Mazel v The State of South Australia

5 Following this the employer issued an application for directions seeking orders that the Notices of Dispute be summarily struck out. Pursuant to r 21 of the Workers Compensation Tribunal Rules 2001 ("the Rules") that application had to be referred to a Presidential Member.

6 The application was duly listed for hearing and a learned Deputy President dismissed the application and referred the matter back for hearing by an Arbitration Officer.

7 Following three pre-arbitration hearings the worker's representative wrote to the Tribunal requesting judicial determination. It would seem that that letter was treated as an application for the purposes of s 92D(3) of the Act, which in turn meant that the application had to be dealt with by a Presidential Member.

8 Thereafter there were several attendances before a learned Deputy President. Ultimately, the parties agreed that the matter should be referred for arbitration. Some further pre-arbitration hearings were then conducted culminating in the recording of consent orders. Those orders included an order that the employer pay the worker's costs.

9 The issue in dispute between the parties is whether or not the costs payable to the worker are limited to those prescribed by reg 7(1) of the Regulations.

10 In order to deal with the respective submissions from the parties it is necessary to make reference to those provisions of the Act and the Regulations that deal with costs.

11 The starting point is s 88F. That provides: "Subject to this Act, the costs of proceedings before the Tribunal are in the discretion of the Tribunal."

12 Next, it is necessary to consider s 95. It provides as follows:-

"95. (1) A party (other than the relevant compensating authority) is entitled, subject to this Part and to limits prescribed by regulation, to an award against the relevant compensating authority for the party's reasonable costs of:

(a) the initial reconsideration of the disputed decision; and

(b) any subsequent proceedings for resolution of the dispute under this Part (but not proceedings by way of an appeal or case stated to a Full Bench of the Tribunal or the Supreme Court).

(a) the cost of representation by a legal practitioner or an officer or employee of an industrial association; and

(b) costs of a kind authorised by regulation that were reasonably incurred.

(3) If the Tribunal is of the opinion that a party acted unreasonably, frivolously or vexatiously in bringing or in relation to the conduct of proceedings, the Tribunal may:

(a) decline to make an award of costs in favour of the party and may further (if it thinks fit) make an award of costs against the party; or

(b) reduce the amount of the award to which the party would otherwise have been entitled.

(4) An award of costs to cover professional advice or assistance may, if the Tribunal considers appropriate, be made in favour of the person who provided the professional advice or assistance.

(5) An award of legal costs cannot exceed 85% of the amount that would be allowable under the relevant Supreme Court scale if the proceedings were in the Supreme Court."

13 In making reference, in s 95(i)(b) to "this Part" the section is referring to Pt 6A titled "Dispute Resolution".

7. (1) Pursuant to s 95(1) of the Act, the following limits on costs are fixed in relation to proceedings that take place under Part 6A of the Act (other than under Division 6 of that Part) ... :

Assistance in preparation and lodgement of a Notice

Participation in the conciliation/dispute resolution

process (payable only if the matter is resolved through

the conciliation process, and including the preparation

Preparation of a case for an arbitration hearing ....

(2) Pursuant to section 95(1) of the Act, the costs awarded to a party who was represented in proceedings before the Tribunal under Division 6 of Part 6A of the Act cannot exceed 85 per cent of the costs that would be payable on a party and party basis if the proceedings were proceedings before the Supreme Court.

(3) Pursuant to s 95(2)(b) of the Act, costs may be awarded to reimburse disbursements incurred by a party to a dispute up to a reasonable amount reasonably incurred, subject to the qualification that costs for medical services reimbursed as disbursements in the dispute resolution process are limited to the scales of charges that apply for the purposes of section 32 of the Act or, if a service is not covered by a scale of charges under that section, to an amount determined in accordance with the principles that apply under that section. ..."

15 The reference to Div 6 of Pt 6A of the Act in reg 7(2) is a reference to ss 94, 94A, 94B and 94C of the Act, all of which relate to the judicial determination of a dispute.

16 The employer contended before the learned Deputy President that the worker's costs were limited to those prescribed by reg 7(1). It contended that the worker was not entitled to any greater award of costs, because at no time was an order made that the matter proceed to judicial determination such that there never were proceedings conducted under Div 6 of Pt 6A of the Act. It was submitted that such an order needed to be made to attract the higher scale of costs provided for by reg 7(2).

17 The learned Deputy President left to one side, the issue as to whether work directed towards making an unsuccessful application before a learned Deputy President seeking an order that a matter be referred for immediate judicial determination attracted the higher scale of costs. He took the view that although the letter that culminated in the matter coming before a learned Deputy President made reference to such an application, what in reality happened were a series of ongoing settlement discussions culminating in an agreement that the matter proceed to arbitration and ultimately the settlement of the dispute.

