to award costs, notwithstanding that the Act made provision
for rules as to scales of costs. Accordingly in 1929 an
amending
Act (No.36 of 1929) provided that the Commission
might - "Make such order as to the payment of costs as it may
think just,
and assess the amount of such costs.""
14. I interpose to note that this provision is quite similar in effect to
s6B(1A) of the
Act (p2). Lamond J continued at p31:-
"Since this enactment no alteration has been made by the
Commission to Rule 16. It
must be assumed, therefore, that
Rule 16(2) and (8) is not in conflict with what the
Commission considers to be "just", in
cases falling within
such Rule.
INASMUCH AS under section 38(3) THE RULES ARE MADE BY THE
COMMISSION ITSELF, AND MAY BE
ALTERED BY THE COMMISSION - - -
IT MAY WELL BE that the Commission is not in the strict sense
"bound" to apply such Rules,
but they have formed the basis
for the settlement of costs in the case to which it is
intended they should apply for very many
years and I can see
no reason why in the present case they should not be applied.
Accordingly I make an order for costs in
favour of the
applicant in accordance with Rule 16(8)." (emphasis mine)
15. It may be noted that the rationale his Honour gave
for his conclusion
that "it may well be" that the Commission was not "bound" to apply its own
Costs Rules was that those Rules were
made (and were alterable) by the
Commission itself, under statutory power. In contrast, in the Act, the
statutory power to make
Costs Rules is vested not in the Court or its members,
collectively or individually, but in the Chief Magistrate as such.
16. In
the light of Lamond J's observations and what was implied by his
comment "it may well be", his Worship clearly considered that the
effect of
s6B(1A) was that he was not bound by the costs scale in the Second Schedule to
the Rules though as he said at p6 "in the
ordinary course of events - - - this
scale of costs would apply." Accordingly, he considered, that:-
"- - - it is incumbent upon
the Applicant worker (the
respondent here) in the instant case to satisfy me that this
is a proper matter for the Court to
order that a scale of
costs different to the Workers' Compensation scale (in the
Rules) should apply."
17. His Worship then
turned to that aspect, the consideration relevant to his
exercise of the perceived discretionary power under s6B(1A). He noted that
in
support of her application the respondent relied on the following matters:
that there had been no change in the scale of costs
fixed by the Rules since
they were introduced on 1 January 1978; that that scale involved an
"approximately 3 times difference" when
compared to the Supreme Court costs
scale, so that the costs of the professional work in question would be allowed
at a sum $22,896.70
more than permitted by the Second Schedule, if it were
assessed on the Supreme Court costs scale, a large difference; and that
under-compensating
a successful applicant for compensation in respect of her
costs defeated the purpose of the Act. He observed that the employer (here
the appellant) conceded that there was a wide discretion under s6B(1A) of the
Act, and did not dispute the respondent's figures.
18. He noted that the respondent's arrangement with her former solicitors,
who had acted for her in the relevant proceedings (a),
(b) and (c) on pp1-2,
was that she would pay them their professional fees calculated on the Supreme
Court costs scale; however, he
accepted that that "should not necessarily be
the starting point", when considering whether a different scale to that set
out in
the Second Schedule should apply. His Worship considered that "a
useful starting point" in that respect was "to compare the Workers'
Compensation Costs Rules with the Supreme Court Costs Rules applicable around
January of 1978." That is to say, he sought to compare
the costs scales in
the two jurisdictions, as they stood when the Court's Costs Rules came into
force. He gave no reason for selecting
Supreme Court costs as a reference
point. As will be seen, he used the resulting ratio as it stood in 1978 as
the guiding star,
when making his decision as to the quantum of costs
applicable to the proceedings which apparently commenced about 1986. He
proceeded
to carry out that exercise comparing the scale items in considerable
detail, as far as practicable, and concluded:-
"In my view,
a comparison of the Workers Compensation Costs
Rules and the Supreme Court Rules with the closest temporal
connection (namely
Rule 18 of 1978) suggests that in terms of
hourly rates for practitioners time, (COSTS UNDER) THE
WORKERS COMPENSATION RULES
(IN 1978) WERE ROUGHLY 75% OF THE
SUPREME COURT RATES. There has been no increase at all in
the Workers Compensation Scale
of costs since they were first
introduced in 1978. I am aware of no good reason (of policy
or otherwise) why this occurred.
