Workers compensation - Entitlement to compensation - Claim disputed - Reasonably arguable case - Costs - Whether fruitless resistance.

Workers Rehabilitation and Compensation Act 1988; ss 42, 59, 81A.

Skyplan Australia Pty Ltd v NM [2025] TASCAT 132;

Bruce Osmond Farrow v State of Tasmania (Metropolitan Transport Trust) [1997] TASSC 62; (1997) 7 TAS R 127;

State of Tasmanian v Muir-Wilson [2000] TASSC 25;

Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534;

Karinya Young Women's Service Inc v W [2023] TASCAT 36;

St Helens Oysters Pty Ltd v Coatsworth [2007] TASSC 90;

Calvary Healthcare Tasmania v S [2014] TASWRCT 55;

Cheryle Williams t/as Battery Point Bed & Breakfast v A [2017] TASWRCT 3;

State of Tasmania (Department of Health) v M [2020] TASWRCT 20;

Patchwork Management Services Pty Ltd (T/A Compass Recruitment) v P [2004] TASWRCT 46;

Macquarie Southern Cross Media v R [2008] TASWRCT 18;

G. v Patrick Stevedores (Asciano Limited) [2011] TASWRCT 32;

Kean v Workers Rehabilitation and Compensation Corporation [1998] 71 SASR 42;

M v Allianz Australia Services Pty Ltd (No. 2) [2019] TASWRCT 35.

The decision has been anonymised for the purpose of publication.

1. Subsequent to a s 81A referral hearing on 18 June 2025 and the receipt of written submissions from the parties by 25 June 2025, by a written decision dated 4 July 2025, I found that the employer had discharged its onus of proof to establish a reasonably arguable case that the employer was not liable to make payments to the worker pursuant to s 81A of the Workers Rehabilitation and Compensation Act 1988 (the WRC Act). Because of this finding, I made orders pursuant to s 81A(3)(c) and (d) of the WRC Act.
2. On 23 July 2025, counsel for the employer made an application seeking that the worker pay the employer's costs with respect to the s 81A referral.
3. On 25 July 2025, I gave chamber directions setting a timetable for the provision of written submissions in relation to the employer's costs application.
4. The last of those submissions were received by 4 September 2025. On 5 September 2025, both counsel for the employer and the worker indicated that they were content for me to determine the employer's costs application on the papers.
5. This is my decision relating to the employer's application for costs.

1. The background to the employer's s 81A reference dated 15 May 2025 is set out in my decision of Skyplan Australia Pty Ltd v NM [2025] TASCAT 132.

1. By s 59(1) of the WRC Act, the Tribunal may make such order as to costs as it considers appropriate. The proper exercise of the discretion in s 59(1) ordinarily requires that costs "follow the event" - see Bruce Osmond Farrow v State of Tasmania [1997] TASSC 62; 7 TAS R 125.
2. In the State of Tasmania v Muir-Wilson [2000] TASSC 25, Cox CJ provided some guidance as to the approach which is to be taken concerning a costs application in a s 81A referral. At [9] his Honour stated:

The present case differs from the ones I have cited in that they were all cases where the question was what order for costs ought to be made after the final determination of the claim for compensation. Here the determination of the Tribunal is very much an interim one. All that has so far been determined is that there is a genuine dispute as to the giving of notice and the fact that it is genuine justifies relieving the employer of the present obligation to pay weekly compensation and he is not taken to have accepted liability in respect of that claim (s81AB). If the worker wishes to pursue the claim, she may still do so at a hearing where all issues in contention will be canvassed.

3. Further in that decision at [12], his Honour went on to state (referencing Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534):

Where there is a Reference under s81A, it is not the case that the worker "has caused the other party to incur the costs of (that) litigation." They are expenses which the employer necessarily incurs in obtaining the relief he seeks. They may be increased by fruitless resistance on the worker's part and this may justify an order that he pay at least the costs occasioned by that resistance... (emphasis added)

4. Because an employer is required only to demonstrate that a reasonably arguable case exists to dispute the claim under s 81A, success by an employer in a s 81A referral does not necessarily inform the question where the ultimate burden of costs ought to lie in the event that the claim is brought back to the Tribunal by the worker and ultimately progresses to a fully arbitrated hearing.
5. The employer by necessity incurs costs while referring the claim to the Tribunal where it wishes to dispute liability under s 81A. It is not those costs which ought to be borne by the worker in circumstances where the s 81A referral succeeds.

