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[2006] NSWCA 129
respondent. 1. Grant each claimant leave to discontinue the proceedings in this Court; 2. Order that the claimant pay the second opponent's costs of each proceeding in this Court (orders proposed by Basten JA...
The claimants sought to quash convictions from the Industrial Relations Commission. After this Court decided a related case (Powercoal) against the claimants on the key constitutional point, and the NSW Parliament amended s179 to require internal appeals to the Full Bench before external review, the claimants sought to discontinue their appeals. The Court (majority) granted leave to discontinue but ordered the claimants to pay the prosecutor's costs because the central constitutional issue had already been authoritatively decided against them and the remaining issues had insufficient prospects or were precluded by the amendment; the minority (Tobias JA) would have made no order as to costs.
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1,995 words · generated 19/06/2026
This set of appeals arose from prosecutions in the Industrial Relations Commission (the Commission) under the Occupational Health & Safety Act 1983, relating to a coal‑mine accident on 14 November 1996 in which four miners died. The Commission (Staunton J as sole judicial member) convicted the five claimants on 9 August 2004 of various offences (see [2], [36]). In January 2005 the claimants issued summonses in the Court of Appeal seeking prerogative relief (certiorari and prohibition) to quash the convictions and restrain the Commission from proceeding.
2 cited instruments linked from this judgment.
The claimants' pleaded contentions included that the Commission lacked criminal jurisdiction because Chapter III of the Commonwealth Constitution precluded conferring criminal jurisdiction on an essentially arbitral tribunal, and other jurisdictional and 'error on the face of the record' contentions (see [3]). Directions were given and the matters were fixed for hearing commencing 28 March 2006 ([4]). Meanwhile, two intervening developments altered the landscape.
First, in Powercoal Pty Ltd v Industrial Relations Commission of NSW (delivered 10 October 2005) this Court (Spigelman CJ, Mason P and Handley JA) rejected the constitutional incompatibility argument, holding that Chapter III did not prevent conferral of criminal jurisdiction on the Commission (see [7], [37]). Second, the Industrial Relations Amendment Act 2005 (NSW) commenced on 9 December 2005 and amended s179 of the Industrial Relations Act 1996. The amendments required that jurisdictional questions be first addressed by the Full Bench of the Commission in Court Session (the Industrial Court) before external supervisory review could be sought ([4]-[6], [8], [11]).
Faced with Powercoal disposing of their primary contention and the Amendment Act effectively removing the Court's supervisory jurisdiction over matters not first considered by the Full Bench, the claimants sought leave to discontinue their appeals on 21 December 2005. The prosecutor (second opponent) consented to discontinuance only on condition that the claimants pay his costs in this Court. The President directed written submissions on costs and the question was determined on the papers ([9]-[12]).
By majority (Basten JA, Mason P agreeing), the Court granted leave to discontinue but ordered that the claimants pay the second opponent’s costs of the proceedings in this Court ([1], [42]). Tobias JA dissented on costs and would have ordered that each party bear their own costs ([33]-[34]).
The decision on costs required the Court to apply its discretionary powers under s76 of the Supreme Court Act 1970 and to reconcile established principles about costs where there has been no hearing with the particular facts: a prior authoritative adjudication (Powercoal) resolved the central constitutional issue, and legislation intervened to require internal appeal before external supervision.
The governing legal principle for cases where proceedings terminate without a hearing is taken from McHugh J’s reasoning in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622: broadly, if both parties have acted reasonably in commencing and defending the proceedings and conduct remained reasonable until the litigation became futile, the proper exercise of discretion will usually be to make no order as to costs ([23]; quoted text at [23]). That approach was accepted and deployed by the Court (see [21]-[25], [38]).
Basten JA’s majority reasoning observed two points that moved the result away from the standard 'no order' outcome. First, the Court in Powercoal had already ruled adversely to the claimants on the constitutional incompatibility argument; accordingly, to the extent that the claimants' case before this Court turned on that constitutional point, the claimants should be treated as having failed (the issue was, in substance, determined), a factor weighing in favour of costs to the successful party ([37], [39]). Second, the remaining issues were either precluded from this Court by the Amendment Act (which required the Full Bench to determine jurisdictional questions first) or could more properly have been left to the Full Bench: there was a practical risk that any relief in this Court would be rendered otiose by appeal outcomes before the Full Bench ([11], [40]-[41]). Combining those elements, the majority concluded that the second opponent should recover costs because the most significant issue had been authoritatively resolved against the claimants and the remaining prospects of success were inadequate to displace an award of costs ([39]-[42]).