I am not aware whether it
was a deliberate and conscious decision by somebody (and who)
not to increase (and why) or whether
it was simply
overlooked.
In the end result, in my view, the Workers Compensation Scale
of Costs are totally out of date
and have made no attempt
even to keep pace with inflation.
I find that the Workers Compensation Scale of Costs fail to
provide
any real indemnity to a successful party and in the
instant case are inequitable.
It would, in my view, be unjust to insist
that the successful
party could recover against the other side no more than the
scale laid down in 1978. These proceedings
were commenced in
1986, and even by that time the scale was unaltered for 8
years.
In my view, justice would be done between
the parties if I
ordered the employer to pay the Applicant's costs to be taxed
at the rate of 75% of the Supreme Court scale
applicable at
the time each item of work was performed.
Mr Brown (of counsel for the employer-appellant) has not
suggested
any prejudice to the employer if an order in excess
of the scale was made." (emphasis mine)
19. His Worship then made the order
now under appeal; see pp1-2.
Two threshold matters
(a) The order of 6 December, as to item (b) on p1: Mr Nosworthy first raised
a threshold point as to the order insofar as it applied to item (b) on p1. It
appeared that in fact an application had been made
to the presiding member of
the Court, Mr McPherson SM, that the costs of the proceedings leading to his
judgment of 21 June 1989
should be allowed on the Supreme Court scale. His
Worship had rejected that application and no appeal from his decision had been
lodged; Mr Nosworthy submitted that it was now too late to appeal from that
decision. Consequently, the application to Mr Trigg
for the same order in
respect of item (b) on p1 had clearly been made in error; there was no
jurisdiction to entertain it, the question
of those costs was res judicata,
item (b) should be treated as having been included in Mr Trigg's costs order
per incuriam, and the
order in relation to that item had to be set aside.
20. Mr Wyvill of counsel for the respondent eventually conceded this point.
He informed me that early at the hearing on 5 September 1994 the respondent
had informed Mr Trigg that she no longer sought any order
in respect of item
(b) on p1, acknowledging that that matter was res judicata. Clearly, that
oral variation to the application had
been overlooked when the order was made
on 9 December. Accordingly, the appeal must succeed in relation to item (b)
on p1 on the
ground that his Worship lacked jurisdiction to deal with that
matter. Accordingly, the order of 6 December in relation to item (b)
on p1 is
quashed and set aside.
(b) The order of 6 December, as to item (c) on p2: Mr Nosworthy also raised
what appeared to be
a similar point in relation to item (c) on p2. In his
judgment, Mr McGregor SM had ruled that the respondent was to have her costs
of the proceedings, up to the time when the only matter remaining in
contention between the parties was her claim for the cost of
alterations under
s11(2A) of the Act. Mr Nosworthy submitted that those costs in favour of the
respondent were clearly intended
by his Worship to be assessed in accordance
with the Second Schedule, and (erroneously, as it turned out) that there had
been no
appeal against that decision. I note that what Mr McGregor said about
costs, at p13 of his reasons for decision of 3 August 1990,
was simply:-
"As to costs, I am of the view that the worker should not
have costs occasioned by the application (under s11(2A))
for
the alteration, but otherwise should have the costs of the
proceedings."
21. If that was all that had occurred, it would
appear that Mr Nosworthy's
submission was essentially that the question of costs as to item (c) was also
res judicata.
