Knight v The State of South Australia & Anor(No 2) - [2022] SASCA 34

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Civil)
KNIGHT v THE STATE OF SOUTH AUSTRALIA & ANOR
(No 2)

[2022] SASCA 34
Judgment of the Court of Appeal
(The Honourable President Kelly, the Honourable Justice Livesey and the Honourable Justice Bleby)
11 April 2022
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - GENERAL PRINCIPLES AND EXERCISE OF DISCRETION
The Court dismissed the appellant’s appeal against a decision of the Full Bench of the South Australian Employment Court, concerning the question whether weekly payments of compensation made pursuant to s 39 of the Return to Work Act 2014 (SA) (the Act) can be taken to be earnings pursuant to s 5 of the Act.
The respondent seeks an order that the appellant pay its costs. The appellant opposes any order for costs, contending that her appeal raised issues of statutory construction of general importance to the operation of the legislative scheme and the respondent, and that it was important that this Court authoritatively determine the proper construction of the Act.
Held (the Court):
1. The appellant must pay the respondent’s costs.
Return to Work Act 2014 (SA) ss 5(3), 5(9); Workers Rehabilitation and Compensation Act 1986 (SA); Uniform Civil Rules 2020 (SA) r 194.5, referred to.
Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485; Knight v The State of South Australia & Anor [2022] SASCA 14; Dallimore v Return to Work Corporation of South Australia (No 2) [2021] SASCFC 8; Ruddock v Vadarlis (2001) 115 FCR 229; Perrett v Commissioner for Superannuation (1991) 23 ALD 257; Hart v Federal Commissioner of Taxation (No 2) [2019] FCAFC 191; Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, considered.

KNIGHT v THE STATE OF SOUTH AUSTRALIA & ANOR (No 2)
[2022] SASCA 34
Court of Appeal – Civil: Kelly P, Livesey and Bleby JJA
THE COURT:

