Hooyer v Workers' Compensation Regulator [2020] QIRC 163

Industrial Relations Act 2016 s 531, s 545, s 558

Canton v Workers' Compensation Regulator [2019] QIRC 145

Gambaro v Workers' Compensation Regulator [2017] ICQ 5

• [1] Jessica Hooyer, the Appellant in substantive proceedings ("the Appellant") lodged an appeal against a decision of the Workers' Compensation Regulator ("the Respondent") on 11 June 2019.
• [2] A Consent Order was issued by the Commission 20 April 2020 allowing the appeal and leaving the only matter outstanding between the parties being the issue of costs.
• [3] Following a directions order of 23 April 2020, the Appellant filed a schedule of costs and both parties filed submissions addressing the matter of costs.
• [4] The Appellant seeks an Order that the Respondent pay her costs and in accordance with the schedule of costs provided as mentioned above. The quantum of costs sought by the Appellant is $9,239.50.
• [5] The Respondent seeks an Order the that the parties bear their own costs or in the alternative, that if the Commission makes a costs order in favour of the Appellant, that the appropriate quantum of costs is $1,730.60.

• [6] In submissions filed on 29 May 2020, the Respondent sets out a chronology of the matter. This chronology is accepted and adopted by the Appellant.
• [7] As the background to the matter is not in dispute and is known to the parties, I do not intend to reproduce the chronology in this decision.
• [8] The relevant parts of the undisputed chronology that correspond with the Appellant's schedule of recoverable costs (filed 30 April 2020) is, in summary:
  • 10 July 2019, Appellant files the Notice of Appeal with the Commission;
  • 19 August 2019, Appellant files Statement of Facts and Contentions;
  • 1 October 2019, Regulator files Statement of Facts and Contentions;
  • 18 October 2019, Appellant requested an extension of time to file and serve her List of Witnesses and Outline of Evidence and Medical Reports which the Regulator immediately consented to;
  • Regulator made arrangements to confer with witnesses on 1 November 2019 to enable it to provide its outlines of evidence and list of witnesses in accordance with the Directions Order;
  • 29 October 2019, Appellant files her list of witnesses. In the Outline of Evidence for expert witnesses, the Appellant advised that: "Various medical experts will give evidence by way of written report; and any written report will be provided closer to the hearing";
  • Regulator needed to consider what was contained in any written report and requested the Appellant's solicitors advise the date it was anticipated they would provide the medical reports;
  • Regulator requested an extension of time to comply with its obligation to provide its list of witnesses and outlines of evidence for one month after the medical reports were provided;
  • 1 November 2019, the Regulator's counsel and the Appeals Officer undertook the pre-arranged conferences with witnesses;
  • 5 November 2019, Appellant's solicitors advised that she would be attending an appointment with Dr Eric De Leacy, Psychiatrist at the end of November;
  • 28 November 2019, Appellant's solicitors provide Regulator with a copy of Dr De Leacy's report dated 19 November 2019;
  • After reading Dr De Leacy's report, the Appeals Officer formed the view that it would be necessary for the Regulator to reconsider the decision to reject the Appellant's application for compensation. To enable her to properly consider what information had been given to Dr De Leacy, the Appeals Officer asked the Appellant's solicitors to provide a copy of the briefing letter which they sent him;
  • Arrangements were made for the Regulator to further conference with potential witnesses;
  • 3 January 2020, Appellant's solicitors provide a copy of the briefing letter which was sent to Dr De Leacy;
  • 14 January 2020, the Appeals Officer and Regulator's counsel conduct further witness conferencing to reconsider Appellant's claims;
  • Following these conferences, Mrs Moroney prepared a proposal to concede the appeal as, based on the opinion of Dr De Leacy, she considered that the appellant's claim could be accepted;
  • 20 January 2020, the Regulator wrote to the Appellant advising that it was reconsidering its position as to whether it would be defending the review decision. The Regulator also requested an extension of time to file its list of witnesses and an outline of evidence;
  • 21 January 2020, the Appellant agreed to the proposed extension of time; and
  • 7 February 2020, Regulator provides Appellant with correspondence advising that it was prepared to consent to the appeal being allowed.

• [9] Section 558(3) of the Workers' Compensation and Rehabilitation Act 2003 ("the WCRA") states: "Costs of the hearing are in the appeal body's discretion, except to the extent provided under a regulation."
• [10] The relevant regulation, being reg 132 of the Workers' Compensation and Rehabilitation Regulation 2014 states:

132 COSTS - PROCEEDING BEFORE INDUSTRIAL MAGISTRATE OR INDUSTRIAL COMMISSION

(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.

(a) costs in relation to counsel's or solicitor's fees are as under the Uniform Civil Procedures Rules 1999, schedule 2, part 2, scale C; and

(b) costs in relation to witnesses' fees and expenses are as under the Uniform Civil Procedure (Fees) Regulation 2019, part 3; and

(c) costs in relation to bailiff's fees are as under the Uniform Civil Procedure (Fees) Regulation 2019, schedule 2, part 2.

