Ralph v Greentree

[2004] NSWCA 112

CITATION:	Ralph v Greentree [2004] NSWCA 112
HEARING DATE(S):	25 March 2004
JUDGMENT DATE:	8 April 2004
JUDGMENT OF:	Tobias JA at 1; McColl JA at 57; Windeyer J at 58
DECISION:	(a) Leave to appeal granted upon condition that a notice of appeal is filed within 14 days of the date of this order; (b) Appeal allowed; (c) The order of Maguire CCJ made on 3 July 2003 that the Australian Jockey Club pay the costs of the opponent and the Public Trustee in the proceedings be set aside; (d) The opponent pay the costs of the claimant of the summons for leave to appeal and of the appeal but to have a certificate under the Suitor's Fund Act 1951, if otherwise qualified
CATCHWORDS:	WORKERS COMPENSATION - Compensation - Redemption of liability - Whether redemption is compensation - Whether 'claim for compensation' - Whether 'person claiming compensation' - Where trustee of redemption money being changed - Whether employer ought to always pay worker's costs - ss 85 85A Workers Compensation Act 1985 (NSW) - s 15 Workers Compensation Act 1926 (NSW) - ss 112 116 Workplace Injury Management and Workers Compensation Act 1998 (NSW) - PRACTICE AND PROCEDURE - Compensation Court - Whether employer was a party to the proceedings - Whether employer ought to have been joined to proceedings - Whether employer had an interest in the proceedings - Abuse of process - Whether Compensation Court had power to order employer to pay worker's costs - Whether exercise of discretion to award costs miscarried - ss112 116 Workplace Injury Management and Workers Compensation Act 1998 (NSW)
LEGISLATION CITED:	Compensation Court Act 1984 (NSW) Compensation Court Rules 1990 (NSW) Guardianship and Administration Act 2000 (Qld) Public Trustee Act 1978 (Qld) Public Trustee Regulation 2001(NSW) WorkCover Legislation Amendment Act 1996 (NSW) Workers Compensation Act 1926 (NSW) Workers Compensation Act 1987 (NSW) Workplace Injury Management and Workers Compensation Act 1998 (NSW)
CASES CITED:	Gosper v Christopherson (1986) 160 CLR 423 Hatfield Engineering Pty Limited v Fitzgerald [2003] NSWCA 345 House v The King (1936) 55 CLR 499 John White & Sons Pty Limited v Changleng [1985] 2 NSWLR 163 Metcalfe v K & C Harris Plasterers (2002) 23 NSWCCR 719 Morey v Woodfield [1964] 1 Q.B 1 Public Trustee v A M Hoipo Pty Limited (1999) 19 NSWCCR 215
PARTIES :	Stephen Leslie Greentree by his next friend Cyril Kevin Greentree Trevor Ralph Australian Jockey Club
FILE NUMBER(S):	CA 40601/03
COUNSEL:	Cl: Mr Maconachie QC / Mr Ventura Opp: Mr King SC / Mr Kearney
SOLICITORS:	Cl: Abbott Tout, Sydney Opp: Liston & Loveband, Glen Innes

LOWER COURTJURISDICTION:	Compensation Court
LOWER COURT FILE NUMBER(S):	CC 3804/87
LOWER COURT JUDICIAL OFFICER :	Campbell CJ

CA 40601/03
CC 3804/87

TOBIAS JA
McCOLL JA
WINDEYER J

Thursday 8 April 2004

TREVOR RALPH & ANOR v STEPHEN LESLIE GREENTREE

Judgment

1 TOBIAS JA: On 14 January 2002, Stephen Leslie Greentree (Mr Greentree) filed a Notice of Motion in the Compensation Court of New South Wales seeking that court's authorisation for the payment of all funds held by the Public Trustee of New South Wales (the Public Trustee) on his behalf to Mr Greentree's parents and sisters to be held by them for his benefit. That Notice of Motion was later amended by what became the Third Amended Notice of Motion whereby an order was sought to have the funds paid to the Public Trustee of Queensland (the Public Trustee Qld) to be held for the benefit of Mr Greentree pursuant to the Guardianship and Administration Act 2000 (Qld) and the Public Trustee Act 1978 (Qld) together with certain consequential orders.

2 On 9 April 2003, McGuire CCJ made the orders sought in the Third Amended Notice of Motion but adjourned the question of costs to 3 July 2003. On that day, after hearing argument, his Honour ordered that the Australian Jockey Club (the AJC) pay the costs of Mr Greentree and the Public Trustee in the proceedings. The AJC seeks this Court's leave to appeal against that order. The application for leave and the substantive appeal were heard concurrently.

The background facts

3 Mr Greentree, a young jockey, suffered a fractured skull and severe brain damage when his horse rolled on him during track work at Cessnock in December 1986. As a consequence, Mr Greentree lost a great deal of his independence and needed varying degrees of nursing and assistance, much of which was provided by his family. Further, he has been (and remains) unable to work.

