Ralser and Comcare
[2012] AATA 558
•24 August 2012
[2012] AATA 558
Division GENERAL ADMINISTRATIVE DIVISION File Number
2011/1574
Re
Michael Ralser
APPLICANT
And
Comcare
RESPONDENT
DECISION
Tribunal Mr S. Webb, Presiding Member
Dr B. Hughson, MemberDate 24 August 2012 Place Canberra Comcare is to pay 50 percent of Mr Ralser’s reasonable costs in these proceedings, excluding costs incurred in respect of Dr Bentivoglio and the professional costs of Ms Barmes.
.........................[sgd].........................................
Mr S. Webb, Presiding Member
WORKERS COMPENSATION – orders for costs – severability of issues – apportionment appropriate – applicant’s partner a material witness and acting as solicitor of record – no exceptional circumstances – partial costs award
Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 6, 14, 67
Legal Profession Act 2004 (NSW), ss 49, 498, 711
Corporation of Burford v Lenthall (1743) 26 ER 731
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Dungey v Angove (1794) 2 Ves. Jr. 304
Griffiths v Australian Postal Corporation [2008] FCA 19
Hughes v Western Australian Cricket Association (Inc.) & Ors [1986] FCA 382
Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563.
Oshlack v Richmond River Council (1998) 193 CLR 72
Re Perrin and Telstra Corporation Limited [1995] AATA 479
Perry v Comcare (2006) 150 FCR 319
Re Ralser and Comcare [2012] AATA 510
Riley v Comcare (1994) 48 FCR 449
Federal Court Rules 2011
Law Society of New South Wales Revised Professional Conduct and Practice Rules 1995
REASONS FOR DECISION
Mr S. Webb, Presiding Member
Dr B. Hughson, Member24 August 2012
Michael Ralser lodged a claim for compensation in respect of a number of injuries[1] allegedly arising from an incident at a coffee shop. Comcare rejected his claim by primary determination[2] and on reconsideration[3]. On review, we concluded that Mr Ralser’s claims in respect of the coffee shop incident were not made out, but that he was entitled to compensation in respect of a subsequent injury arising within the scope of his claim. Thus, the decision under review was set aside and the matter was returned to Comcare to assess Mr Ralser’s entitlement to payment under particular heads of compensation, subject to claim.
[1] Exhibit A4 and T8.
[2] T34.
[3] T47.
Time was allowed for the parties to make submissions in respect to orders for costs. This has now been done in writing. With no request from either party to be heard orally, we will proceed to determine the matter on the written materials filed.
Mr Ralser has been partially successful in the proceedings he instituted and the Tribunal’s decision is more favourable to him than the reviewable decision. The Tribunal has discretion to order Comcare to pay his costs of the proceedings, or part of those costs, under s 67(8) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Act). Clause 6.8 of the Tribunal’s March 2007 Guide to the Workers Compensation Jurisdiction (the Guide) provides that an order for costs will, unless otherwise ordered, be on a party and party basis and may include:
·witness expenses at the prescribed rate;
·all reasonable and proper disbursements; and
·professional costs allowable with any scale of costs determined by the Tribunal, or if there is no such scale, 75 percent of all professional costs, including counsel’s fees, which would be allowable under the Federal Court scale.
Two issues presently arise. The first concerns the proposition that Mr Ralser should only be awarded costs for aspects of the proceedings in which he was successful. This requires consideration of the severability of Mr Ralser’s injury claims and the apportionment of costs.
The second issue concerns the proposition that Comcare should not be ordered to pay any professional costs in respect of Mr Ralser’s partner, Catherine Barmes, as she represented him while being a material witness in his case.
The issues are to be decided applying s 67 of the Act, which is a code in relation to costs[4]. The primary rule is set out in s 67(1): each party to a proceeding shall bear their own costs. Subsections 67(2) to (12) set out exceptions to the rule[5]. The only exception of present relevance is set out in s 67(8). This section vests the Tribunal with discretion to order a responsible authority, presently Comcare, to pay all or part of a claimant’s costs in proceedings if the Tribunal makes a decision that is more favourable to the claimant, varying or setting aside the reviewable decision.