1. In its written application for costs on 23 July 2025, the employer's counsel indicated that they were instructed to apply for an order that the worker pay the employer's costs that amount to the worker's fruitless resistance of the s 81A referral. These costs would be for the time spent by the employer in preparing for and attending the hearing on 18 June 2025 and the reading of the written submissions filed by the worker and the preparation of the employer's written submissions.
2. In that application, the employer's counsel advised that on 8 July 2025 he had invited the worker to consent to the orders sought, but on 22 July was advised that such a costs order would not be agreed to.
3. The employer's costs submissions referenced the cases which confirm the Tribunal has an unfettered discretion to order costs pursuant to s 59(1) of the WRC Act.
4. The employer's counsel also referenced the section of Cox CJ's decision in State of Tasmania v Muir-Wilson (supra) indicating different considerations may apply in a costs application relating to a s 81A referral. The specific reference was made to his Honour's comments in [12] above.
5. Counsel for the employer also referred to Senior Member Jack's decision in Karinya Young Women's Service Inc v W [2023] TASCAT 36 at [43] and [44]:

... resistance that does not, ultimately, 'bear fruit' in the sense of not achieving a desired outcome. It does not necessarily have to be resistance that was completely hopeless, or lacking in substance from the outset. > > That is a right of every worker where the employer disputes liability to pay compensation in relation to a claim that has been made. However, in doing so, the worker runs the risk of a costs order where the employer's costs, necessarily incurred as part of that referral, are increased by the worker's unsuccessful, or 'fruitless' resistance.

6. The employer's counsel summarised these authorities by stating that:

It is clear that if a worker seeks to resist a s 81A referred filed by the employer, particularly in circumstances where legal advice had been obtained first, and orders are then made in favour of the employer, there is a high probability that the worker's resistance of the employer's 81A referral will amount to fruitless resistance and a costs order will follow.

7. Alluding to the grounds of the dispute and referencing the evidence upon which the employer relied, the employer's counsel further submitted that the worker's resistance to the s 81A was fruitless resistance.
8. This evidence included three witness statements of witnesses employed in senior roles with the employer, including its Chief Executive. The employer's counsel asserted that these statements made it clear that the worker's version of events relevant to each of the grounds of the dispute was put to the witnesses for the employer, with each witness disputing different aspects of what the worker had said and done.
9. Referencing the test as to whether a reasonably arguable case exists as enunciated by Evans J in St Helens Oysters Pty Ltd v Coatsworth [2007] TASSC 90 at [10], the employer's counsel submitted that it was clear that there were a number of fundamental factual disputes between the parties, all of which were going to result in the orders that were eventually made.
10. The employer's counsel next asserted that this ought to have been apparent to the worker's counsel and the s 81A referral should have been concluded prior to the hearing on 18 June 2025. However, the worker instructed his counsel to proceed, and in doing so, ran the risk of a costs order by not conceding the s 81A referral prior to that date. He also gained the benefit of continuing to be paid weekly payments during that period.
11. The employer's counsel submitted that it cannot be argued by the worker's counsel that the worker did not have ample time to obtain appropriate advice or properly consider the documents filed in support of the s 81A referral because he was served with them on 15 May 2025. The worker had also had the benefit of an adjournment from 2 June (the first scheduled hearing date) to 18 June 2025 and was paid weekly payments through to 4 July 2025 when he might otherwise have received orders ceasing his payments as early as 2 June 2025.
12. The employer's counsel concluded his written submissions by stating: "the point being that the worker has benefited from the way in which his solicitor has managed his s 81A referral from filing through to the orders made, even if a costs order is made for his 'fruitless resistance'".

1. In response to the employer's costs application, the worker stated its position as:

(a) The employer's application for costs should be dismissed; or in the alternative

(b) The decision in relation to the employer's application for costs should be reserved until the final determination of the proceedings between the parties.

The Worker's submissions to dismiss the employer's application for costs

1. In support of its submissions that the employer's application for costs should be dismissed, the worker also referenced the decision of Cox CJ in State of Tasmania v Muir-Wilson.
2. The worker's counsel contended that the worker's consideration of whether there was a reasonably arguable case was made more difficult by the way in which the s 81A referral and supporting documentation was prepared: "There were numerous unnecessary duplications of documents. Further, there were various contradictions and inconsistencies contained within the documentation".
3. The worker's counsel noted that "whilst the worker's claim was complex and multifaceted, it could have been easily defended if the employer had presented a more cogent s 81A referral. If this had been done, it is likely that the worker would have consented".
4. The worker's counsel stated that the worker's resistance of the s 81A referral was not without substance and merit. Whilst the Tribunal found that there was a reasonably arguable case in relation to the employer's liability, that finding was not 'inevitable'".
5. The worker's counsel submitted that the exercise of the Tribunal's discretion to award costs against a worker on a s 81A referral should be exercised with caution. It was stated:

It would set a poor precedent if costs were liberally awarded against workers who do not concede s 81A referrals. In our respectful submission, it would be contrary to the purposes of the Act (and particularly s 81A) if workers felt pressured to consent to a s 81A referral due to the risks of costs that will be awarded against them, particularly where the onus is on the employer to establish that there is a reasonably arguable case, and not the other way around.