(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 -

(b) the importance, difficulty or complexity of the matter to which the procedure relates.

• [11] The Respondent submits that as observed by Martin P in Kim v Workers' Compensation Regulator [2019] ICQ 14, the general power to award costs in these proceedings is governed by section 545 of the Industrial Relations Act 2016 ("the IR Act"):

(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...

• [12] The Respondent believes the foundation of the Appellant's application for costs, as articulated in the affidavit of Mr Andrew McKenzie filed 22 April 2020:

10. By virtue of the Respondent rejecting the Application for Compensation and subsequently, the Applicant thereby having to lodge an Appeal, legal costs and disbursements have been incurred by the Applicant.

• [13] In that case, the Respondent submits that rather than being directed at the Respondent's actions with regard to these proceedings, the application is apparently directed towards the Respondent's discharge of its statutory functions pursuant to, Chapter 13 Part 2 of the WCRA and that therefore the application can be dismissed.
• [14] In response, the Applicant says that the general principle regarding costs arising from an appeal pursuant to the WCRA is that costs follow the 'cause', and says that this is supported by the most recent reported decisions of the Commission in appeals pursuant to the WCRA.
• [15] Further, the Appellant submits that it is for the Respondent to show why costs should not be awarded to the successful party; in this case, the Appellant.
• [16] The Appellant submits that the Affidavit of Ruth Moroney shows that as early as 28 November 2019, the Respondent formed the view that the Respondent ought to "reconsider the decision to reject the appellant's application for compensation" and that this demonstrates that as per s 545(2)(a)(ii) of the IR Act , it was reasonably apparent to the Respondent that the application or response to the application had no reasonable prospect of success.
• [17] The Appellant also rejects the Respondent's assertion that the application for costs can be dismissed because there was no step by the Respondent after commencement of the 'proceedings' giving rise to discretion to award costs and says that the operation of s 545(2)(a)(ii) means that prospects of success must be considered before the commencement of, or response to, an application.
• [18] The Appellant points to s 531(3) of the IR Act which provides that the Commission "is to be guided in its decisions by equity, good conscience and the substantial merits of the case.." and says that when these considerations are applied to this application, costs would be awarded to the Appellant on the basis that the initial application was approved, the Respondent overturned the approval following the then-employer's appeal, the Appellant incurred legal costs as a result, the Appellant was, and remains, an injured worker; and the Respondent is a statutory body.
• [19] The Appellant argues that the recent decision of O'Connor VP in Canton v Workers' Compensation Regulator [2019] QIRC 145 is authority for the approach of awarding costs following the event.
• [20] Additionally, the Appellant points to the decision of Martin J in Gambaro v Workers' Compensation Regulator [2017] ICQ 005 when His Honour considered s 545 of the IR Act and the general power to award costs noting in that case that where it was abundantly clear that the Appellant had no prospect of success on any of the grounds of appeal, an order for costs was appropriate.
• [21] In submissions in reply, the Respondent accepts that the usual approach adopted by the QIRC after the hearing of an appeal pursuant to the WCRA is that costs of the hearing follow the event. The Respondent points to s 558 of the WCRA:

(c) set aside the decision and substitute another decision; or

(d) set aside the decision and return the matter to the respondent with the directions the appeal body considers appropriate.

(2) If the appeal body acts under subsection (1)(b) or (c), the decision is taken for this Act, other than this part, to the be the decision of the insurer.

(3) Costs of the hearing are in the appeal body's discretion, except to the extent provided under regulation.

• [22] The Respondent says that the 'event' is usually success following the hearing. The appellant is not applying for costs of the hearing, the application is for costs of the proceedings.
• [23] With regard to the decision in Canton, I agree with the Appellant that the Vice President O'Connor states that the ordinary case is that costs follow the event, however, the context of that paragraph of the decision is that the Appellant had made an argument before the Commission that was successful:

The Appellant's argument before the Commission was successful. The Regulator's argument that the Appellant be prevented from leading evidence contained within the Statement of Facts and Contentions was not accepted. Nothing has been put by way of argument which would remove this matter from the ordinary case where costs follow the event. Accordingly, the Appellant is entitled to its costs of this application.[1]

• [24] I accept that it is the ordinary course of things that costs follow the event in Workers' Compensation appeals at the Commission. But, in this case, the usual 'event' did not occur in that the matter was conceded by the Regulator before it was allocated to a member for hearing. This does not preclude me from hearing submissions as to why I should exercise the discretion to award costs.
• [25] That being the case, I will consider the submissions of the parties as to whether the general power to award costs under s 545(2)(a)(i) or (ii) of the IR Act may apply in that either the Respondent's response to the appeal was vexatious or whether it should have been reasonably apparent to the Respondent that the response to the application had no reasonable prospect of success.

Was the response vexatious or without reasonable cause?