4 Mr Trevor Ralph employed Mr Greentree at the time of his accident. However, it would appear that the AJC was the relevant employer for worker's compensation purposes. Accordingly, in 1987 Mr Greentree filed an application for compensation joining Mr Ralph and the AJC as respondents. On 16 July 1990, the Compensation Court, pursuant to s 15(1) of the Workers Compensation Act 1926 (the 1926 Act) made the following order:

"That the liability of the respondents to make weekly compensation payments to the applicant in respect of incapacity for work resulting from injury/ies referred to in the application for determination may be redeemed in whole as from 1 January 1986 by payment to the applicant of a lump sump of $1,500,000 as determined by the Court pursuant to the provisions of Schedule 6 in addition to any payments made."

5 The reference to Part 4 of Schedule 6 in the above order was a reference to clause 6 of Schedule 6 to the Workers Compensation Act 1987 (the 1987 Act) which provided that s 15 of the 1926 Act continued to apply to a liability in respect of a weekly payment of compensation for a period of incapacity for work resulting from an injury received before the commencement of Division 2 of Pt 3 of the 1987 Act (which related to benefits by way of weekly compensation).

6 The Compensation Court's order also contained a note that:

"The applicant agrees that the said lump sum redeems liability under sections 60 and 66."

The parties to the appeal agreed that the reference to ss 60 and 66 (of the 1987 Act) was a typographical error and should have referred to ss 10 and 16 of the 1926 Act. This is because cl 6(3) of Part 4 of Schedule 6 to the 1987 Act provided that s 15(1A) of the 1926 Act also applied to a liability under Division 3 or 4 of Part 3 of the 1987 Act. Sections 60 and 66 fall within that Division, they being the equivalent of ss 10 and 16 of the 1926 Act.

7 Because Mr Greentree, due to the severity of his injuries, was unable to care for his own affairs, a lump sum of $1,500,000 (the lump sum) was, either by agreement or order of the Compensation Court, paid to the WorkCover Authority pursuant to s 15(3) of the 1926 Act as amended in 1984, 1988 and 1989 with respect to the State agency to which such funds were required to be paid. As a consequence of Schedule 1.9 to the WorkCover Legislation Amendment Act 1996, the Public Trustee replaced the WorkCover Authority as the body to which lump sums, the subject of redemption pursuant to s 15 of the 1926 Act or commutation pursuant to the relevant provisions of the 1987 Act, were to be paid. By clause 6(5) of Schedule 1.9 [9], compensation paid to the WorkCover Authority under s 85 of the 1987 Act was after 1 March 1997, taken to have been paid to the Public Trustee. The lump sum, or so much thereof as was then left, (the fund), was held by the Public Trustee from that date.

The relevant statutory provisions

8 As I have observed, the Compensation Court's order of 16 July 1990 was made pursuant to s 15(1) of the 1926 Act. The relevant provisions of s 15 were as follows:

"Redemption of weekly payments either in whole or in part
15(1) Subject to this Act, the liability in respect of any weekly payment may, with the consent of the worker, be redeemed either in whole or in part by the payment of a lump sum, determined by the Court, having regard to any dispute as to liability to pay compensation under this Act and the injury, age and occupation of the worker at the time of the occurrence of the injury, as well as to his diminished ability to compete in an open labour market.

(1A) Where the Court determines a lump sum under subsection (1) and the worker agrees that payment of the lump sum should also redeem any liability to make a payment under section 10 or 16 in respect of the injury, payment of the lump sum also redeems any liability to which the agreement of the worker relates.
…

(2) An agreement as to the redemption of a payment by a lump sum shall not, nor shall the payment of the sum payable under the agreement exempt the person by whom the payment is payable from any liability under this Act unless such sum has been determined by the Court in accordance with this Act.
(3) Such lump sum may by agreement or order of the Court be paid to the Board to be invested, applied, paid out or otherwise dealt with as agreed upon or ordered or, subject to any such agreement or order, as provided by section 57."

9 Section 15(3) of the 1926 Act was replaced by s 85 of the 1987 Act (which also replaced ss 57, 58 and 61 of the 1926 Act). For present purposes, the following provisions of s 85 are relevant:

"(1) The following compensation shall be paid to the Public Trustee in trust for the benefit of the persons entitled to the compensation:
a)…
b)…
c)…
d) a lump sum commutation payment which the worker agrees or the Commission orders to be paid to the Public Trustee.

(2) Any money so paid to the Public Trustee may be invested, applied, paid out or otherwise dealt with by the Public Trustee in such manner as the Public Trustee thinks fit for the benefit of the persons entitled to the money.
…

(6) The Commission may, for any sufficient cause, vary the manner in which the Public Trustee invests, applies, pays out or otherwise deals with money under this section.
(7) The Public Trustee may apply for any such variation."

