Johnson v Denwest Nominees Pty Ltd t/as Cunderdin Roadhouse
[2017] WASCA 200
•2 NOVEMBER 2017
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: JOHNSON -v- DENWEST NOMINEES PTY LTD T/AS CUNDERDIN ROADHOUSE [2017] WASCA 200
CORAM: MURPHY JA
MITCHELL JA
PRITCHARD J
HEARD: 16 OCTOBER 2017
DELIVERED : 2 NOVEMBER 2017
FILE NO/S: CACV 57 of 2015
BETWEEN: JOHN JOHNSON
Appellant
AND
DENWEST NOMINEES PTY LTD T/AS CUNDERDIN ROADHOUSE
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :BIRMINGHAM QC DCJ
Citation :JOHN -v- DENWEST NOMINEES PTY LTD t/as CUNDERDIN ROADHOUSE [2015] WADC 22
File No :APP 104 of 2014
Catchwords:
Workers' compensation - Application for weekly payments - Appeal against award of costs on an indemnity basis, on the basis that the proceedings were an abuse of process - Whether leave to appeal should be granted
Legislation:
Workers' Compensation and Injury Management Act 1981 (WA)
Result:
Application for an extension of time in which to appeal refused
Leave to appeal refused
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant: No appearance at the hearing
In person from 30 January 2017
Chapmans Barristers & Solicitors until 29 January 2017
Respondent: Mr R Nash
Solicitors:
Appellant: Chapmans Barristers and Solicitors
Respondent: GG Legal
Case(s) referred to in judgment(s):
A v C [No 2] [2015] WASCA 199
Allmark v Mossensons (A Firm) [2006] WASCA 127
Apache Northwest Pty Ltd v Department of Mines and Petroleum [2012] WASCA 167
Avsar v Binning [2009] WASCA 219
Cardno BSD Pty Ltd v Water Corporation (No 2) [2011] WASCA 161
Catholic Education Office of WA v Granitto [2012] WASCA 266
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Frigger v Kitay (No 2) [2017] WASCA 139
Frigger v Lean [2012] WASCA 66
Frigger v Professional Services of Australia Pty Ltd (No 2) [2016] WASCA 68
Garner v Rohanna Pty Ltd [1999] WASCA 178
Gipp v The Queen [1998] HCA 21; (1998) 194 CLR 106
Glew v City of Greater Geraldton [2012] WASCA 94
Hawker Pacific Pty Ltd v Lang [2015] WASCA 256
John v Denwest Nominees Pty Ltd [2015] WADC 22
Kanowna Belle Goldmines v Feierabend [2003] WASCA 246
Kezic v St John of God Health Care Inc [2015] WASCA 182
Kezic v St John of God Health Care Inc [2015] WASCA 220
Kidd v The State of Western Australia [2015] WASCA 62 (S)
Reichel v McGrath (1889) 14 App Cas 665
Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93
Simonsen v Legge [2010] WASCA 238
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
The State of Western Australia v Cunningham [No 2] [2017] WASCA 197
Table of contents
Introduction
Statutory provisions
Liability to pay compensation
Registered agreements
Claims against uninsured employers
Exclusive jurisdiction
Notifications and claims
Conciliation of disputes
Costs of conciliation and arbitration proceedings
Enforcement of awards
Appeals to the District Court
Appeals to the Court of Appeal
Facts found by the primary judge
Appellant's employment and workers' compensation claim
Conciliation agreement
Magistrates Court judgment
De-registration of the respondent
Enforcement proceedings against the respondent's directors
District Court action against Mrs Walker
Settlement of the District Court action at mediation conference
2013 application to the arbitrator
Arbitrator's approach
Appeal to the District Court
Grounds of appeal
Notice of contention
Primary judge dismisses the grounds of appeal
Primary judge upholds the notice of contention
Orders made by the District Court
The appeal to this court
Abuse of process - general principles
Appellant's submissions on ground 1 (abuse of process)
Irrelevant matters
Relevant matters not considered
Facts not established by the evidence
Admissibility of evidence and procedural fairness
Respondent's submission on ground 1
Parties' submissions on ground 2
Disposition of appeal
Grounds of appeal do not have merit
No substantial injustice has been demonstrated
Costs of this appeal are disproportionate to the issues at stake
Conclusion as to leave to appeal
Orders
REASONS OF THE COURT:
Introduction
The appellant was employed by the respondent as a cook at a roadhouse in Cunderdin for approximately six weeks in August and September 1995. In 1996, he made a claim for workers' compensation under the Workers' Compensation and Injury Management Act 1981 (WA) (Act).[1] At a conciliation conference held in June 1998, the parties agreed that the respondent would pay the appellant weekly wages for a defined period in the amount of $11,331.60 (conciliation agreement).
[1] At the time the Act was called the Workers' Compensation and Rehabilitation Act. It is convenient to refer to the Act by its current name.
The respondent, which was uninsured, did not make the payments required by the conciliation agreement. The appellant commenced proceedings to enforce the conciliation agreement in the Magistrates Court and, in November 2005, obtained judgment in the sum of $11,331.60. In those proceedings the respondent obtained judgment on a counterclaim in the sum of $1,861.05. Despite a number of attempts by the appellant to enforce the Magistrates Court judgment against the respondent and its directors, the judgment sum remains unpaid.
In 2010, the appellant commenced proceedings in the District Court against a director of the respondent, Mrs Walker, seeking to recover damages. In those proceedings, the appellant also claimed the sum of $9470.55 (the difference between $11,331.60 and the $1,861.05 awarded on the respondent's counterclaim). Those proceedings were settled at a pre-trial mediation conference on 13 July 2011, on terms which included that the appellant and Mrs Walker release and discharge each other from all claims either had against the other.
Subsequently, on 17 July 2013, the appellant made another application under the Act for the respondent to pay weekly payments of workers' compensation in respect of the period of incapacity to which the sum of $11,331.60 related. That application was dismissed, as was an appeal to the District Court against that dismissal.
Although it was not necessary to do so, the primary judge in the appeal to the District Court upheld a notice of contention alleging that the 2013 application was an abuse of process. Having reached that conclusion, the judge ordered that the appellant pay the respondent's costs of the appeal to the District Court on an indemnity basis.
The current appeal to this court seeks to impugn the conclusion that the application was an abuse of process, and the award of indemnity costs.
The appellant requires leave to appeal against the primary judge's decision. For the following reasons, leave to appeal should be refused and the appeal dismissed.
Statutory provisions
The following is a summary of the most relevant provisions of the Act. Except where specifically indicated, the provision has not relevantly altered between the date of the conciliation agreement and now. The terms of the Act as they stood in 1998 (at the time of the conciliation agreement) are reflected in the 29 January 1999 reprint of the Act.
Liability to pay compensation
Under s 18 of the Act:
If a disability/injury[2] of a worker occurs, the employer shall, subject to this Act, be liable to pay compensation in accordance with Schedule 1.