[4] Griffiths v Australian Postal Corporation [2008] FCA 19 at [2]-[4]; Perry v Comcare (2006) 150 FCR 319 at 338-339; Riley v Comcare (1994) 48 FCR 449 at 451.
[5] Perry v Comcare (2006) 150 FCR 319 at 338.
The discretion to order costs under s 67(8) involves the exercise of administrative power, in relation to which the Tribunal must act with “judicial detachment and fairness”[6] and not “arbitrarily, capriciously or so as to frustrate the legislative intent”[7]. One might expect that the usual order as to costs[8] would follow a determination favourable to an applicant in proceedings such as this, and ordinarily that would be so. But the discretion conferred by s 67(8) operates within the statutory context of the Act. There is strong authority of long standing that the award of costs to a successful party in litigation has a compensatory purpose, providing partial indemnity for the costs incurred[9]. But this is not an absolute rule[10]; nor is it the necessary consequence of a favourable determination, whether in great or small proportion to the causes of action in the litigation or to the scope of disputed issues in the proceedings.
[6] Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 65.
[7] Oshlack v Richmond River Council (1998) 193 CLR 72, per Gaudron and Gummow JJ at 81.
[8]Ibid. per McHugh J at 97.
[9] Ibid. per Kirby J at 121-122.
[10] Ibid. per Gaudron and Gummow JJ at 88; per Kirby J at 121-122.
In a case such as this, where there is but one application before the Tribunal arising from one compensation claim form (covering a number of alleged injuries), an assessment must be made as to the severability of the causes of action underlying the application, and the attribution of costs in appropriate proportion to the respective causes, severally. If the causes are inextricably interwoven to the extent that severance cannot reasonably be made, the issue of apportionment falls away. But that is not the end of the assessment.
There is equally long standing authority that the award of costs is not punishment for the losing party, but it is a function of justice in the particular circumstances – “to do that which appertains to justice and that which appertains to example, and to vindicate the honour and justice of the court”[11], “as to the satisfaction on one side or the other on account of vexation”[12]. Thus, the award of costs to a succeeding party might be expected to serve justice in the particular case. This broad conception must be properly construed under the statute conferring jurisdiction, and it requires consideration of any improper, unnecessary or unreasonable costs incurred by either party in the proceedings, as well as any public interest or other factors that are relevant in the particular case.
[11] Dungey v Angove (1794) 2 Ves. Jr. 304 at 313, per Lord Chancellor Loughborough.
[12] Corporation of Burford v Lenthall (1743) 26 ER 731 at 732, per Lord Hardwicke.
Thus, in order to address Comcare’s submissions in respect of Ms Barmes, it is necessary to consider whether her professional costs in the proceedings were improperly, unnecessarily or unreasonably incurred and whether there is a public interest in such matters; and, if so, whether this is relevant to the exercise of the discretion conferred by s 67(8).
Severability and apportionment
Comcare asserts that Mr Ralser should not be awarded costs in respect of claims for physical and psychological injuries sustained as a result of being punched by Dieter Tietz during a coffee break outside his place of work. These aspects of the case, Comcare says, are the primary causes of action under the claim for compensation Mr Ralser lodged, which he subsequently pressed on reconsideration by Comcare and on review by the Tribunal, and they are severable from the secondary cause of action concerning a subsequent psychological injury relating to perceived bullying at work.
In Comcare’s submission, the “vast majority” of the evidence and argument, and the costs of the proceedings, are attributable to the primary causes of action under claim, relating to the coffee shop incident. Mr Ralser was not successful in this aspect of his case and he should not be awarded costs relating to it. Comcare urged us to confine exercise of the s 67(8) discretion to Mr Ralser’s costs that were properly incurred in respect of the secondary cause of action, alone, relating to perceived bullying at work: “the costs awarded in favour of the applicant should be no higher than 50% of the professional legal costs incurred by the applicant for Dr Ward and Ms Fabiani”[13].