10 Section 85A of the 1987 Act is also relevant because it was probably pursuant to that provision that the Compensation Court made the order on 9 April 2003 which, in effect, substituted the Public Trustee Qld for the Public Trustee as the trustee of the fund. Relevantly it provides:

"(1) Despite section 85, the Commission may authorise the payment of compensation referred to in section 85(1)
(a)…
(b) to such other person, for the benefit of the person entitled to the compensation, as the Commission thinks fit."

11 The issue in dispute between the parties concerns the order for costs made by the primary judge on 3 July 2003. In this respect, the Compensation Court's powers with respect to the payment of costs are to be found in s 112 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) which relevantly provides as follows:

"(1) In this section, a reference to costs is a reference to the costs payable by a party in or in relation to proceedings, including disbursements.
(2) Subject to this Act and the regulations and the rules of the Compensation Court and subject to any other Act:
(a) costs in or in relation to any proceedings 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 in or in relation to any proceedings, and
…

(3) Subject to this section, the Court may not order the payment of costs by a person claiming compensation unless the Court is satisfied that the application for compensation was frivolous or vexatious, fraudulent or made without proper justification;
…

(7) An order of the Court for payment of costs may include:

(a) the costs actually incurred or to be incurred by a person claiming compensation, and
…

(c) costs incurred in relation to any proceedings under this Act (including conciliation of a dispute under Division 3),
…

(8) In this section:
'application for compensation' includes any proceeding sin connection with an application for compensation.
'compensation' means compensation under this Act."

12 By s 18 of the Compensation Court Act 1984 (the Court Act), s 112 of the 1998 Act was extended to any proceedings in the Court and not just proceedings under the 1998 Act.

13 The effect of s 112(3) of the 1998 Act is that the Compensation Court is enjoined from making an order that the "person claiming compensation" pay the costs of any third party unless the court is satisfied that "the application for compensation" was frivolous etc. Section 112(8) defines "application for compensation" to include "any proceedings in connection with" such an application. However, where the costs incurred on behalf of the "person claiming compensation" are not reasonable from the employer, the ability of the legal representatives of that person to recover those costs from him or her is governed by s 116 of the 1998 Act which provides that:

"(1) The legal representative or agent of a person claiming compensation under this Act is not entitled:
(a) to recover from the person any costs in respect of the claim, or
(b)…
unless those costs are awarded by the Compensation Court.

(2) Any such award may be made on the application either of the person claiming compensation or the person's legal representative or agent.
…

(7) A reference in this section to a claim includes a reference to a prospective claim (whether or not the claim is ever actually made)."

14 Section 17 of the Court Act is also relevant in respect of the Compensation Court's discretion to order costs. It relevantly provides:

"(1) A decision of the Court in any matter shall be upon the real merits and justice of the case…"

The proceedings before the primary judge

15 As I have already observed, the "proceedings" in the present case were commenced by Notice of Motion filed on behalf of Mr Greentree on 14 January 2002 whereby he sought an order, inter alia, that the Compensation Court, pursuant to s 85A of the 1987 Act, authorise the payment of all funds held by the Public Trustee for his benefit pursuant to s 85 of that Act, to his parents and sisters to be held for his benefit. No order for costs was expressly sought in that document. The Notice of Motion was filed in Matter No. 3804 of 1987 which was the court number given to the original application by Mr Greentree for payment of weekly compensation. The Notice of Motion, after stating the name of the applicant thereto, identified three respondents. Firstly, it identified Mr Ralph and the AJC as the "RESPONDENT (to original application)" and, secondly, it identified the "RESPONDENT (to this motion)" as the Public Trustee.

16 An Amended Notice of Motion was filed on 18 March 2002, which differed from the original Notice of Motion only in that it identified "Costs" as one of the orders sought. However, it did not identify the party against whom such an order was sought. A Second Amended Notice of Motion was filed on 29 August 2002 which, so far as is relevant, differed from the previous notices of motion by substituting a different trustee to Mr Greentree's parents and sisters.

17 The affidavits filed in support of these notices of motion asserted concern on the part of the family that the fund had been reduced from $702,000 in 1997 to $430,000 in May 2001. It was alleged that there was a fear that if appropriate steps were not taken to conserve and rebuild the fund over the long term, eventually Mr Greentree would be left without adequate means of support. It was therefore desired to give the family control over the fund and Mr Greentree's "destiny", in part because the family had moved to Queensland in 1988 where they had purchased a farm. Accordingly, the thrust of the evidence filed in support of the orders sought in the amended Notice of Motion was that the family circumstances and their future plans in Queensland made it more likely that the fund could be built back up to about $700,000 over the next 8-10 years if there was a change to a Queensland-based trustee. It is fair to say that it was not suggested that the Public Trustee had maladministered the fund during its stewardship of it.

