Peter Nicholas Moloney t/a Moloney & Partners v Workers Compensation Tribunal & Anor

[2011] HCATrans 268

[2011] HCATrans 268

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A5 of 2011

B e t w e e n -

PETER NICHOLAS MOLONEY T/A MOLONEY & PARTNERS

Appellant

and

WORKERS COMPENSATION TRIBUNAL

First Respondent

ATTORNEY-GENERAL FOR THE STATE OF SOUTH AUSTRALIA

Second Respondent

FRENCH CJ
GUMMOW J
HAYNE J
KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON WEDNESDAY, 28 SEPTEMBER 2011, AT 10.19 AM

Copyright in the High Court of Australia

MR H.A.L. ABBOTT, SC:   If it please the Court, I appear with my learned friend, MR A.J. CROCKER, for the appellant.  (instructed by Moloney and Partners)

MR M.G. HINTON, QC, Solicitor‑General for the State of South Australia:   If the Court pleases, I appear for the second respondent with my learned friend, MR D.J. MACKINTOSH.  I think there is a submitting appearance for the first respondent.  (instructed by the Crown Solicitor (SA))

FRENCH CJ:   Yes, thank you.  Yes, Mr Abbott.

MR ABBOTT:   Would the Court like me to address the issue of revocation of leave?

FRENCH CJ:   Well, is there an application for revocation first?  Perhaps we should hear from the solicitor.

MR HINTON:   There is, if the Court pleases.  We apologise for no formal notification of it.  The reason for that is we were giving people every opportunity to check with the Tribunal as to what was outstanding.  Your Honours now have before you two affidavits from Mr O’Flaherty, one dated 16 September 2011, the second 23 September 2011.  Those affidavits advise your Honours that the Workers Compensation Rules Committee recommended that rule 31 be revoked and replaced, that the President signed the instrument rescinding rule 31 and making a new rule 31 on 16 September 2011.  The rule came into effect upon 22 September 2011 upon being gazetted.  It also advises your Honours that there is only one application on foot; it is an application that does not concern the appellant.

The new rule is materially different.  Whereas the old rule precluded recovery of additional costs unless an award was first obtained, the new rule does not make recovery conditional.  It requires the client or the worker be advised of potential avenues that they could exploit if they believed that they are subject of unreasonable charges, those avenues under the Legal Practitioners Act or, indeed, under section 95A of the Workers Rehabilitation and Compensation Act. 

The effect then, in my submission, of the revocation is that any decision by this Court on this matter can only have an impact on one matter.  That matter is not one, as I said, that involves the appellant.  The appellant’s interest is now reduced to one of costs.  Not that it is an overly weighty matter, but had the appellant commenced their action today, of course, they would not have standing and there would be no matter.  That highlights the academic nature of what your Honours are now concerned with.

In my submission, the appeal can no longer be considered to give rise to a question of general importance.  There is no general principle that can be derived from it that would have a wide ranging application.  The resolution will not provide guidance in the course of the application of any statutory framework.  For those reasons special leave should be rescinded.  Overnight we attempted to find some authorities with respect to the rescission of special leave.  We have provided those, as brief as they are, with a front page ‑ ‑ ‑

GUMMOW J:   We do not need authorities on that subject.  What do you say about costs.....?

MR HINTON:   If the Court pleases.  My instructions are that with respect to the costs of today and the costs of the special leave application on the prior occasion, the respondents would bear their own costs.  For those reasons, if the Court pleases, special leave should be rescinded.

FRENCH CJ:   Yes, all right, thank you.  Yes, Mr Abbott.

MR ABBOTT:   If it please the Court, in my submission, special leave should not be revoked.  The basis of the grant of special leave has remained unchanged by the repeal of the rule.  The same questions as to the rule‑making power still exist despite the rescission of the rule.  The Full Court decision, in our submission, is wrong and it would be inappropriate to leave it stand and have the Tribunal’s rule‑making power left in accordance with that decision.  In my submission, it is this Court’s function to determine whether the decision appealed from was correct when it was given and the rescission of the rule does not alter that fact. 

In my submission, there is continued utility in the appeal for three reasons.  First, the new rule throws up similar issues to the old in terms of the rule‑making power, notwithstanding the different terms of the rule.  The new rule, which is exhibited to the affidavit of Mr O’Flaherty, imposes an obligation upon a worker’s representative and although it says representative, it must actually mean a solicitor because that obligation is an obligation to advise the worker of his or her rights under sections 41 and 42 of the Legal Practitioners Act. 

Those rights, your Honours, are, first, that you – the prohibition of section 41 is against recovery of costs by a legal practitioner before delivering a bill in a suitable form and section 42 provides either the solicitor or the client the right to apply to the Supreme Court for taxation of the bill.  So the new rule imposes the obligation to advise the client of those rights and it also involves an obligation to advise the worker of sub‑rule (1) of the new rule.  So the new rule assumes a power in a Tribunal to make the rules regulating obligations of solicitors to their clients.  That would involve similar questions regarding the interpretation of section 88E(1)(f) and the meaning of costs in that section, and how section 88G impinges on the extent of the power in (1)(f). 

Second, your Honours, there is utility in that if leave were to be revoked, there would be nothing to prevent this President or any later President from re‑enacting the old rule or the rule which we say would be offensive in similar ways and it cannot be said that that possibility is not fanciful.  The new rule, we say, demonstrates that the President and those whom he must consult under the Act before he makes a rule has taken a certain view of his powers which this appeal would examine.