Tobias JA took a different view on costs. He applied the Lai Qin principles and concluded that the claimants had acted reasonably and that the discontinuance was compelled by the legislative amendments; he was not prepared to find that the claimants were 'almost certain' to fail on all issues, particularly since much of the second opponent’s work occurred before Powercoal and the claimants’ arguments were not manifestly unarguable when advanced ([26]-[33]). On that basis Tobias JA would have ordered that each party bear their own costs ([33]-[34]).
In short: the majority treated Powercoal as operating in substance to decide the principal issue against the claimants and, combined with the jurisdictional exclusion produced by the statutory amendment, considered an order for costs in favour of the prosecutor appropriate. Tobias JA would have adopted the usual 'no order' approach because the claimants acted reasonably and the discontinuance was necessitated by intervening legislation.
Before this decision the well‑settled approach to costs where there is no hearing was that the court should avoid resolving costs by conducting a hypothetical trial; instead, reasonableness of conduct and the prospects of success are the key determinants. The High Court's formulation in Lai Qin shaped this approach and had been applied in NSW appellate decisions such as Edwards Madigan Torzillo Briggs v Gloria Stack (see [23]-[25]).
This Court in Newcastle Wallsend confirmed and applied those principles but also clarified practical consequences where a central issue has been authoritatively decided in another judgment before discontinuance. Basten JA held that where a prior decision has resolved a legal question central to the claim and that decision is authoritative, the court may treat that question as in substance having been determined for costs purposes, and may award costs accordingly ([39]). That is a qualified refinement: the usual 'no order' approach remains the starting point, but an authoritative prior ruling disposing of a principal issue can justify a costs order against the discontinuing party.
The decision also reiterates the longstanding principle that courts should avoid deciding constitutional questions where alternative grounds or forums exist to determine the dispute (Peters v Hobby principle), a principle endorsed by the High Court authorities R v Hughes and Re Te and applied in this industrial relations context ([40]-[41]).
Thus the after‑state: courts will continue to follow Lai Qin for 'no-hearing' costs but will be disposed to order costs against discontinuing litigants when an authoritative decision has already disposed of core issues; and superior courts will be cautious to intervene in the face of available alternative remedies or internal appeal mechanisms.
Passage (McHugh J quoted) [23]:
Passage (Basten JA) [39]:
Passage (Basten JA) [40]:
Orders (Basten JA) [42]:
The decision is particularly relevant where:
This judgment itself cites and applies High Court and NSW appellate authorities on costs and constitutional adjudication (Lai Qin, Edwards Madigan Torzillo Briggs, One Tel, Peters v Hobby, R v Hughes, Re Te). The salient contribution of Newcastle Wallsend is practical: it records that a prior authoritative decision can be taken as resolving an issue for costs purposes and confirms that the 'no order' norm is not absolute when a discontinuing party's prospects were effectively extinguished by prior authority or statutory change ([39]-[42]).
Practitioners and courts faced with discontinuance after intervening adverse authority should take from this case that a majority court may award costs against the discontinuing party where the earlier decision has in substance decided the crucial legal question. Conversely, a careful record that the discontinuance was compelled, and that parties acted reasonably, will support a 'no order' result (as Tobias JA advocated) in appropriate circumstances ([26]-[33]).
Degree of 'authoritativeness' required: Newcastle Wallsend treated Powercoal as authoritative for the constitutional point. Future cases may require finer delineation of when an earlier decision is sufficiently persuasive or binding (same bench level, same jurisdiction, or differing factual matrices) to justify treating an issue as in substance determined for costs purposes ([39]). The judgment recognises this as fact‑sensitive.
Apportionment of costs where only part of the case was disposed of: Basten JA treated the constitutional issue as enough to justify costs for the prosecutor generally. In cases where only a narrower issue is decided by prior authority, courts will need to consider apportioning costs rather than awarding all costs to the successful party. Newcastle Wallsend does not establish firm rules on apportionment beyond the present outcome.
Interaction between timing of incurred costs and later adverse authority: Tobias JA emphasised that much of the second opponent’s costs were incurred before Powercoal and that this affects the fairness of a universal costs order ([32]). How courts will calibrate costs liability to reflect when work was done and what issues were then live remains a practical question for later cases.
The margin between 'insufficient prospects' and 'almost certain to have succeeded': Lai Qin envisages rare cases where one party was almost certain to succeed; Newcastle Wallsend sits between that and ordinary 'no order' cases. Future authorities will need to unpack the threshold for departing from the 'no order' baseline when prospects have been materially weakened but not eliminated.