18 The hearing of the Second Amended Notice of Motion was listed before the primary judge on 11 February 2003 in Brisbane. In the course of that hearing his Honour made it clear that he would not appoint the trustee proposed in the Second Amended Notice of Motion in lieu of the Public Trustee. The Public Trustee Qld was then suggested as the appropriate trustee and the proceedings were adjourned to 9 April 2003 to enable a further amendment to the Notice of Motion. As I have indicated, the Third Amended Notice of Motion was filed on 9 April 2003 and orders were made by consent that the fund held by the Public Trustee be paid to the Public Trustee Qld. On that occasion the question of the costs of the Notice of Motion was adjourned for hearing on 3 July 2003.

19 In the meantime, on 9 July 2002, the Amended Notice of Motion was mentioned before Campbell CJ when, apparently, the AJC appeared and asked to be excused from further attendance. His Honour ordered that the AJC be excused subject, however, to being recalled on the question of costs. The Public Trustee (who had been named as the sole respondent to the motion), remained as respondent in order to test and challenge the order for a change of trustee which had been sought.

20 On 3 July 2003 Mr Greentree, as the applicant in the Notice of Motion, sought an order that the AJC pay his costs as well as those of the Public Trustee in respect of the proceedings. It appeared by that time that the Public Trustee had reimbursed itself out of the fund in respect of the costs and expenses that it had incurred in relation to the Notice of Motion and its various amendments. It was empowered to do so by clause 25 of the Public Trustee Regulation 2001. As Mr Greentree's legal costs and expenses could only be paid from the fund and as the Public Trustee had already reimbursed itself with respect to its costs and expenses from the fund, the application before the primary judge was that the AJC pay both the costs and expenses of Mr Greentree as well as those of the Public Trustee.

21 The primary judge was referred to and relied upon the decision of this Court in Public Trustee v A M Hoipo Pty Limited (1999) 19 NSWCCR 215. As Mr Greentree also relied upon this decision in this Court, it is convenient to analyse it at this point. A worker killed in a work-related accident was survived by his wife and several dependant children and step-children (the claimants). The claimants were entitled to claim compensation pursuant to s 25 of the 1987 Act as dependants of the deceased. Compensation under s 25 had two components, one of which was a statutorily determined lump sum which was required, by s 85(1)(a) of the 1987 Act, to be paid to the Public Trustee in trust for the benefit of the persons entitled thereto. By s 29 of that Act, that lump sum was required to be apportioned between the claimants.

22 The deceased's employer paid the lump sum to the Public Trustee. It was not its function to apportion the lump sum payment amongst the claimants. That function was to be performed either by the Compensation Court or the Public Trustee. In this case, due to the complexity of the matter as it involved both children and step-children, the Public Trustee declined to apportion the fund as it was entitled to do. Accordingly, the matter came before the Compensation Court to perform that function on the application of the deceased's widow. She joined the employer and the claimants (other than herself) as respondents. When the matter came before the Compensation Court for the first time, it was adjourned to allow for separate representation of the various groups of dependants and the employer was "excused from further attendance". At that time, the judge ordered that the Public Trustee be joined as a respondent.

23 Thereafter the widow filed a notice of motion successfully seeking an order rescinding the earlier order that the employer be excused from further attendance. The basis of this application was that other than the employer, there was "no entity to pay the legal costs of these proceedings". The apportionment application was duly listed for hearing in which four different legal representatives appeared for the different categories of claimants. The employer and the Public Trustee were also represented. The proceedings were resolved by consent between the groups of claimants without the necessity for a hearing. Neither the employer nor the Public Trustee played any role in the resolution so achieved.

24 The Compensation Court ordered that the costs of the claimants be borne by the Public Trustee and the employer in equal portions. Both disputed their liability to pay costs and appealed to this Court. Beazley JA, with whom Sheller JA and Hodgson CJ in Eq agreed, delivered the main judgment of the Court. Her Honour referred to ss 112 and 116 of the 1998 Act and observed ([16])

"I will merely comment at this point that, in exercising a discretion to order costs, it cannot be sufficient for a party to have a fund or resource out of which it can pay those costs."

25 After referring to the provisions of s 29 of the 1987 Act with respect to apportionment of lump sum compensation, her Honour turned to the question of the appropriate parties to such an application and said ([21]):

"In the ordinary course, the parties to an application for compensation are the persons entitled to compensation and the employer. In this case, had it been necessary for any of the claimants to bring an application for compensation to which they were entitled under s 25, Hoipo would have been joined as a respondent. An application for apportionment is a concomitant part of an application for compensation under s 25 and as such, Hoipo was a proper respondent to that application. The fact that it was excused from attendance supports, rather than detracts from the fact that the application was originally properly constituted."

26 Her Honour then considered whether it was appropriate for the Public Trustee to have been joined as a party to an application for apportionment pursuant to s 29. She held that it should not have been so joined, her reasons being as follows ([23]):

"There is nothing in s 29 which requires or even makes it desirable that the Public Trustee be joined as a party to such an application. Indeed, the whole tenor of the section suggests that the Public Trustee is not a proper party to such an application. It has no contribution to make to the proceedings. The factual input to the application can only come from the persons entitled to compensation (or those who represent their interests). It is not a contradictor to any party. It has no interest in the outcome of the proceedings and therefore has no relevant submission to make to the court in relation to the apportionment, which ought to be made. No order is or can be made against the Public Trustee under the section. As I have already stated, it is bound by the order of apportionment made by the court, in whatever circumstance that order is made either by clear statutory implication or expressly under subs 29(5)."

