Quick v WorkCover Corporation - [2007] SASC 355

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
QUICK v WORKCOVER CORPORATION
[2007] SASC 355
Judgment of The Honourable Justice Nyland
3 October 2007
MAGISTRATES - APPEALS FROM AND CONTROL OVER MAGISTRATES - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - COSTS
Appellant charged with making dishonest statements and obtaining benefits by dishonest means contrary to provisions of Workers Rehabilitation and Compensation Act 1986 - convicted after trial of 26 of 88 offences - appeal against order for costs - finding by magistrate that WorkCover successful party notwithstanding dismissal of majority of charges - mandatory nature of s 120(3) of the Act which required order to be made where finding of guilt - adjustment of costs order to take into account appellant success as to some charges - applicability of s 13 of Sentencing Act to costs order - whether sufficient reduction made and allowance for poor financial position of appellant - all matters considered by magistrate - no grounds to interfere with order - appeal dismissed.
Workers Rehabilitation and Compensation Act 1986 s 120(1) and 120(3); Criminal Law (Sentencing) Act 1988 ss 13, 18A and 121(3); Legal Services Commission Act 1977 s 20; Summary Procedure Act 1921 s 189(1), referred to.
Timms v van Diemen [1968] SASR 379; Schaaf v Lamshed (1988) 49 SASR 431; Butt v Police [2003] SASC 373; Mitsubishi Motors Australia Ltd v Ghassemi-Farr (unreported) SASC S5822, Matheson J, 20 September 1996, considered.

QUICK v WORKCOVER CORPORATION
[2007] SASC 355
Magistrates Appeal
NYLAND J:

This is an appeal from an order for costs made by a Stipendiary Magistrate in the Magistrates Court at Adelaide on 29 May 2007. The appellant was the defendant to proceedings instituted against him by WorkCover in which he was charged with 88 offences against s 120(1) of the Workers Rehabilitation and Compensation Act 1986 (the Act). For convenience, I will continue to refer to the parties as WorkCover and defendant.
Counts 1 to 16 alleged offences against s 120(1)(c) of the Act in that it was alleged that on relevant dates the defendant had dishonestly made a statement about a claim under the Act, knowing that the statement was false and misleading. The remaining counts alleged offences against s 120(1)(a) of the Act, it being alleged that on the dates specified in the various counts the defendant had obtained by dishonest means a payment or other benefit under the Act.
The defendant pleaded not guilty to all 88 charges. The hearing of those charges (including a voir dire) took place over a period of about 12 days. In April 1999, the defendant lodged a workers compensation claim for a back injury that had occurred at work on 2 June 1998 when he slipped from a truck and fell into a ditch. It appeared that the defendant represented himself as being significantly disabled as a result of his back injury and was therefore unable to perform any work at all. As a result, it was determined that he was totally incapacitated with little prospect of rehabilitation. Part of the evidence called by the prosecution at the trial consisted of video footage obtained by various surveillance operators employed by WorkCover over a number of days which demonstrated that the defendant was not totally incapacitated and was able to perform light duties.
On 5 October 2006, the magistrate found the defendant guilty of Counts 4, 7, 8, 11, 14, 16, 57 to 72 and 85 to 88 but acquitted him of the remaining 62 counts.
On 12 April 2007, the magistrate sentenced the defendant with respect to the offences for which he had been found guilty. She imposed one penalty pursuant to s 18A of the Criminal Law (Sentencing) Act 1988 (the Sentencing Act) and sentenced the defendant to be imprisoned for a period of 12 months with a non-parole period of five months. That sentence was suspended upon the defendant entering into a bond in the sum of $500 to be of good behaviour for a period of two years. She made a further order that the defendant make good any loss resulting from the commission of the offences. It was agreed that the amount of loss sustained as a result of the commission of the offences of which the defendant had been convicted was the sum of $15,470.32. She therefore made an order pursuant to s 120(3)(a) of the Act that the defendant compensate WorkCover for that amount. There was also an application for WorkCover to be reimbursed costs incurred in investigating the offences which were agreed in the sum of $9,240.64. Pursuant to s 120(3)(b) of the Act, the magistrate made an order that the defendant repay that amount.
