Keogh v CPB Contractors Pty Ltd (No 3)

[2024] NSWDDT 10

Dust Diseases Tribunal

New South Wales

Medium Neutral Citation:

Keogh v CPB Contractors Pty Ltd & Ors (No 3) [2024] NSWDDT 10

Hearing dates:

30 September 2024

Date of orders:

9 October 2024

Decision date:

09 October 2024

Before:

Russell SC DCJ

Decision:

(1)   Dismiss the application made by the second defendant, and the first and third defendants in respect of their liability to the plaintiff as an employer in Queensland (the Applicants), for a variation of the existing costs orders.

(2)   Order the Applicants for the variation to pay the plaintiff’s costs of and incidental to the application.

Catchwords:

DUST DISEASES – damages – defendant entitled to reduction of damages to reflect workers compensation benefits paid – issue not raised at trial – damages reduced to reflect totality of payment –amendment unnecessary because of parties’ sensible solution

COSTS – choice of law – whether costs are procedural or substantive law – power to make costs orders circumscribed by Queensland legislation – costs are a tool for courts to manage proceedings – costs are procedural – Queensland legislation fettering discretion over costs ineffective to bind courts in NSW – law of forum applies for costs

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 98, 99

Interpretation Act 1987 (NSW), ss 12, 65

Statute of Gloucester (1278) 6 Edw I c 1

Workers Compensation and Rehabilitation Act 2003 (Qld), ss 39A, 185, 235, 270, 271, 275, 289, 292, 295, 306A, 306H, 316, Ch 5 Pt 5, Ch 5 Pt 6, Ch 5 Pt 8, Ch 5 Pt 12 Div 2

Dust Diseases Tribunal Regulation 2019 (NSW), Pt 5

Cases Cited:

Chubs Constructions Pty Ltd v Chamma [2009] NSWCA 98

Cvilikas v Sunshine Coast Hospital and Health Service [2023] QSC 36

Hamilton v Merck & Co Inc [2006] NSWCA 55; (2006) 66 NSWLR 48

Hudson v Amaca Pty Ltd [2022] NSWDDT 6

John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503

Keogh v CPB Contractors Pty Ltd & Ors (No 2) [2024] NSWDDT 9

Labuda v Langford [2001] ACTSC 126

Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164

Peregrine Fixed Income Ltd v JP Morgan Chase Bank [2005] HKCFI 71

Preferential Trade Area Bank v ESCOM [2003] MWHC 74

Somers v Fournier (2002) 60 OR (3d) 225 (Ont CA)

Tickner v Teys Australia Biloela Pty Ltd [2020] QSC 62

Union Discount Co Ltdv Zoller (2002) 1 All ER 693 (CA)

Wimpey Construction (UK) Ltd v Martin Black & Co (Wire Ropes) Ltd [1988] SLT 637

Texts Cited:

William Reynolds, “Legal Process and Choice of Law” (1997) 56 Maryland Law Review 1371

GE Dal Pont, Law of Costs (2003, 1st ed, LexisNexis)

Richard Garnett, Substance and Procedure in Private International Law (2012, 1st ed, Oxford University Press)

Sagi Peari, “Substance and Procedure in Private International Law by Richard Garnett” (2013) 14(1) Melbourne Journal of International Law 304

Richard Oppong, “A decade of Private International Law in African Courts 1997-2007 (Part I)”, (2007) 9 Yearbook of Private International Law 223

Category:

Costs

Parties:

Craig Andrew Keogh (Plaintiff)
CPB Contractors Pty Ltd (First Defendant)
Campbell Mining Services Pty Ltd (Second Defendant)
Downer EDI Mining Pty Ltd (Third Defendant)
Downer Mining Regional (NSW) Pty Ltd (Fifth Defendant)

Representation:

Counsel:
S Tzouganatos/V Boutas (Plaintiff)
A Schonell (First Defendant re Poitrel Mine)
A Truce (Solicitor) (First Defendant re Moorvale Mine)
A Schonell (Second Defendant re Moorvale Mine)
A Schonell (Third Defendant re Blackwater Mine)
J Sheller SC (Third Defendant re Boggabri Mine)
T Rowles (Fifth Defendant re Boggabri Mine)

