Workers' Compensation Regulator v Queensland Nurses and Midwives' Union of Employees

Workers' Compensation and Rehabilitation Act 2003, s 32, s 550, s 552, s 556, s 558, s 561

Workers' Compensation and Rehabilitation Regulations, r 132

Davidson v Blackwood [2014] ICQ 008, considered

Kim v Workers' Compensation Regulator [2019] ICQ 14, cited

Oschlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, cited

Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 075, related

Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 076, related

SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 91 ALJR 936, cited

The Queen v A2; The Queen v Magennis; The Queen v Vaziri [2019] HCA 35; (2019) 93 ALJR 1106, cited

Workers' Compensation Regulator v Glass [2020] QCA 133; (2020) 4 QR 693, cited

Workers' Compensation Regulator v Queensland Nurses and Midwives' Union of Employees [2021] ICQ 12, related

M Grant-Taylor QC and PB Rashleigh for the respondent

• [1] The Regulator appeals under ss 561 of the Workers' Compensation and Rehabilitation Act 2003 (the WCR Act) and 557 of the Industrial Relations Act 2016 (the IR Act) against a decision of an Industrial Commissioner to award costs against it after the current respondent (the Union) successfully appealed a determination by the Regulator accepting two claims of injury pursuant to s 32(1) of the WCR Act.[1]

• [2] The claims both concerned an employee of the Union, Ms Margurite Walker.
• [3] Ms Walker had been employed by the Union since November 2011. In late 2015, the Union was implementing a new computer system. That caused conflict in the workplace.
• [4] A mediation was scheduled for 16 June 2016 but Ms Walker became unwell. She then went on extended leave returning to the workplace on 1 November 2016. There was further conflict. She again became unwell.
• [5] Ms Walker lodged two applications for compensation for psychiatric or psychological injury. The first application (WC/2017/94) concerned injury suffered up to the point she went on extended leave. The second application (WC/2018/137) concerned injuries suffered after she returned from extended leave.
• [6] Because the claims related to psychiatric or psychological injuries, s 32(5) of the WCR Act was engaged. That, relevantly here, is in these terms:

(1) An injury is personal injury arising out of, or in the course of, employment if the employment is a significant contributing factor to the injury.

(5) Despite subsections (1) and (3),[2] injury does not include a psychiatric or psychological disorder arising out of, or in the course of, any of the following circumstances -

(a) reasonable management action taken in a reasonable way by the employer in connection with the worker's employment;

(b) the worker's expectation or perception of reasonable management action being taken against the worker;

(c) action by the Regulator or an insurer in connection with the worker's application for compensation."[3]

• [7] The Regulator allowed both claims.
• [8] The Union appealed both determinations of the Regulator to the Queensland Industrial Relations Commission (QIRC). Industrial Commissioner Black heard both appeals and he allowed both. The appeal on the first determination[4] is the subject of the Industrial Commissioner's judgment in Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 075. The decision on appeal against the second determination,[5] is Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 076.
• [9] The Regulator appealed both decisions to the this Court.
• [10] However, the only challenge to the Industrial Commissioner's judgment allowing the appeal on the first claim[6] is to his costs determination. He ordered in these terms:

"[118] The appeal is allowed. The decision of the Workers' Compensation Regulator Review Unit dated 8 May 2017 is set aside and replaced with a decision that Ms Walker's claim for compensation is not one for acceptance.

[119] The respondent is to pay the appellant's costs of the appeal."

• [11] The Industrial Commissioner made similar orders in relation to the second claim:

"[105] The appeal is allowed. The decision of the Workers' Compensation Regulator dated 20 July 2018 is set aside and replaced with a decision that Ms Walker's application for compensation is not one for acceptance. The respondent is to meet the appellant's costs of the appeal."[7]

• [12] On appeal to this Court, the Regulator challenges the costs determination relating to the second claim. It also challenges the substantive order allowing the appeal from its determination allowing the second claim.

The position of the respective parties on this appeal

• [13] The Regulator submits in relation to the appeals against both costs orders:

1. The Industrial Commissioner gave no reasons for making the costs orders.

1. The failure to give reasons is an error of law which engages this court's jurisdiction on appeal under s 557 of the IR Act.
2. While the Regulator was not successful in defending its position on appeal to the QIRC in relation to the first claim, the appeal on the first claim was heard with the appeal on the second claim. Therefore, the costs of the two appeals overlapped. Consequently, if the appeal by the Regulator to this Court against the decision of the QIRC on the second claim is successful so that the Regulator's decision in relation to the second claim is restored, the Regulator ought not be ordered to pay the costs of the appeal to the QIRC of the first claim or the second claim.
3. The power to award costs comes from s 558(3) of the WCR Act and that only empowers the court to make a costs order in relation to the "costs of the hearing" as opposed to the "costs of the appeal".