6. When responding to the term 'fruitless resistance', the worker's counsel embarked upon a consideration of the number of costs applications in s 81A referrals which have been awarded against workers. It was asserted that since the commencement of the WRC Act in 1988 only 17 costs application in s 81A referrals have been successful and that in the majority of those cases where the Tribunal has awarded costs, it has done so in circumstances where it was 'inevitable' or that there was 'a degree of inevitability' that there would be a reasonably arguable case determination.
7. In this context, the worker's counsel relied on Calvary Healthcare Tasmania v S [2014] TASWRCT 55, Cheryle Williams t/as Battery Point Bed & Breakfast v A [2017] TASWRCT 3, State of Tasmania (Department of Health) v M [2020] TASWRCT 20 and Patchwork Management Services Pty Ltd (T/A Compass Recruitment) v P [2004] TASWRCT 46.
8. The final aspect of the worker's counsel's submissions with regard to this aspect was its assertion that in many of the 17 cases in which an employer has been awarded costs over the past 25 years (in s 81A referrals), the employer had put the worker on notice that an application for costs may be based on 'fruitless resistance' prior to the s 81A hearing. The worker's counsel indicated that in this case the employer did not put the worker on notice as to costs. If the employer had put the worker on notice as to costs, the worker may have elected to consent to the s 81A referral.

1. The worker has asserted that as an alternative to the dismissal of the employer's application for costs, this application should be reserved until either the final determination of any s 42 referral filed by the worker, or until after a reasonable amount of time has elapsed without such a referral being filed. In support of this suggestion, the worker's counsel cited the State of Tasmania v Muir-Wilson, Macquarie Southern Cross Media v R [2008] TASWRCT 18, and G. v Patrick Stevedores (Asciano Limited) [2011] TASWRCT 32.
2. The worker's counsel asserts that in any s 42 referral, the numerous issues that the worker outlined in his oral and written submission of 18 and 25 June 2025 in relation to the s 81A referral would be live. There would be significant questions about the veracity and reliability of the employer's witnesses, and medical evidence would be adduced for determination.
3. In summary, with regard to this submission, the worker's counsel asserted "to use the terminology of his Honour Cox J in State of Tasmania v Muir-Wilson, we say that for the various reasons outlined above, it is not possible in this case to see on which side of justice the decision who should bear costs should fall until the final determination of any s 42 referral".

1. In its reply submissions of 4 September 2025, the "only additional point" which the employer's counsel sought to raise related to the worker's counsel's submission concerning the reserving of the decision in relation to costs.
2. The employer's counsel asserted that the authorities are clear that there are two distinct categories; costs for fruitless resistance, which is what the employer's application seeks, and costs in the traditional sense, which is when a litigation is at an end. "This is not what the employer's counsel has been instructed to apply for".
3. The employer's counsel submitted that the order being sought is for the costs of fruitless resistance and it should be made based on the submissions filed by the employer.

The dismissal of the employer's application for costs

1. There is no doubt that a s 81A referral by an employer seeking a finding of a reasonably arguable case in relation to its liability to pay a worker's claim is a preliminary determination. As Evans J in St Helens Oysters Pty Ltd v Coatsworth (supra) at [10] stated:

It is a preliminary determination that results in interim orders. The very notion of a reasonably arguable case like the very notion of a prima facie case precludes a final determination of a disputed question of fact.