A 'disability' or 'injury' includes a 'disease' (which term comprehends any mental ailment) contracted by a worker in the course of his or her employment.[3] Psychological injury resulting from the stress of events in the workplace can be a disability or injury under this limb of the definition.[4] Schedule 1 to the Act provides, among other things, for the making of weekly payments of workers' compensation during the total or partial incapacity of a worker.[5]
[2] The current legislation refers to an 'injury' while at the time of the conciliation agreement the reference was to a 'disability'.
[3] Section 5 of the Act.
[4] See, for example, Catholic Education Office of WA v Granitto [2012] WASCA 266. Such impairment may also satisfy other limbs of the definition in certain circumstances: see Kanowna Belle Goldmines v Feierabend [2003] WASCA 246 [19] ‑ [24].
[5] Clause 7 of sch 1 to the Act.
Under s 23(1)(b) of the Act, as it stood from 2004, compensation is not payable 'in respect of anything to the extent that … judgment has been obtained against the employer independently of' the Act.
Registered agreements
Section 76(1) of the Act requires that, where the amount of compensation under the Act has been ascertained by agreement, a memorandum thereof shall be sent to the Director who shall record the agreement in a special register. By s 76(3), an unregistered agreement has 'no force or validity if it exempts the employer wholly or partially from any liability for compensation to which the worker is or may subsequently become entitled under' the Act. Under s 77 of the Act:
An agreement to which section 76 is applicable shall not be binding on or enforceable against the parties or admitted as valid unless it is registered as provided in this Division.
Claims against uninsured employers
Section 174(1) of the Act relevantly applies where:
(a) compensation in accordance with this Act is due by an employer to a worker …;
(b) the employer is not insured against his liability to pay compensation to the worker under this Act …; and
(c) the employer does not pay the compensation due within 30 days of the obtaining of an award by the worker …,
In those circumstances, the Commission (at the time of the conciliation agreement) or WorkCover WA (now) is to pay to the worker from moneys standing to the credit of the General Account the amount required to satisfy the award and any award for costs in respect thereof.[6] At the time of the conciliation agreement, s 174(1) of the Act gave the Commission the right to sue and recover the amount paid from the uninsured employer. Currently, s 174(6) and s 174(8) of the Act give WorkCover WA the right to file a certificate as to the amount paid in a court of competent jurisdiction. On filing, that certificate is taken to be a judgement of that court for a debt payable by the employer to WorkCover WA of the stated amount.
[6] Currently, this is subject to s 174(5AA) of the Act. At the time of the conciliation agreement, the General Account was called the 'General Fund'.
Section 174AA of the Act was inserted in 2004, after the conciliation agreement. It applies where none, or some but not all, of an amount paid from the General Account under section 174 is recovered from a body corporate liable to pay the amount under that section. In such a case, WorkCover WA may sue and recover the unpaid amount from a responsible officer of the body corporate. In essence, a 'responsible officer' includes a director of the body corporate at the time when it was not insured, or was inadequately insured, who does not establish a 'due diligence' defence.[7]
Exclusive jurisdiction
[7] Section 174(2) of the Act.
Proceedings for the resolution of disputes about liability to pay compensation under the Act are not capable of being brought other than under the relevant Part of the Act.[8]
Notifications and claims
[8] Section 84A and s 84B of the Act at the time of the conciliation agreement; s 176 of the Act now.
Generally, proceedings for recovery of compensation for an injury/disability under the Act are not maintainable unless notice of the occurrence of an injury/disability has been given to the employer as soon as practicable after the occurrence and the claim for compensation is made within 12 months of the injury/disability.[9]
[9] Section 84I of the Act at the time of the conciliation agreement; s 178 and s 179 of the Act now.
Currently, s 57B of the Act applies where a claim for compensation by way of weekly payments is made against an uninsured employer, who is served with a relevant medical certificate.[10] Within 17 days, the employer must either make the first weekly payment (if liability is accepted), give notice that liability is disputed or give notice that a decision as to whether or not liability is accepted is not able to be made in the time allowed. Failure to comply with this requirement is an offence.[11]
[10] Section 57B(1) of the Act.
[11] Section 57B(2) of the Act.
Currently, an arbitrator is allocated to determine the matter or matters in dispute in accordance with the Act and the arbitration rules.[12] Currently, s 58(2) of the Act provides for the jurisdiction of an arbitrator where the first of the claimed weekly payments is not made after 17 days or the employer notifies that liability is disputed or a decision as to liability is not able to be made within the time allowed. In those circumstances:
an arbitrator may, on the application of the worker hear and determine the question of liability to make the weekly payments claimed.
[12] Section 182ZV and s 185 of the Act.
Section 58(5) currently provides that, on a hearing under s 58(2), the arbitrator is to satisfy herself as to all of the evidence before her and:
(a)if the arbitrator considers that the evidence is satisfactory to establish liability to make weekly payments, may:
(i)make an order that weekly payments including arrears to the date of the hearing shall be paid out of moneys standing to the credit of the General Account and that the employer shall forthwith pay to WorkCover WA for the General Account the amount of such payments together with an additional 10% of that amount; or
(ii)make an order as to weekly payments by the employer to the worker on such terms as the arbitrator sees fit;
or
(b)if the arbitrator considers that the evidence is not satisfactory to establish liability to make weekly payments, may dismiss or adjourn the application on such terms as the arbitrator sees fit.
By s 58(6), the fact that an application has been dismissed under s 58(5) shall not be taken into account by an arbitrator in any other proceedings under the Act.
Conciliation of disputes
At all material times, provisions of the Act have provided for the conciliation of a dispute by a conciliation officer.[13]
[13] Part IIIA div 2 of the Act at the time of the conciliation agreement; currently pt XI div 3 of the Act.
Currently, s 182N of the Act authorises a conciliation officer, with the consent of the parties to the dispute, to issue an order of the kind that an arbitrator could issue setting out matters that have been agreed to during conciliation. Section 182O provides for when conciliation of the dispute ends, including where agreement is reached by the parties on all matters in dispute. At the end of conciliation of the dispute, the conciliation officer is to issue a certificate setting out matters which include the outcome of conciliation.[14] A person to whom money is to be paid under a conciliation decision or a conciliation agreement may enforce the decision or agreement by filing in a court of competent jurisdiction a certified copy of the conciliation decision or certificate of outcome and an affidavit stating the amount not paid. On the filing of those documents, the conciliation decision or agreement is taken to be an order of the court and may be enforced accordingly.[15]
[14] Section 182O(2) of the Act.
[15] Section 182ZH of the Act.
At the time of the conciliation agreement, rules made under the Act provided that, when conciliation came to an end, the conciliation officer was to give the Director a certificate.[16] At that time the Act did not provide for the enforcement of an agreement contained in a conciliation certificate.
Costs of conciliation and arbitration proceedings
[16] Rule 9 of the Workers' Compensation (Conciliation and Review) Rules 1994 (WA).