The revocation of the rule so late in the piece tends to indicate that there is something tactical about it.  It tends to indicate that the Tribunal did not want a decision of this Court made on its powers, but it preferred to retain the benefit of the Full Court decision.  No reason has been given for the late revocation of the rule a week before this hearing and, in my submission, those inferences are open.  The utility of the appeal is established also because this rule has been in operation since February 2009. 

We have put on evidence in the affidavit of Mr Milsom of one application where costs, additional costs, were ordered less than those that were claimed.  We do not know how many other adverse awards were made under the rule in that period of its operation.  We inquired of the Tribunal, as Mr Milsom deposes, but the Tribunal has not been able to answer that question and it would be a fair assumption that there was not simply one adverse order, but more than one, and the rights of those representatives who have been by adverse awards deprived of costs would be affected by a declaration made by this Court.

On the issue of costs, if it please the Court, if the Court is minded to revoke leave, the Court’s power to order costs is wide under section 26 of the Judiciary Act and rule 50 of the High Court Rules.  In my submission, revocation of leave should be on terms as to costs.  There are five matters which I would want to put on the issue of costs.  The first is the late revocation of the rule.  If the President had revoked the rule earlier, my client would not have incurred all the costs that he has.  In fact, the rule has been revoked on 22 September, putting him to the expense of preparing right up to the present moment the appeal.                     Special leave was granted back in February. 

I referred before to what might be inferred as to the motivation of the first respondent in this late amendment.  It has filed a submitting appearance save as to costs and yet its conduct in rescinding this rule at this late stage would tend to indicate that it does have some interest in the outcome and which I would submit would be inconsistent with a Tribunal lodging a submitting appearance.  That sort of conduct, in my submission, ought to be discouraged by a costs order.

FRENCH CJ:   Against whom?

MR ABBOTT:   My submission will be, your Honour, that the costs order should be against the first respondent.  It is not usual to make costs orders against tribunals who make submitting appearances, but it has been done when their conduct has warranted it, your Honour.  Mr Milsom’s affidavit also exhibits correspondence from my client to the Tribunal directed to the President protesting at the validity of the rule.  The first letter was written when my client was unaware it had been gazetted five days after the gazettal and the second letter was written following that before he applied to the Supreme Court for the declaration, and the response essentially was to invite my client to challenge it if he wished.

My submission in the circumstances is that it would be unjust to leave my client to bear his costs of the special leave application or the appeal and it would be unjust that he should be left to bear the adverse costs order below that was made against him in favour of the second respondent who was then an intervener.  The Tribunal, your Honour, the first respondent, whilst lodging a submitting appearance knew very well it had the benefit of a contradictor in the Attorney and therefore did not have to support its own rules. 

It has been said in this Court that although it is not unusual for a Tribunal to take an active stance against one of its decisions, it is open in exceptional circumstances for the Tribunal properly to take an active stance to defend its practice and procedure.  The Tribunal did not do so here but it had the benefit of the contradictor, the Attorney and it would be unjust, in my submission, to allow the first respondent therefore to escape the consequences of its late revocation of this rule. 

So, in my submission, if leave is to be revoked, it should be on terms and I am instructed to submit that those terms might be that the first respondent pay the costs in this Court both of the special leave application and the appeal, that those costs should be on an indemnity basis, at least the costs of the appeal if not the special leave application.  The appeal was listed in June, your Honours, and if this rule had been revoked before then, then none of the appeal costs would have been incurred.  Secondly, that the second respondent bear his own costs in this Court and that he undertake not to enforce the costs order made in favour of him below.  Fourth, that the first respondent undertake as a condition of the revocation to indemnify my

client against his own liability of the costs of the proceedings below.  If it please the Court.

FRENCH CJ:   Thank you, Mr Abbott.  Mr Solicitor.

MR HINTON:   Just briefly, your Honour.  Firstly, in the defence of the Tribunal your Honours, in my submission, should draw no inference that there has been anything tactical or untoward about what the rules committee and the President of the Tribunal have done.  Whenever rules are changed by any judicial body there will always be a party who has litigation ongoing that may be affected in one way or another.  It is an unfortunate consequence, one might decide, of this rule change, but to go so far as to say there has been a tactical decision made so as to preserve judgment of the Full Court, in my submission, is a large step that your Honours should not take.

Secondly, I think it is in the judgment of Chief Justice Mason in Hardiman’s Case that makes it clear that only in the most exceptional circumstance should a judicial body, whose decision is the subject of judicial review proceedings, instruct counsel to make submissions on behalf of that judicial body.  This is not one of those exceptional cases.  This is a case where quite rightly the Tribunal has seen fit to.....In my submission, no order for costs should be made against the Tribunal and certainly no order for indemnity costs should be made against the Tribunal.  If the Court pleases.

FRENCH CJ:   Thank you, Mr Solicitor.  The Court will adjourn briefly to consider what course it should take.

AT 10.34 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.38 AM:

FRENCH CJ:   The Court is of the opinion that by reason of the revocation of the challenged rule this appeal no longer raises a general question of principle which would warrant the maintenance of the grant of special leave and the Court will revoke the grant of special leave.  However, having regard to the lateness of the revocation of the relevant rule, the Court is also of the opinion that the second respondent should pay the appellant’s costs of the appeal to this Court.  That does not cover, of course, the special leave application and the costs of that remain where they lie.  The Court will now adjourn to reconstitute.

AT 10.39 AM THE MATTER WAS CONCLUDED