[13] Respondent’s Submissions on Costs, 10 August 2012, page 3.
While these submissions have some force, there are two clear difficulties. Firstly, Comcare’s assertion that “The evidence relating to the applicant’s perception of bullying and harassment was only raised in the report of Dr Allnutt, dated 25 February 2012”[14] is not correct. Mr Ralser’s claim[15] and subsequent documents he provided to Comcare[16] clearly set out his allegations of workplace bullying by Mr Tietz before and after the coffee shop incident. This assertion is plain in the submissions drafted by Dr Christopher Ward and filed on Mr Ralser’s behalf in the course of these proceedings, on 25 July 2012. We note that the Statement of Facts, Issues and Contentions of the Applicant, drafted by Ms Barmes and filed on 24 November 2011, is squarely directed to the incident at the café and only passing reference is made to “psychological sequellae”. On review of the file, this appears to be consistent with the intention, stated earlier in the proceedings by Ms Barmes, to proceed with Mr Ralser’s case on the basis of the alleged injuries arising from the café incident alone. Nevertheless, on a generous interpretation of these documents, it is reasonably clear that Mr Ralser’s case proceeded on two limbs.
[14] Ibid, page 2.
[15] T8 folio 16.
[16] See T14 folios 45-46 and T22 folio 66, for example.
Secondly, the issues, evidence and arguments in these proceedings relating to Mr Ralser’s psychological injury claims are not readily severable on the basis of circumstance, relating to the coffee shop incident. The causes underlying his psychological injury claim include the coffee shop incident and allegations of bullying and harassment in his workplace. Insofar as issues of costs are concerned, these causes sensibly considered, are not severable and for this reason, on this point, we reject Comcare’s submission.
But it does not follow that Mr Ralser’s submissions as to costs can be accepted, or that Comcare’s submissions are entirely devoid of merit – they are not.
Mr Ralser’s representatives assert that he is entitled to his costs in the ordinary way – there is no basis for seeking to go behind the “proceedings” to consider his success or failure on individual issues, or to reduce his recovery of costs on the basis of apportionment.
It appears to us that Mr Ralser’s claims in respect of physical injuries to his right upper limb and to his cervical spine are readily severable from other aspects of his claim concerning psychological injury.
This is not a case in which the issues of fact and law arise before us as an indivisible whole, a singular corpus, albeit made of many parts. Mr Ralser’s case is squarely raised on two distinct limbs that stand apart and that are essentially distinct, although perhaps linked in various ways. On the one side there are his claims relating to physical injuries, and on the other side are his claims relating to psychological injuries. To our minds, these two limbs are severable.
This is so despite there being some evidence to suggest that pain and disability arising from Mr Ralser’s claimed physical injuries contributed to his psychological condition and disorder. Regard must be had to the circumstances and the contributory causes of each claimed injury as these were the matters before us for determination. Mr Ralser attributes the right upper limb and cervical spine injuries under claim to being punched by Mr Tietz at the coffee shop, whereas his psychological disorder is multifactorial, being primarily attributed to perceived bullying and harassment at work. These causes of action are severable.
Arriving at that conclusion, we note the cautionary remarks of Toohey J in Hughes v Western Australian Cricket Association (Inc.) & Ors[17] and the principles his Honour set out in relation to the costs discretion under the Federal Court Rules 2011 –
[17] [1986] FCA 382
9. … There are decisions, both of Australian and English courts, that throw light on the way in which the discretion is to be exercised. I shall not refer to those decisions in any detail; I shall simply set out in a summary way what I understand to be their effect.
1Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v. Godfrey (1920) 2 KB 47.
2Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v. Farquhar (1893) 1 QB 564.