These uncertainties mean that Newcastle Wallsend provides an important applied template, but not a black‑letter rule; its application will be fact and timing sensitive, and counsel should frame submissions on costs carefully where discontinuance follows intervening authority or statute.
CITATION: Newcastle Wallsend Coal Co Pty Ltd v Industrial Relations Commission of NSW & Anor ; Richard M Porteous v Industrial Relations Commission of NSW & Anor; Jonathan E H Romcke v Industrial Relations Commission of NSW & Anor; Oakbridge Pty Ltd v Industrial Relations Commission of NSW & Anor; Mark Robinson v Industrial Relations Commission of NSW & Anor [2006] NSWCA 129 This decision has been amended. Please see the end of the judgment for a list of the amendments.
JUDGMENT OF: Mason P at 1; Tobias JA at 2; Basten JA at 35
DECISION: 1. Grant each claimant leave to discontinue the proceedings in this Court; 2. Order that the claimants pay the second opponent's costs of each proceedings in this Court
CATCHWORDS: COSTS - apportionment - proceedings discontinued - legislative amendments necessitated discontinuance - whether each party should bear its own costs - whether proceedings likely to fail in any event - whether discontinuing party had an arguable case - impact of judgment in an unrelated matter concerning a relevant point of constitutional law
Industrial Relations Act 1996, s 151A, s 168, s 196, s 179 Industrial Relations Amendment Act (NSW) 2005 LEGISLATION CITED: Occupational Health & Safety Act 1983, s 15(1), s 16(1) Supreme Court (Summary Jurisdiction) Act 1967 Supreme Court Act 1970, s 76
Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack [2003] NSWCA 302 Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72 One Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548 CASES CITED: Peters v Hobby 349 US 331 (1955) Powercoal Pty Ltd v Industrial Relations Commission of NSW (2005) 156 A Crim R 269 R v Hughes (2000) 202 CLR 535 Re the Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 Re Minister for Immigration and Multicultural Affairs; ex parte Te (2002) 212 CLR 162
Newcastle Wallsend Coal Co Pty Ltd Industrial Relations Commission of New South Wales Stephen Finlay McMartin PARTIES: Richard Myles Porteous Jonathan Erik Humphries Romcke Oakbridge Pty Ltd Mark Robinson
FILE NUMBER(S): CA 40076/05; 40077/05; 40078/05; 40079/05; 40083/05
Cl: B D Hodgkinson SC / W Thompson for Newcastle Wallsend Coal Co Ltd Cl: B D Hodgkinson SC / W Thompson for Oakbridge Pty Ltd Cl: Sparke Helmore (Solicitor) for Jonathan E H Romcke COUNSEL: Cl: B D Hodgkinson SC / W Thompson for Richard Porteous Cl: B D Hodgkinson SC / W Thompson for Mark Robinson Opp: Crown Solicitor for Industrial Relations Commission of NSW Opp: S Crawshaw SC for Stephen Finlay McMartin
Cl: Truman Hoyle for Newcastle Wallsend Coal Co Ltd Cl: Truman Hoyle for Oakbridge Pty Ltd Cl: Sparke Helmore for Jonathan E H Romcke SOLICITORS: Cl: Truman Hoyle for Richard Porteous Cl: Truman Hoyle for Mark Robinson Opp: Crown Solicitor for Industrial Relations Commission Opp: Slater & Gordon for Stephen F McMartin
LOWER COURT JURISDICTION: Industrial Relations Commission
LOWER COURT FILE NUMBER(S): IRC 3198-3249 of 2000
IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40076/05 CA 40077/05 CA 40078/05 CA 40079/05 CA 40083/05
MASON P TOBIAS JA BASTEN JA
Tuesday 30 May 2006 NEWCASTLE WALLSEND COAL CO PTY LTD v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR RICHARD MYLES PORTEOUS v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR JONATHAN ERIK HUMPHRIES ROMCKE v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR OAKBRIDGE PTY LTD v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR MARK ROBINSON v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR
The Industrial Relations Commission convicted the claimants of a number of offences. In January 2005, the claimants commenced proceedings in the Court of Appeal seeking to have their convictions quashed, and their summonses were fixed for hearing in March 2006.
The claimants contended, inter alia, that Chapter III of the Constitution prevented criminal jurisdiction from being conferred on the Commission. That argument was resolved in favour of the second opponent in October 2005 by another judgment of the Court of Appeal: Powercoal Pty Ltd v Industrial Relations Commission of NSW (2005) 156 A Crim R 269.