22. Mr Wyvill
informed me, however, that Mr Hiley QC of counsel for the
respondent before Mr McGregor, had submitted to his Worship at transcript
pp380-3 on 25 May 1989 that the costs of the application should be awarded on
the Supreme Court scale. I note that Mr Hiley there
relied, as does Mr
Wyvill, on s6B(1A) of the Act to found his submission that the Court had
jurisdiction to order costs on that basis.
He submitted in support as
follows: the complexity and size of the case warranted an award for costs on
the Supreme Court scale;
his Worship should direct the Registrar as to the
scale he should apply, to overcome the effect of r30(1); that Rule could not
fetter
the statutory power under s6B(1A); it was to be noted that the Work
Health Act applied the Supreme Court costs scale; since the respondent
was
paying her solicitors on the Supreme Court scale, the employer should not be
allowed a "windfall" at her expense, by paying her
less; and the Second
Schedule rate was $30 an hour while the Supreme Court scale was a minimum of
$110 per hour.
23. It turned out
that Mr Nosworthy was wrong in saying there had been no
appeal from the judgment of Mr McGregor. Mr Wyvill referred to a Notice
of
Appeal of 31 August 1990, instituting proceedings no. 519 of 1990, by which
the respondent appealed against Mr McGregor's judgment.
That appeal does not
appear to have been prosecuted; it presently lies dormant. However, in par6
of that Notice of Appeal the respondent
contends:-
"6. His Worship erred in law in failing to make any
determination in response to the Appellant's (here the
respondent's)
submission that costs awarded in favour of the
Appellant (here the respondent) should be awarded at the
Supreme Court Scale."
24. That is, the respondent's contention is that Mr McGregor, in his brief
reasons at p12, failed to rule upon the issue raised
by Mr Hiley Q.C. that
costs should be assessed on the Supreme Court costs scale, and left that issue
undecided. Amongst the orders
sought by the respondent in that appeal is
Order no.4, viz:-
"4. That the respondent (here the appellant) pay the
Appellant's
(here, the respondent's) costs and disbursements
of the whole of the proceedings before the Workers'
Compensation Court at
the Supreme Court Scale."
25. That is to say, the relief sought from this Court in those proceedings in
1990 is identical with the
relief sought in the application before Mr Trigg
whose decision is under appeal in these proceedings, as regards item (c) on
p2.
26. Mr Wyvill first objected to the point raised by Mr Nosworthy on item (c)
being entertained; he submitted that it had not been
taken before Mr Trigg,
had not been properly raised in the Notice of Appeal and leave to amend should
not now be given to enable
it to be raised. I ruled against that submission
and granted leave to the extent necessary, to enable the point to be raised
and
argued. I should say that the reason for this contretemps in the
proceedings before Mr Trigg, probably stemmed from several changes
in
solicitors by the respondent.
27. This led to an application by Mr Wyvill to have the issue in par6 of
proceedings 519 of 1990
heard with this appeal. This was resisted by Mr
Nosworthy, unless the balance of the relief sought by the respondent in
proceedings
519 of 1990 was now withdrawn. Mr Wyvill accepted that it would be
an abuse of process for both the issue in par6 of proceedings
no. 519 of 1990
and the issue raised as to Mr Trigg's order on item (c) on p2 in these
proceedings to remain alive in different proceedings.
He informed me that the
respondent would consent to a stay of proceedings on the issue raised in par6
of the Notice of Appeal in
proceedings 519 of 1990, if Mr Trigg's decision of
6 December were upheld; but if that decision were held to be a nullity, the
respondent
wished to have the issue in par6 dealt with when that appeal was
heard. Mr Nosworthy said that this was unfair; he submitted that
the
respondent should now be made to elect which proceedings to pursue. I ruled
against that submission, and accepted Mr Wyvill's
last mentioned proporal.
28. In the course of argument later, Mr Wyvill advanced the following
submissions relevant to this aspect.