Solicitors:
Shine Lawyers (Plaintiff)
BT Lawyers (First Defendant re Poitrel Mine)
Mills Oakley (First Defendant re Moorvale Mine)
BT Lawyers (Second Defendant re Moorvale Mine)
BT Lawyers (Third Defendant re Blackwater Mine)
Wotton & Kearney (Third Defendant re Boggabri Mine)
Sparke Helmore (Fifth Defendant re Boggabri Mine)

File Number(s):

DDT 2021/45484

Judgment

1. In these proceedings I delivered judgment in favour of the plaintiff against the defendants on 25 July 2024 (the primary judgment): Keogh v CPB Contractors Pty Ltd & Ors (No 2) [2024] NSWDDT 9.

2. In this judgment I will refer to the following parties as the “WorkCover Defendants”:

1. The first defendant re the Poitrel Mine.

2. The second defendant re the Moorvale Mine.

3. The third defendant re the Blackwater Mine.

3. The plaintiff and the WorkCover Defendants have returned to the Tribunal to litigate the following post-judgment issues:

1. Whether the damages ordered against the WorkCover Defendants should be reduced by reason of workers compensation payments made by WorkCover Queensland to the plaintiff.

2. Whether the costs ordered in favour of the plaintiff against the WorkCover Defendants should be varied because of s 316 of the Workers Compensation and Rehabilitation Act 2003 (Qld) (the WCRA), by limiting costs payable by the WorkCover Defendants to ordinary costs from 10 December 2021.

4. On these issues, Mr Tzougantos and Ms Boutas appeared for Mr Keogh and Mr Schonell appeared for the WorkCover Defendants.

Issue 1: Should the Damages be Reduced by Reason of Queensland Workers Compensation Payments?

5. The parties agreed that the answer to this question is “yes”.

6. Section 270 of the WCRA provides as follows:

“270 When damages are to be reduced

(1)   The amount of damages that an employer is legally liable to pay to a claimant for an injury must be reduced by the total amount paid or payable by an insurer by way of compensation for the injury.

(2)   However, subsection (1) applies to compensation paid or payable under chapter 4A only if the damages include treatment, care and support damages.

(3)   Also, the amount of damages must not be reduced by an amount paid under section 193.

(4)   This section does not limit the reduction of the amount of the damages by any other amount that the insurer or the claimant is legally liable to pay on account of the worker under another law.”

7. Section 271 of the WCRA provides as follows:

“271   Assessment by court of total liability for damages

(1)   This section applies if—

(a)   damages are awarded for an injury; or

(b)   damages are to be paid in settlement of a claim for an injury.

(2) To establish the reduction under section 270(1) in damages for compensation paid, the claimant or insurer may apply to—

(a)   the court in which the proceeding is brought; or

(b)   if a proceeding has not been started—the Industrial Magistrates Court.

(3)   The court’s decision is binding on the insurer and all persons entitled to payment by the insurer for the injury.”

8. The parties agreed that s 270 is expressed in mandatory terms and that the damages that an employer is legally liable to pay must be reduced by the total amount of compensation paid or payable for the injury. The evidence established that workers compensation benefits in the aggregate sum of $268,682.89 were paid by WorkCover Queensland (as the insurer of the WorkCover Defendants) to Mr Keogh. Had this issue been raised in the Defence, and had evidence been presented at the trial, then the ultimate judgments against the WorkCover Defendants would have been reduced to reflect the totality of this payment.

9. I was informed from the Bar Table that:

1. The WorkCover Defendants had paid the plaintiff all of the damages which I ordered, less the workers compensation benefits which he had received.

2. The plaintiff acknowledged that he was only entitled to this reduced amount.

10. In those circumstances the necessity to amend the judgments disappears, as the parties have sensibly worked out a solution to give effect to s 270 of the WCRA. I recite this matter in this judgment, to record that the WorkCover Defendants are entitled to a reduction in the damages payable because of workers compensation benefits paid to the plaintiff.