Further, the Industrial Relations Amendment Act (NSW) 2005 commenced on 9 December 2005. The amendments effectively required the claimants to take their claims before the Full Bench of the Industrial Relations Commission in Court Session (now known as the Industrial Court) before the Court of Appeal could exercise its supervisory jurisdiction.
Accordingly, the claimants in each proceeding sought leave to file a notice of discontinuance with respect to each summons. The second opponent (the prosecutor in each proceeding) sought an award of costs for the appeal proceedings. The claimants argued that it was appropriate for each party to bear its own costs.
IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40076/05 CA 40077/05 CA 40078/05 CA 40079/05 CA 40083/05
MASON P TOBIAS JA BASTEN JA
Tuesday 30 May 2006 NEWCASTLE WALLSEND COAL CO PTY LTD v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR RICHARD MYLES PORTEOUS v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR JONATHAN ERIK HUMPHRIES ROMCKE v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR OAKBRIDGE PTY LTD v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR MARK ROBINSON v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & ANOR Judgment (on the papers)
2 TOBIAS JA: On 9 August 2004, the Industrial Relations Commission of New South Wales (the Commission), constituted by her Honour Justice Staunton, convicted Newcastle Wallsend Coal Pty Ltd, Richard Myles Porteous, Jonathan Erik Humphries Romcke, Oakbridge Pty Ltd and Mark Robinson (together the claimants) of a number of offences against ss15(1) and 16(1) of the Occupational Health & Safety Act 1983. In January 2005, each of the claimants issued a summons in this Court claiming an order in the nature of a writ of certiorari to quash their convictions. Each summons also claimed an order in the nature of a prohibition to restrain the Commission from continuing to entertain the proceedings against the respective claimants. Stephen Finlay McMartin, the second opponent, was the prosecutor in each case.
3 In each matter, points of claim were filed alleging that the Commission lacked the jurisdiction to hear and determine the proceedings arising out of the charges. Relevantly, it was alleged that: (a) the Commission had no jurisdiction to exercise a criminal jurisdiction in occupational health and safety;
(b) s179 of the Industrial Relations Act 1996 (the IR Act) prevented supervision by this Court of the exercise of judicial power by the Commission and was therefore invalid as contrary to Chapter III of the Commonwealth Constitution;
(c) on its true construction, s179 of the IR Act did not apply to a conviction for a criminal offence;
(d) to the extent that s179 of the IR Act did not apply to criminal proceedings, the proceedings in the Commission disclosed an error on the face of the record as defined by s69(4) of the Supreme Court Act ;
(f) to the extent that s179 of the IR Act applied to the proceedings, orders were available from the Supreme Court under s69 of the Supreme Court Act because the record disclosed jurisdictional error and/or error remediable pursuant to the Hickman principle;
(g) there were other errors in the judgment of the Commission which amounted to errors of law on the face of the record or errors that went to the jurisdiction of the Commission.
4 The proceedings in this Court were case managed by the President and a number of direction hearings were held between February and June 2005. On 29 September 2005, Registrar Schell fixed the summonses for hearing over three days from 28 March 2006. However, the Industrial Relations Amendment Act (NSW) 2005 (the Amendment Act) received Royal Assent on 1 December 2005, and commenced on 9 December 2005.
5 Schedule 1 to the Amendment Act enacted a number of amendments to s179 of the IR Act. It was common ground that these amendments had the effect of requiring the Full Bench of the Commission in Court Session to deal with all jurisdictional questions before any review was available in another court or tribunal. In other words, the effect of the amended s179 is, firstly, to prevent this Court from exercising its supervisory jurisdiction with respect to decisions of the Commission which allegedly involve an error of law on the face of the record. Secondly, it operates to deny this Court its supervisory jurisdiction with respect to a purported decision of the Commission that was alleged to have been made without jurisdiction. These restrictions operate unless and until the alleged errors of law or jurisdiction have been the subject of an appeal to the Full Bench of the Commission in Court Session, or the Full Bench has refused leave to appeal against the decision (or purported decision) of the Commission at first instance. Clause 31B of Schedule 4 to the Amendment Act applied the amended s179 to the proceedings before this Court.
6 Section 196 of the IR Act provides for appeals to the Full Bench in respect of criminal proceedings taken before a judicial member of the Commission. At the time the proceedings were instituted in this Court none of the claimants had appealed or sought leave to appeal to the Full Bench. This was remedied in March or April 2005. However, as at December 2005, those appeals had not been heard or determined.
