite level of complexity or input by a solicitor.
- The ordinary meaning of "to sue" is to "institute legal proceedings; make application to lawcourt for redress". The filing of a Notice of Appeal in the Industrial Registry is instituting a legal proceeding and it stands to reason that the Appellant is entitled to claim the costs incurred in undertaking this task. I am not satisfied that I should follow the reasoning in Edwards or Connolly.
- I see no reason for refusing to award costs on the basis that a Notice of Appeal is supposedly less complex than drafting a Claim or Statement of Claim. A party seeking its costs before the Supreme, District or Magistrates courts would not be disqualified from making a claim on the basis that its Claim or Statement of Claim was not sufficiently complex or the input of the solicitors was minor.
- Equally, an appeal of this type, as Hall P observed in State of Queensland (Queensland Health) v Q-COMP and Coyne, traditionally has been treated as a hearing de novo.
- The nature of a hearing de novo was discussed by Dawson J in Harris v Caladine where he said:
An order made by a Registrar is reviewable by way of a hearing de novo. That means that the court reviewing the order begins afresh and exercises for itself any discretion exercised below by the Registrar. The parties commence the application again, subject to any restrictions in the rules upon the calling of evidence or provisions relating to the use before the court of evidence called before the Registrar. A hearing de novo involves the exercise of the original jurisdiction and ‘the informant or complainant starts again and has to make out his case and call his witnesses’: Builders Licensing Board v. Sperway Constructions (Syd.) Pty. Ltd.; see also Reg. v. Pilgrim; Campbell, ‘Judicial Review and Appeals as Alternative Remedies’, Monash University Law Review.
- The fact that an Appellant "starts again" does not mean that they do so unrestricted by any requirements as to the identification of the nature of the case. That identification requires the bringing of some independent and objective judgment by the Appellant’s legal advisors to ensure that a basis exists to bring an appeal. That initial assessment will ultimately find form in the Statement of Facts and Contentions to which the Appellant will be bound.
- For the reasons advanced above I am of the view that the Appellant is entitled to an award under Item 1 of the UCPR Schedule 3, Part 2, Scale E (Reprint 1 March 2017) in the amount of $825.00.
Item 2 and 3 – Preparation for Trial
- The Appellant claims $1,654.00 under item 5(a) "Preparing for trial, up to and including settlement conference…(a) including brief for counsel to appear at conference" and $1,757.00 under item 6(a) "Balance of preparing for trial (a)including trial brief if counsel engaged" pursuant to the UCPR Schedule 2, Part 2, Scale C (Reprint 28 August 2018).
- The Respondent contends that the only costs the Appellant is entitled to is an award of costs under Item 5(a) of Scale E in the amount of $2505.00.
- Item 6(a) did not exist in the UCPR at the time the costs were incurred. Therefore, the Appellant’s only claim is under item 5(a) pursuant to the UCPR Schedule 3, Part 2, Scale E (Reprint 24 November 2017) in the amount of $2505.00.
Item 4 – Attendance by Solicitor with Counsel on application for directions 29 May 18
- The Respondent's position is that because the listing on 29 May 2018 was vacated the Appellant is not entitled to an award of costs. I note the email from the Industrial Registry to the Respondent dated 31 January 2019 confirming that the Mention listed for 29 May 2018 was cancelled. Given that attendance was not required I am not prepared to grant costs for this item.
Item 5 and 6 – Attendance by Solicitor for the two hearing days
- The Appellant is entitled to an award of costs for this item, noting, that the appropriate scale to be used falls under Item 8(a) of the UCPR Schedule 3, Part 2, Scale E (Reprint 24 November 2017), being an amount of $450.00 per day, or a total of $900.00.
Item 7 – Disclosure
- The Appellant is entitled to an award of costs for this item. In accordance with the UCPR Schedule 3, Part 2, Scale E (Reprint 24 November 2017) the Appellant is entitled to $284.00 for Item 11(a)(i) and $555.00 for Item 11(a)(ii), totalling $839.
Item 8 – Attendance by Solicitor on Application for Costs Assessment
- Given that no order was made by the Commission for the costs to be assessed and having regard to the fact that the Appellant was put on notice by the Respondent that it opposed the engagement of a costs assessor, I am not persuaded to award costs for this item.