27 As the Public Trustee was erroneously joined as a party to the proceedings, her Honour held that the order for costs against it could not stand. However, having determined that the employer was properly joined as a respondent to the application for apportionment, the Compensation Court had the power pursuant to s 112 of the 1998 Act to order it to pay the claimant's costs of that application. As the claimants were "persons claiming compensation", s 116 prohibited their legal representatives from recovering from them the costs incurred on their behalf unless the court awarded those costs. As no such order had been sought or made, her Honour considered ([34]) that it became:

"acutely obvious that the only party who could and should be made liable was the employer"

28 She then continued ([35] and [36]):

"35. The employer protested that it was, at the point of the apportionment application, but an innocent bystander with no interest in the proceedings. There are two reasons why that submission is unappealing. First, it was the party liable to pay compensation. Secondly, the Workplace Injury Management and Workers Compensation Act contemplates that an employer will be liable for costs, even where a claim is paid voluntarily and without recourse to the court.
36. In short, the entire scheme of the costs provisions of the Workplace Injury Management and Workers Compensation Act recognises that the employer will be liable for costs of a claim for compensation regardless of whether an applicant commences proceedings or not, unless the claim is determined to have been made or brought frivolously or vexatiously."

29 It follows from the foregoing that underpinning this Court's decision was the implicit finding that in the apportionment application the claimants were, within the meaning of s 116(1)(a) of the 1998 Act, "persons claiming compensation". Given the policy of the legislation to which Hodgson CJ in Eq referred in his concurring judgment (see below), it was therefore inevitable that the Compensation Court's discretion was properly exercised in ordering the employer to pay the claimant's costs, there being no suggestion that the apportionment application was brought frivolously or vexatiously (cf. s 112(3)).

30 Hodgson CJ in Eq observed, as did Beazley JA, that ss 112 and 116 of the 1998 Act made it clear that the claimants could not, other than in exceptional circumstances, be liable for the costs of other parties or even their own costs. That being so, the effect of a finding that neither the Public Trustee nor the employer was liable for the claimants' costs was that the legal representatives for the claimant would be unable to recover their costs or disbursements from anyone.

31 In these circumstances, his Honour ([42]) did not believe that

"it could have been the legislature's intention that claimants should be represented, in apportionment proceedings, only by such lawyers as might be willing to receive no payment for their professional services and to be out of pocket for disbursements. In my opinion, the intention of the legislature was to make employers liable for the costs of successful claims; and if the final resolution of a claim requires apportionment, then normally the employer will be liable for the costs of apportionment."

32 In my opinion, it is clear that, given the context of his Honour's remarks, his reference to the intention of the legislature being to make employers liable "for the costs of successful claims" was intended by him as a reference to the costs of the "person claiming compensation" within the meaning of that expression as found in s 112(3) and s 116(1) of the 1998 Act.

33 It is appropriate to now return to the primary judge's reasons. In [16], his Honour held that the Notice of Motion as amended was "a proceeding in connection with an application for compensation" within the meaning of the definition of "application for compensation" in s 112(8) of the 1998 Act. As s 112(7)(c) empowered the Compensation Court, when making an order for the payment of costs, to include the "costs incurred in relation to any proceedings under" the 1998 Act, it followed that the Compensation Court had power, in its discretion, to order the AJC to pay Mr Greentree's costs of the Notice of Motion and that such an order should be made given the policy of the legislation referred to by Hodgson CJ in Eq in Hoipo at [42].

The submissions on the appeal

34 The primary submission of the AJC was that it was not a party or a proper party to the proceedings constituted by the Notice of Motion as a consequence whereof there was no power in the Compensation Court pursuant to s 112 of the 1998 Act to order costs against it. Alternatively, it was submitted that the exercise by the Compensation Court of its discretion pursuant to s 112(2)(a) to order costs against the AJC miscarried in that, in particular, the primary judge's reliance upon this Court's decision in Hoipo was misunderstood and misplaced. It was also submitted that given the nature of the proceedings constituted by the Notice of Motion and the subject matter of the dispute between Mr Greentree and the Public Trustee, the "real merits and justice of the case" dictated that the AJC should not be ordered to pay the costs of Mr Greentree and/or the Public Trustee: see s 17(1) of the Court Act.