18 As for those attendances, the learned Deputy President took the view that the costs in respect of them were to be assessed by reference to reg 7(1).

19 It would appear that the parties argued the matter before the learned Deputy President, on the basis that unless the proceedings before a Presidential Member of the Tribunal could be characterised as those to which reg 7(2) applied, it necessarily followed that the costs had to be fixed in accordance with reg 7(1).

20 In fairness to the learned Deputy President, he was never presented with an argument that we explored with the parties in the course of their submissions before us, and that was that there might be proceedings conducted under Pt 6A of the Act that are not governed by the Regulations; in other words that they fall between the items stipulated in reg 7(1) and proceedings conducted under Div 6 of Pt 6A of the Act.

21 It seems to us, that reg 7(1) of the Regulations could be interpreted in one of two ways.

"Pursuant to s 95(1) of the Act the following limits on costs are fixed in relation to proceedings under Pt 6A of the Act (other than under Div 6 of that Part) and no other costs are payable beyond these limits."

"Pursuant to s 95(1) of the Act the following limits on costs are fixed in relation to proceedings under Pt 6A of the Act (other than under Div 6 of that Part) in respect of the following items."

24 We now turn to consider which interpretation should be preferred.

25 In undertaking this exercise we think that it is important to note some other features of the Act.

26 For example, through s 88E of the Act Parliament has granted the President of the Tribunal the power to make rules which include rules:-

"(a) regulating the business of the Tribunal and the duties of the various officers of the Tribunal; and

(b) authorising conciliation and arbitration officers to exercise any part of the jurisdiction of the Tribunal; and

(c ) regulating the practice and procedure of the Tribunal; and

(d) imposing mutual obligations on parties to proceedings in the Tribunal to disclose to each other the contents of expert reports or other material of relevance to the proceedings before the proceedings are brought to trial; and

(e) regulating the form in which evidence may be taken; and

(g) dealing with any other matter necessary or expedient for the effective and efficient operation of the Tribunal."

27 In enacting this provision it is in our opinion reasonable to assume that Parliament would have contemplated that the President would make rules of the type provided for by r 21 of the Rules, which amongst other things vests exclusive jurisdiction in a Presidential Member of the Tribunal to deal with contested applications about matters such as:

* "a stay of proceedings pending submission by a party to a medical examination by a medical expert": r 21(5)(xix);

* "a stay of proceedings for any other reason": r 21(5)(xx);

* "the striking out of any pleading, affidavit, or document filed in the action": r 21 (5)(xxi);

* "the granting of summary relief": r 21(5)(xxii);

* the determination of an objection to a summons to a witness or summons for the production of any document: r 23(8);

* the restricting of access to a document or thing produced in compliance with the issue of a summons to produce documents or things: r 23(5).

28 Applications concerning issues of these types can plainly arise in the course of the dispute resolution process prior to the referral of the matter to a Presidential Member for the judicial determination of the dispute.

29 These are issues that clearly relate to the proceedings under Pt 6A of the Act.

30 If the first of the alternate interpretations that we have postulated were correct, that being the position that is urged upon us by the employer, it would mean that unless any procedure associated with any of these matters could be characterised as one of the items stipulated in reg 7(1), no costs would be recoverable.

31 Given that Parliament has gone to the trouble of creating a costs regime which plainly encourages workers to be appropriately represented (see for example: Monroe Australia Pty Ltd v Hill [2003] SAWCT 59 at par 19 and 21) we think it highly unlikely that such an outcome was intended.

32 In our view, the second of the alternate interpretations should be preferred.

33 In other words, the costs limitations imposed by reg 7(1) only apply to those items stipulated. Otherwise, costs incurred in proceedings under Pt 6A of the Act not related to proceedings conducted under Div 6 of Pt 6A are to be determined in accordance with s 88F, that is, in the discretion of the Tribunal, subject of course, to the limitation imposed by s 95(5), that the award of costs cannot exceed 85 per cent of the relevant Supreme Court scale.

34 We have not heard argument from the parties as to what the appropriate order for costs should be. This case was argued before us on the preliminary issue as to whether or not the scale of costs prescribed by reg 7(1) applied to all the work undertaken by the worker's solicitors and for the reasons just discussed, we consider that they do not. It does not, however, follow that the worker is entitled to recover costs on the basis of 85 per cent of the relevant Supreme Court scale. The award of costs cannot exceed that amount but it does not mean that that is the appropriate amount to award in every case in which a worker is entitled to costs that are not fixed by reg 7(1). The award of costs will reflect what is fair in all the circumstances.

35 We allow the appeal and remit the matter back to the learned Deputy President to reconsider the worker's application for costs in light of these reasons.