Mr Trigg had jurisdiction under s6B(1A)
to deal with the application in respect of item (c) at p2. The then (and
still) pending
appeal in proceedings 519 of 1990 did not go to Mr Trigg's
jurisdiction to hear that application, but was relevant to the separate
question whether the proceedings before Mr Trigg constituted an abuse of
process. The appellant had not taken that point before Mr
Trigg, and should
now be treated as having waived it. Alternatively, if the proceedings before
Mr Trigg amounted to an abuse of
process, the respondent's proposal (see p14)
cured it. Mr McGregor plainly had not adjudicated on the issue raised before
Mr Trigg
of the appropriate scale, even though it had been raised before him.
An objection by the appellant to the decision of 6 December
on item (c), based
on "res judicata", should have been pleaded, and did not go to jurisdiction.
29. I will rule on this matter at
this point, in terms of the submissions set
out above.
30. It is clear, in the light of what transpired before Mr McGregor, and
of
the terms of the pending appeal from his decision on the costs aspect, that
the respondent should not have applied to Mr Trigg
for the relief sought in
item (c) on p2. Had the position concerning Mr McGregor's decision of 3
August 1990 and the relief sought
in the pending appeal therefrom been made
known to Mr Trigg, his Worship should have declined to entertain the
application in relation
to item (c) on p2, since it involved an issue which
was then pending in this Court on appeal. It was an abuse of process in the
circumstances for the respondent to have made the application. It cannot be
treated as having been waived. The respondent cannot
be permitted to retain
the decision which is the fruits of proceedings, his institution of which were
an abuse of the process of
the Court. This Court has inherent jurisdiction to
correct such an abuse of the process of the Court. I consider that correction
would best be made by the following order. The appeal against the order made
on 6 December as to item (c) on p2 is allowed, and
the order quashed and set
aside; if the matter rested only on an abuse of process, the proceedings in
the Court by way of an application
in respect of item (c) on p2 should be
permanently stayed. However, the ultimate disposition is affected by the
outcome of the appeal
on the merits, to which I now turn.
The appellant's submissions
31. Mr Nosworthy submitted that his Worship had no power to make
the order of
6 December; second, if he had that power, he had wrongly exercised it in
making the order at pp1-2.
32. Mr Nosworthy
conveniently grouped his submissions under various headings.
I have not attempted to deal with them all.
33. He submitted that s6F
of the Act constituted a code for the determination
of the issue of costs before the Court, and accordingly the decision by Mr
Trigg,
which went beyond that code, was made without jurisdiction. He
referred to Churcher v Edwardstown Carpets (Reg) [1993] SASC 3897; (1992) 60 SASR 503, but that
case turned on the construction of certain statutory provisions. Howard v
Graves (1858) 52 LT 858 bears some similarities to the present case, but again
turns on the construction of certain statutory provisions relating to the
power to order costs.
34. He submitted that his Worship was obliged to use the costs machinery
provided by the Rules. He referred
to Pryor v City Offices Company (1883) 10
QB 504, which concerns the exercise of power by a Recorder; but again that
case turns on the interpretation of a statutory provision.
35.
He submitted that Mr Trigg lacked power to make the order at pp1-2, in
light of the power as to costs vested in the Chief Magistrate
under s6F(1) of
the Act. I accept that Mr Trigg's powers are limited by the provisions of the
Workers' Compensation Act; see Smith
v Smith (1925) 2 KB 145. The question,
however, is as to what those powers are, a matter turning on the
interpretation of the provisions of Act.
36. I accept
that his Worship could not give himself jurisdiction by wrongly
construing the Act; see R v Hickman; ex p. Fox [1945] HCA 53; (1945) 70 CLR 598, per Latham
CJ at p606.
37. Mr Nosworthy noted that in this case the respondent had entered into a
costs agreement with her former
solicitors whereby she agreed to pay their
costs on the Supreme Court scale. He conceded that it was not clear whether
his Worship
had taken this into account, in making his order, but submitted
that it should not have formed any part of his consideration. I
do not think
that it did. He submitted that in relation thereto, his Worship had not taken
into account the provisions of s130 of
the Legal Practitioners Act which
provides for reduction of the amount of costs agreed between solicitor and
client where it is not
"fair and reasonable". Since his Worship did not treat
the costs agreement as relevant, I consider he did not have to consider the
effect of s130.