• [14] The Union's position is:
  1. It accepts that the failure to give reasons is an error of law.
  2. Accepting that the costs orders should be set aside for that reason, it should still have an order for its costs of the appeal in relation to the first claim irrespective of the result of the Regulator's appeal to this court in relation to the second claim. Any issue about extracting out the costs which apply to the appeal to the QIRC in relation to the first complaint is a matter for a costs assessor.
  3. Costs of the appeal to the QIRC on the second claim should follow the result of the appeal to this Court.
  4. It accepts that the costs of both appeals to the QIRC should be limited to the "costs of the hearing" assessed in accordance with r 132 of the Workers' Compensation and Rehabilitation Regulations.

• [15] The failure of the Industrial Commissioner to give reasons for making the costs orders against the Regulator is perhaps partly explained as a misunderstanding of the effect of the decision of this court in Davidson v Blackwood.[8] There, in considering the costs of an appeal to the QIRC under the WCR Act, this was said:

"[24] It was a further ground of appeal that the appellant should not have been ordered to pay the costs of the appeal to the Commission. The appellant's application for compensation was rejected. The appeal to the Commission failed. There was nothing put by way of argument which would remove this matter from the ordinary case where costs follow the event."

• [16] The power to award costs under s 558 of the WCR Act is not limited like the power to award costs given by s 545 of the IR Act.[9] It therefore follows that costs ought ordinarily follow the event.[10] While costs would normally follow the event of the appeals to the QIRC, there is a discretion to make some other costs order. In Davidson v Blackwood, the point is made that in the absence of any reasons to make any other costs order, costs follow the event. That does not remove the discretion to make some other order and does not extinguish the necessity to give reasons why any costs order was made. By not giving reasons for making the costs orders which he did, the Industrial Commissioner erred.
• [17] It is therefore necessary to set aside the costs order and exercise the discretion in relation to costs afresh.
• [18] In a separate judgment,[11] I have dismissed the Regulator's appeal against the judgment of the QIRC concerning the second claim. That being so, there is no dispute between the parties that the appropriate order is that the Workers' Compensation Regulator pay the costs of the Queensland Nurses and Midwives' Union of the hearing of both appeals to the QIRC to be assessed in accordance with r 132 of the Workers' Compensation and Rehabilitation Regulations. The QIRC's orders relate to "costs of the appeal".
• [19] In order to avoid any argument on the assessment of those costs, it is necessary to explain what such an order ("costs of the hearing") means.
• [20] Part 3 of the WCR Act provides for appeals from certain determinations by the Regulator to the QIRC.
• [21] Section 550 prescribes a procedure for the appeal. Section 552 provides that notice must be given of the "time and place for hearing". Sections 552A and 552B provide as follows:

(1) If the appeal is to the industrial commission, the industrial commission may, before the hearing of the matter, call a conference of the parties.

552B Legal representation at appeal or conference

A party may be represented by a lawyer at a conference called under section 552A or at the hearing of an appeal, but only with -

• [22] It is obvious then from those sections that there is at least a possibility that the parties will be represented by lawyers, both at the conference called under s 552A, or at the "hearing of an appeal".
• [23] Section 554 concerns the exchanging of evidence before the "hearing". Section 555 provides that the "hearing" may be adjourned. Section 556 concerns "additional medical evidence". Importantly, s 556(2) provides:

(2) The appeal body may, at any time before or after the start of the hearing, order the claimant or worker to submit to a personal examination by 1 or more specified registered persons." (emphasis added)

(c) set aside the decision and substitute another decision; or

(d) set aside the decision and return the matter to the respondent with the directions the appeal body considers appropriate.

(2) If the appeal body acts under subsection (1)(b) or (c), the decision is taken for this Act, other than this part, to be the decision of the insurer.

(3) Costs of the hearing are in the appeal body's discretion, except to the extent provided under a regulation." (emphasis added)

• [25] By s 558(3), what is "in the appeal body's discretion" (here the QIRC ) are the "costs of the hearing". The "costs of the hearing" may be quite a different thing to the "costs of the appeal".
• [26] The power to award costs is not a common law power. It is one granted by statute. Consequently, if the QIRC does not have a power vested by statute to award costs of the appeal beyond the costs of the hearing, then it cannot do so.
• [27] There is an additional power to award costs under s 545 of the IR Act. That provides as follows:

(1) A person must bear the person's own costs in relation to a proceeding before the court or commission.