11. I express the view that in any future case similar to that of Mr Keogh, it would be the better course for this issue to be raised at the trial, rather than after the event. Mr Schonell cited two decisions of the Supreme Court of Queensland, being Cvilikas v Sunshine Coast Hospital and Health Service [2023] QSC 36 and Tickner v Teys Australia Biloela Pty Ltd [2020] QSC 62. I note that in both cases, the trial judge who assessed damages was also asked, as part of the primary judgment, to reduce the assessed damages by reason of an agreed amount of workers compensation benefits which had been received. I do accept the submission of Mr Schonell that s 271 of the WCRA entitles a defendant to come to court after damages have been assessed to obtain a reduction.

12. In my view there is no need to amend the assessed damages, because of the sensible agreement reached between the parties and the agreed amount which has already been paid, to reflect the damages assessed minus the workers compensation benefits received.

Issue 2: Should the Costs Orders Against the WorkCover Defendants be Varied?

13. In the primary judgment, Order 9 was as follows:

“Order the first, second, third and fifth defendants to pay the costs of the plaintiff.”

14. The WorkCover Defendants sought a variation of that order, so that the costs order against the WorkCover Defendants in respect of the plaintiff’s costs be expressed as follows (MFI 34, par 2):

“The second defendant, and the first and third defendants in respect of their liability to the plaintiff as an employer in Queensland, pay the plaintiff’s costs on the ordinary basis from 10 December 2021.”

15. The factual background to that application is to be found, in part, in the affidavit of Mr Thomas sworn on 12 August 2024 (DX 14). Mr Thomas is the solicitor for the WorkCover Defendants. The chronology of events is as follows:

1. On 23 October 2018 the plaintiff lodged an application for workers compensation with WorkCover Queensland.

2. On 19 June 2019 WorkCover Queensland accepted the plaintiff’s workers compensation claim and commenced making workers compensation payments (which were back paid from 28 October 2018 and then paid up to 10 May 2020). The total of the workers compensation benefits paid to the plaintiff by WorkCover Queensland was $268,682.89.

3. On 15 July 2020 WorkCover Queensland issued a Notice of Assessment to the plaintiff in respect of his injury, pursuant to s 185 of the WCRA. Inter alia, such a notice must state whether the worker has sustained permanent impairment from the injury, and if so, the degree of permanent impairment assessed by WorkCover Queensland. The Notice of Assessment stated that the plaintiff had a 19% permanent impairment.

4. On 16 February 2021 the Statement of Claim commencing these proceedings in the Dust Diseases Tribunal was filed.

5. On 19 May 2021 the plaintiff served a Notice of Claim for damages pursuant to s 275 of the WCRA upon WorkCover Queensland as the insurer of the WorkCover Defendants.

6. Section 275(1) of the WCRA provides that “before starting a proceeding in a court for damages, a claimant must give notice under this section within the period mentioned in s 302(1)” (emphasis added). The balance of s 275 of the WCRA prescribes the matters which must be contained in the Notice of Claim.

7. On 10 December 2021 the plaintiff, WorkCover Queensland and the Queensland employers participated in a conference. In his affidavit (DX 14, par 7) Mr Thomas characterised this as “a compulsory conference pursuant to s 289 of the WCRA”. I deal below with whether that assertion is correct.

8. At the conclusion of that conference, WorkCover Queensland and the plaintiff served written offers upon each other. Mr Thomas characterised these offers in his affidavit (DX 14, par 7) as “mandatory final offers pursuant to s 292 of the WCRA”. I deal below with the question of whether that assertion is correct.

9. Section 292(2) provides that if a claim is not settled at a compulsory conference, each party must ensure that it makes a written final offer which would dispose of the claim if it were accepted. Again, any such written final offer must necessarily be given before starting a proceeding in a court for damages.

10. Such written final offers have to be filed with the court in sealed envelopes – s 292(10) and s 292(11). This did not happen.