7 As I have mentioned, one of the issues raised by the claimants was that Chapter III of the Commonwealth Constitution prevented criminal jurisdiction from being conferred on the Commission. This challenge was founded on the alleged incompatibility of combining the arbitral functions of the Commission with a criminal function or jurisdiction. However, that issue was resolved by this Court in Powercoal Pty Ltd v Industrial Relations Commission of NSW (2005) 156 A Crim R 269. In a judgment delivered on 10 October 2005, Spigelman CJ, with whom Mason P and Handley JA agreed, held, inter alia, that Chapter III of the Commonwealth Constitution did not prevent the conferral of criminal jurisdiction on the Commission (at 284-287 [38]-[48]). Accordingly, a major aspect of the claimants' argument before this Court was determined in favour of the second opponent.
8 Of course, the decision in Powercoal did not resolve all of the issues raised by the claimants in their Points of Claim before this Court. There were still a number of other issues capable of attracting the supervisory jurisdiction of the Court. However, the amendments to s179 of the IR Act effected by the Amendment Act put paid to the balance of those issues, given that they had not yet been determined by the Full Bench of the Commission in Court Session pursuant to the appeals which had been filed in March and April 2005.
9 The summonses were therefore relisted for mention before the President on 21 December 2005. At that time, two points were conceded on behalf of the claimants. The first was that Powercoal had resolved the issue of whether criminal jurisdiction had been validly conferred upon the Commission. The second was that, as a consequence of the amendments to s179 effected by the Amendment Act, this Court no longer had jurisdiction to deal with the other issues raised in the Points of Claim insofar as they arose out of a purported decision of a single judicial member of the Commission. Accordingly, the claimants sought the Court's leave to file a notice of discontinuance with respect to each summons.
10 The President was informed that consent to the filing of those notices had been obtained from the Commission. However, the second opponent indicated to the President that he would not consent to the discontinuance of each proceeding unless orders were made for the payment of his costs in this Court. Although it was agreed that the proceedings were, as the President put it, "stopped in their tracks" by the amendments to s179, the second opponent submitted that, in any event, the proceedings were doomed from the start because the majority of the claimants' arguments were resolved against them by the decision of this Court in Powercoal.
11 It was common ground that the amendments to s179 created a legal obstacle to the commencement or continuation of the proceedings in this Court unless and until the claimants had exercised their right of appeal to the Full Bench and that appeal had been determined. Accordingly, it was submitted that even if the amendments to s179 had not been made, this Court would not as a matter of discretion have granted relief to the claimants in respect of any of the outstanding issues left undetermined by Powercoal unless and until the claimants' appeal to the Full Bench had been finalised. This was because those issues would have become academic if any such appeal was successful.
12 Accordingly, the President vacated the hearing date fixed to commence on 28 March 2006, noted that the claimants proposed to discontinue each matter and that the only outstanding issue was that of costs, and directed the parties to file written submissions in relation to costs, which were to be determined by this Court on the papers. Those written submissions have now been filed, thus enabling the Court to proceed to resolve the question of costs.
13 The claimants submitted that, because of the amendments to s179 effected by the Amendment Act, they had little alternative but to discontinue the proceedings. A change in the law had occurred, it was contended, that revealed an express intention of the Parliament to terminate proceedings that were already on foot. While it was accepted that the Supreme Court Rules dictated that liability for the costs of an appeal rested with the party seeking its discontinuance, in the present case such an order was not appropriate as the discontinuance of the proceedings was necessitated by intervening legislation. It was submitted that but for the amendments to s179, the claimants had an arguable basis for seeking to have this Court review the decisions of the Commission whereby the claimants had been convicted. Accordingly, in the circumstances, it was appropriate that each party should bear its own costs of the proceedings before this Court.
14 The second opponent submitted that the claimants never had an arguable case, either before or after the decision in Powercoal. It was argued that even a cursory examination of the outline of submissions filed in the proceedings by the claimants, and the reply filed by the second opponent, would reveal a number of matters that told strongly against the claimants having had any real chance of success in the proceedings.