Under s 264 of the Act, costs are generally in the discretion of the relevant 'dispute resolution authority' (which includes a conciliation officer and arbitrator).[17] However, by s 264(5):
A dispute resolution authority is not to order the payment of costs by a worker unless the dispute resolution authority is satisfied that the costs relate to an application made by the worker that was frivolous or vexatious, fraudulent or made without proper justification.
Enforcement of awards
[17] Section 5 of the Act.
Currently, a person to whom money is to be paid under a decision of an arbitrator may enforce the decision by filing in a court of competent jurisdiction a certified copy of the decision and an affidavit stating the amount not paid. On the filing of those documents, the decision is taken to be an order of the court and may be enforced accordingly.[18]
[18] Section 219 of the Act.
At the time of the conciliation agreement, the Act provided for a dispute to be referred for determination by a review officer or a compensation magistrate's court. Section 84ZT of the Act provided for an enforcement application to the compensation magistrate's court where a person failed to comply with an order made by a conciliation officer or a review officer. Where it appeared that an employer had not paid the amount which the worker was entitled to be paid under an order of a review officer, the court could order payment of the underpaid amount.[19] Orders of the compensation magistrate's court were enforced in accordance with regulations made under the Act.[20]
Appeals to the District Court
[19] Section 84ZT(5) of the Act.
[20] Section 84ZZ of the Act.
Currently, s 247 of the Act provides for an appeal to the District Court, with leave, against an arbitrator's decision where written reasons are given. The District Court is, relevantly, not to grant leave in the case of an appeal in which the amount of compensation is in issue unless:[21]
[21] Section 247(2)(a)(i) of the Act.
(i)a question of law is involved and the amount at issue in the appeal is both:
(I)at least $5 000 or such other amount as may be prescribed by the regulations; and
(II)at least 20% of the amount awarded in the decision appealed against;
or
(ii)a question of law is involved and, in the opinion of the District Court, the matter is of such importance that, in the public interest, an appeal should lie;
The District Court is not to grant leave in any other case unless a question of law is involved.[22]
[22] Section 247(2)(b) of the Act.
On the hearing of the appeal, the District Court may:[23]
(a)affirm, vary, or quash the decision appealed against, or substitute, and make in addition, any decision that should have been made in the first instance; and
(b)subject to section 267, make any further or other decision, as to costs or otherwise, as the District Court thinks fit.
Section 267 of the Act imposes certain restrictions on the award of the costs of the appeal to the District Court. Relevantly for this case, where the appeal to the District Court is by a worker who was not successful in the appeal, the court is not to make an order for the payment of the appellant's costs of the appeal by any other party to the appeal. The Act does not prevent an award of costs in favour of a successful respondent to an appeal by a wholly unsuccessful worker.[24]
Appeals to the Court of Appeal
[23] Section 247(7) of the Act.
[24] Kezic v St John of God Health Care Inc [2015] WASCA 220 [56].
Section 79 of the District Court of Western Australia 1969 (WA) provides for a right of appeal from judgments of the District Court to this court. Under s 254 of the Act:
Under the District Court of Western Australia Act 1969 section 79, an appeal may be made to the Court of Appeal in respect of a judgment, order or determination in proceedings in the District Court under this Part but -
(a)the appeal must relate to a question of law; and
(b)leave to appeal must be obtained from the Court of Appeal.
The Act does not expressly provide for the criteria to be applied by this court when deciding to grant or withhold leave to appeal under s 254(b) of the Act. There is no applicable equivalent to s 60(1)(e) of the Supreme Court Act 1935 (WA), specifically requiring leave to appeal against a decision as to costs.[25]
[25] As to operation of s 60(1)(e) of the Supreme Court Act see Apache Northwest Pty Ltd v Department of Mines and Petroleum [2012] WASCA 167 [93] ‑ [105].
In Hawker Pacific Pty Ltd v Lang,[26] the court observed:
This court's power to grant leave to appeal under s 254 of the Act is conferred in general terms. The power is not restricted or qualified except that the appeal must relate to a question of law. Leave should be granted if, in all the circumstances, it is in the interests of justice that there be a grant of leave. (citation omitted)
[26] Hawker Pacific Pty Ltd v Lang [2015] WASCA 256 [27].
In Kezic,[27] the court summarised the principles to be applied in considering whether to grant leave to appeal under s 254 of the Act in the following terms:
The principles relevant to the grant of leave were summarised, sufficiently for present purposes, in Allmark v Mossensons (A Firm):[28]
'Leave will usually only be granted where the decision below was wrong, or at least attended with sufficient doubt to justify the granting of leave, and if in addition substantial injustice would be done by leaving the decision unreversed. These are not rules but guidelines. The Court has a residual discretion to do justice in any case requiring leave even if the guidelines are not satisfied. (citations omitted)'
Further, it should be noted that the primary judge was dealing with applications for leave to appeal in respect of interlocutory decisions concerning practice and procedure in arbitration proceedings conducted by arbitrators under the Act. The courts have consistently stated that special restraint must be exercised when dealing with appeals in respect of interlocutory orders concerning practice and procedure.
The need for appellate restraint applies equally, if not more so, to appeals from intermediate appellate decisions concerning practice and procedure. (some citations omitted)
[27] Kezic v St John of God Health Care Inc [2015] WASCA 182 [84] ‑ [86].
[28] Allmark v Mossensons (A Firm) [2006] WASCA 127 [26].
Facts found by the primary judge
The primary judge made the following findings of primary fact.[29]
Appellant's employment and workers' compensation claim
[29] John v Denwest Nominees Pty Ltd [2015] WADC 22 (primary decision) [7] ‑ [40].
Following a period of unemployment, the appellant was employed by the respondent as a cook at the Shell Roadhouse at Cunderdin from 6 August 1995 to 17 September 1995 (approximately six weeks). The appellant says that, throughout that period, the respondent's manager, Mrs Pauline Walker, subjected him to such criticism, harassment, humiliation and close supervision that his physical and mental condition deteriorated to such an extent that he suffered depression.
In April 1996, some seven months after he had ceased to work for the respondent, the appellant was diagnosed as having suffered a work related injury pursuant to the Act. He lodged the claim for compensation on 23 May 1996. Liability was disputed by the respondent.
Conciliation agreement
Ultimately the matter was referred to conciliation. The matter for determination at conciliation was the appellant's entitlement to weekly wages pursuant to s 58 of the Act.
On 12 June 1998 a conciliation conference was conducted with an officer of the Conciliation Review Directorate. The parties reached an agreement whereby the respondent accepted responsibility to pay the appellant's weekly wages from 19 November 1995 to 18 June 1996 on the basis that the appellant was totally incapacitated as a result of a work related injury during that period. The wages said to be owed to the appellant were agreed in the sum of $11,331.60.
It was agreed that the wages would be paid by monthly instalments commencing on 30 August 1998. A certificate recording the agreement resolving the matter was signed by the conciliation officer.
The respondent did not have workers' compensation insurance in place in respect of this claim. The respondent failed to make the payments referred to in the conciliation agreement.