3A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v. Lombardi (1975) 13 SASR 4 at 12.
10. There is no difficulty in stating the principles; their application to the facts of a particular case is not always easy. Also it is necessary to keep in mind the caveat by Jacobs J. in Cretazzo v. Lombardi at 16. His Honour sounded what he described as “a note of cautious disapproval” of applications to apportion costs according to the success or failure of one party or the other on the various issues of fact or law which arise in the course of a trial. His Honour commented:
“But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues”.[18]
[18] Ibid. at [9] and [10]
Of course, the Tribunal is not a court vested with powers to make rules or orders in respect to costs; and the third point of principle to which Toohey J referred is clearly not applicable here. Presently, the Tribunal’s jurisdiction is conferred by s 67 and its power to make costs orders is confined by the terms of the section. Nevertheless, the matters to which Toohey J referred are matters we have carefully considered when exercising the discretion conferred by s 67(8).
On balance, weighing the relevant factors and interests, it is not appropriate to order Comcare to pay Mr Ralser’s costs that are attributable to the physical injury aspects of the proceedings, in which he was singularly unsuccessful.
As to the issue of apportionment of costs between the severable parts of Mr Ralser’s case – the psychological injury claim in which he was successful and the physical injury claims, in which he was not – Comcare relies on Re Perrin and Telstra Corporation Limited[19]. Those representing Mr Ralser say that this decision is not on point as it addressed two separate applications, whereas this case involves only one. There is no doubt that this detail is correct, but the principle applied by the Senior Member in Perrin is presently apposite.
[19] [1995] AATA 479
The issue in Perrin’s case, as here, was one of apportionment of costs. The Tribunal determined one of the two applications before it in a manner that was favourable to Mr Perrin and proceeded to apportion costs by order, without taxation, having heard the parties. There was no question that Mr Perrin was not entitled to costs in the unsuccessful application; the issue for determination related to the apportionment of costs in respect of the successful application, when both applications were heard concurrently. The Senior Member said:
I consider that Ss67(8) of the SRC Act is broad enough in its provisions, particularly by reference to the discretion to award part of those costs, to allow me to make an order for costs which roughly reflects the apportionment between the matters, and it is desirable that I undertake this task, the proceedings having taken place before me.[20]
[20] Ibid. at [12].
Our present task is not dissimilar, and we agree on the point of construction.
Turning to consider the course of the proceedings before the Tribunal and the evidence adduced, it is quite clear that substantial parts of the medical evidence were directed to Mr Ralser’s physical injury claims, alone. Dr Bentivoglio and Dr Cairns, orthopaedic surgeons, and Dr Ruttenberg, an occupational physician, gave written and oral evidence that primarily and substantially related to Mr Ralser’s physical injury claims. Of these doctors, only Dr Bentivoglio was briefed and called on Mr Ralser’s account. It is not appropriate to order Comcare to pay Mr Ralser’s costs relating to Dr Bentivoglio.
Dr Simone, Norma Beattie, Ms Barmes, Mr Tietz, Sonia Teston, John Alexander and Tabor Akman gave written and oral evidence that was primarily directed to circumstances relevant to Mr Ralser’s physical injury claims. But their evidence extended, in part and in varying degrees, to circumstances that are relevant to his psychological injury claims. Only Dr Simone, Ms Beattie and Ms Barmes were called on Mr Ralser’s account. We will deal with issues relating to Ms Barmes separately.