15 It was also contended by the second opponent that the claimants' primary argument was that the Commission had no jurisdiction to hear criminal proceedings at all. Moreover, even if it did, the claimants' alternative argument was that s179 (in its unamended form) had no application to the proceedings at first instance because of the provisions of s168 of the IR Act. That section provided that proceedings in respect of any offence taken before the Commission were to be dealt with summarily in accordance with the Supreme Court (Summary Jurisdiction) Act 1967. Further, by force of s168(4), the provisions of that section were to prevail over any other provision in Part 5 for the purpose of proceedings for an offence. As s179 was also in Part 5, the claimants contended that it had no application to proceedings for an offence dealt with by the Commission in accordance with s168. The second opponent submitted that these arguments were almost certain to fail, particularly after the decision of this Court in Powercoal.
16 To the extent to which Powercoal did not govern the totality of the issues raised by the claimants, it was submitted that those issues involved a miscellany of complaints about the decision at first instance which were framed in language redolent of points of appeal rather than as jurisdictional errors on the face of the record.
17 The second opponent further submitted that, irrespective of the amendments to s179, the claimants faced the impediment of having this Court hear the proceedings in circumstances where the claimants had commenced proceedings in this Court before exercising their rights of appeal to the Full Bench and in circumstances where, having subsequently lodged such appeals, the Full Bench had not yet determined them. There was therefore a strong argument that this Court should not grant discretionary relief to the claimants before the appeal process in the Commission had been exhausted, especially given that a successful appeal by the claimants would have made the present proceedings otiose.
18 Finally, it was contended that the claimants' burden in persuading this Court to exercise its discretion in favour of the granting of relief would have been even more onerous where in the circumstances, the relevant issues would be more appropriately dealt with by the Full Bench. This was particularly so where the constitutional issue raised by the claimants as their primary contention could no longer be sustained as a result of the decision of this Court in Powercoal.
19 Accordingly, it was submitted that the second opponent had been put to considerable expense in preparing submissions to defend the proceedings which were highly likely to fail, irrespective of the amendments to s179. As such, it was argued, leave to discontinue should only be granted on the basis that the claimants pay the second opponent's costs before this Court.
20 The claimants' outline of submissions with respect to the issues raised in the Points of Claim was filed on 11 March 2005. The second opponent's outline of submissions in reply was filed on 31 May 2005. The claimants filed supplementary submissions on 3 and 9 August 2005 and the second opponent responded to these on 20 September 2005. As is thus apparent, all these submissions were filed before the decision of this Court in Powercoal, which was delivered on 10 October 2005, the case having been argued in July 2005.
21 Although s76 of the Supreme Court Act 1970 confers a wide jurisdiction upon the Court to award costs, that power is ordinarily exercised after a hearing on the merits. The general rule is that the successful party is entitled to his or her costs absent good reason to the contrary: Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72 at 96-97.
22 However, as McHugh J observed in Re the Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 642, where there has been no hearing on the merits the court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
23 In that case, McHugh J (at 624-625) considered that the following approach should be taken in circumstances such as the present (omitting citations): "In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and a moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80% of the applicant's tax costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the court will make no order as to the costs of the proceedings. This approach had been adopted in a large number of cases."
24 More recently, a similar approach was adopted by this Court in Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack [2003] NSWCA 302. After referring to the observations of McHugh J in Lai Qin, Davies AJA, with whom Mason P and Meagher JA agreed, observed (at [5]): "When proceedings are brought to an end without a determination after a trial, the judge may find it difficult, even impossible, to make an award of costs. If the judge does make an award, it will generally be because the judge is satisfied that one party has had a substantial victory and the other a substantial loss, or that there has been a marked difference in the reasonableness of the actions taken by the parties, so that one party should be rewarded for its reasonable actions and the other party should suffer a detriment in costs.