• [26] I note that there is no suggestion from the Appellant that the response from the Respondent was vexatious or without reasonable cause. However, it is addressed in the Respondent's submissions and for completeness I will address the matter briefly.
• [27] There is no evidence before me that the Workers' Compensation Regulator behaved in a vexatious way in determining to defend the decision of the Review Unit under appeal. As has been canvassed in the submissions, the Review Officer conducts a 'desktop' review of material 'on the papers' to determine whether or not a claim should have been accepted or rejected. It is when an appeal is commenced that the Appeals Officer undertakes further investigations and considers material put forward by the Appellant. It is the case that occasionally this leads to the Regulator conceding the matter prior to hearing.
• [28] When an appeal is filed in the Registry, the normal course of events is that an initial conference is held (where the Appellant does not have legal representation) and following this, Directions are issued for the filing of Statements of Fact and Contentions, exchange of documents, discovery of materials, witness lists and outlines of evidence and a s 552A conference. It is not possible for the Respondent to determine its position in relation to an Appeal without having access to the evidence that will be brought forward at a hearing in the Commission.
• [29] There is nothing vexatious or unreasonable about the way the Respondent has conducted itself in relation to this matter.

Was it reasonably apparent that the response to the application had no reasonable prospect of success?

• [30] The Respondent says that the Notice of Appeal filed on 10 June 2019 identified 2 'events', the incident that occurred on 18 July 2018; and a meeting between the appellant and the principal who described her as being 'manipulative'.
• [31] The Respondent says that the Appellant's Statement of Facts and Contentions then expanded on the claim and the Appellant sought to prove that all the events previously nominated in her initial application for compensation had caused her claimed injury. WorkCover had determined those additional 'events' had not occurred in the manner as claimed by the Appellant and similar findings were made in the Regulator's review decision.
• [32] The Respondent points out that the Appellant's representatives obtained additional medical evidence to support her claim. Following receipt of the report from Dr De Lacey:
  • The Appeals Officer determined it was necessary for the Regulator to reconsider the decision to reject the Appellant's application for compensation and took timely steps to enable this to occur;
  • the Regulator took steps to defer compliance with procedural steps to avoid unnecessary costs being incurred by the Appellant; and
  • the Regulator acted appropriately. As soon as it had the opportunity to carefully consider the additional evidence, it took steps to concede the appeal.
• [33] In response to this, the Appellant says that:
  • the Respondent has rejected the claim for compensation on appeal by the employer in reliance on a report by Dr Harding;
  • the report by Dr Harding was not specific about what would be the significant contributing factor to the psychological injury suffered by the Appellant;
  • significant contributing factor to the psychological injury suffered by the Appellant is a major, if not the major issue for determination in considering the claim for compensation; and
  • the regulator did not have a psychiatric report addressing a major issue at the time of rejecting the claim for compensation.
• [34] In submissions in reply, the Respondent notes that the Appeals Officer also says in her affidavit that following receipt of Dr De Leacy's report she asked for the briefing letter. Further conferences with potential witnesses were also organised and occurred on 14 January 2020. This enabled the Regulator to further consider the claims made by the Appellant.
• [35] The Respondent also points out that the Appellant submits that she "was required to obtain [the report from Dr De Leacy] to support this appeal".
• [36] In those circumstances, the Respondent submits that it is not possible to draw an inference that it should have been reasonably apparent to the Respondent that the response to the proceedings had no reasonable prospects of success. Rather, the Respondent suggests that the history demonstrates a sensible approach to the appeal with the Respondent reconsidering the decision once additional evidence was provided by the Appellant and further conferences were conducted with the witnesses.
• [37] It is the case that the Regulator gains an understanding of what case it is responding to when it receives the Statement of Facts and Contentions and then when any further expert report or other evidence is provided or outlined.
• [38] As far as I can see from the submissions before me, the Appellant sought a medical opinion to support her appeal in the Commission. The outline of evidence provided by the Appellant to the Respondent in compliance with the Directions Order indicated that there were some medical reports the Regulator did not have access to. The Regulator asked for copies of these and received the report of Dr De Leacy. This report prompted the Regulator to undertake some further investigations and ultimately led to a change of position. This all occurred during the steps leading up to the s 552A conference (should it be required) and as a result, the matter was never allocated a member for hearing and hearing dates were never listed.
• [39] I accept that the Respondent only determined that the response to the application may not have reasonable prospects of success upon receipt of Dr De Leacy's report and the further investigations arising out of it. This is a different set of circumstances to those which faced Martin P in Gambaro.
• [40] I accept that at the time the application was made and the Regulator filed its response, it was reasonably apparent to the Regulator that the response had limited prospects of success. On the facts before me, the Regulator took reasonable steps to concede the matter and this happened before the matter progressed to hearing.
• [41] In the circumstances, I have determined that the circumstances do not give rise to costs being awarded to the Appellant.
• [42] The application is dismissed.
• [43] I order that the parties bear their own costs.

[1] Canton v Workers' Compensation Regulator [2019] QIRC 145 [33].