2. In my decision with regard to the s 81A referral, Skyplan Australia Pty Ltd v NM (supra) at [50] when dealing with ground 2 of the employer's s 81A referral, I found that the worker's counsel's assertions relating to the perception in the mind of a worker and its contribution in a material degree to an aggravation (or occurrence) of the employee's ailment was misconceived. I found so as the fundamental aspect of the referenced decisions was the finding of facts. The cases referenced this as "if conduct which actually occurred in the workplace" and "if the incident or state of affairs actually occurred".
3. I found that, taking the employer's case at its highest, there were numerous factual disputes as between the worker's claim form indications and the evidence provided by the employer and that "there are thus many contested series of incidents and states of affair".
4. I agree with the employer's counsel's submissions that these were plainly apparent on the evidence filed with the employer's referral.
5. I do not accept the worker's counsel's submissions that the way the employer presented its s 81A referral where "there were numerous unnecessary duplications of documents, and further, there were various contradictions and inconsistencies contained within the documentation", are a relevant considerations in supporting the worker's counsel's submission that this costs application should be dismissed.
6. The extent and breadth of the factual disputes as between the worker's claim form and the employer's referral evidence were plainly apparent and known to the worker's counsel before the hearing on 18 June 2025.
7. In [55] of my decision in the s 81A referral dealing with grounds 4 and 5 of the employer's referral, I found following the reasoning of Belby J in Kean v Workers Rehabilitation and Compensation Corporation [1998] 71 SASR 42 at p 63 where his Honour stated:

... whether administrative action is reasonable or is taken in a reasonable manner depends first on the finding of the primary facts as to what occurred in the taking of the administrative action, namely what decision was made, who made it, and why it was made, what was done, what was omitted to be done, and the factual background against which the decision was made or implemented. It is a finding of fact as to whether the action was taken in a reasonable manner, that fact depends in part on inferences to be drawn from the primary facts, or the weight to be given to particular primary facts and the fact finder's assessment of what is reasonable in all of those circumstances.

8. That passage was cited with approval by Chief Commissioner Webster (as he then was) in M v Allianz Australia Services Pty Ltd (No. 2) [2019] TASWRCT 35.
9. Considering these authorities, I found that taking the employer's case at its highest, there were significant factual disputes with the worker's evidence relating to the meeting of 20 March and it was not appropriate for me to reconcile those factual disputes in a s 81A hearing.
10. In doing so, I was guided by the authorities' indications that a s 81A referral is not the time for the finding disputed facts such findings to be made in a contested s 42 hearing, if such an application is filed.
11. Because of these matters, and considering the comments of Senior Member Jack in Karinya Young Women's Service Inc v W (supra) at [43], I find the worker's resistance to the employer's s 81A referral was fruitless resistance.
12. Before turning to the other basis of the worker's counsel's submissions, I pause to comment on two further matters.
13. First, although the worker's counsel has undertaken some research into the number of costs orders made by the Workers Compensation Tribunal and TASCAT in s 81A referrals, and has asserted that this was done so in circumstances where it was "inevitable" or that there was "a degree of inevitability" that there would be a reasonably arguable case determination, I do not consider this case analysis to have relevance to this matter, as each case turns on its own facts. Further, noting SM Jack's definition of 'fruitless resistance' in Karinya Young Women's Service Inc v W, the worker's resistance does not need to be completely hopeless or lacking in substance from the outset.
14. The second matter relates to the worker's counsel's submissions regarding the employer's counsel's failure to put the worker on notice as to costs and that had the employer's counsel done so, the worker may have elected to consent to the s 81A referral. This submission also lacks cogency.
15. By the time of the hearing on 18 June 2025 the worker had retained counsel who, advising the worker properly, should have advised him of at least the potential vulnerability for an order for costs if the desired challenge to the s 81A referral on the basis advised to him ultimately failed. It was for the worker's counsel, properly advising her client, to provide that advice. It was not the responsibility of the employer's counsel to do so.

1. The worker's counsel's submissions in support of the reserving of the question of costs until either the final determination of a s 42 referral filed by the worker, or until a reasonable amount of time has elapsed without such a referral being filed, in my opinion is not sustainable.
2. As the employer's counsel has indicated in his reply submissions, the authorities are clear that there are two distinct categories for costs orders; costs for fruitless resistance which is what the employer's application seeks, and costs in a traditional sense which is when litigation is at an end.
3. This situation is akin to an order for "costs of and incidental to the application", being the general order made when a specific application in litigation is concluded, such as an application for an extension of time.
4. It would be prejudicial to the employer to be at the whim of the worker as to whether or not it filed a s 42 application subsequent to a reasonably arguable case finding in the s 81A, given there is no time limit for the filing of such an application.

1. For all of these reasons, I am satisfied that the employer has made out its case that in defending the s 81A referral, the worker's case amounted to fruitless resistance and it is appropriate in these circumstances to make the order for costs the employer seeks, though this will not include the preparation of the s 81 referral, nor preparation for the s 81A referral hearing, as these are costs the employer would incur in the filing of a s 81A referral in any event.

1. The worker is to pay the employer's costs of and incidental to the employer's s 81A referral from and including the date of the hearing on 18 June 2025, and for the review of the worker's post-hearing written submissions, and the employer's preparation of post-hearing submissions.