25 His Honour then referred to the judgment of Burchett J in One Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548, who made the point in these terms: "It is accepted that, in a case which terminates before there has been a hearing, the court should not resolve the issue of costs by engaging in something in the nature of a hypothetical trial: Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201; Re Minister for Immigration and Ethnic Affairs ; Ex parte Lai Qin (1997) 186 CLR 622 at 624. But this does not mean that the Court never make an order for costs. Often, it will be unable to do so; but in other cases an examination of the reasonableness of the conduct of the parties, respectively, may provide the basis of an order, or a 'judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter has been fully tried', as McHugh J put it in Ex parte Lai Qin at 625. His Honour added: 'If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.' Although his Honour thought this would 'usually' be so, he made it clear that he was not laying down an invariable rule. At the beginning of his discussion of the applicable principles (at 624), he referred to the discretionary nature of the power to order costs, and to the 'general rule [that] the successful party is entitled to his or her costs', and he said: 'In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action.' As Sackville J pointed out in Rizal v Minister for Immigration and Multicultural Affairs [1999] FCA 334 at [16], the remarks made by McHugh J evince 'a somewhat more flexible approach' than that taken by the Court in Gribbles Pathology Pty Ltd v Heath Insurance Commission (1997) 80 FCR 284 at 287, when it suggested that 'there will be very few cases, where the issues will be sufficiently clear, in the absence of a hearing, for an order for costs to be made in favour of a party.' What is well established is that frequently the determining factor will be the reasonableness of the conduct of the parties, a matter which was emphasised in each of the decision I have cited, and also in Reddy v Hughes (1996) 37 IPR 413; Sun Zhan Qui v Minister for Immigration and Ethnic Affairs [1999] FCT 119; and Australian Securities Commission v Berona Investments Pty Ltd 18 ASCR 772. In the last case, Cooper J commented, concerning the principles laid down in Australian Securities Commission v Aust-Home Investments (at 774):
'These propositions are of assistance in focussing attention upon some of the relevant circumstances which should be considered in the exercise of the discretion to award costs where proceedings do not proceed to a final hearing. However, they are not the only circumstances; nor are they intended to limit the discretion.' In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs."
26 With the above principles in mind, it is apparent that the present is not a case where it could legitimately be suggested that the claimants acted unreasonably in commencing the proceedings in this Court or that their conduct was other than reasonable until the further prosecution of their claims became futile. With respect to their primary claim, this futility was a result of the decision of this Court in Powercoal in October 2005. With respect to the balance of their claims, it resulted from the amendments to s197 of the IR Act that deprived this Court of jurisdiction unless and until the claimants had exhausted their appeal rights to the Full Bench.
27 Nevertheless, as I have indicated, the second opponent submitted that the various heads of claim advanced by the claimants in their Points of Claim and outline of submissions were doomed to fail. As a consequence, the second opponent was "almost certain to have succeeded" if the proceedings had gone to trial, and he would therefore have been entitled to his costs.
28 As I understand the submissions, the claimants' primary argument was that Chapter III of the Commonwealth Constitution prevented criminal jurisdiction from being validly conferred upon the Commission. An identical argument failed in Powercoal. However, there is nothing in the Chief Justice's judgment on the issue of constitutional incompatibility in Powercoal at [38] to [48] which, on its face, would justify the conclusion that the constitutional incompatibility argument advanced by the claimant in Powercoal was always doomed to failure. Certainly it failed, but that is not the test.
29 It is true that a more than cursory reading of the submissions on the issue of constitutional incompatibility filed in the present proceedings is consistent with the basis upon which that issue was rejected in Powercoal. But it was not suggested that the issue was unarguable in that case, notwithstanding that senior counsel for the second opponent in the present case also argued the matter for the second opponent in Powercoal. In fact, a perusal of the transcript of argument in Powercoal reveals that counsel representing the Attorney General and the second opponent in that case were both called on with respect to the constitutional incompatibility argument. In these circumstances I would not be prepared to accede to the second opponent's proposition that that issue prior to the Court's decision with respect to it in Powercoal was doomed to fail.
30 The same observation, in my opinion, should also be made with respect to the balance of the issues raised by the claimants in their Points of Claim and outline of submissions which were not determined by the decision of this Court in Powercoal. Having read the submissions of both the claimants and the second opponent, it is apparent to me that the issues raised are complex and that their resolution in favour of the second opponent was not a foregone conclusion.
31 The fact is that the claimants had no choice but to discontinue the proceedings because of the amendments made to s179 which took effect on 9 December 2005. On the basis of the "cursory analysis" that the second opponent submitted should be undertaken of the outline of submissions of the claimants filed on 11 March 2005 and that of the second opponent filed on 31 May 2005, I am not prepared to find that the claimants were "almost certain" to fail on all issues.
32 I accept that it may have been probable that the claimants would have had difficulty succeeding in their claim, and this was certainly the case after October 2005 when this Court handed down its decision in Powercoal. However, the majority of the costs in respect of which the second opponent seeks an order were incurred well before that case was argued. Although I accept that the second opponent had a reasonably strong argument after the decision in Powercoal, particularly on the issue of discretion, I am not prepared to regard the present case as one of those "rare cases" to which McHugh J referred in Lai Qin. A reasonably careful reading of the respective written submissions of the parties does not reveal that the claimants never had, to adopt the test adumbrated in the second respondent's submissions on the question of costs, any real chance of success in the proceedings before this Court.
33 For the foregoing reasons, leave to discontinue the proceedings should be granted to each claimant and there should be no order as to costs.