These reasons address the costs of an unsuccessful appeal. On 4 March 2022, this Court granted the appellant worker permission to appeal but dismissed the appeal, finding:
1.The Full Bench was correct to conclude that payments of workers compensation are not to be taken into account as amounts paid while a worker is on leave for the purposes of s 5(3) of the Return to Work Act 2014 (SA) (the Act). In so finding, the Court followed, and refused to distinguish or overrule, an earlier ruling by the Full Court of the Supreme Court in Flinders Ports Pty Ltd v Woolford, to the effect that absence from work by reason of a work injury while in receipt of workers compensation could not be regarded as “leave” in any “commonly understood industrial sense”.[1]
2.The Full Bench was correct to conclude that the words “a work injury” in s 5(9) of the Act referred to the injury for which average weekly earnings must be set and did not extend to a prior injury. In so ruling, particular reliance was placed on the text as well as the history and operation of the precursor provision under the Workers Rehabilitation and Compensation Act 1986 (SA).[2]
[1] Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485 (Woolford), [105] (Stanley J, with whom Kelly J agreed, Kourakis CJ contra). See Knight v The State of South Australia & Anor [2022] SASCA 14, [17], [57]-[61] (Kelly P, Livesey and Bleby JJA).
[2] Knight v The State of South Australia & Anor [2022] SASCA 14, [66]-[76] (Kelly P, Livesey and Bleby JJA).
Having dismissed the appeal, the Court invited submissions on costs. The parties were given an opportunity to consider the reasons of the Court before providing written submissions. These have now been received and considered. In essence, the appellant has submitted that there should be no order as to costs, whereas the respondent sought an order for its costs. The intervenor did not seek to be heard on the question of costs. The intervenor did not seek an order for costs.
As might be expected, there was significant common ground between the parties as to the applicable principles.
Whilst costs ordinarily follow the event,[3] the Court retains an overriding, unfettered discretion,[4] and may make some other order should there be good reason to do so.[5]
[3]     Uniform Civil Rules 2020 (SA) r 194.5(2).
[4]     Uniform Civil Rules 2020 (SA) r 194.5(1)(d).
[5]     Dallimore v Return to Work Corporation of South Australia (No 2) [2021] SASCFC 8 (Dallimore), [12] (Peek J, Stanley J and David AJ).
Indeed, where a matter raises an issue of general importance of some difficulty, the appeal court may decline to make an order for costs against the unsuccessful party.[6] The cases illustrate that where the clarification of an issue of law raised by an appeal is of particular importance to a respondent, by virtue of its position as an authority, the appeal court may decline to order costs in favour of the respondent and against the unsuccessful party.[7]
[6] Ruddock v Vadarlis (2001) 115 FCR 229, [17] (Black CJ and French J); Dallimore v Return to Work Corporation of South Australia (No 2) [2021] SASCFC 8, [12] (Peek J, Stanley J and David AJ).
[7] Perrett v Commissioner for Superannuation (1991) 23 ALD 257, 269 (Wilcox, Burchett and Ryan JJ); Ruddock v Vadarlis [2001] FCA 1865, [17] (Black CJ and French J); Dallimore v Return to Work Corporation of South Australia (No 2) [2021] SASCFC 8, [12] (Peek J, Stanley J and David AJ).
It has been held by the Full Court that, where it is important that the issue of law raised by an appeal be authoritatively determined, that will provide a reason for the Court to decline to make an order for costs against the unsuccessful party.[8] However, it has also been recognised that merely because it may be beneficial to obtain appellate authority on a disputed issue of statutory construction, that may not be sufficient, standing alone, to justify departure from the usual order as to costs.[9]
[8] Dallimore v Return to Work Corporation of South Australia (No 2) [2021] SASCFC 8, [12] (Peek J, Stanley J and David AJ).
[9] Hart v Federal Commissioner of Taxation (No 2) [2019] FCAFC 191, [6] (Kenny, Kerr and Moshinsky JJ).
In this case, the appellant sustained a compensable work injury in 2011 but sustained a further compensable work injury in 2017. The question at issue was the proper calculation of her average weekly earnings. At first instance, the appellant was partially successful in that she obtained a ruling that average weekly earnings were to be calculated by reference to her capacity for work at the time of her second injury rather than by reference to the lower amount determined by the respondent. The appellant’s appeal was designed to improve on that position. That appeal was heard immediately after the matter of Heywood-Smith v Return to Work Corporation of South Australia.[10]
[10] Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249.
Against this background, the appellant contends that because her appeal raised issues of statutory construction of general importance to the operation of a legislative scheme, and that these were of some difficulty and of particular importance to the respondent, the Court should exercise its discretion by making no order as to costs. The appellant emphasises that it was important that this Court authoritatively determine the proper construction of the Act. The appellant says that this is demonstrated by the intervention of the intervenor.
Whilst we accept that issues of some importance were raised there are, in our view, three features which bear on the exercise of discretion in this case.
First, the appellant was seeking to improve on the success obtained at first instance. Whatever else might be said about the appeal, its ostensible purpose was to improve the appellant’s financial position. We accept that, standing alone, this consideration does not necessarily suggest that an order other than the usual order should not be made.
Secondly, whilst issues of general importance were raised, as exemplified by intervention of the intervenor and the grant of permission, whether there is intervention and a grant of permission to appeal cannot, standing alone, displace the operation of the ordinary rule as to costs. These are nonetheless relevant considerations.
Thirdly, there was in this case no antecedent uncertainty about the operation of the provisions considered by the Court of Appeal. Woolford was regarded as settling the approach to s 5(3) and this was the unanimous view in the Tribunal and the Full Bench. Whilst s 5(9) raised different considerations, it ultimately turned on a straightforward consideration of the predecessor provision and the likely purpose of the change made to its wording when re-enacted in the Act. As we explained, it ought not be overlooked that the effect of the appellant’s contention concerning s 5(9) tended to undermine the legislative purpose evident in the confinement of the entitlement to weekly compensation to a maximum of 104 weeks under the Act.[11]
[11] Knight v The State of South Australia & Anor [2022] SASCA 14, [81] (Kelly P, Livesey and Bleby JJA).
Unlike cases such as Dallimore, it could not be said that the appeal to this Court was necessary to resolve conflicting decisions of the Full Bench of the Tribunal. It cannot be said that it was apparent that there was some prevailing, widespread uncertainty about the operation of the Act caused by questions of construction of particular difficulty.
In the circumstances of this case, the appellant must pay the respondent’s costs.