The respondent's submissions
38. Mr Wyvill's primary submission was that his Worship had correctly
interpreted
s6B(1A) of the Act. In support he relied on 6 propositions.
(1) This was an appeal on a question of law only; to succeed, the appellant
had to show an error of law. I accept that.
(2) Section 6B(1A) of the Act on its proper construction vests in the Court a
general
discretion as to costs, fettered only by the rule that it must be
exercised judicially. This is clearly the crucial submission.
(3) The purpose of a discretionary award of costs is to ensure that a
successful party is properly indemnified for the costs he has
incurred, and
that is clearly what his Worship sought to do by his order in this case. I
accept that, as a general proposition.
(4) It is only if a matter is unconnected with the litigation, that it is
improper to take it into account when exercising the discretion.
(5) The Costs Rules cannot fetter the exercise of a statutory discretion under
s6B(1A). I accept that; see Clarke v Cameron (1880) 6 VLR 449 and Hartmont v
Foster (1881) 8 QB 82 at pp85-6. I note that the prior question is whether
s6B(1A) imports the discretion contended for.
(6) It was proper for his Worship
to depart from the Second Schedule scale,
because it would have been unjust to have applied it, since to do so would not
have given
the successful party, the respondent, a proper indemnity for her
costs. Mr Wyvill relied on many matters in seeking to establish
these general
propositions.
39. He noted the different result to that he contended for, in common form
provisions such as O65 R1
of the (former) Rules of the Supreme Court of
Victoria, and s24(1) of the Supreme Court Act 1986 (Vic), which made it clear
that the Court's discretionary power as to costs was subject to any express
provision in "the Rules";
and the similarity of wording in that respect, of
r63.03(1) of the Supreme Court Rules, which itself has statutory force. He
submitted
that, in contrast, the discretionary power in s6B(1A) is not
expressed to be subject to s6F(1), or to the Rules made thereunder.
40. He referred to s293 of the Local and District Criminal Courts Act (S.A.)
and the commentary thereon in Hannan: 'Local Court
Practice'. However, I note
that the costs dealt with in s263 are those "not herein otherwise provided
for", which means those not
otherwise provided for by the Rules.
41. Mr Wyvill also relied on what Lamond J had said in Harris v Burrows
(supra). He noted
the provisions of R30(7)(b) - see p5 - as indicating a
power in the Registrar to allow a larger amount for items than that in the
Second Schedule where in the circumstances of the particular case he
considered the Schedule amount to be "inadequate".
42. He referred
to authorities in Western Australia: however, they have to be
understood against the quite different way in which costs are determined
in
Western Australia and they turn upon O66 R12(1) of the Rules of the Supreme
Court of Western Australia allowing for a special
order by which increased
amounts of costs beyond the scale may be awarded if "unusual complexity or
importance of the case" or "any
other good or sufficient reason" is shown.
There the Rules scale is used as a starting point.
43. He submitted that the matters
which his Worship had taken into account
(see p10) were all matters which were proper to have been taken into account
in the exercise
of the discretion under s6B(1A).
44. Mr Wyvill pressed the cross-appeal only should it be found that his
Worship had discretionary
power under s6B(1A); in that event the submission
was that he had wrongly exercised his discretion, as indicated at (1) and (2)
on
p3. He relied in that respect on the matters put in the submission to Mr
McGregor SM by Mr Hiley; see p12.
