WorkCover Authority of New South Wales (Inspector Dawson) v Plastachem Pty Ltd & Ors

WorkCover Authority of New South Wales (Inspector Dawson) v Plastachem Pty Ltd & Ors - [2001] NSWIRComm 244 - NSWIRComm 2001 case summary — Zoe

[8]

FILE NUMBER: IRC 147 151 152 153 and 154 of 2000 CORAM: Wright J President; Walton J Vice-President; Hungerford J Costs - indemnity costs - proceedings for offences under Occupational Health and Safety Act 1983 - prosecutor sought to withdraw proceedings - trial judge purported to grant leave to withdraw - whether power to grant leave to withdraw the proceedings - whether proceedings dismissed - whether power to award costs following dismissal of proceedings - trial judge awarded costs in favour of defendants on an indemnity basis - appeal against decision to award indemnity costs - principles relating to exercise of discretion to award costs - ordinarily just and reasonable to award costs in favour of defendant against whom proceedings have been dismissed - must be some special or unusual features to justify award of indemnity costs - award of indemnity costs not appropriate in this case - appeal upheld - no order as to costs of appeal. CATCHWORDS : Appeal - appeal from a decision awarding costs following the dismissal of summary criminal proceedings - whether jurisdiction to bring appeal from costs order in summary criminal proceedings - appeal brought pursuant to Criminal Appeal Act 1912 - nature of appeal - appeal by way of rehearing. Criminal Appeal Act 1912 s5AA s17 Industrial Relations Act 1996 s168 s181 s196 LEGISLATION CITED : Industrial Relations Commission Rules 1996 r138 r139 r222 r223 Occupational Health and Safety Act 1983 s15 s16 s17 s19 s47 Supreme Court (Summary Jurisdiction) Act 1967 s14(1) Achutan v Coates (1986) 6 NSWLR 472 Anderson v Boner [1993] 52 IR 114 Boner v Anderson (No 2) [1993] 50 IR 470 Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 99 IR 29 Colgate-Palmolive Co Ltd v Cussons Pty Ltd (1993) 46 FCR 225 Degman Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354 Fletcher Construction Australia Ltd v WorkCover Authority of NSW (Inspector Fisher) (1999) 91 IR 66 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Frost v Speaker of the Legislative Assembly of New South Wales [2001] NSWIRComm 14 Latoudis v Casey (1990) 170 CLR 534 CASES CITED : Norton v Morphitt (1995) 83 A Crim R 90 Packer v Meagher [1984] 3 NSWLR 486 Public Service Association (SA) v Federated Clerks' Union (1991) 173 CLR 132 Ridge Consolidated Pty Ltd v WorkCover Authority of New South Wales (Inspector Mauger) (2000) 100 IR 157 Rosniak v Government Insurance Office (1997) 41 NSWLR 608 Swift Placements Pty Ltd v WorkCover Authority of New South Wales (Inspector May) (2000) 96 IR 69 Tuholi Ltd v Caltex Australia Petroleum Ltd (2001) 103 IR 329 Van Huisstede v Commissioner of Police (No 2) (2001) 106 IR 56 Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority of New South Wales (Inspector Smith) v Dubavo Pty Ltd (unreported, Fisher P, Marks and Schmidt JJ, Matter No. CT95/1237, 1238 and 1239, 5 March 1998) WorkCover Authority of New South Wales (Inspector Ankucic) v J L Lennard Food Equipment Pty Ltd (No 2) (1999) 92 IR 111

[37]