The appellant did not seek to register the agreement pursuant to s 76 of the Act.
Magistrates Court judgment
On 8 November 2002 the appellant commenced proceedings in the Magistrates Court seeking payment of the agreed sum. The action proceeded to trial.
On 25 November 2005, 10 years after the appellant had ceased employment, the appellant obtained judgment in relation to the agreed sum of $11,331.60. The respondent was successful in a counterclaim in respect of some funds owed to it by the appellant.
De-registration of the respondent
On 25 January 2006, in response to a request for payment of the judgment sum, Mr Michael Walker, a director of the respondent, informed the appellant that the respondent had ceased trading in 1997 and existed in name only with no assets.
On 22 October 2008 the respondent was voluntarily deregistered and thereafter defunct.
Enforcement proceedings against the respondent's directors
On 21 January 2010 - some 16 months later - the appellant sought to enforce the judgment against the directors of the respondent, Mr and Mrs Walker. On 9 February 2010 that application was refused by Magistrate Cockram.
On 17 February 2010, the appellant appealed to the District Court against the magistrate's decision. On 24 May 2010, Judge Staude dismissed the appeal and ordered that the appellant pay Mrs Walker's taxed costs of the appeal. (In the intervening period Mr Walker had succumbed to cancer and died.)
On 14 June 2010 the appellant lodged an appeal from the decision of Judge Staude to this court.
On 7 September 2010 the appeal was discontinued. The appellant was ordered to pay Mrs Walker's taxed costs of the appeal including reserved costs.
District Court action against Mrs Walker
On 21 July 2010 the appellant commenced an action in the District Court against Mrs Walker. Mrs Walker filed an appearance to the writ on 9 September 2010, two days after the appeal had been discontinued.
In the statement of claim filed in the District Court action, the appellant sought to recover from Mrs Walker, inter alia, the sum of $11,331.60 - the same sum relating to his loss of wages (as agreed in the conciliation agreement).
The statement of claim pleaded the relevant history and alleged that Mrs Walker deregistered the respondent in knowledge of an outstanding liability to the appellant and thereby 'deliberately and fraudulently' attempted to avoid liability to the appellant arising out of the Magistrates Court action and in disregard of her duties as a director. It further alleged breaches of the Corporations Act 2001 (Cth) in relation to alleged insolvent trading during the 10-year period from June 1998 to October 2008. The appellant was informed in 2007 that the respondent had not traded since 1997.
The loss and damage claimed by the appellant included the loss of wages (after set off of the sum claimed in the counterclaim), together with legal costs (of not less than $20,000) and loss of enjoyment of life, stress and anxiety.
The claim was defended by Mrs Walker.
The loss of wages claimed by the appellant in that action was the same $11,331.60 said to be due for the period that the appellant was employed by the respondent.[30] It is the same sum that was the subject of the earlier Magistrates Court action.
Settlement of the District Court action at mediation conference
[30] As noted above, the amount claimed was $9470.55, being the difference between $11,331.60 and the $1,861.05 awarded on the respondent's counterclaim in the Magistrates Court.
In due course, a mediation conference was scheduled on 13 July 2011. The appellant was required to attend the conference in person. On 12 July the appellant's solicitors submitted a medical certificate to excuse the appellant from attendance.
At all material times during the District Court action, the appellant resided in Shepparton, Victoria.
The conference proceeded on the scheduled date with the appellant being in attendance via telephone from Victoria. The appellant was represented at the conference by his solicitor, Mr Stewart. Mr Stewart communicated with the appellant during the conference.
The action was settled on terms whereby Mrs Walker agreed to not enforce the costs orders in favour of her against the appellant (when sued in her capacity as a director of the then defunct respondent) in the District Court action and the earlier appeal to this court. The appellant and Mrs Walker each released and forever discharged the other from all claims, actions, demands or costs either had or may have against the other.
In accordance with the concluded settlement agreement, the District Court action was dismissed with no order as to costs.
2013 application to the arbitrator
Notwithstanding the settlement of the District Court action, on 27 March 2013 the appellant, through his solicitors, sought to have the respondent reinstated on the register of companies. It was restored to the register of companies on June 2013.
The appellant commenced proceedings by way of an application to WorkCover on 17 July 2013 (a little over two years after the District Court proceedings had been settled).
In the application the appellant sought the payment of wages from 13 November 1995 to 18 June 1996 - being the sum of $11,331.60 the subject of the previous proceedings in the Magistrates Court and later in the District Court.
On 30 September 2014 the application was dismissed by an arbitrator.
Arbitrator's approach
The arbitrator provided written reasons for her decision to dismiss the appellant's application. She decided to dismiss the application for two reasons.
First, the arbitrator found that there was no dispute to enliven her jurisdiction under s 58 of the Act, as the dispute about the respondent's liability to make weekly payments had been resolved at conciliation in 1998. The arbitrator said that she did not have power to enforce a payment, but rather only had power to determine liability to make weekly payments.[31]
[31] Arbitrator's decision [48] - [53], [108].
Secondly, the arbitrator found that the fact that the appellant obtained judgment in the Magistrates Court for the conciliated amount enlivened s 23(1)(b) of the Act, so that compensation was not payable under the Act.[32]
[32] Arbitrator's decision [46], [101] - [106], [109].
The arbitrator considered and rejected a number of other arguments advanced by the respondent in opposition to the application, based on the doctrines of res judicata, abuse of process, estoppel and unconscionability.[33]
[33] Arbitrator's decision [20], [29] - [45], [56] - [100].
The order made by the arbitrator was that the appellant's application be dismissed.
Appeal to the District Court
Grounds of appeal
The appellant appealed to the District Court against the arbitrator's dismissal of his application on two grounds:
1.The Learned Arbitrator erred in Law in finding there is no jurisdiction to determine the question of liability to make weekly payments pursuant to section 58 of the WCIMA.
2.The Learned Arbitrator erred in Law in determining that section 23 of the WCIMA has application to the present matter, notwithstanding the appellant has not received payment of compensation for the period 13 November 1995 to 18 June 1996.
Notice of contention
The respondent filed a notice of intention which indicated that the respondent would argue that the decision should be upheld on grounds not relied upon by the arbitrator. Relevantly for present purposes, those grounds were:
2.That the Appellant's claim for compensation could not succeed because it constituted an abuse of process of the WorkCover Arbitration Service because it was an attempt to relitigate issues which were the subject of a previous agreement and the Local Court Judgement [sic] given in respect of that agreement.
3.That it was unconscionable for the Appellant to bring or maintain the claim for compensation by reason of the previous conduct of the Appellant and the representations of the Appellant and his legal counsel.
Primary judge dismisses the grounds of appeal
The primary judge heard the appeal to the District Court on 27 February 2015, and delivered his ex tempore reasons at the conclusion of that hearing. Written reasons were edited from the transcript. For reasons which are not presently controversial, the primary judge dismissed both of the appellant's grounds of appeal to the District Court.[34] It followed from the failure of those grounds that the appellant's appeal to the District Court failed.