Both WorkCover and the defendant subsequently applied for costs of the proceedings. The defendant argued that, as WorkCover had failed to prove the majority of charges against him, he was entitled to recover costs to reflect that he had been predominantly successful. The defendant’s counsel also submitted that because of the complexity of the matter, costs should be considered on a scale in excess of the Magistrates Court scale of costs and that a counsel fee of $2,000 per day was not unreasonable. He argued that those costs should be awarded even though they were in excess of the actual legal fees incurred, and referred to s 20 of the Legal Services Commission Act 1977 which required the court not to take into account the defendant’s legal aid status.
WorkCover submitted, however, that costs should be paid to them as the successful party. That did not depend on a numerical count of the charges which had succeeded, but rather upon who had succeeded on the substantial issues in the case. They also referred to s 120(3) of the Act which provides that where a court finds a person guilty of an offence, it “must” order the defendant to “reimburse costs incurred by the applicant in investigating and prosecuting the offence”. WorkCover argued that where some charges were proven, the prosecution was entitled to recover all of its costs in proving all matters relevant to the proven charges. In this case, all of the evidence led was relevant to the proven charges and the defendant should therefore reimburse all of the prosecution costs. They further submitted that, in any event, the defendant would not be entitled to costs in excess of any amount paid to his solicitor and counsel as costs are at best an indemnity for the amount a party has actually incurred.
The magistrate gave detailed reasons with respect to this matter. She referred to the fact that the trial was complex, having taken 12 days of hearing. She said extensive medical evidence had been led by both the prosecution and defence, in addition to which there were lengthy written submissions at the conclusion of the evidence. She said[1] that the bulk of court time was spent on -
(a)considering video footage of the defendant, some of which was admitted after a one-day voir dire.
(b)Medical evidence from various doctors and health care professionals relating the defendant’s physical and verbal presentation.
(c)Opinion evidence from various medical practitioners relating to the extent of disability shown on the video footage.
(d)Medical evidence as to the defendant’s physical capacity to perform certain activities.
(e)In particular, psychiatric and psychological evidence relating to whether there was a conscious exaggeration of the level of disability and thus dishonesty.
[1] Reasons of Ms Anderson SM delivered 29 May 2007 at [15]
She went on to say that no court time and little submission time was taken up on the issue that led her to acquit the defendant of Counts 17 to 56 and 73 to 84, namely the extent to which the video footage could be used to prove the level of the defendant’s incapacity prior to July 2003. She accepted the prosecution’s submission that notwithstanding the acquittals, almost all of the evidence led at the trial would have been led if the trial had only related to the charges on which the defendant was convicted. She said[2]:
The substantial issue at the trial was whether the prosecution had proven beyond reasonable doubt that the defendant acted dishonestly by deliberately overstating his level of disability in his presentation to health professionals involved in the management of his worker’s compensation claim. The prosecution was successful in so proving. It was unsuccessful in proving his actual level of functioning prior to July 2003 and it was unsuccessful in proving certain of the false statement charges. However, the issues on which the prosecution failed were of minor import in the overall trial, occupying very little court or counsel time. In this context, it would be appropriate to ask: what costs did the defendant incur which could only be attributed to the charges on which he was acquitted? The answer to that question is that only a small proportion of his legal costs could be so attributed.
[2] Reasons of Ms Anderson SM delivered 29 May 2007 at [20]
She went on to say that if she were to determine the issue of costs based on the general discretion to award costs under s 189(1) of the Summary Procedure Act 1921 she would have concluded that the prosecution was the successful party. She would have also concluded that there ought to be an apportionment of 80/20 per cent to take into account issues and counts on which the prosecution was not successful and the court and counsel time attributable thereto.