35 Mr Greentree submitted that the relevant proceedings for the purposes of s 112 were the original proceedings for an award of weekly compensation in which Mr Greentree was clearly the "person claiming compensation". Accordingly, the discretion of the Compensation Court to order costs pursuant to s 112 was enlivened. As the AJC was a necessary party to the original proceedings, it was appropriate that it should bear the costs of not only the original application but also any proceedings "in connection with" that application within the meaning of s 112(8). Furthermore, the AJC was in the same position as was the employer in Hoipo with the consequence that it was the policy of the legislation that, given the provisions of s 116, Mr Greentree's legal representatives should not be left to bear his costs of the proceedings.

Was the AJC a party to the proceedings within the meaning of s 112(1) of the 1998 Act?

36 There is, of course, no doubt that the AJC was not only joined but also properly joined as a party to the original application for an award of weekly compensation. Those proceedings had been disposed of when the AJC's liability to make weekly compensation payments to Mr Greentree was redeemed by the payment by the AJC of the lump sum determined by the Compensation Court on 16 July 1990 pursuant to the provisions of s 15 of the 1926 Act and which, as a consequence of Mr Greentree's agreement as noted in the Compensation Court's order of that date, also redeemed the AJC's liability to make payments under ss 10 and 16 of that Act.

37 As Mahoney JA said in John White & Sons Pty Limited v Changleng [1985] 2 NSWLR 163, 167, the effect of the foregoing is that the redemption extinguishes the liability redeemed. Although it may be, as the primary judge pointed out, that the Compensation Court is never really finished with an application for compensation, nonetheless in my opinion, it is clear that whatever applications might otherwise be made under the legislation, no such application can be made by Mr Greentree for the payment of weekly compensation or in respect of the expenses referred under s 10 or for compensation in respect of the injuries referred to in s 16 of the 1926 Act or their successors. The liability for the payment of compensation to Mr Greentree in respect of each of those heads of compensation has been extinguished and cannot be revisited unless and until the Compensation Courts' jurisdiction under s 17(4) of the Court Act is enlivened: see, eg, Hatfield Engineering Pty Limited v Fitzgerald [2003] NSWCA 345.

38 The critical issue, however, is the meaning to be given to the word "proceedings" in s 112. In my opinion, that word is required to be read in the context of a provision empowering a court to order the payment of the costs of those proceedings. Accordingly, the reference in s 112 to "proceedings" is confined to the particular proceedings in respect of which an order is sought for the payment of the costs incurred in relation to them. In the present case, the only order sought (and which could be sought) was in respect of the costs of the Notice of Motion. It follows that the relevant proceedings for the purposes of s 112 were the proceedings constituted by the Notice of Motion and its amendments.

39 Accordingly, the question is whether the AJC was a proper party to the proceedings as so constituted. In my opinion it was not. The Public Trustee was a proper party to the Notice of Motion and it was joined accordingly. The employer in Hoipo was held to be properly joined as the application for apportionment pursuant to s 29 of the 1987 Act was a concomitant part of the application for compensation under s 25. There was a close connection between the liability of the employed to pay compensation under s 25 and the identity of the recipients of that compensation which was required to be determined pursuant to s 29.

40 In the present case, the AJC's position is more akin to that of the Public Trustee in Hoipo. I would adopt and adapt what Beazley JA said in [23] of her judgment that there is nothing in ss 85(6) and/or 85A which required, or even made it desirable that the AJC be joined as a party to the subject application. Indeed, as her Honour said in Hoipo (which accords with my opinion in the present case), the whole tenor of ss 85 and 85A suggest that, apart from the person entitled to the compensation in question, the only proper respondent to an application pursuant to those provisions is the Public Trustee. Furthermore, the AJC (like the Public Trustee in Hoipo) had no contribution to make, or interest in, the identity of the trustee of the fund. It had no interest or say in its administration. The factual input to the application could only come from the person entitled to the compensation or those who represented his interests and from the existing or proposed trustee. The AJC as Mr Greentree's former employer is not a proper contradictor to any of those parties. It had no interest in the outcome of the proceedings and, therefore, had no relevant submission to make to the Compensation Court in relation to the identity of the trustee of the fund. No order was or could be made against the AJC pursuant to those provisions. Once the lump sum had been paid by it to the Public Trustee pursuant to s 85(1)(d), the AJC had no further interest therein.

41 For the foregoing reasons, therefore, I am of the opinion that the AJC was not a proper party to the Notice of Motion. No substantive relief was sought (nor could be sought) against it and therefore, it should never have been considered by the Compensation Court as a respondent to the Notice of Motion.

42 Furthermore, the AJC was not in fact named as a respondent to the Notice of Motion. No doubt this was because no relief was sought against it. That it was not so named was in accordance with clause 2(3)(e) of Pt 14 of the Compensation Court Rules 1990 (the Court Rules). Although the AJC is named as a respondent to the original application, the only respondent named to the Notice of Motion was the Public Trustee: see [15] above. This was clearly correct. Accordingly, it was never a party to the Notice of Motion and, therefore, not a party to the relevant proceedings for the purpose of s 112.