[34] Primary decision [42] - [68].
Primary judge upholds the notice of contention
Although it was not necessary for his Honour to do so in light of his resolution of the grounds of appeal, the primary judge went on to consider and uphold ground 2 of the respondent's notice of contention.
After referring to the parties' submissions and the decision of this court in Sheraz Pty Ltd v Vegas Enterprises Pty Ltd,[35] the primary judge noted the appellant's election to pursue his claim for compensation to judgment in the Magistrates Court and his attempts to enforce that judgment.[36] The primary judge referred to the District Court action and the mediation conference held in relation to that action. His Honour noted that, at the mediation conference, 'that matter was settled as were all matters between Mrs Walker and the appellant and mutual releases given'.[37]
[35] Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93.
[36] Primary decision [77].
[37] Primary decision [78] - [79].
The primary judge then reached the following conclusions in relation to the mediation agreement:[38]
[38] Primary decision [80] - [81].
I am satisfied that on the proper construction of that agreement between the appellant and Mrs Walker it was the common intention of the parties that the benefit of the settlement agreement concluded would inure to the respondent if so required.
In my view 'it went without saying' that the release granted by Mrs Walker in respect of the adverse costs orders against the appellant in two unsuccessful appeals - and her costs to date in the District Court proceedings in which the appellant seemingly enjoyed little prospect of success - brought to an end all of the proceedings arising out of or in connection with the appellant's employment with the respondent in July - August 1995.
The primary judge referred to statutory declarations before the arbitrator concerning discussions at the mediation conference, to which the appellant objected on the basis that they disclosed 'without prejudice' communications.[39] The primary judge concluded:[40]
[39] Primary decision [82] - [85].
[40] Primary decision [86].
In my opinion, the learned arbitrator was wrong to confine the use of those communications and that material and to construe the outcome of the agreement reached as only relating to the proceedings between the appellant and Mrs Walker.
The primary judge held that evidence of communications at the mediation conference was relevant and admissible in relation to whether the appellant was acting oppressively and the conduct of proceedings was an abuse of process.[41] The primary judge held that communications evidencing abuse of process will not be protected by 'without prejudice' privilege.[42]
[41] Primary decision [87].
[42] Primary decision [88].
The primary judge referred to the appellant's continued attempts to enforce the Magistrates Court judgment, including by examining Mrs Walker on 20 March 2015. The primary judge accepted the respondent's submission that the only motive for the appellant to examine Mrs Walker, when he was 'aware that the respondent had no assets and was unable to pay the judgment debt owed', was to 'vex her'.[43]
[43] Primary decision [89] - [92].
The primary judge said:[44]
[44] Primary decision [94] - [95].
The claims that the appellant sought to litigate in the District Court proceedings arose out of and directly related to the same issues that are sought to be litigated in these proceedings. They are the same issues that are already the subject of a separate judgment in the Magistrates Court.
In my view the conduct of the appellant in seeking to pursue the claim before the learned arbitrator was an abuse of process.
The primary judge then referred to the prospect of inconsistent outcomes if the arbitrator had proceeded to determine the liability to make weekly payments.[45] His Honour also considered the prejudice to the respondent if required to 'proceed to a trial'. He referred to the death of Mr Walker, the unknown whereabouts of doctors and the prejudice to the respondent in having to re-litigate the matter.[46]
[45] Primary decision [96].
[46] Primary decision [97] - [98].
The primary judge then said:[47]
[47] Primary decision [99] - [101].
By the proceedings issued before the learned arbitrator the appellant sought to enliven proceedings that would effectively impact directly upon Mrs Walker and require her to pay a judgment sum that was not otherwise her responsibility and, in any event, would have been the subject of a legitimate compromise in respect of all matters in issue between her and the appellant.
In substance, ignoring the camouflage, the appellant is seeking to do in a different forum the same that he has sought to do through the process of harassment of the directors of the respondent over many years.
The appellant is seeking to pursue matters arising out of a brief period of employment over 19 years ago. The matters having been duly resolved and settled 'once and for all' in 2011 any fresh proceeding by the appellant in respect of the same matter gives rise to an oppressiveness and unfairness that threatens the integrity of the administration of justice if it is permitted to continue. It flies in the face of an express agreement that resolved all matters in issue between the parties. (emphasis added)
The emphasised parts of the passages quoted above indicate that the primary judge's conclusion as to abuse of process was based on his construction of the 2011 settlement agreement between the appellant and Mrs Walker as applying to proceedings between the appellant and the respondent.
The primary judge considered the following passage of the decision of Lord Halsbury LC, in Reichel v McGrath,[48] to be applicable:[49]
[48] Reichel v McGrath (1889) 14 App Cas 665, 668.
[49] Primary decision [93], [102].
it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again ...
I believe there must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure…
The primary judge concluded:[50]
[50] Primary decision [103] - [104].
Further, to allow the appellant to recant from the settlement of all matters - in the face of an express statement that the matters between them were at an end - would be to sanction unconscionable dishonest behaviour in the face of the court.
In my opinion the learned arbitrator should have upheld the respondent's [contention] that the proceedings were an abuse of process. Further, that the appellant continues to separately pursue enforcement of the Magistrate[s] Court judgment against the respondent simply highlights the appellant has and continues to engage in conduct that amounts to an abuse that it is unjustifiably oppressive, unfair, unreasonably burdensome and unconscionable.
Orders made by the District Court
After the primary judge delivered his ex tempore reasons, the hearing of the appeal was adjourned to 13 March 2015 to allow the parties to make written submissions as to costs. On 13 March 2015, the primary judge acceded to the respondent's application for indemnity costs of the appeal, on the basis that he had found the proceedings to be an abuse of process.[51]
[51] Primary ts 84 - 85.
The following orders were made on 13 March 2015:
1.There be leave to appeal;
2.The appeal be dismissed;
3.Ground 2 of the Respondents' Notice of Contention be upheld;
4.The decision of the arbitrator be varied such that in addition to the reasons for dismissing the appellant's application, the appellant's application be dismissed on the grounds that it constituted an abuse of process;
5.The appellant pay all of the costs incurred by the respondent in respect of the appeal, excepting so far as they are an unreasonable amount or have been unreasonably incurred, so that subject to the above exceptions the respondent is completely indemnified by the appellant for its costs;
6.The [matter] be referred back to the arbitrator for determination of the question of costs in relation to the arbitration proceedings in accordance with the reasons of the Court.
The appeal to this court
On 7 April 2015, the appellant filed an appeal notice in this court against the orders made by the District Court on 13 March 2015. However, by re-amended appeal notice filed on 11 November 2015, the appeal has been confined to an appeal against orders 3 - 6 above.
The appellant no longer challenges orders 1 and 2 made by the District Court. That is, the appellant accepts that his application to the arbitrator and appeal to the District Court were appropriately dismissed for the reasons given by the arbitrator. The practical purpose of the appeal to this court would seem to be to impugn the decision to award the respondent indemnity costs of the appeal to the District Court. That, and avoiding the prospect of an award of costs by the arbitrator, would be the only direct impact of an order allowing the appeal on the rights and liabilities of the appellant.