(2) However, the court or commission may, on application by a party to the proceeding, order -

(a) a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied -

(i) the party made the application or responded to the application vexatiously or without reasonable cause; or

(ii) it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or

(b) a representative of a party (the represented party) to pay costs incurred by another party to the proceeding if the court or commission is satisfied the representative caused the costs to be incurred -

(i) because the representative encouraged the represented party to start, continue or respond to the proceeding and it should have been reasonably apparent to the representative that the person had no reasonable prospect of success in the proceeding; or

(ii) because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the proceeding.

(3) The court or commission may order a party to pay another party an amount reasonably payable to a person who is not a lawyer, for representing the other party."

• [28] However, the QIRC's only power to award costs in this case probably comes from the WCR Act, not restricted by s 545 of the IR Act.[12] In determining the proper construction of s 558(3), and in particular the meaning of the term "costs of the hearing", regard must be had to the context and purpose of the section having regard to the statute as a whole.[13]
• [29] In my view, the legislature has clearly deliberately limited the costs which can be recovered on an appeal to the QIRC. It has drawn a clear distinction between different parts of the appeal process. While the legislation envisages that the appeal process may involve a conference, no power to award costs associated with a conference is given. The costs are limited to the "costs of the hearing".
• [30] The law of costs recognises "costs of action" and "costs of trial". In my view, they equate to "costs of appeal" and "costs of hearing" respectively. The distinction is explained by Professor Dal Pont in his work Law of Costs[14] in these terms:

"1.19 An order for 'costs of the action' includes not only costs of the trial but also those of interlocutory proceedings and their preparation (such as costs relating to interrogatories, notices to produce and admit and preparation of counsel's brief). These represent the costs to which the successful party in the action is entitled on taxation or assessment, in the absence of an order to the contrary. The 'costs of the trial' cover only the costs incurred in the conduct of the trial itself, not any interlocutory matters preceding the trial. In any case, as an action ends with judgment, each of these orders excludes costs incurred after final judgment. Costs of executing the judgment are therefore not costs of the action (or of the trial) but are payable of the execution."

• [31] I accept that distinction. I consider that the term "costs of the hearing" in s 558(3) is equivalent to "costs of trial" recognised by the law of costs and explained by Professor Dal Pont.
• [32] Consequently, when the QIRC is exercising a discretion under s 558(3) of the WCR Act, the order which should be made is not "costs of the appeal" but "costs of the hearing" and costs assessors should assess the "costs of the hearing" as they would "costs of trial" as explained by Professor Dal Pont.

• [33] Section 563 of the WCR Act concerns costs on an appeal to this Court. It provides as follows:

(1) On an appeal, the industrial court may order a party to pay costs incurred by another party only if satisfied the party made the application vexatiously or without reasonable cause.

(2) Costs of the order are to be in accordance with the Industrial Relations (Tribunals) Rules 2011, rule 70."

• [34] Here, the Regulator was partially successful in its appeals against the costs orders. It was successful to the extent that it:
  1. showed error;
  2. showed an entitlement to have the orders reconsidered;
  3. achieved more favourable orders on appeal as the scope of the costs orders against it were narrowed.
• [35] Neither party though sought costs of the appeal. That approach was consistent with s 563. There was no suggestion of any party acting vexatiously or without reasonable cause.

• [36] I make the following orders in relation to the appeal against the judgment of the QIRC in Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 75, which concerns the first claim:
  1. Appeal allowed to the extent of setting aside the costs order in WC/2017/94. In lieu, it is ordered:
  2. The Workers' Compensation Regulator pay the Queensland Nurses and Midwives' Union of Employees' costs of the hearing before the Queensland Industrial Relations Commission of WC/2017/94.
• [37] Similar orders will be made in relation to the second claim. Those orders appear in Workers' Compensation Regulator v Queensland Nurses and Midwives' Union of Employees [2020] ICQ 12.

[1] Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 075.

[4] Relating to the claim for injury before Ms Walker went on extended leave.

[5] Relating to the claim for injury once Ms Walker returned to work after the extended leave.

[6] Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 075.

[7] Queensland Nurses and Midwives' Union of Employees v Workers' Compensation Regulator [2020] QIRC 076.

[8] [2014] ICQ 008.

[9] Kim v Workers' Compensation Regulator [2019] ICQ 14 at [52]-56]

[10] Oschlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 per McHugh J at 97.

[11] Workers' Compensation Regulator v Queensland Nurses and Midwives' Union of Employees [2021] ICQ 12.

[12] Workers' Compensation Regulator v Glass [2020] QCA 133; (2020) 4 QR 693.

[13] SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 91 ALJR 936 at [14] and [35]-[40], The Queen v A2; The Queen v Magennis; The Queen v Vaziri [2019] HCA 35; (2019) 93 ALJR 1106 at [32].