43 In any event, Mr Greentree's application for a change of trustee should not have been made by way of a notice of motion in the original proceedings. By cl 11B(i) of Part 5 of the Court Rules, proceedings for an order, direction or authorisation in respect of the payment of compensation pursuant to ss 85 and 85A of the 1987 Act are required to be commenced by summons where no proceedings have been commenced in relation to the subject matter in dispute. The original application did not constitute such proceedings as there was no outstanding matter in dispute. Had the proceedings been commenced by way of summons, they would have been entirely independent of the original application and, clearly, the AJC would not have been a proper party thereto. It was impermissible to commence the proceedings by way of notice of motion in the original proceedings if the purpose of so doing was to engage the AJC as a party to the proceedings for the purpose only of seeking an order for costs against it. That would be an abuse of the Compensation Court's process. I am not, of course, suggesting that that was the case here: I merely seek to illustrate the point that the AJC was not a proper party to the proceedings within the meaning of s 112(1) of the 1998 Act.

44 It follows that the Compensation Court had no power to order the AJC to pay the costs of Mr Greentree and/or the Public Trustee in the proceedings with the consequence that the primary judge's order that it pay those costs was in error and must be set aside.

Did the primary judge's discretion miscarry?

45 It is strictly unnecessary to deal with this question, but for completeness I shall do so. It proceeds upon the assumption that the AJC was a proper party to the proceedings constituted by the Notice of Motion.

46 Whether the primary judge's discretion miscarried must, of course, be determined in accordance with the well known principles set out in the joint judgment of Dixon, Evatt and McTiernann JJ in House v The King (1936) 55 CLR 499 at 504-505. In my opinion, the primary judge's discretion miscarried for a number of reasons.

47 Firstly, his Honour misunderstood what Hodgson CJ in Eq was saying in Hoipo with respect to the intention of the legislation to make employers liable for the cost of successful claims where otherwise those costs would have to be borne by the worker's legal representatives because of the prohibition contained in s 116(1). However, as already observed, Hodgson CJ in Eq made his remarks in the context of persons successfully claiming compensation where the disentitlement to which s 116(1) refers is confined to the recovery of the costs "in respect of the claim" by a "person claiming compensation under this Act". In Hoipo the claimants were persons "claiming compensation" within the meaning of that provision. In the present case, Mr Greentree was not a "person claiming compensation" under "this Act" (which expression, by force of the combined operation of ss 2A(2) of the 1987 Act and s 60(2) of the 1998 Act, includes both the 1997 and 1998 Acts). He was bringing a proceeding under the 1987 Act but that proceeding was not a claim for "compensation" as defined.

48 Secondly, the primary judge wrongly rejected the decision of Armitage CCJ in Metcalfe v K & C Harris Plasterers (2002) 23 NSWCCR 719 as relevant to the issue before him. In that case, the applicant worker applied for an order for costs against his employer pursuant to s 122(1) of the 1998 Act being costs incurred in attempting to negotiate the commutation of the applicant's future rights. The applicant argued that the Compensation Court was empowered to order such costs pursuant to s 112(2) and s 112(7)(a) of the 1998 Act.

49 Armitage CCJ held that those provisions had no application because the costs in respect of which the application was made were not, within the meaning of s 112(7)(a), costs incurred "by a person claiming compensation". His Honour referred to the decision of the High Court in Gosper v Christopherson (1986) 160 CLR 423 where it was held that because there was no liability or obligation on an employer to pay a lump sum determined by the Compensation Court pursuant to s 15(1) of the 1926 Act, where a redemption occurred by the voluntary payment by the employer of the lump sum, that sum was not "compensation" for the purposes of s 112(7)(a). Accordingly, the costs claimed were not, within the meaning of that provision, "actually incurred…by a person claiming compensation".

50 The primary judge sought to distinguish Metcalfe upon the basis that, in the present case, the order being sought from the Compensation Court was for the payment not of costs incurred by a person claiming compensation within the meaning of s 112(7)(a) but of costs incurred in relation to "any proceedings under" the 1998 Act within the meaning of s 112(7)(c). This is true but irrelevant. His Honour has overlooked the fact that Metcalfe is relevant to the application of s 116(1) which only prohibits the recovery of a worker's costs where he or she is "a person claiming compensation under this Act"; and, as I have said, it was in the context of s 116 that Hodgson CJ in Eq in Hoipo made his observations as to the policy of the legislation upon which the primary judge has relied. It follows that s 116(1) did not, in the present case, prevent Mr Greentree's legal representatives being paid by their client out of the fund the costs incurred by them in relation to the prosecution of the Notice of Motion on his behalf.

51 Thirdly, the primary judge in the context of his reliance upon the observations of Hodgson CJ in Eq in Hoipo as to the policy in the legislation with respect to those who represent injured workers, applied that policy because he was of the view that the Notice of Motion was a proceeding "in connection with an application for compensation" within the meaning of the definition of "application for compensation" in s 112(8). However, given that the observations of Hodgson CJ in Eq were made in the context of s 116 and not s 112, the primary judge has, in effect, found that Mr Greentree was a "person claiming compensation" by virtue of the fact that the original proceedings were "an application for compensation". As a consequence the concepts of "a person claiming compensation" and "an application for compensation" have become conflated. In other words, his Honour seems to be suggesting that any person found to be making an application for compensation within the meaning of s 112(8) is necessarily "a person claiming compensation". However, it is clear that that is not necessarily so.