12 His Honour expressed his conclusions in the following terms: The unfortunate reality is that the failure by WCA to ascertain the truth of the situation as reported by the Rowe family has resulted in Mr DuBont escaping very lightly from the results of his gross negligence and in the defendants herein and also WCA being involved in lengthy and expensive proceedings as to which, in my view, WCA should have had serious doubts as to the likelihood of success from the outset. That doubt should not only have been maintained, it should have increased from February 1998 onwards. At the close of the final day of the hearing my impression was that the evidence thus far presented was such that a prima facie case had not been made out in respect of Plastachem and, as to Shamrock Holdings, at the very least a no case to answer submission would succeed. I accept the submission of Mr Radojev that the appropriate inference to draw from the withdrawal of the remaining matters is that WCA had reached the view that it would not be able to make out a prima facie case. The test enunciated by Hill J in Boner is clearly met. Had these matters been more thoroughly investigated it is unlikely that they would have been commenced. The material available in April 1995 cast such doubt upon the status of Mr DuBont that further inquiry was then required. The assertions by Mr and Mrs Rowe at the mention before Cahill V-P and the subsequent provision of a sample of the documents should have, but did not, lead to further investigations. The further disclosures at the mention in December 1998 also should have, but did not, lead to further investigations. I award costs on a solicitor client basis, to do otherwise would be inequitable. Costs are so awarded in order that the defendants not to be out of pocket in circumstances in which the prosecutions are based upon such flawed investigations and in which WCA has failed, despite ample opportunity, to initiate fresh inquiries in circumstances in which the indications were that further investigation was necessary. After all WCA had to prove its case beyond reasonable doubt yet it chose not to investigate matters which cast doubt upon its case and which the prosecutor agreed, when presented with a sample of the supporting documentation, would have caused a chain of enquiry had they been brought to his attention. It would be unreasonable and unfair for the defendants to be out of pocket.

[42]

The documents marked for identification as MFI8 and 9, clearly relied on by his Honour in coming to a decision to award indemnity costs, were materials not in evidence and as such were not open for his Honour to rely upon. 2. His Honour was incorrect in concluding there was no compelling evidence brought forward as to the existence of an employer/employee relationship. Further, the appellant was bound to explore every reasonable avenue for prosecution of those who might have been responsible for a breach of the occupational health and safety laws. If there was evidence which the prosecuting authority could reasonably put before the Court then it should not be penalised for doing so. 3. The principles set out in Anderson v Boner [1993] 52 IR 114 as to the basis on which an order for indemnity costs may be made were correct, except in so far as the discretion vested in the Court was to be considered "absolute". In that regard, the Court was constrained in the manner in which it exercised its discretion so that the discretion must be exercised judicially. It would be incongruous to say that a discretion was absolute and yet the discretion must be exercised in any particular manner. 4. It was a rare case that would warrant indemnity costs being ordered in a criminal matter. Courts have ordered indemnity costs on a number of bases, such as where a case was brought that should never have been brought: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 where the conduct of one of the parties was deserving of criticism; Packer v Meagher [1984] 3 NSWLR 486 where the action was conducted for an ulterior motive or collateral purpose; Degman Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354 being a case which was vexatious, oppressive or a misuse of process; and Rosniak v Government Insurance Office (1997) 41 NSWLR 608. The approach adopted by the Full Bench in Anderson v Boner was correct. One searches in vain in the proceedings presently under review for some "unusual feature of an unmeritorious or improper … nature": Anderson v Boner (at 118). 5. It was in the discretion of a prosecutor as to whether or not a prosecution should be withdrawn. That may be done for a variety of reasons. One cannot draw from the fact that prosecutions were withdrawn that the prosecutor was not able to make out a "prima facie case", as his Honour did. 6. In relying on the number of charges brought against the respondents, his Honour took into account an irrelevant consideration.

[49]

