Smith v Employers Mutual Limited/Talent 2 Pty Ltd [2009] SAWCT 9

"the Presidential Member does not have the power to make a declaration of right as to the validity of the Rules. In other words, there is no equivalent in the Act of s31 of the Supreme Court Act 1935, which gives this Court the power to make binding declarations of right".

9

For that reason I decline to address the argument as to the validity of the Rule. But there is also another reason why I take that approach. I have reached the conclusion that Rule 28A does not apply to the facts of this case in any event and accordingly Moody Rossi and Co was not required to apply for an order for the payment of additional representation costs.

10

In those circumstances, any views expressed by me about the validity of that Rule would constitute an impermissible advisory opinion based on a general or hypothetical situation.

11

As Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ observed in Bass v Permanent Trustee Co Ltd[7]:

"The purpose of a judicial determination has been described in varying ways. But central to those descriptions is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy. In R v Trade Practices Tribunal; Ex Parte Tasmanian Breweries Pty Ltd [52], Kitto J said:

'[J]udicial power involves, as a general Rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons... [T]he process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which... entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist.'"

12

Rule 28A of the Workers Compensation Tribunal Rules 2009 provides a means by which a worker's representative may obtain an order for the payment of costs of professional advice and assistance from his or her client over and above the representation costs which are payable to the representative by the compensating authority.

13

The President made Rule 28A on 15 December 2008 and it became operative on 1 January 2009.[8]

14

The Rule provides as follows:

"(1) A representative of a party shall not charge excessive representation costs. Unless there are exceptional circum-stances representation costs greater than the Supreme Court scale as varied from time to time ('the Supreme Court scale') shall be regarded as excessive.

(2) A representative acting for a worker in respect of proceedings under the Act is not entitled to recover from that worker any costs in respect of those proceedings in addition to those payable by the compensating authority or claim any lien in respect of such costs or deduct such costs from sum awarded as compensation to the worker unless those additional costs have been awarded by a Presidential Member of the Tribunal. Where a worker's representative seeks such an award of costs the representative shall file an Application for Directions and a supporting affidavit and serve them upon the worker. The Application shall then be referred to a Presidential member who shall make such orders or give such directions, as may be appropriate including, for example:

(a) directing the worker's representative to prepare a short or long form bill of costs;

(b) directing the worker or the worker's representative to obtain an opinion from an independent lawyer regarding the reasonableness of the claim for additional costs and directing who should bear the costs of obtaining that opinion;

(c) directing the worker or the worker's representative to participate in a conciliation conference to explore the resolution of any issues arising out of the claim for additional costs;

(d) directing the Registrar to conduct a taxation of costs and make recommendations such as what amount of additional costs are reasonable;

(e) directing the worker's representative to produce all files relating to the worker that are in the representative's possession, custody or control; and

(f) directing that any documents produced in connection with the Application be marked confidential.

(3) A Presidential Member in determining what, if any additional costs should be awarded shall have regard to the conduct of the worker, the amount of money involved, the importance of the case, the complexity of the issues in dispute and any other relevant matter.

(4) Subrules (2) and (3) only apply to matters in respect of which instructions were given on or after 1 January 2009."

15

Notably subrule (4) limits the application of the Rule to matters in respect of which instructions were given on or after 1 January 2009.

16

In this instance the worker instructed Moody Rossi and Co to file the application for expedited decision at some time prior to 1 January 2009[9]. However Ms Chambers sought further instructions from the worker by telephone on one occasion during January 2009.[10]

17

Mr Rossi's point was that, as the expression "instructions" is not qualified in any way, the ordinary literal meaning to be applied results in the Rule applying to matters where instructions in relation to the particular proceedings straddle 1 January 2009.

18

The purpose of subrule (4) is to limit the operation of the amended costs Rule. In that sense it is a proviso which is "dependent on the main enactment" and not an "independent enacting clause" and therefore "should not be interpreted as if it were a substantive provision independent of the provisions to which it is a proviso".[11]

19

Rule 28A changes the previous position regarding solicitor client costs. It is not merely procedural. It affects the substantive rights of a worker's representative to recover costs from a client in that additional costs cannot be recovered from the client unless they are awarded by the Tribunal.

20

This is a matter of some moment and it can be inferred that the Rule maker's purpose in enacting subrule 28A(4) was to provide an unambiguous dividing line between proceedings to which the Rule applies and proceedings which are excluded from it.

21

The means by which that dividing line is identified is the date of the giving of instructions in relation to the proceedings under the Act.

22

"Instructions" is a word which can refer to various aspects of the contractual relationship between a solicitor and client. Examples are a general retainer where a client instructs a solicitor to perform services in relation to a particular class of activity, or a specific retainer where a client instructs a solicitor to undertake a specific service, like the commencement of legal proceedings on his or her behalf. However, it can also refer to the specific, and sometimes numerous, occasions during the course of a litigation process where the solicitor obtains express permission to undertake specific steps.

23

Perhaps the subrule could have been more precisely expressed, however its meaning is to be determined not just by its literal construction but by its intended purpose[12]. When read in context it does not refer to a general retainer. It is intended that the giving of instructions applies to specific proceedings filed in the Tribunal pursuant to the Act. Thus it applies to instructions for a specific notice of dispute or a specific application for expedited decision as the initiating process.

24

Furthermore the Rule maker did not use the word "instructions" intending to refer to every occasion upon which the worker gives specific instructions for steps taken in the course of such an application. As the purpose of the Rule is to modify the solicitor's entitlement to recover costs from his or her client the expression is directed to "instructions" as the source of the contractual relationship between the solicitor and the worker from which flows the solicitor's entitlement to charge and recover costs from the client worker.[13]

25

In this instance the instructions to act for the worker in relation to the application for expedited decision were given by the worker prior to 1 January and accordingly the solicitor's contractual entitlement to charge costs in relation to that proceeding emanated from an agreement made prior to 1 January 2009.

26

Therefore Rule 28A does not apply to this situation. I have no jurisdiction to make an order pursuant to para 1 of the application for directions. The application is dismissed.

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with the form titled Notice of Appeal within 14 days of the delivery of this decision and must be served on all parties.

It is the practice of this Tribunal to publish its reasons for decision in full on the Internet. If any party or person contends that these reasons for decision should not be published in full the party or person must make an application within seven days of the delivery of these reasons. The application shall be by an Application for Directions with a supporting affidavit and should be addressed to the presiding member(s). If no such application is lodged within the time specified these reasons will be published in accordance with the Tribunal's usual practice.

[1] Application for directions filed on 20 January 2009

[2] Nicole Smith v Talent 2 Pty Ltd/Employers Mutual Limited Action No 2/2009

[3] Government Gazette 29 January 2009 at p 445

[4] Affidavit sworn on 20 January 2009, Exhibit A1 in relation to the Application for Directions

[6] [2006] SASC 32 at 73

[8] The South Australian Government Gazette 18 December 2008 p5653

[9] Mr Rossi made that concession at tr p 4

[11] Minister of State for the Army v Dalziel (1944) 68CLR 261 at 274-5; Statutory Interpretation in Australia, 6th Edition DC Pearce and RS Geddes 4.48.

[12] Project Blue Sky Inc v Australian Broadcasting Commission [1998] HCA 28; (1998) 194 CLR 355 at 511

[13] Dal Pont Law of Costs, LexisNexis Buterrworths, Edition 1, Chapter 1