11. The judgments ordered against the WorkCover Defendants exceeded the offer made by the plaintiff on 10 December 2021.

The Conference held on 10 December 2021

16. Prior to the conference between the parties which took place on 10 December 2021, there was a considerable amount of correspondence as to whether the plaintiff was obliged to attend any conference, and as to whether any conference was a compulsory conference pursuant to s 289 of the WCRA. The ultimate position of the solicitors for the plaintiff was expressed in an email dated 26 March 2021 (PX 20, p 2). That email said:

“We do not agree that there is any necessity for the plaintiff to comply with the pre-court procedural provisions of the WCRA, for the reasons we have already set forth. However, to avoid the costs and delay of a hearing on this issue, I am instructed to agree to an amended version of Bruce Thomas’ proposed orders, as set out below.”

17. The email proposed, inter alia, that the parties attend a mediation, and that “such mediation is to be considered a compulsory conference with respect to the plaintiff’s claim against the first defendant, the second defendant and the third defendant in their capacity as the plaintiff’s employers in the State of Queensland pursuant to s 289 of the WCRA”.

18. While the parties agreed to characterise the mediation as a compulsory conference under the WCRA, consideration of that legislation suggests that the mediation was not, as a matter of law, a compulsory conference under the WCRA. Section 289(1) of the WCRA provides as follows:

“Before the claimant starts a proceeding for damages, there must be a conference of the parties (the compulsory conference).”

19. Section 295 of the WCRA provides that a claimant may start proceedings in a court for damages only if the complainant has complied with the “Pre-Court Procedures” in accordance with Chapter 5 Parts 5 and 6 of the WCRA. It was common ground that the parties did not comply with many of those pre-court procedures before the Statement of Claim was filed in this Tribunal. In particular there was no compulsory conference. Further, no written final offers were made or placed in sealed envelopes prior to the commencement of court proceedings for damages.

20. The conference between the parties was held 10 months after proceedings were commenced by the plaintiff, whereas s 289(1) of the WCRA required such a conference to be held before the claimant started a proceeding for damages. Section 289(6) of the WCRA entitles a party to apply to a court to fix the time and place for the compulsory conference or dispense with the compulsory conference for good reason. No such application was made by either party. Nor was any application made by the WorkCover Defendants to stay the proceedings brought in this Tribunal or to strike them out because of non-compliance with s 289 of the WCRA.

21. I find that the conference held between the parties on 10 December 2021 was not a compulsory conference within the meaning of s 289 of the WCRA.

The Written Offers Made After the Conference on 10 December 2021

22. Section 292 of the WCRA provides that if a claim is not settled at a compulsory conference, each party must make a final written offer to every other party. I find that the offers made in writing at the conclusion of the conference held on 10 December 2021 were not final written offers within the meaning of s 292 of the WCRA, as they were offers made after a conference between the parties which was not a compulsory conference within the meaning of s 289 of the WCRA, and further because they were made after, and not before, proceedings for damages were commenced.

Statutory Basis for a Variation of Costs Order

23. Chapter 5 of the WCRA deals with “Access to Damages”. Part 12 of Ch 5 deals with “Costs”. Division 2 of Pt 12 deals with “Costs applying to worker who does not have a terminal condition and has DPI of less than 20%”. Mr Schonell submitted that Div 2 applies to Mr Keogh, who does not have a terminal condition (defined in s 39A of the WCRA as one which will lead to the worker’s death within five years of diagnosis) and who has been assessed as having a degree of permanent impairment of less than 20%.

24. Section 316 of the WCRA provides as follows:

“316   Principles about orders as to costs

(1)   No order about costs, other than an order allowed under this section, is to be made by the court in the claimant’s proceeding.

(2)   If a claimant or an insurer makes a written final offer of settlement that is refused, the court must, in the following circumstances, make the order about costs provided for—

(a)   if the court later awards an amount of damages to the worker that is equal to or more than the worker’s written final offer—an order that the insurer pay the worker’s costs on the standard basis from the day of the written final offer;

(b)   if the court later dismisses the worker’s claim, makes no award of damages or awards an amount of damages that is equal to or less than the insurer’s written final offer—an order that the worker pay the insurer’s costs on the standard basis from the day of the final offer.

(3)   If an award of damages is less than the claimant’s written final offer but more than the insurer’s written final offer, each party bears the party’s own costs.”