The magistrate then went on to consider the effect of s 120(3) of the Act. This is an express provision that relates to prosecutions under the Act. She considered that section to be mandatory and that it removed the court’s discretion to award compensation and costs. She said that it required that such orders be made where there is a finding of guilt. She also accepted the submission that the prosecution was entitled to its costs relevant to any charges of which the defendant was found guilty because of the express provisions of s 120(3)(b) of the Act. As the defendant was, however, acquitted of some counts she was obliged to determine how much of the costs should be attributable to the charges on which the defendant was acquitted and make a deduction from the costs actually incurred. In view of the factors that she had identified in considering s 189(1) of the Summary Procedure Act 1921, she found that there should be a 20 per cent deduction for that reason.
The magistrate then considered the quantum of costs payable to the prosecution. Having been provided with particulars thereof, she found that the total amount to be reimbursed to the prosecution, after the 20 per cent reduction, was a sum of $50,451.01. Having made that finding, the magistrate turned her mind to the applicability of s 13 of the Sentencing Act, which is in the following terms:
(1)The court must not make an order requiring a defendant to pay a pecuniary sum if the court is satisfied that the means of the defendant, so far as they are known to the court, are such that -
(a)the defendant would be unable to comply with the order; or
(b)compliance with the order would unduly prejudice the welfare of dependants of the defendant, (and in such a case the court may, if it thinks fit, order the payment of a lesser amount).
(1a)In considering whether the defendant would be able to comply with the order, the court should have regard to the fact that defendants may enter into arrangements under Division 3 of Part 9 for an extension of time to pay pecuniary sums or for payment by instalments.
(2)The court is not obliged to inform itself as to the defendant's means, but it should consider any evidence on the subject that the defendant or the prosecutor has placed before it.
The magistrate considered that it was necessary to consider the defendant’s financial position to determine whether she should order the payment of a lesser amount than that which she had determined was payable to the prosecution pursuant to s 121(3) of the Act. In considering this matter she took into account the fact that she had made orders for repayments of the workers compensation in the sum of $15,470.32 as well as investigation costs of $9,240.64. She mentioned that she had little information before her as to the defendant’s financial means, but the information that she did have suggested that the defendant was not working and was in receipt of a disability pension. She was also aware that, at various times during the court proceedings, she had been advised by counsel that the defendant had limited financial means. As a result, his attendance at some hearings was excused so he did not have to incur additional expense travelling to court from his home at Port Lincoln. The magistrate concluded that the defendant had limited ability to repay any pecuniary sums, although she considered he would be able to enter into an arrangement with the Registrar to make instalment repayments of any sum ordered. She thought the defendant would not be able to comply with an order for repayment of the total amount of the prosecution costs, but decided it was appropriate for him to pay some lesser amount. She therefore reduced the sum by one half and ordered the defendant to pay the sum of $25,000 by way of costs of the prosecution, which sum included prosecution witness expenses.
It is from that order that the defendant has appealed to this court. The argument on appeal essentially focused on the failure of the magistrate to make an award of costs in favour of the defendant, notwithstanding that he was overall successful with respect to the litigation having had 62 of the counts against him dismissed. Further, and in the alternative, there was a complaint that the magistrate had erred by failing to make a greater reduction in the amount awarded against the defendant, pursuant to s 13 of the Sentencing Act, having regard to the defendant’s limited financial means.
In Timms v van Diemen[3], the defendant was convicted on one of three counts. The court held that the court of summary jurisdiction had erred in ordering the prosecutor to pay the defendant’s costs on all counts, when he had only been convicted of one, and that the proper order should have been either an order for no costs at all, or an order apportioning them. Bray CJ said (at 388):
In the civil court where the plaintiff succeeds on some issues and the defendant on others the situation would normally be met by some sort of apportionment order, though the successful plaintiff would normally be awarded the general costs of the action. Here the Magistrate awarded no costs at all to the prosecution on the second count. I do not think it matters that the respondent might or would have pleaded guilty if the second count had stood alone. In fact he pleaded not guilty and the complainant had to prove the charge and did prove it. The situation is therefore analogous to that of a civil plaintiff who succeeds on some issues but not on others, but who has not only been awarded no costs at all, but has also been ordered to pay the defendant’s costs of the action. Such an order, I think, would, in the absence of special circumstances, be unusual and probably improper.