45. Conclusions: At
the root of this costs litigation is the unexplained
fact that the costs in the Second Schedule, which came into force on 1 January
1978, have never been adjusted since. The whole rationale for the existence
of costs provisions such as this is to provide an indemnity
to a successful
party for his costs. Undoubtedly, there should have been increases in the
Schedule amounts over time, to accord
with this raison d'etre. The result of a
lack of increases over time is that there is great force in Mr Trigg's
criticism at p10
to the effect that the scale now is "totally out of date" no
attempt having been made "even to keep pace with inflation", with the
result
that it now does not provide "any real indemnity" to a successful party; and
since in the present case the application of
the scale would accordingly yield
a result which is "inequitable", it would be "unjust" to restrict the
respondent to that scale.
46. Nevertheless, the question remains one of the proper construction of
s6B(1A), read in the light, in particular, of s6F(1).
I consider that the
better view is that propositions (a) and (b) on p2 are correct. The Act
contemplates that a scale of costs for
proceedings under the Act will be fixed
by the Chief Magistrate under s6F(1), and the power in s6B(1A) does not extend
to applying
a different scale of costs to that so fixed. The Rules
contemplate that above-scale amounts may be awarded by the Registrar in cases
which fall within R30(7)(b), while R30(7)(c) provides for "reasonable" amounts
in cases "not specifically provided for" in the Schedule.
47. This construction has the merit of keeping the Court in line with the
general approach to costs in other Courts.
48. It follows
that I uphold ground of appeal (1) on p2. It is therefore
unnecessary to deal with the alternative ground of appeal (2) on p2; if
it
were necessary to do so, I would accept proposition (a) on p3 and I would
consider that his Worship erred in the exercise of his
discretion by taking
into account the factors he mentions at p10.
49. It also follows that the cross-appeal, which was not pressed
in the light
of this finding, must be dismissed, though ground (2) on p3 is made out.
50. A separate matter which should be mentioned
is the basis of the costs
paid by the respondent to her former solicitors, referred to by his Worship
(see p9) and during argument.
Section 129(2) of the Legal Practitioners Act
permits a legal practitioner to agree with his client on the amount of costs
for the
professional work he is to undertake for the client. Theirs is a
fiduciary relationship; accordingly such an agreement is enforceable
only if
it is just, fair and reasonable in the circumstances. See generally Clare v
Joseph (1907) 2 KB 369 and Weiss v Barker Gosling (1993) 16 Fam L.R. 728. It
must also meet the requirements of s129(3) and (4). This Court may scrutinize
such agreements as part of its general disciplinary
function in relation to
legal practitioners, to ensure that solicitors do not charge exorbitant fees.
See generally Tarry v Pryce
(No.2) (1987) 88 FLR 270 at p272; Burgundy Royale
Investments Pty Ltd (Receivers and Managers Appointed (In liq)) v Westpac
Banking Corporation (1992) 37 FCR 492 at pp496-9; and McInnes v Twigg (1992)
16 Fam LR 185 at pp192-8; and the authorities there cited. In general, a
solicitor's fees for legal work in a particular Court must be reasonable,
a
matter in the assessment of which existing cost scales are usually taken into
account. That is one reason why costs scales need
always to be kept
up-to-date. In certain circumstances the charging of fees substantially in
excess of those which would be allowed
on taxation may amount to professional
misconduct; see s45(2)(e) of the Legal Practitioners Act and Re Veron; ex p
Law Society of
New South Wales (1966) 84 WN (Pt 1) (NSW) 136 at p144. Here,
the suggestion that a firm of solicitors entered into a costs agreement
with a
client based on the Supreme Court scale of costs to carry out work in the
Workers' Compensation Court is sufficiently unusual,
on the face of it, to
warrant the question of its propriety in the circumstances being referred to
the Law Society for consideration;
this I now do, without intending any
reflection on the firm involved.
Orders
(1) The appeal against the orders made by the Court
on
6 December 1994 is allowed; the orders are quashed and set
aside.
(2) In lieu thereof it is ordered that the costs which
are
payable to the respondent by the appellant, pursuant to an
agreement between them recorded and dated 8 February 1989, be
taxed in accordance with the Workers' Compensation Tribunal
Rules.
(3) The cross-appeal is dismissed.
51. I will hear the
parties as to costs.