34 The formal orders I would therefore propose are as follows: (a) Grant each claimant leave to discontinue the proceedings in this Court; (b) Each party is to bear its or his own costs of the summonses filed on 28 January 2005 in Case Numbers: 40076/05, 40077/05, 40078/05, 40079/05 and on 31 January 2005 in Case Number 40083/05.
35 BASTEN JA: The nature of the proceedings in this Court have been set out in the judgment of Tobias JA.
36 Prosecutions under the Occupational Health and Safety Act 1983 were commenced against the claimants in relation to an accident in a coal mine on 14 November 1996, in which four miners died. The summonses in relation to some 52 charges were issued by the Industrial Relations Court on 21 August 2002. Each of the claimants was found guilty of particular charges on 9 August 2004.
37 As Tobias JA has noted, a number of the issues raised by the claimants in this Court were disposed of adversely to their position in Powercoal Pty Ltd & Anor v Industrial Relations Commission of NSW & Anor (2005) 156 A Crim R 269, being a judgment delivered on 10 October 2005. Success on the remaining issues was precluded by the enactment of the Industrial Relations Amendment Act 2005 (NSW), which commenced on 9 December 2005. On 21 December 2005 the claimants sought leave to discontinue the proceedings.
38 In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin (1997) 186 CLR 622 at 624-625, McHugh J stated: "A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. … If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings."
39 If this principle applies, for the reasons outlined by Tobias JA, I would agree that there should be no order for costs in the present case. Further, consistently with Ex parte Lai Quin, the opponents, who resisted this conclusion, should properly pay the costs of the application for costs. However, I am not persuaded that this is a case in which there has not been, in substance, a hearing on the merits, at least in relation to part of the contentions raised by the claimants. To the extent that the constitutional arguments were disposed of by Powercoal, the claimants should be taken to have failed. The costs involved would no doubt have been reduced because the matter did not proceed to a hearing, but there was, in effect, a determination by a Court adverse to the claimants on this issue, which they properly recognised as binding on them, in a practical sense.
40 The other issues raised by the claimants were matters which could properly have been raised on an appeal before a Full Bench of the Industrial Court, as the Commission in Court Session is now known: Industrial Relations Act 1996 (NSW), s 151A. Had it not been for the constitutional issue, it would have been difficult for the claimants to obtain discretionary relief to quash the decision of the primary judge in this Court, in circumstances where alternative proceedings were available in the Industrial Court. That difficulty was not lessened by the filing of appeals with the Full Bench of the Industrial Court in March and April 2005. Further, because it is a well-established principle that constitutional issues should not be addressed in circumstances where a case may be determined on other issues, an application to have this Court intervene because there were constitutional issues potentially involved would itself not have enjoyed reasonable prospects of success: see the classic statement in Peters v Hobby 349 US 331 (1955) at 338 and at 349 (Black J); in the course of argument Frankfurter J told counsel: "The question is not whether you want to win the case on that ground or not. This Court reaches constitutional issues last, not first": 23 US Law Week 265-66 (1955), quoted by Henry J. Abraham, The Judicial Process (6th ed, 1993) p 364. In the High Court, see recent comments to similar effect: R v Hughes (2000) 202 CLR 535 at [66] (Kirby J) and Re Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at [135] (Gummow J). In this Court, see, eg, John Holland Group Pty Ltd v Industrial Relations Court of NSW [2006] NSWCA 93 at [10] (Spigelman CJ).
41 Once appeals were filed in the Industrial Court, it would in any event have been inappropriate for this Court to intervene in circumstances where its judgment could have been rendered irrelevant by the substitution of a different decision for the decision from which the proceedings in this Court were brought.
42 Because a significant, if not the principal, issue sought to be agitated before this Court has been ruled upon adversely to the claimants, and because their application for orders quashing the decisions of the primary judge had insufficient prospects of success in any event, in my view the Second Opponent should have his costs of the proceedings in this Court. Accordingly, I propose the following orders:
04/08/2010 - Typographical error - Paragraph(s) [40]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
(1990) 170 CLR 534
(1998) 193 CLR 72
(2000) 101 FCR 548
(2000) 202 CLR 535
(1997) 186 CLR 622
(2002) 212 CLR 162
(1993) 44 FCR 194
(1997) 80 FCR 284
(1996) 37 IPR 413
1. Grant each claimant leave to discontinue the proceedings in this Court; 2. Order that the claimant pay the second opponent's costs of each proceeding in this Court (orders proposed by Basten JA and agreed by Mason P) [1], [42].