Employers Mutual Limited v Heise (No 2)

[2022] NSWSC 663

Supreme Court

New South Wales

Medium Neutral Citation:

Employers Mutual Limited v Heise (No 2) [2022] NSWSC 663

Hearing dates:

On the papers

Decision date:

25 May 2022

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

(1) Dismiss the charge against the plaintiff of contravening s 283(1) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW).

(2)   Order the defendant to pay the plaintiff’s costs of the proceedings in the Local Court, except the plaintiff’s costs of the notice of motion filed on 15 March 2019, within 28 days of their being ascertained by agreement or quantified by this Court.

(3)   In default of agreement being reached by 1 July 2022 as to the quantum of the costs in order (5) made on 19 April 2022 and order (2) above:

(a)   direct the plaintiff to file and serve any evidence establishing the costs which it contends are “just and reasonable” by 15 July 2022, together with any submissions in support;

(b)   direct the defendant to file and serve any evidence in response, together with submissions by 29 July 2022, such submissions and evidence to include any application which the defendant wishes to make regarding any costs of the proceedings in the Court below to which she claims to be entitled; and

(c)   direct the plaintiff to file any evidence or submissions in reply by 5 August 2022.

(4)   Determine, subject to an application to the contrary, that the quantification of costs will be determined on the papers.

(5)   Grant liberty to restore the matter before me on 3 days’ notice to my Associate.

Catchwords:

COSTS — where plaintiff successfully appealed from conviction in Local Court — whether Court has power under the Crimes (Appeal and Review) Act 2001 (NSW) to award costs of Local Court proceedings — whether power is express or implied

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 4, 98

Crimes (Appeal and Review) Act 2001 (NSW), ss 3, 28, 49, 55, 70, 71

Criminal Procedure Act 1986 (NSW), s 213

Legal Profession Act 2004 (NSW), s 353

Legal Profession Uniform Law (NSW)

Supreme Court Act 1970 (NSW), s 23

Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 283

Cases Cited:

ACP v Munro [2012] NSWSC 1510

Cunningham v Cunningham (No 2) [2012] NSWSC 954

[Decision restricted] [2019] NSWSC 1786

Employers Mutual Limited v Heise [2022] NSWSC 465

Kostov v Commissioner of Police (No 3) [2020] NSWSC 1122

Lopes v Cook [2020] NSWSC 1776

Plaintiff M70/2011 v Minister for Immigration and Citizenship; Plaintiff M106/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case) (2011) 244 CLR 144; [2011] HCA 32

Turner v Wheeler (No 2) [2016] NSWSC 431

Category:

Principal judgment

Parties:

Employers Mutual Limited (Plaintiff)
Julie Heise (Defendant)

Representation:

Counsel:
N Chen SC / T Smartt (Plaintiff)
J Morris SC / M Weightman (Defendant)

Solicitors:
HWL Ebsworth Lawyers (Plaintiff)
Cardillo Gray Partners (Defendant)

File Number(s):

2021/273126

 Decision under appeal 

Court or tribunal:

Local Court

Date of Decision:

30 August 2021

Before:

Lacy LCM

File Number(s):

2020/200346

Judgment

Introduction

1. On 19 April 2022, I made orders and gave reasons in this matter: Employers Mutual Limited v Heise [2022] NSWSC 465 (the principal judgment). The orders I made were as follows:

“(1)   Grant leave to the plaintiff to appeal against its conviction in respect of both grounds in the amended summons filed on 13 April 2022.

(2)   Allow the appeal.

(3)   Set aside the conviction.

(4)   Set aside the order made by the Local Court that the plaintiff (the defendant in the Local Court) pay the defendant’s (the prosecutor’s in the Local Court) costs of the proceedings.

(5)   Order the defendant to pay the plaintiff’s costs of the proceedings in this Court, such costs to be paid within 28 days of agreement or assessment.

(6)   Grant liberty to the plaintiff to seek an order that the defendant pay its costs of the proceedings in the Local Court, such liberty to be exercised by notice in writing to my Associate within seven days, with a view to directions being made in chambers and the question being determined on the papers.”