Item 9 – Cost of Counsel to settle Claim and Statement of Claim
- The Respondent submits that no award should be made because there was no indication that the Notice of Appeal or Statement of Facts and Contentions was settled by Counsel.
- It is uncontroversial that the Appellant had briefed Dr Cross as its Counsel therefore I am satisfied that it is entitled to claim the costs sought pursuant to the UCPR Schedule 3, Part 2, Scale E (Reprint 24 November 2017), Item 6(a) an amount being $181.00.
Item 10 – Counsel to settle Special Affidavit
- The Appellant relies upon Item 8(b) which states "Counsel's fees…to settle special affidavit, reply or particulars…". The Respondent submits that no affidavit material was filed in these proceedings and objects to the claim.
- The Appellant argues that the claim is made on the basis that the Commission ordered that the parties prepare outlines of evidence. It is submitted that it was reasonable therefore for the Appellant to prepare affidavits for the witnesses and for those affidavits to be settled by counsel.
- The directions order of 10 October 2017 required service on the Respondent of an "outline of evidence to be given by each lay witness at the hearing (one A4 page per witness)". In short, each lay witness called, who is not an "expert" (doctors, psychologists, psychiatrists, etc.), needs to provide a single A4 page summary of the evidence that they intend to give at the hearing of the matter before the Commission.
- The rationale for the order is to avoid a "hearing by ambush" and to ensure that the parties are better prepared to advance their cases.
- Notwithstanding the submissions of the Appellant it was not necessary to prepare affidavits for the witnesses and accordingly I make no allowance for this item.
Item 11 – Counsel Conferences
- The Appellant claims a total of 12 hours of witness conferencing under Item 8(d). The Respondent submits that the claim for 12 hours is excessive and that an appropriate amount should be 3 hours on the basis that "the entirety of all evidence in the Appellant's case including cross-examination took less than six hours".
- Considering that the Appellant had the benefit of affidavits from their witnesses I am not prepared to grant the full claim of 12 hours, rather I will allow a claim for 6 hours at the rate of $181.00 an hour pursuant to the UCPR Schedule 3, Part 2, Scale E (Reprint 24 November 2017). This totals $1,086.00.
Item 12 – Counsel to advise on evidence / provide opinion
- The Respondent does not cavil with this claim. Pursuant to Item 6(e) of the UCPR Schedule 3, Part 2, Scale E (Reprint 24 November 2017) I will allow a claim of $201.00
Item 13 and 14 – Counsel to attend on hearing
- The Appellant claims $1545.00 for the first day of hearing in accordance with Item 8(f) and $1032.00 for the second day of hearing in accordance with Item 8(g).
- Pursuant to Items 6(f) and 6(g) of the UCPR Schedule 3, Part 2, Scale E (Reprint 24 November 2017) I will allow a claim of $1120.00 and $750.00 totalling $1870.00.
Item 15 – fees for preparation of Bill of Costs.
- For the reasons stated above at paragraph  I am not prepared to make an award of costs for this Item.
Claim for 1.5x Uplift in accordance with s 132(3) Workers Compensation Regulation 2014.
- Section 132(3) of the Workers Compensation Regulation 2014 provides the Commission was a discretion to award a 1.5 times uplift on costs and is in the following terms:
- (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.
- The Appellant claims it is entitled to the uplift because, broadly speaking, it was dissatisfied by the manner in which the Respondent defended the appeal. The Appellant claims that the work involved was exacerbated by the Respondent's conduct and it is contended that on that basis an uplift is reasonable.