The appellant appeals against orders 3 - 6 on two grounds.
Ground of appeal 1 contends that the primary judge erred in upholding ground 2 of the respondent's notice of contention 'by taking into account irrelevant matters and failing to take into account relevant matters'.
Ground of appeal 2 contends that the primary judge erred in law in ordering the appellant to pay the costs of the appeal to the District Court on an indemnity basis.
Although the appeal notice was filed within time, due to an administrative oversight by the appellant's solicitors it was not served on the respondent until 26 May 2015.[52] As an appeal is not commenced until the appeal notice is served,[53] the appellant requires an extension of time in which to appeal. As noted above, the appellant also requires leave to appeal under s 254(b) of the Act.
[52] Affidavit of Michael Joseph Lourey affirmed on 2 July 2015.
[53] Rule 27 of the Supreme Court (Court of Appeal) Rules 2005 (WA).
The appellant was initially represented by solicitors in the appeal, who assisted the appellant to prepare his grounds of appeal and submissions in support of those grounds. The solicitors ceased to act for the appellant in January 2017. The court sent notice of the hearing of the appeal by post to the last address notified by the appellant (in court documents filed in May 2017) and by email to an address used by the appellant to communicate with the court (in April 2017). The appellant did not attend the hearing, or provide the court with any indication as to why he could not attend. In these circumstances, particularly in light of past delays in having the appeal ready for hearing, which were generally attributable to the appellant, it is in the interests of justice to determine the appeal on the appellant's written grounds and submissions.
Abuse of process - general principles
In The State of Western Australia v Cunningham [No 2],[54] Murphy and Mitchell JJA observed:
[54] The State of Western Australia v Cunningham [No 2] [2017] WASCA 197 [49] - [50].
As this court noted in Sheraz Pty Ltd v Vegas Enterprises Pty Ltd,[55] what constitutes an abuse of process is incapable of being described exhaustively, but the High Court has stated that at least one of three characteristics will be apparent in many cases of abuse of process, namely:
[55] Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [5] - [6], [118] - [119].
1.a court's processes being invoked for an illegitimate or collateral purpose;
2.the use of a court's procedures being unjustifiably oppressive to a party; or
3.the use of a court's procedures bringing the administration of justice into disrepute.
The following propositions concerning the nature of abuse of process may also be identified from the reasons in Sheraz:[56]
[56] Sheraz [8] - [20], [118] - [134], [151].
1.Inherent or implied power exists to prevent misuse of the court's procedures in a manner which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation or would bring the administration of justice into disrepute among right-thinking people.
2.Abuse of process extends to proceedings that are seriously and unfairly burdensome, prejudicial or damaging or productive of serious and unjustified trouble and harassment.
3.Categories of abuse of process are not closed and the court may exercise its power as and when the administration of justice demands.
4.An abuse of process may arise where there are successive proceedings which are vexatious or unjustifiably oppressive, or which threaten the integrity of the administration of justice.
5.It would be a scandal to the administration of justice if a litigant were to be permitted, by changing the form of the proceedings, to set up the same case again, in circumstances where the same question had previously been disposed of.
6.A court may invoke principles of an abuse of process to prevent attempts to litigate an issue which could and should have been litigated in earlier proceedings, as well as to prevent attempts to re-litigate an issue which has, in substance, been litigated and determined in earlier proceedings.
7.The focus in applying the principles of abuse of process should be on matters of substance and not form.
Appellant's submissions on ground 1 (abuse of process)
The appellant's first ground of appeal to this court contends that the primary judge took into account irrelevant matters and failed to take into account relevant matters. However, the submissions advanced in support of the ground of appeal go beyond the scope of that ground.
Irrelevant matters
The appellant identifies the following irrelevant matters which it is alleged the primary judge took into account, which are listed in [72] of the primary decision:[57]
[57] Appellant's Submissions, par 28.
•electing to pursue the claim in compensation to judgment of the Magistrates Court;
•thereafter pursuing enforcement of the judgment through the various processes against the directors of the respondent, including pursuing two unsuccessful appeals, to the District Court and the Supreme Court;
•at the mediation on 13 July 2011 of the District Court action, entering into a settlement with Mrs Walker, which included the giving of mutual releases from each party and resulting in Mrs Walker releasing the appellant from adverse cost orders, obtained against him in the two unsuccessful appeals initiated on the earliest occasion;
•representing through his counsel at that mediation that:
•no further claims arising out of or in connection with the workers' compensation claim by the appellant would ever be brought against her again in the future; and
•the matter was for once and for at an end and brought to an end all matters the subject of the history of litigation between the parties.
•inducing Mrs Walker to believe that all claims against her for personal liability, in respect of the workers' compensation claim had been released and discharged;
•not disclosing at the time of entering into that settlement agreement, an intention to have the respondent, a de-registered company, reinstated in order to make a fresh claim for compensation under the Act;
•Commencing the 2013 proceedings and thereby exposing Mrs Walker to personal liability under s 174AA of the Act, insofar as the respondent has no means to pay the amount that might be ordered under s 58;
•Contemporaneous with the application to WorkCover continuing to seek enforcement of the Magistrates Court's judgment in respect of the same sum claimed. On 16 February 2015 the appellant's solicitors served on the respondents solicitors a notice, calling upon the director of the respondent, namely Mrs Walker, to attend the Magistrates Court in Hay Street, Perth on 20 March 2015 at 9.30 for a means inquiry, in an effort to see what steps could be taken to satisfy the judgment that was obtained some 13 years ago.
It is clear that the primary judge did take these matters into account in determining whether the application to the arbitrator constituted an abuse of process. The contentious issue raised by this aspect of the ground concerns whether the matters were irrelevant to the question of whether the application constituted an abuse of process.
It appears that the appellant's contentions about irrelevancy are largely, if not wholly, based on the terms of ground 2 of the respondent's notice of contention,[58] which referred only to the re-litigation of 'issues which were the subject of a previous agreement and the Local Court Judgement [sic] given in respect of that agreement'. The agreement referred to here is evidently the conciliation agreement, as that was the agreement to which the Magistrates Court judgment gave effect. Ground 2 of the respondent's notice of contention does not refer to the attempts to enforce the Magistrates Court judgment or the proceedings against Mr and Mrs Walker in the District Court.
[58] Particulars to the ground of appeal; Appellant's Submissions, pars 40 - 43.
Relevant matters not considered
The appellant submits that the only relevant matters which the primary judge was required to take into account were the conciliation agreement and the Magistrates Court judgment, and that the primary judge took neither matter into account.[59]
[59] Appellant's Submissions, par 43.
Facts not established by the evidence
The appellant also submits that there was no 'reliable evidence' before the primary judge 'to reach' conclusions about the matters said to be irrelevant matters.[60]
[60] Appellant's Submissions, par 29.