[3] [1968] SASR 379
The situation of a partially successful defendant was also considered in Schaaf v Lamshed[4]. Von Doussa J said (at 433):
Although at the end of the day the appellant was found guilty on one count I do not think the appellant should to any significant extent suffer a penalty in costs by having pleaded not guilty to count two. As I have said, I think it is reasonable to assume that the trial took place because of count one, and on that the appellant was successful. In many cases it would be appropriate where there is more than one count and the defendant does not succeed on all of them, to apportion costs, perhaps on a time basis: see, for example, Timms v van Diemen. However in this case I think very little if anything was added to the trial by the plea of not guilty on count two. (footnote omitted)
Von Doussa J then held that in the circumstances of that case, it would be unrealistic to endeavour to apportion costs.
[4] (1988) 49 SASR 431
In Butt v Police[5] a defendant appealed against a magistrate’s failure to award costs in his favour. Following a not guilty plea, the defendant was convicted of one count of resisting police, but was acquitted of a charge of assault, that being the more serious charge. Bleby J said (at [38]):
Nevertheless, I consider that it was within the proper exercise of the Magistrate’s discretion not to award costs in favour of the appellant, even though the charge which was dismissed might be regarded as the more serious. There is a difference between a defendant who is totally successful in securing an acquittal and one who is partially successful in relation to one charge which is alleged to have arisen out of one discreet physical action during a course of conduct relevant to another charge upon which the defendant was convicted. The evidence was required to be led on the charge on which the appellant was convicted in any event. While I do not agree with the Magistrate’s reasons, there was adequate justification for the decision to make no award of costs.
[5] [2003] SASC 373
At the hearing of the appeal, Mr Amey, for the defendant, argued that the present matter was distinguishable from Schaaf and Butt, in the sense that while there may have been one discrete physical action involved in each of those cases, in this case, the present action had occurred over an extended period. The learned magistrate had therefore erred when finding that the time taken to prove the offences on which the prosecution was ultimately successful had to be of its very nature, considerably less than the time taken to hear and determine the full 88 counts, as the mere addressing of such a large number of counts, of necessity, had to take a significantly longer amount of the court’s hearing time. Mr Amey argued that as the prosecution was approximately 70% unsuccessful, in the terms of the overall fairness of the situation, an order for costs of an appropriate proportion should have been in favour of the defendant.
If that was not the case, in the alternative, Mr Amey argued that the terms of s 13 of the Sentencing Act were such that there should not have been any order at all made against the defendant for repayment of any of the costs as assessed.
In support of this part of the argument, and with the consent of Mr Schroeder for WorkCover, I received a copy of an income/expenditure statement prepared with respect to the defendant and his wife. In round terms, that shows a total income by way of disability and carer’s allowance of $973.77 per fortnight with an expenditure for the same period of $929.70, leaving a deficit surplus of $44.07.
In response to the argument as to the mandatory nature of s 120(3) of the Act, Mr Amey referred to Mitsubishi Motors Australia Ltd v Ghassemi-Farr[6]. In that case, Matheson J took the view that s 13(1) of the Criminal Law (Sentencing) Act 1998 permitted the court to require a defendant to pay a pecuniary sum (which included an order for costs) that was less than that which was required by s 120(3) of the Act. Mr Amey therefore submitted that the appropriate order in this case was that any order as to costs and compensation that might otherwise be required to be paid by the defendant pursuant to s 120(3) of the Act should be reduced to nil.
[6] (unreported) SASC S5822, Matheson J, 20 September 1996

Mr Schroeder for WorkCover argued, however, that s 120(3)(b) of the Act removed the discretion as to apportionment of costs in relation to evidence which had been successfully used to prove any of the counts against the defendant. He referred to the finding of the magistrate that the issues on which the prosecution had failed were of minor import in the overall trial, occupying very little court or counsel time. He submitted that in those circumstances it would be inconsistent to award the defendant any costs by way of set off in respect to the same evidence or trial time taken up.