2. The plaintiff, Employers Mutual Limited (EML), has invoked the liberty granted in order (6) above. In its submissions in reply dated 20 May 2022, it seeks the following orders:

“1) The charge preferred against the plaintiff of contravening s 283(1) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) be dismissed.

2)   The defendant pay the plaintiff’s costs of the proceedings in the Local Court, except the plaintiff’s costs of the notice of motion filed on 15 March 2019, within 28 days of their being ascertained by agreement or further order.

3)   In default of agreement being reached by 1 July 2022 as to the quantum of the costs in order 5 made on 19 April 2022 and order 2 of these orders, grant the plaintiff liberty to apply for a lump sum costs order by 8 July 2022 by email to the Associate to Adamson J.”

3. Julie Heise, the defendant, accepted that the first order sought by EML ought be made on the basis that the power to dismiss the charge is a necessary corollary of s 55(1)(a) of the Crimes (Appeal and Review) Act 2001 (NSW) (the Act).

Whether this Court’s power to order costs in the Court below is express or implied

4. It was common ground that this Court has a power to make an order with respect to the costs of the proceedings in the Local Court. EML contended that there was no express power but that the power was necessarily implied. Ms Heise contended that the Act expressly conferred power on this Court to make an order with respect to costs in the Local Court.

Whether there is an express power for this Court to make an order for costs in the Court below

5. Ms Heise contended that the power was express by reason of the extended definition of “sentence” in s 3 of the Act and its effect on s 55(2)(c) of the Act. It is convenient to address Ms Heise’s submission first by reference to the statutory provisions.

6. Section 3(1) relevantly defines “sentence” as meaning:

“(a)     any order made by the Local Court in respect of a person as a consequence of its having convicted the person of an offence …

…

(e)     any order for costs made by the Local Court against a person in connection with summary proceedings taken against the person …

…”

7. Section 3(2)(b) provides that “a reference in this Act to a sentence includes a reference to an order made on the finding of guilt under that Act”, but as it only applies to applications or appeals in relation to decisions of the Children’s Court, it has no application in the present case, which involved an appeal from a decision of the Local Court.

8. Section 3(3) of the Act provides:

“In this Act, a reference to varying a sentence includes—

(a)     a reference to varying the severity of the sentence, and

(b)     a reference to setting aside the sentence and imposing some other sentence of a more or less severe nature, and

(c)     a reference to varying or revoking a condition of, or imposing a new condition on, an intensive correction order, community correction order or conditional release order.”

9. Section 55(1) of the Act concerns this Court’s power with respect to appeals against convictions in the Local Court, whereas s 55(2) concerns its power with respect to appeals against sentences imposed by the Local Court. Under s 55(2)(b), this Court has power to vary the sentence or set it aside and remit it to the Local Court.

10. Section 71 of the Act provides as follows:

“71   Variation of sentences of Local Court

(1)  An appeal court may not vary a sentence so that the sentence as varied could not have been imposed by the Local Court.

(2)  An appeal court may not make an order or impose a sentence that could not have been made or imposed by the Local Court.

(3)  Any sentence varied or imposed by an appeal court, and any order made by an appeal court under this Act, has the same effect and may be enforced in the same manner as if it were made by the Local Court.”

11. While the extended definition of “sentence” in s 3(1)(e) of the Act, which includes an order for costs, might be thought to be capable of applying to the power to vary a costs order, this interpretation would be at odds with the express words of s 3(3). Although s 3(3) is expressed to include the matters listed, it is difficult to conceive of any of those matters having application in the context of a costs order.

12. However, there is an even more fundamental reason why this Court’s express powers under the Act do not extend to varying the costs order in the Local Court. In the present case, EML sought that its conviction be set aside. In this context, its seeking to have the costs order made in the Court below set aside and the charge dismissed did not amount to an appeal against sentence within the meaning of s 55(2)(b) but rather an application for consequential orders if the appeal against conviction was allowed. Thus s 55(2) of the Act has no application in the present case and there is no express power for this Court to make an order for the costs of the Court below.