- Section 132(2) essentially provides two limbs. The Commission must make an assessment as to whether the amounts provided for in the scale are inadequate because of the "work involved or the importance, difficulty or complexity of the matter to which the proceeding relates". In Pritchard v Q-Comp, President Hall in declining to award an uplift of costs wrote:
I have read the Acting Industrial Magistrate's decision on the substantive matters. It was a simple case about whether a psychiatric injury was withdrawn from the statutory definition of "injury" because it arose out of or in the course of reasonable management action reasonably taken. It differs not at all from other cases of the type which I have encountered in the past seven years. It is all about facts and credibility. I do not suggest that only errors of law may render matters complex or difficult. Factual matters, particularly factual matters dependent on expert evidence, may well justify resort to the multiplier of 1.5 and the briefing of two Counsel. But nothing has been drawn to the attention of the Court which would justify the adoption of that course here. It was not material that the practitioner to whom the brief had been passed had only eight days to prepare. It was a pedestrian matter. That was a perfectly adequate period of time. It is not to the point that an attempt at mediation, ordered by the Co-ordinating Magistrate, may have miscarried. For the purposes of the appeal I am prepared to assume that the parties conduct in mediation - and I make no findings about what in fact occurred - may lead to the recovery of costs on some issues otherwise than in accordance with the event, and may lead to the award of costs on a higher than usual basis (perhaps on an indemnity basis). But in the circumstances of this case, accepting all of the assertions put on Ms Pritchard's behalf about the mediation, nothing occurred to enlarge the work involved in preparing for the hearing or in conducting the case, nor did anything occur to magnify the complexity of that work. Neither before nor after the failure of the mediation process did the matter warrant the engagement of two Counsel. No case was made for going outside the nominated scale. (emphasis added)
- In Schloss v Bell; Bell v Schloss I awarded an uplift on costs pursuant to s 158B(2) of the Justices Act 1886 because, inter alia: the matter involved some legal importance, the prosecution was of a type not ordinarily encountered in the Industrial Magistrates Court, the prosecution was factually dense and the evidence was complex and detailed submissions were prepared for the learned Magistrate. The wording of s 158B(2) of the Justices Act 1886 is in similar terms to s 132(3) of the Workers Compensation Regulation 2014: "…the justices may allow a higher amount for costs if the justices are satisfied that the higher amount is just and reasonable having regard to the special difficulty, complexity or importance of the case". In Schloss I cited the case of Cullinane v McCahon where his Honour Judge Farr SC wrote:
That submission ignores the actual words used in ss 158B and 232A of the Justices Act, namely "just and reasonable having regard to the special difficulty, complexity or importance of the case". The adjective "special" does not apply to, or restrict, the words "just and reasonable". They apply to "difficulty, complexity or importance". Properly construed, the discretion to award a higher amount for costs as provided for in the statutory provisions, is enlivened where: (a) special difficulty, complexity or importance exists; and (b) it is just and reasonable to make a higher award having regard to the identified special difficulty, complexity or importance.
- Similar to Pritchard, the primary issue on appeal was whether the employer (Queensland Bulk Water Supply Authority) exercised reasonable management action, taken in a reasonable way. The Appellant has not been able to draw to my attention anything which would demonstrate an entitlement to award the uplift. On the contrary, I accept the submissions of the Respondent that this was an appeal in which no medical evidence was called, the matter was not factually complicated, few exhibits were tendered, the number of hearing days was relatively short, namely, two days and the law which was considered and applied was well settled. I am not persuaded that the work involved in prosecuting this appeal justifies an uplift pursuant to 132(3)(a).
- Nor am I satisfied that the conduct of the Respondent was such as to warrant an uplift in costs.
- For the reasons given above I am not persuaded to make an order under Regulation 132(3) for an uplift of the professional fees.
Item 1: $825.00
Item 2 and 3: $2505.00
Item 4: Nil
Item 5 and 6: $900.00
Item 7: $839.00
Item 8: Nil
Item 9: $181.00
Item 10: Nil
Item 11: $1086.00
Item 12: $201.00
Item 13 and 14: $1870.00
Item 15: Nil
- The Respondent is to pay the Appellant's costs fixed in the sum of $8407.00
 Maxwell v Murphy (1957) 96 CLR 261 at 267; P St. J Langan, Maxwell on the Interpretation of Statutes (Sweet & Maxwell, 12th ed, 1969) 215.
 Blackwood v Egan  ICQ 020.
 (1936) 55 CLR 499
 Latoudis v Casey (1990) 170 CLR 534, 543.
 Ibid, 567.
  QIRC 17.
  QIRC 104.
 Ibid at .
 The Australian Concise Oxford Dictionary.
 (2003) 172 QGIG 1447.
 (1991) 172 CLR 84.
 T1-9 Ll20-23.
  QIC 19.
  ICQ 017.
 Ibid, .
  QDC 120, .
- Published Case Name:
Queensland Bulk Water Supply Authority v Workers' Compensation Regulator
- Shortened Case Name:
Queensland Bulk Water Supply Authority v Workers' Compensation Regulator
 QIRC 54
Member O'Connor VP
28 Mar 2019