25. The submission made by Mr Schonell was that s 316(2)(a) of the WCRA applied because:

1. The claimant had made a written final offer of settlement to the insurer that was refused.

2. The Tribunal awarded an amount of damages to the worker that was more than the claimant’s written final offer.

3. Thus, the appropriate order was for the insurer to pay the worker’s costs on the standard basis only from the date of the written final offer.

26. As previously recited, the evidence of Mr Thomas (DX 14) showed that the judgment sum ordered by the Tribunal against the WorkCover Defendants exceeded the written offer made by the plaintiff after the conference held on 10 December 2021.

27. If such a costs order were to be made it would deny the plaintiff any costs prior to 10 December 2021, noting that by that date these proceedings had been on foot in the Tribunal since 16 February 2021 and costs had been incurred in investigating the claim and formulating it before it was filed in the Tribunal.

28. The costs provisions in s 316 of the WCRA, if they did apply, would not have such a draconian effect. This is because the compulsory conference, and the making of final written offers, are required to take place before proceedings are commenced. In the ordinary course of events, if a claimant bettered their offer at a hearing, they would still obtain all of the costs of the proceedings, as well the costs of any preliminary investigation and preparation costs incurred after the making of the written final offer, within the meaning of the WCRA.

Is s 316 of the WCRA Substantive or Procedural Law?

29. The primary submissions made by Mr Tzouganatos and Mr Schonell, revolved around whether or not s 316 was a matter of substantive law or procedural law. If s 316 is characterised as substantive law, then the power of this Tribunal to make an order against the WorkCover Defendants in these proceedings is circumscribed by the WCRA. If on the other hand s 316 of the WCRA is to be characterised as procedural law, then the Tribunal is not bound to apply that provision, and can exercise its general discretion to order costs, to be found in s 98 of the Civil Procedure Act 2005 (NSW).

Introduction

30. Whether a provision is substantive or procedural is not always an easy matter to determine. In the journal article “Legal Process and Choice of Law” (1997) 56 Maryland Law Review 1371, Professor William Reynolds said:

“The confusion is complete. The poor lawyer who gives advice to clients on choice-of-law matters meets with stares of disbelief.”

31. In a Book Review by Sagi Peari of “Substance and Procedure in Private International Law”, published in the Melbourne Journal of International Law, the reviewer stated:

“Issues like rules of proceedings, admissibility of evidence, witnesses, functions of the judge, burden of proof, pleadings, discovery, trial, mode of argumentation, joinder, rules of jurisdiction, appeal and preclusion must be treated as procedural issues. Viewed as a technical part of litigation, procedural issues are related to the manner in which the court regulates its proceedings rather than to the litigating parties’ substantive rights and duties. In other words, procedural rules are the means by which the courts apply their substantive rules to the particular circumstances of the case.”

32. In the same Book Review, the learned author said that “[w]hile procedural matters deal with the machinery of proceedings, the substantive matters address the rights and duties of the litigating parties”.

Costs Orders: Historical Background

33. The power of the common law courts to order costs has always been a power granted by statute. The foundation for the common law jurisdiction as to costs is the Statute of Gloucester (1278) 6 Edw I c 1.

34. In GE Dal Pont, Law of Costs (2003, 1^st ed, LexisNexis), the learned author says at [6.4]:

“The historical legacy has dictated a starting point that, statute apart, there is no power to order costs, so that authority to award costs must always be traced to a statutory provision. To this end, the court’s primary task when the issue of jurisdiction arises is to examine the provisions of the Act relied upon and to consider whether those provisions sustained the order.”

35. It is noted that s 316(1) of the WCRA commences by saying that no order about costs, other than an order allowed under the section, can be made by the court in the claimant’s proceeding. Section 316 does not grant a power to order costs, but rather it limits any costs order which might be made. Thus, one needs to find a statutory provision applicable in the Tribunal to order costs in the first place. That provision is s 98 of the Civil Procedure Act 2005 (NSW) which provides as follows:

“98   Courts powers as to costs

(1)  Subject to rules of court and to this or any other Act—

(a)  costs are in the discretion of the court, and

(b)  the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c)  the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

(2)  Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.