13. This conclusion is fortified by the absence of a provision that corresponds to the provisions with respect to appeals to the Land and Environment Court (s 49(4) of the Act) and the District Court (s 28(3) of the Act), each of which expressly empowers the appellate court to “make such order as to the costs to be paid by either party (including the Crown) as it thinks just.” This is noteworthy when s 55(2) of the Act, which confers appellate jurisdiction on this Court, is replicated in s 39(2) for the Land and Environment Court and s 27(1) for the District Court.

14. If the Act were construed as granting this Court an express power with respect to the costs of the Local Court on an appeal, ss 28(3) and 49(4) of the Act would have no work to do: see Plaintiff M70/2011 v Minister for Immigration and Citizenship; Plaintiff M106/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case) (2011) 244 CLR 144; [2011] HCA 32 at [97] (Gummow, Hayne, Crennan and Bell JJ).

15. To date, this Court’s calls for the Act to be amended to provide for an express power have gone unheeded: Cunningham v Cunningham (No 2) [2012] NSWSC 954 at [11] (Button J) and ACP v Munro [2012] NSWSC 1510 at [106] (Button J). It is possible that this apparent omission reflects an acceptance by the legislature that this Court’s jurisdiction enables it to make such costs orders in any event without such an express power.

16. For these reasons, I reject the submission that the Court has an express power (because of the extended definition of “sentence”) to set aside or vary the costs order made by the Local Court.

Whether there is an implied power

17. This Court held that it has an implied power, on an appeal against conviction under s 55(1) of the Act, to make a costs order with respect to the proceedings in the Local Court. I referred to the various authorities in Lopes v Cook [2020] NSWSC 1776 at [78] as follows:

“This Court has held that it has power to order costs in proceedings under Part 5 of the CAR Act by a combination of s 23 of the Supreme Court Act 1970 (NSW) and by necessary implication from ss 55 and 72 of the CAR Act: Cunningham v Cunningham (No 2) [2012] NSWSC 954 at [18] (Button J); Turner v Wheeler (No 2) [2016] NSWSC 431 at [11] (Campbell J) and [Decision restricted] [2019] NSWSC 1786 at [27] (Adamson J).”

18. I note for completeness that, in the decisions I cited in Lopes v Cook, the argument that there was an express power does not appear to have been put.

19. The Local Court’s discretion to order costs in the proceedings arose from s 213 of the Criminal Procedure Act 1986 (NSW), which provides in s 213(1) that, if a matter is dismissed (as the present ought to have been), the Court may order the prosecutor (in the present case, Ms Heise) to pay professional costs to the Registrar of the court, for payment to the accused person (in this case, EML). Section 213(2) provides that the amount of professional costs is to be the amount that the Magistrate considers to be just and reasonable. Section 213(5) requires the order for costs to specify the amount of professional costs payable.

20. Because this Court’s power to make an order for costs in the Local Court is implied rather than express, it is not bound by the limitations that apply, by reason of s 213 of the Criminal Procedure Act when the Local Court determines the question of costs. Section 70 of the Act does not apply because it limits the circumstances in which orders for costs can be made against public prosecutors, whereas Ms Heise is a private prosecutor.

21. However, some limitations necessarily arise as this Court has held that there is no right to assessment of costs in relation to criminal proceedings brought in the summary jurisdiction of the Local Court since s 353 of the Legal Profession Act 2004 (NSW) is not available in respect of costs orders made in the exercise of this Court’s jurisdiction under the Act: Turner v Wheeler (No 2) [2016] NSWSC 431 at [12] (Campbell J), which was followed in Kostov v Commissioner of Police (No 3) [2020] NSWSC 1122 at [42] (Davies J) where the Legal Profession Uniform Law (NSW) applied.

The orders and directions required to give effect to my decision

Dismissal of the charge

22. It was common ground that it followed from the appeal against conviction being allowed that the charge ought be dismissed by this Court. For the reasons given in the principal judgment, the charge ought to have been dismissed by the Local Court because the prosecution by Ms Heise in the Local Court was flawed from the outset.

Costs order

23. On 15 September 2021, the Local Court ordered EML to pay Ms Heise’s costs of the proceedings, which it quantified in the sum of $170,942.80. As referred to above, I set this order aside on 19 April 2022.