He further argued that even with respect to those counts which were dismissed, facts were nevertheless proved which showed a course of dishonest conduct by the defendant. On that basis WorkCover had been able to use some of the evidence led with respect to unsuccessful counts in proof of the other counts. Mr Schroeder referred to the findings made by the magistrate and submitted that the charges on which the defendant was acquitted were charges in which the evidence was relevant to the general question of dishonesty. WorkCover had led much evidence to show that whilst a few statements and observations might on their own be explicable as being consistent with innocence, when looked at as a whole, the evidence painted a detailed and strong picture of the defendant consistently and consciously exaggerating his level of disability. To put it another way, he argued that a few vague statements on their own might not be convincing proof, but a consistent pattern of many statements, including some which were vague, disproved coincidence as a defence. He also submitted that statements which had been made in the presence of the defendant, although possibly not by him, were also directly relevant to dishonesty, although they could not be the subject of a conviction in their own right.
As to counts 17 to 56 and 73 to 84, of which the defendant was acquitted, Mr Schroeder argued there was no additional evidence of substance called with respect to those charges that was not required for other similar charges. What was alleged was a course of conduct that was dishonest. It was only the starting point of that course that resulted in some success for the defendant. For present purposes, Mr Schroeder did not seek to challenge the reasoning of Matheson J in Mitsubishi v Ghassemi-Farr and was prepared to accept that s 13 of the Sentencing Act encompassed a costs order. He did, however, suggest that s 13 had primarily been enacted for application to fines and possibly orders for compensation as opposed to costs. He pointed out that the cases in which s 13 had been applied, usually arose in the context of sentencing a defendant so as not to impose an overly onerous burden upon him/her, particularly where some alternative approach could be taken, such as an order for community service. Costs, however, fell into a different category as there did not appear to be any limit on the time within which a defendant might be required to pay the amount ordered, and it might well be that the amount would never be paid, depending on the future financial position of the defendant.
Mr Schroeder took issue with some of the items set out in the defendant’s expenditure statement but did not seriously dispute that the defendant was a person of limited means. He did, however, refer to the fact that there was a possibility in the future of the defendant becoming eligible for a lump sum WorkCover payment. In my view, however, that can only be speculative and does not assist in resolving the issues which arise for determination on this appeal.
At first glance there would appear to be some unfairness to the defendant in not receiving an order for costs in his favour when so many of the charges against him were dismissed. The defendant has, however, been unable to point to any error in the approach taken by the learned special magistrate in resolving these matters. The learned magistrate carefully considered each of the charges against the defendant and gave detailed reasons for the acquittal/convictions with respect to them. She took similar care in considering the question of costs. She took into account the argument as to the time spent on each of the various charges. She concluded that an appropriate apportionment would be 80% to 20% and adjusted the costs order accordingly. As she explained in her ruling on costs, this was a complex and lengthy matter, the hearing of which took place over many days. It was, however, her considered view that the issues on which the prosecution failed had taken up very little extra court time, and she is clearly the person in the best position to assess the amount of time taken up in the determination of the various issues.
The magistrate considered the effect of s 120(3) of the Act and, in my view, correctly, held that it is mandatory in its terms, and takes precedence over the general provisions relating to costs in s 189 of the Summary Procedure Act 1921. Having done that, the magistrate went on to consider the applicability of s 13 of the Criminal Law (Sentencing) Act 1988 to the order she was about to make, (notwithstanding that neither counsel appears to have referred to the possible applicability of that section in the course of submissions before her). Although there was little information before the magistrate as to the defendant’s financial position, she accepted that he was a person of limited financial means with limited ability to repay pecuniary sums and made an appropriate adjustment to the costs order to allow for that matter.
In my opinion, no grounds have been made out to interfere with the decision of the learned magistrate. An examination of the written reasons published by the magistrate for each of her rulings in this case discloses a meticulous consideration of all the issues which arose for her determination, and no error has been demonstrated in her approach to those matters. The appeal is therefore dismissed. In those circumstances, it is unnecessary for me to reach a conclusion as to the quantum of costs which would otherwise have been payable to the defendant as a legally aided person, although I believe that the conclusion reached by the magistrate as to this aspect of the matter is also correct.