The appellant's submissions challenge the primary judge's conclusion that the agreement reached between Mrs Walker and the appellant operated to the benefit of the respondent.[61]
[61] Appellant's Submissions, pars 30, 39, 45.
The appellant also submits (in effect) that there was 'no legal basis' for the primary judge to conclude that, if the appellant's application to the arbitrator was successful and WorkCover WA paid the award, WorkCover WA would proceed against Mrs Walker as director of the respondent.[62] He says[63] that there is 'no basis' for the primary judge's conclusion that the application to the arbitrator was designed to 'enliven proceedings that would effectively impact directly upon Mrs Walker'[64] or that he was in some way covering the proceedings with 'camouflage'.[65]
[62] Appellant's Submissions, par 31.
[63] Appellant's Submissions, par 49.
[64] Primary decision [99].
[65] Primary decision [100].
The appellant submits that there was 'no basis' for the primary judge to conclude that his 'only motive' was to vex Mrs Walker.[66]
[66] Appellant's Submissions, par 33, made by reference to primary decision [92].
The appellant submits that the primary judge's conclusion that the appellant recanted 'from the settlement of all matters - in the face of an express statement that the matters between them were at an end'[67] was 'factually incorrect', and that there was 'no evidence' to support the conclusion.[68]
[67] Primary decision [103].
[68] Appellant's Submissions, par 34.
Admissibility of evidence and procedural fairness
The appellant submits that the primary judge was 'wrong in his ruling' that statutory declarations before the arbitrator as to statements made in the District Court mediation conference were admissible. The submissions do not explain why the appellant says the ruling was wrong. Further, the appellant says (in effect) that it was not open to the primary judge to reach conclusions based on that material without giving him an opportunity to respond.[69] It appears from the arbitrator's decision that the appellant had indicated that he did not want to adduce evidence in response or cross-examine the witnesses.[70]
[69] Appellant's submissions, par 38.
[70] Arbitrator's decision [88].
Respondent's submission on ground 1
The respondent submits that the appellant has misconstrued the primary judge's reasons, in that the abuse of process conclusion was based on both grounds 2 and 3 of the respondent's notice of contention. Ground 3 contended that the application to the arbitrator should have been dismissed on the basis that it was unconscionable to maintain the claim in light of the previous conduct. The respondent's written submissions in support of that ground relied on the matters now said to be irrelevant.[71]
[71] Respondent's Submissions, pars 29 - 32.
The respondent submits that the primary judge was 'properly entitled to have regard to matters of substance and not form',[72] and that the claims in the Magistrates Court and before the arbitrator were in substance the same.[73] The respondent submits that the primary judge was entitled to consider the 'broader picture' of how the appellant had conducted the proceedings against the respondent and its directors over a period of 19 years in assessing whether there was an abuse of process.[74]
[72] Respondent's Submissions, par 33.
[73] Respondent's Submissions, pars 34 - 37
[74] Respondent's Submissions, par 42.
Parties' submissions on ground 2
The appellant submits,[75] and the respondent accepts,[76] that if ground 1 succeeds and the finding of abuse of process is set aside, then there was no basis for making an indemnity costs order.
[75] Appellant's Submissions, par 51.
[76] Respondent's Submissions, par 57.
The appellant also submits,[77] and the respondent denies,[78] that even if the abuse of process finding stands, there was 'no basis' for an indemnity costs order as all matters dealt with in the appeal were arguable. In support of that contention, the appellant points to the arbitrator's finding that his application was not an abuse of process.[79]
[77] Appellant's Submissions, par 52.
[78] Respondent's Submissions, pars 59 - 60.
[79] Appellant's Submissions, pars 52 - 53.
Disposition of appeal
It is not in the interests of justice to grant the appellant leave to appeal in this case. That is so for the following three reasons, considered in combination.
Grounds of appeal do not have merit
First, there is no merit in the appellant's grounds of appeal, as formulated.
So far as ground 1 contends that the various specified steps taken by the appellant to enforce the respondent's liability were irrelevant, it fails to recognise that the question of an abuse of process is to be considered as a matter of substance. In deciding whether the proceedings before the arbitrator were an abuse of process, the primary judge was entitled to have regard to the broader context in which the various steps taken by the appellant occurred. When the terms of the respondent's notice of contention and submissions before the District Court are considered as a whole, they raised the broader context for the primary judge's consideration. Whether or not the matters said to be irrelevant established the proceedings before the arbitrator to have been an abuse of process, those matters were not irrelevant to the primary judge's consideration of the question.
So far as ground 1 contends that the primary judge failed to have regard to relevant matters, it is clear from the primary judge's reasons that the specified matters were taken into account. The primary judge refers to the conciliation agreement and Magistrates Court judgment at a number of points in his reasons.[80]
[80] For example, primary decision [9] - [15], [77], [88] - [89].
The appellant's submissions point to a number of other alleged errors in the primary judge's reasons, some of which might be arguable. However, those matters stand outside the scope of the grounds of appeal. This court is confined to dealing with the grounds of appeal. As McHugh and Hayne JJ noted in Gipp v The Queen:[81]
[81] Gipp v The Queen [1998] HCA 21; (1998) 194 CLR 106 [58].
The jurisdiction of a court of appeal ordinarily depends on the grounds of appeal that can be legally raised in support of the appeal. Under the common law system of justice, jurisdiction is the authority to decide issues between parties. In the case of an appellate court, that authority is governed by the issues raised in the notice of appeal and any notice of contention relied on to support the judgment against which the appeal is brought. In the absence of a special statutory regime, a notice of appeal that does not specify a ground of appeal is invalid and the appellate court in which it is 'filed' has no authority to determine any issue affecting the parties. (citations omitted)
Although their Honours were dissenting on the question of whether the High Court could allow an appeal on a point not taken below, this observation has been applied by this court on many occasions.[82] The appellant has not sought to invoke the power of this court to amend his grounds of appeal to capture arguments raised in the submissions.
[82] See, for example, Avsar v Binning [2009] WASCA 219 [37]; Simonsen v Legge [2010] WASCA 238 [9]; A v C [No 2] [2015] WASCA 199 [17] (Albeit misattributing the observation to Kirby J).
Ground 2, so far as it stands independently of ground 1, has no prospect of success. The breadth of the court's discretion to award costs, and the limited circumstances in which appellate intervention is warranted, are well established. As the court noted in Frigger v Lean:[83]
[83] Frigger v Lean [2012] WASCA 66 [53]
The discretion regarding costs has been described as absolute, unconfined or unfettered, although a discretion that must be exercised judicially, not arbitrarily or capriciously, or on grounds unconnected with the litigation. The principles to be applied in an appeal from a decision awarding costs were recently summarised in Keet v Ward [2011] WASCA 139:
'The costs of and incidental to all proceedings in the Supreme Court are in the discretion of the court or judge: s 37(1) Supreme Court Act 1935 (WA). The discretion conferred by s 37 of the Supreme Court Act is not an unfettered discretion. It is a discretion which must be exercised judicially. The legal principles which govern the review of discretionary decisions by an appellate court are well established. In the absence of express error, an appellate court is not entitled to substitute its own decision for that which is the subject of the appeal merely because it prefers a different result or even merely because it thinks that a different result would be more just and equitable. Before it intervenes, it must be satisfied that the decision is clearly wrong. In the absence of an identifiable error of fact or law (and none has been identified in this case) the appellate court must be persuaded that the order stands outside the limits of a sound discretionary judgment before it intervenes. In short, the appellate court may only intervene in a case where no express error is revealed if upon the facts the decision is "unreasonable or plainly unjust".'