(3)  An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

(4)  In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to—

(a)  costs up to, or from, a specified stage of the proceedings, or

(b)  a specified proportion of the assessed costs, or

(c)  a specified gross sum instead of assessed costs, or

(d)  such proportion of the assessed costs as does not exceed a specified amount.

(5)  The powers of the court under this section apply in relation to a married woman, whether as party, tutor, relator or otherwise, and this section has effect in addition to, and despite anything in, the Married Persons (Equality of Status) Act 1996.

(6)  In this section, costs include—

(a)  the costs of the administration of any estate or trust, and

(b)  in the case of an appeal to the court, the costs of the proceedings giving rise to the appeal, and

(c)  in the case of proceedings transferred or removed into the court, the costs of the proceedings before they were transferred or removed.”

36. I did raise with Mr Schonell whether the words “or any other Act” in s 98(1) of the Civil Procedure Act could encompass a reference to the WCRA. On reflection, I have come to the view that those words can only apply to a NSW Act – see ss 12 and 65 of the Interpretation Act 1987 (NSW). An example of a case where a NSW statute restricted the type of costs order which could be made in a NSW court is Chubs Constructions Pty Ltd v Chamma [2009] NSWCA 98. The Court of Appeal held that provisions in the NSW workers compensation legislation meant that NSW courts had no power to order costs on an indemnity basis for a work injury damages claim made under that legislation.

Ineffective Queensland Provision Concerning Substantive Law

37. It is noted that Ch 5 of the WCRA, dealing with “Access to Damages” contains s 235 which is in the following terms:

“Requirements of chapter to prevail and are substantive law

(1)   If a provision of an Act or a rule of law is inconsistent with this chapter, this chapter prevails.

(2)   All the provisions of this chapter are provisions of substantive law.

(3)   However, subsection (2) does not affect minor variations in procedure.”

38. However, the NSW Court of Appeal has made it clear that while the Parliament of Queensland can modify the common law for the purposes of the rules to be applied by the courts of Queensland, the Parliament of Queensland cannot vary the common law choice of law rule which is to be applied by the courts in NSW: Hamilton v Merck & Co Inc [2006] NSWCA 55; (2006) 66 NSWLR 48 at [44] (Hamilton).

39. The provision in s 235 of the WCRA is “ineffective” to bind a court in NSW: see Hamilton at [47].

High Court Approach to Substantive/Procedural Distinction

40. In John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503 (Pfeiffer) the High Court said at [99] and [100]:

“99   Two guiding principles should be seen as lying behind the need to distinguish between substantive and procedural issues. First, litigants who resort to a court to obtain relief must take the court as they find it. A plaintiff cannot ask that a tribunal which does not exist in the forum (but does in the place where a wrong was committed) should be established to deal, in the forum, with the claim that the plaintiff makes. Similarly, the plaintiff cannot ask that the courts of the forum adopt procedures or give remedies of a kind which their constituting statutes do not contemplate any more than the plaintiff can ask that the court apply any adjectival law other than the laws of the forum. Secondly, matters that affect the existence, extent or enforceability of the rights or duties of the parties to an action are matters that, on their face, appear to be concerned with issues of substance, not with issues of procedure. Or to adopt the formulation put forward by Mason CJ in McKain, “rules which are directed to governing or regulating the mode or conduct of court proceedings” are procedural and all other provisions or rules are to be classified as substantive.

100   These principles may require further elucidation in subsequent decisions but it should be noted that giving effect to them has significant consequences for the kinds of case in which the distinction between substance and procedure has previously been applied. First, the application of any limitation period, whether barring the remedy or extinguishing the right, would be taken to be a question of substance not procedure (which is the result arrived at by the statutes previously referred to). The application of any limitation period would, therefore, continue to be governed (as that legislation requires) by the lex loci delicti. Secondly, all questions about the kinds of damage, or amount of damages that may be recovered, would likewise be treated as substantive issues governed by the lex loci delicti.”