22 The appellant's further written submissions were in the following terms: POWER TO AWARD COSTS 1. For criminal proceedings before the Industrial Relations Commission in Court Session s168 of the Industrial Relations Act 1996 (IR Act) applies. 2. Therefore the Supreme Court (Summary Jurisdiction) Act 1967 applies: s168(2) IR Act; 3. Costs may be awarded where the charge is dismissed: s14 Supreme Court (Summary Jurisdiction) Act 1967; 4. Section 181 IR Act is not applicable to criminal proceedings as the provisions of the Supreme Court (Summary Jurisdiction) Act prevail over any other provisions of Part 5 of the IR Act for the purposes of proceedings for an offence: s168(4) IR Act; 5. There is no power to award costs where a summons has been withdrawn DISMISSAL OF SUMMONSES 6. A criminal prosecution may be discontinued pursuant to r223 and Pt19 of the Industrial Relations Commission Rules (IR Rules) prior to the commencement of the trial, with the leave of the Commission: Workcover Authority of NSW (Inspector Ankucic) v J L Lennard Foods Equipment Pty Ltd (No2) (1999) 92 IR 111. 7. On 14 December 1998 Maidment J granted leave to withdraw 21 summonses. 8. As the 21 summonses had been withdrawn and not dismissed there was no power to award costs; 9. A hearing commenced in relation to the 5 remaining summonses. The prosecution advised of its intention to discontinue/withdraw the 5 summonses; 10. It would appear that the prosecution did not formally seek leave to withdraw the summonses and that Maidment J did not formally dispose of these summonses. 11. As the hearing had commenced, leave could not be given to discontinue the summonses pursuant to r223 and Pt 19 of the IRC Rules; 12. The summonses should have been dismissed: r223 IRC Rules 13. The Commission may have awarded such costs as seemed just and reasonable: s14(1) Supreme Court (Summary Jurisdiction) Act 1967 14. The amount of the costs should have been specified in the order s14(3) of the Supreme Court (Summary Jurisdiction) Act 1967. NATURE OF APPEAL 15. The Criminal Appeal Act 1912 applied to criminal appeals and the other provisions of Part 7 (apart from s196) are inapplicable: s196 IR Act 16. However in relation to costs both the Criminal Appeal Act and Part 7 of the IR Act appear to be excluded: s196(4). This would mean that there is no procedure specified for an appeal against costs. Therefore it is submitted that the exemption in s196(4) refers to the awarding of costs on appeal (which would exclude s17 of the Criminal Appeal Act) rather than criminal appeals in relation to costs. 17. Accordingly, s5AA of the Criminal Appeal Act applies to appeals in relation to costs 18. An appeal in relation to costs is in the nature of a rehearing on the evidence before the trial judge: s5AA(3) Criminal Appeal Act 19. The Appellate Court in proceedings before it on appeal may confirm the determination of the trial judge or may vacate the determination of the trial judge and make any determination that the trail judge could have made on the evidence heard on appeal: s5AA (4) Criminal Appeal Act.

[119]

54 The parties agreed, appropriately in our view, that the proper approach to the award of indemnity costs was that expressed by Hill J in Boner v Anderson (No.2) [1993] 50 IR 470 at 475, where his Honour said: There is little doubt that orders for costs on an indemnity basis still constitute exceptions to the general rule. While costs are, under the Act and the Rules, within the absolute discretion of the Court, nevertheless the Court must exercise its discretion judicially. Many of the criteria upon which such discretion is exercised in cases involving indemnity costs are to be found in the cases to which Mr Shaw referred and in a number of other cases dealing with the matter. It is fair to say that generally speaking an order for costs on an indemnity basis is justified in a case in which there are special or unusual features of an unmeritorious or improper nature surrounding the case of one party (usually the loser) which make it unreasonable and unfair that the successful party should be out of pocket as a result of the proceedings. It is unnecessary to traverse the cases in any detail; they demonstrate in one form or another special or unusual circumstances which manifest themselves in improper or unmeritorious conduct by the unsuccessful party as, for example, in cases involving the maintenance of a vexatious claim or defence, the institution and/or maintenance of an action or defence which, while not vexatious or involving an ulterior or collateral purpose, may, on a rational basis, be described as untenable or doomed to failure and cases where a party has conducted its case in wilful disregard of known facts or clearly established law. However, even where there are special or unusual circumstances attaching to a particular case it does not follow as of course that indemnity costs will be awarded. But it may be observed, and the authorities demonstrate, that the categories of special or unusual circumstances justifying indemnity costs are not closed; a too rigid or narrow approach can lead to error in the exercise of the discretion. (See generally on indemnity costs Singleton v Macquarie Broadcasting Holdings Ltd and Qantas Airways Ltd v Dillington (unreported, Supreme Court, 14 May 1987) and Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 33 - 35, per Kirby P, Gleeson CJ concurring.

At a glance

Court

Decision date

Before

Source

Judgment (141 paragraphs)

Parties

Cases Cited (19)

Cited By (7)