(some citations omitted)
In Flotilla Nominees Pty Ltd v Western Australian Land Authority,[84] Pullin J observed that:
[84] Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [8] - [9].
The usual costs order is one for party and party costs. An order for indemnity costs will only be made if there is some special or unusual feature in the case to justify a departure from the ordinary practice. In effect, the court has jurisdiction to make an indemnity costs order whenever justice requires such an order. When the justice of the case does require such an order, then the court will have a discretion as to whether the order should be made.
Many examples can be found where an indemnity costs order has been made. Suffice it to say that most of these involve some element of improper, or at least unreasonable, conduct on the part of the parties or their legal advisors in relation to the case. (citations omitted)
Those observations have been adopted by this court.[85]
[85] See, for example, Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10] and Frigger v Professional Services of Australia Pty Ltd (No 2) [2016] WASCA 68 [81].
An order for indemnity costs may be appropriate in circumstances where proceedings have been found to constitute an abuse of process, particularly where the proceedings otherwise have no arguable merit.[86]
[86] See, for example, Frigger v Kitay (No 2) [2017] WASCA 139 [120] and Glew v City of Greater Geraldton [2012] WASCA 94 [11].
Having found that the proceedings before the arbitrator, and by extension the appeal to the District Court, constituted an abuse of process, it was open to the primary judge to decide that an award of indemnity costs was an appropriate exercise of his judicial discretion. That is particularly so where the primary judge found the appellant's grounds of appeal to be without merit in any event. As noted above, the correctness of the primary judge's conclusion as to the substantive merits of the appeal to the District Court are not challenged in the appeal to this court.
For the above reasons, the appellant's grounds of appeal cannot succeed.
It may also be noted, in passing, that the grounds and submissions do not clearly identify the question of law to which this appeal relates for the purposes of s 254(a) of the Act. However, in light of the above conclusions as to the merit of the grounds, it is unnecessary to dwell on this point.
No substantial injustice has been demonstrated
Secondly, the appellant has not established that any substantial injustice would result from leaving the challenged orders made by the primary judge unreversed. Even if the appeal to this court were to succeed, the appropriate order would still be that the appellant pay the respondent's costs of the appeal to the District Court. Such an order would reflect the primary judge's unchallenged conclusion that the appellant's grounds of appeal in the District Court were without merit, so that the appeal to that court was properly dismissed. The substantive issue at stake in these proceedings concerns whether the appellant should pay the respondent's costs of the appeal to the District Court on an indemnity or an ordinary basis, and be exposed to the possibility of an order of costs of the proceedings before the arbitrator. There is no evidence before this court as to the actual or likely difference, if any, between the costs of the proceedings assessed on an indemnity and ordinary basis in this particular case. Nor were we invited to infer, from all the circumstances of the case, that there would be a substantial difference between the two.
Costs of this appeal are disproportionate to the issues at stake
Thirdly, even if we were to assume the existence of some substantial difference in the costs of the proceedings below assessed on an indemnity and ordinary basis, the costs of the appeal to this court, and the burden placed on the limited judicial resources of the State, would appear to be disproportionate to the matters at stake. The costs of an appeal to this court are likely to exceed the difference between indemnity and ordinary costs by a substantial measure.
In this context, the observations of Martin CJ in Cardno BSD Pty Ltd v Water Corporation (No 2),[87] made in a context where leave to appeal against a costs order was not required, are relevant:
[87] Cardno BSD Pty Ltd v Water Corporation (No 2) [2011] WASCA 161 [10], Newnes JA agreeing at [12].
Parties incurring costs and deploying the limited resources of the court to hear argument about reopening orders that have been made with respect to the allocation of costs previously incurred is a classic example of the law of diminishing returns. It is a process which should be actively discouraged. In the case of appeals from the Supreme Court, the requirement for the grant of leave provides a mechanism by which the court can actively discourage the dissipation of further costs in what will very often prove to be a futile attempt to challenge a discretionary judgment relating to costs.
It may also be noted that this court has recognised the undesirability of the parties' and the court's resources being diverted by protracted arguments about costs following the disposition of an appeal. In relation to 'satellite' litigation about costs orders following the determination of an appeal, the court has observed:[88]
[88] Kidd v The State of Western Australia [2015] WASCA 62 (S) [2].
Such litigation has a very real capacity to consume resources of the parties and the limited resources of the court to an extent which is entirely disproportionate to the significance of the issues involved. Protracted disputes with respect to costs should be discouraged …
Similar policy issues inform the exercise of this court's discretion to grant leave to appeal where the only matter at stake is an issue about the costs of proceedings below. Consideration of an application for leave 'must start from the premise that, as a matter of policy, appeals as to costs only are to be discouraged'.[89]
[89] Garner v Rohanna Pty Ltd [1999] WASCA 178 [15] per Malcolm CJ, who would have refused leave to appeal in that case. Ipp and Parker JJ would have granted leave on the basis that the case raised a question of sufficient general importance: [23],[31], [45].
There will, of course, be cases where it is appropriate to grant leave to appeal where the only issue at stake is the costs of the proceedings below. However, the issues of public policy referred to above are a factor counting in favour of refusing leave to appeal, particularly where the amount at stake is disproportionate to the costs of an appeal and there is little prospect of a discretionary decision at first instance being disturbed.
Conclusion as to leave to appeal
In the present case, the only matter at stake in the appeal is a question of whether the costs of the appeal to the District Court should be assessed on an indemnity or ordinary basis, and whether the appellant should be exposed to the possibility of an adverse costs order in relation to the arbitration proceedings. It is clear that the application to the arbitrator and the appeal to the District Court were correctly dismissed. The grounds of appeal to this court lack merit. The appellant has not demonstrated that the difference between indemnity and ordinary costs in this case would produce any substantial injustice if leave is refused. Any such difference would be disproportionate to the burden which the appeal to this court imposes on the parties and the community. In all these circumstances it is not in the interests of justice to grant leave to appeal against the orders made by the primary judge.
Orders
For the above reasons, this court should exercise its discretion to refuse to grant the appellant leave to appeal against the orders of the primary judge which remain under challenge in this appeal. As any grant of an extension of time to appeal would be futile in these circumstances, the application for that extension should also be refused.
The appropriate orders are:
1.The application for an extension of time in which to appeal is refused.
2.Leave to appeal is refused.
3.The appeal is dismissed.
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