52 Fourthly, as a consequence of his Honour's misapplication of s 116, the primary judge has, in effect, considered that the policy of the legislation mandated an order that Mr Greentree's costs be paid by the AJC. No other considerations entered into his reasoning process. In my opinion, he erred in this regard and, therefore, did not properly consider the real merits and justice of the case, as he was required to do by s 17(1) of the Court Act.

53 In my opinion there were several factors which suggest that the discretion to order costs pursuant to s 112(2) ought not to have been exercised against the AJC and that each party should have been left to pay their own costs. They are:

(a) the Notice of Motion for the substitution of one trustee for the another arose, it would seem, out of two considerations. The first was that Mr Greentree and his family had moved to Queensland and it was considered more appropriate for the fund to be administered in Queensland rather than New South Wales. Secondly, it was alleged that the fund had diminished whilst in the hands of the Public Trustee and the family wished to have the opportunity to reverse that situation and considered that it was in a better position to achieve that objective than the Public Trustee;

(b) the history of the amendments to the Notice of Motion make it clear that neither the Public Trustee nor the Compensation Court was prepared to accept Mr Greentree's family as trustees of the fund given, no doubt, that they would ultimately be interested parties in those funds upon Mr Greentree's death. There was therefore the possibility of a conflict of duty and interest. Mr Greentree then sought to substitute a disinterested person as the proposed trustee but, again, this met with disfavour from both the Public Trustee and the Compensation Court. Finally, the Public Trustee (Qld) was proposed and this was accepted. Had the latter been approached in the first instance, the change in trustee could have been made with a minimum of expense. Accordingly, if the AJC was required to pay the costs of both Mr Greentree and the Public Trustee then it would be paying for a great deal of unnecessary expense which was not of its own making;

(c) accordingly, Mr Greentree was unsuccessful in the proceedings until he agreed that the trustee should be the Public Trustee Qld. Furthermore, it is apparent that Mr Greentree's parents and siblings were the moving parties albeit in his name;

(d) the nature of the dispute between Mr Greentree and the Public Trustee was akin to one between an investor and financial manager. The former not being happy with the returns being generated was seeking a more effective manager. The AJC was an innocent bystander to that dispute and, understandably, sought to distance itself from it. It had no interest in the proceedings and, in particular, had no say (let alone control), over the nature of the dispute, the manner in which it was prosecuted and the costs and expenses that were incurred with respect to it.

54 It is true that in most cases the employer is required to pay the worker's costs. There is, no doubt, in an overarching sense, a legislative intention that the worker's compensation should not be drained as a consequence of incurring legal expenses where the employer is liable for the injury that warranted the payment of compensation in the first place. However, it is also the case that the 1998 Act only protects the worker's general freedom from costs in the circumstances referred to in ss 112(3) and 116. Both provisions are only applicable to "a person claiming compensation". Where that is not the case, the Compensation Court's discretion to award costs under s 112(2) must be exercised upon the real merits and justice of the case as s 17(1) of the Court Act mandates. In my opinion, there is no reason why there should be any prima facie presumption that that discretion should be exercised in all proceedings in favour of the worker.

55 In my view, the merits and justice of the case did not require that the AJC pay the costs of Mr Greentree and the Public Trustee with respect to the Notice of Motion. Rather, those costs should be borne by the fund as they would be in any other case where a beneficiary seeks a change of trustee in circumstances that do not involve any finding of maladministration on the part of the existing trustee: cf. Morey v Woodfield [1964] 1 Q.B 1, 4. To the extent, therefore, that this Court should re-exercise the primary judge's discretion under s 112 of the 1998 Act, that discretion ought to be exercised in favour of each party bearing his or its own costs of the Notice of Motion.

Conclusion

56 In light of the views I have expressed above, it is unnecessary to consider the AJC's subsidiary arguments, namely, that it was denied procedural fairness and that Mr Greentree had no standing to claim costs on behalf of the Public Trustee. I would therefore propose the following orders:

(a) Leave to appeal granted upon condition that a notice of appeal is filed within 14 days of the date of this order;
(b) Appeal allowed;
(c) The order of Maguire CCJ made on 3 July 2003 that the Australian Jockey Club pay the costs of the opponent and the Public Trustee in the proceedings be set aside;
(d) The opponent pay the costs of the claimant of the summons for leave to appeal and of the appeal but to have a certificate under the Suitor's Fund Act 1951, if otherwise qualified.

57 McCOLL JA: I agree with Tobias JA.

58 WINDEYER J: I agree with Tobias JA.

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Last Modified: 04/14/2004