41. An example of the kind of damage or the amount of damages recoverable occurred in the present case, where the parties argued the effect of s 306H of the WCRA – see the primary judgment at [439]-[462]. Clearly the quantification of a head of damage is a matter of substance. Section 306H applies in dust cases. The existence of and elements of a cause of action, including provisions regarding liability, causation and contributory negligence (see Ch 5 Pt 8 of the WCRA) are also substantive and not procedural, although they did not apply in these proceedings as it is a dust case – see s 306A of the WCRA.

42. Pfeiffer was not a case concerning whether costs orders were substantive or procedural law. Neither counsel could cite any authority on that issue.

Non-Binding Authorities Say That Costs are Procedural not Substantive

43. Professor Richard Garnett does deal with the issue in his book Substance and Procedure in Private International Law (2012, 1^st ed, Oxford University Press). This text is the subject of the Book Review noted above. In par 6.31 Professor Garnett says that the position under the laws of Commonwealth countries (ie common law countries) regarding the classification of costs, in the sense of whether they are substantive or procedural is “reasonably settled”. Professor Garnett says that “[w]here the question relates to what law should be applied to determination of costs at the time of judgment, the law of the forum has exclusive application”. For that proposition Professor Garnett cites authorities from the following jurisdictions:

1. Australia: Labuda v Langford [2001] ACTSC 126 at [6].

2. Canada: Somers v Fournier (2002) 60 OR (3d) 225 (Ont CA) (Somers).

3. Scotland: Wimpey Construction (UK) Ltd v Martin Black & Co (Wire Ropes) Ltd [1988] SLT 637.

4. Malawi: Preferential Trade Area Bank v ESCOM & Ors [2003] MWHC 74 (High Court of Malawi, 2003, cited in R Oppong, “A decade of Private International Law in African Courts 1997-2007 (Part I)”, (2007) 9 Yearbook of Private International Law 223 at p 241).

5. England: Union Discount Co Ltdv Zoller (2002) 1 All ER 693 (CA).

6. Hong Kong: Peregrine Fixed Income Ltd v JP Morgan Chase Bank [2005] HKCFI 71 at [74].

44. Professor Garnett, citing Somers, says:

“Costs are therefore ‘an essential tool designed… to make the machinery of the forum court run smoothly’ and to aid courts ‘in administering their machinery’. Costs are also incidental to the rights of the parties in that they are awarded at the conclusion of litigation and so not determinative of outcome (although, under Commonwealth law, they normally follow the outcome). Consequently, the court’s power to award costs is best seen as a tool in the forum court’s management of its proceedings and therefore properly subject to forum law.”

45. Of academic interest is the citation by Professor Garnett (in par 6.32) of a similar approach taken by courts in civil law countries – Germany, Japan, France and Greece.

46. The authorities cited by Professor Garnett from common law countries are of course not binding. However, they speak with one voice. In particular, the judgment of the Court of Appeal for Ontario in Somers is most instructive. The appeal involved the choice of law to be applied in an international negligence action commenced in Ontario which arose from a two-car motor vehicle accident which occurred in the State of New York. One of the issues was the choice of law applicable to costs in the action. The trial judge had held that the substantive law of New York and the procedural law of Ontario applied to the action. He concluded that costs were procedural in nature and were therefore governed by Ontario law.

47. The Court of Appeal for Ontario said at [16] that while costs have a primary function of indemnifying the party to whom they awarded for legal fees and expenses incurred in litigation, that is not the exclusive function of an award of costs. The court said that costs served many purposes, among them being the goal of encouraging settlement and facilitating the management and control of the litigation process.

48. At [17] the court said that costs are both a discretionary indemnification device and a mechanism by which abusers of the court’s processes may be deterred and penalised. This echoes the words of the High Court of Australia in Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 at [25].

49. The phrases from Somers reproduced in par 44 above appear at [18].

50. At [19] the Court of Appeal for Ontario said:

“Finally, costs of litigation are incidental to the determination of the rights of the parties. They are not part of the lis between litigants.”