24. The Local Court, had it not erred in the way that I have found in the principal judgment, would have had the power to order Ms Heise to pay EML’s costs in an amount that the magistrate considered to be just and reasonable.

25. Both parties accept that EML is entitled to its costs in the Local Court. EML accepts that it is not entitled to its costs of the notice of motion filed on 15 March 2019 (see the orders sought by EML set out above). I note that no separate order for costs was made for this notice of motion and that the costs were included in the costs of the proceedings.

Whether there is a power to remit the question of costs to the Local Court

26. Given that, as referred to above, the parties cannot have the costs assessed, it is necessary for a court to quantify them, unless the parties can agree. The question arises whether this Court must perform that task or whether it is a task which can be remitted to the Local Court.

27. This Court’s power to remit the proceedings to the Local Court on an appeal against conviction under Part 5 of the Act is conferred by s 55(1)(b), which provides that the Supreme Court may determine an appeal against conviction “by setting aside the conviction and remitting the matter to the Local Court sitting at the place at which the original Local Court proceedings were held for redetermination in accordance with the Supreme Court’s directions”. The word “redetermination” is not apt to include an order for costs in the present circumstances, since EML’s entitlement to costs has not yet been determined since the Local Court ordered that EML be convicted, whereas, as I have found, it ought to have dismissed the charge.

28. In these circumstances, it appears that the costs must be quantified by this Court, there being no power to remit the matter to the Local Court for that purpose.

Contention regarding right of set-off

29. I note for completeness that Ms Heise also contends that she ought be entitled to set off any amount that she is obliged to pay to EML by the amount that she is entitled to receive from EML for the costs of the notice of motion. This submission presupposes that she is entitled to some part of her costs in the proceedings in the Court below, a matter which has not been established, since the costs were included in the costs of the proceedings as she succeeded (on an incorrect basis, as I have found) in the Court below. I note that while EML does not seek its costs of the motion filed on 15 March 2019, it does not appear to accept that it is liable to pay Ms Heise’s costs of the motion. There may be other issues relating to costs of which I am presently unaware.

Whether a lump sum costs order can be made

30. EML seeks a lump sum costs order, which I understand to be an order that Ms Heise pay its costs of the proceedings in a specified amount. I note that s 98(4) of the Civil Procedure Act 2005 (NSW) which makes provision for costs in a gross sum to be ordered does not apply to the present proceedings as they are criminal proceedings: s 4 of the Civil Procedure Act and [Decision restricted] [2019] NSWSC 1786 at [23]-[24] (Adamson J). However, this Court has power under s 23 of the Supreme Court Act 1970 (NSW) to quantify costs for the purposes of a costs order: Turner v Wheeler (No 2) at [15] (Campbell J).

31. At present, the quantum of EML’s costs has not been the subject of evidence.

32. In the directions set out below, I have deferred the obligation on the parties to file documents for some period. The reason for the deferral is that it would be preferable and more cost-effective if agreement could be reached as to costs and short minutes of order prepared by the parties. The parties ought be permitted time to come to a negotiated agreement about these matters.

Orders and directions

33. For the reasons given above I make the following orders and directions:

1. Dismiss the charge against the plaintiff of contravening s 283(1) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW).

2. Order the defendant to pay the plaintiff’s costs of the proceedings in the Local Court, except the plaintiff’s costs of the notice of motion filed on 15 March 2019, within 28 days of their being ascertained by agreement or quantified by this Court.

3. In default of agreement being reached by 1 July 2022 as to the quantum of the costs in order (5) made on 19 April 2022 and order (2) above:

1. direct the plaintiff to file and serve any evidence establishing the costs which it contends are “just and reasonable” by 15 July 2022, together with any submissions in support;

2. direct the defendant to file and serve any evidence in response, together with submissions by 29 July 2022, such submissions and evidence to include any application which the defendant wishes to make regarding any costs of the proceedings in the Court below to which she claims to be entitled; and

3. direct the plaintiff to file any evidence or submissions in reply by 5 August 2022.

4. Determine, subject to an application to the contrary, that the quantification of costs will be determined on the papers.

5. Grant liberty to restore the matter before me on 3 days’ notice to my Associate.

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Decision last updated: 25 May 2022