51. I find such reasoning persuasive. Courts in NSW make costs orders not only to indemnify a party for the legal expenses incurred in running an action but also award costs to encourage settlement – see Pt 5 of the Dust Diseases Tribunal Regulation 2019 (NSW) concerning Offers of Compromise. Indemnity costs can be awarded, including in circumstances where a party has been dilatory or in default of directions or procedural provisions – see s 98(1)(c) of the Civil Procedure Act 2005 (NSW). Further, courts in NSW have a power to impose a cost liability upon a legal practitioner for unnecessary costs incurred by reason of serious neglect, incompetence or misconduct, or incurring costs improperly or without reasonable cause – see s 99 of the Civil Procedure Act 2005 (NSW). The power to award costs is thus a machinery provision, to be used in administering the machinery of the court as distinguished from the product of the court – see Somers at [18].

52. I find that, in these proceedings, s 316 of the WCRA is to be regarded as procedural law, which does not govern or bind this Tribunal in making an appropriate costs order.

53. Because s 316 of the WCRA does not fetter the discretion of this Tribunal in making a costs order, the application for a variation of the existing costs order is refused.

Further Reasons for Declining to Apply Section 316 WCRA

54. There is an additional reason why this Tribunal is not bound by s 316 of the WCRA in the circumstances of this case. That is because a necessary precondition in s 316 has not been met. As found above, the parties never made a “written final offer of settlement” as that phrase is understood in the WCRA. Section 316(2) only applies if the parties had made a written final offer of settlement. The legislation clearly contemplates that such an offer must be made before the commencement of the proceedings. As a fact, written offers were not made by Mr Keogh, or by WorkCover Queensland, until over 10 months after the proceedings were commenced in this Tribunal. If a party wishes to take advantage of a restrictive provision in legislation such as the WCRA, it is incumbent upon that party to follow the procedure laid down by the legislation to obtain any protection afforded, whether in relation to costs or otherwise. WorkCover Queensland did not follow the procedure in the WCRA in the case of Mr Keogh, and thus s 316 of the WCRA could never have any application to the present proceedings.

55. Further, the WCRA provisions relating to pre-court procedures are clearly procedural law, similar to the pre-court notice provisions in the law of the Australian Capital Territory considered by the Tribunal in Hudson v Amaca Pty Ltd [2022] NSWDDT 6 at [68]. It would be an anomalous result if procedural provisions could lead to s 316 of the WCRA being substantive and not procedural. Surely pre-court procedures (which are part of procedural law) could only lead to costs consequences which are themselves procedural and not substantive.

56. It is emphasised that these are alternative reasons why this Tribunal will not have its costs discretion fettered by s 316 of the WCRA. The primary reason, applicable not only in this case, but in any similar case, is that s 316 of the WCRA is procedural law not substantive law, and thus it is not the applicable law in proceedings in this Tribunal concerning a tort committed in Queensland.

Exercise of this Tribunal’s Costs Discretion

57. Since I have found that costs are governed by the law of the forum, I confirm that my costs orders were made under s 98 of the Civil Procedure Act 2005 (NSW). Mr Schonell made a submission that if I was against his primary submission, I should still “award costs in accordance with section 316 as a matter of comity” (Tcpt 30/9/24 p 17/15). I see no reason on the facts of this case to apply a Queensland procedural provision to proceedings conducted entirely in a NSW court, and which have been run from start to finish in accordance with NSW procedural law. Firstly, the necessary steps to enliven the exercise of the power, even by a Queensland court, were not taken. Secondly, the solicitors for the plaintiff asserted in correspondence that the WCRA provisions were procedural only and were thus not binding in NSW litigation, but only consented to the conference with WorkCover Queensland in order to save time and expense. Thirdly, when the conference was held, it was treated as a mediation and was attended by the other parties to this litigation, who had no involvement with the WCRA. Fourthly, the application of s 316 of the WCRA would cause injustice to the plaintiff, as it would deprive him of costs incurred in the 10 months between the proceedings being commenced in this Tribunal (without demur by WorkCover Queensland) and the holding of the conference.

Orders

58. The orders of the Tribunal are:

1. Dismiss the application made by the second defendant, and the first and third defendants in respect of their liability to the plaintiff as an employer in Queensland (the Applicants), for a variation of the existing costs orders.

2. Order the Applicants for the variation to pay the plaintiff’s costs of and incidental to the application.

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Decision last updated: 09 October 2024