With regard to representation it appears that counsel, Dr Ward, was briefed early in the proceedings and that he attended a number of conferences with Ms Barmes, the solicitor of record – a consultant with A. L. Wunderlich & Co, Solicitors and Attorneys. Once again, we will address issues relating to Ms Barmes separately. It is unusual for counsel to attend preliminary conferences in the Tribunal with the instructing solicitor. In the ordinary course work of this nature would be undertaken by the solicitor. It appears likely that the circumstances in this case, in which Ms Barmes was both her client’s partner and a material witness as well as the solicitor of record may have precipitated Dr Ward’s early involvement, but this is not presently established by evidence. We note that Ms Barmes had carriage of the matter as solicitor of record until just prior to the listed hearing on 23 July 2012. Gabriella Fabiani of Fabiani Solicitors instructed Dr Ward during the course of the hearing, and she has filed written submissions on Mr Ralser’s behalf in respect to costs. We are not privy to the details of the solicitor-client arrangements between Mr Ralser and Ms Barmes (or her employing firm), or between Mr Ralser and Ms Fabiani.
With regard to hearing time, the matter was set down for three days and it was completed in the allotted time. In our estimation more than 70 percent of the time was spent taking evidence and hearing argument relevant to the coffee shop incident and Mr Ralser’s physical injury claims. Evidence was taken from four medico-legal experts, only one of whom, Dr Allnutt, is a psychiatrist who squarely addressed Mr Ralser’s psychological injury claims. Dr Bentivoglio, Dr Cairns and Dr Ruttenberg addressed Mr Ralser’s physical injury claims within their areas of expertise. Oral evidence was taken from Dr Simone, Ms Beattie, Ms Barmes, Mr Tietz, Ms Teston, Mr Alexander, Mr Akman and Mark Bayliss. The evidence of these witnesses was relevant to Mr Ralser’s physical and psychological injury claims, with most time being spent establishing the circumstances of the coffee shop incident.
Weighing these considerations and excluding costs relating to Dr Bentivoglio, it is reasonable, fair and appropriate to apportion 50 percent of Mr Ralser’s remaining costs to his physical injury claims and 50 percent to his psychological injury claims. But this is not the end of the matter. The issues relating to Ms Barmes must be dealt with.
Practice rules and Ms Barmes
Comcare asserts that Mr Ralser should be denied costs attributable to work performed on his case by his partner, Ms Barmes. This is so, the argument goes, because Ms Barmes was both solicitor of record and a material witness, acting in a manner that is contrary to the Law Society of New South Wales Revised Professional Conduct and Practice Rules 1995 (the Legal Profession Rules) made under Part 7.5 of the Legal Profession Act 2004 (NSW) (the Legal Profession Act) and applying to solicitors registered to practice in New South Wales. Furthermore, Comcare asserts that “Ms Barmes in evidence to the Tribunal said that she was not acting as a solicitor for her partner but rather was merely offering him administrative assistance in the proceedings”[21].
[21] Respondent’s Submissions on Costs, 10 August 2012, page 1.
Those representing Mr Ralser cavil with this proposition, submitting that Ms Barmes was cross-examined on this point and gave evidence that “she was indeed the solicitor on the record until shortly before the Hearing, but that she could not recall when she commenced acting”[22]. In Mr Ralser’s submission, Ms Barmes’ evidence was not contentious and she was not cross-examined on factual issues in dispute. On this basis, those representing Mr Ralser argue that there is no sound basis to exclude Mr Ralser from recovering legal costs properly incurred by Ms Barmes and her firm.
[22] Written Submissions of the Applicant on the Question of Costs, 15 August 2012, page 2.
Generally, the award of costs to a successful party may be discounted or reduced if the costs of either party have been incurred or increased improperly, unnecessarily or unreasonably, or as a result of misconduct, by the legal representatives of the succeeding party in the proceedings[23].
[23] Perry v Comcare (2006) 150 FCR 319 at 339.
It is important to observe immediately that it is not for us to determine whether or not Ms Barmes has breached the rules of her profession[24] under the governing statute[25]. That, properly, is a matter for others to determine, if pressed. We simply note that the Legal Profession Rules is a legislative instrument that is binding on a practicing solicitor[26], under which conditions may be attached to the solicitor’s practicing certificate[27].
[24] Relevantly, the Law Society of New South Wales Revised Professional Conduct and Practice Rules 1995.
[25] Relevantly, the Legal Profession Act 2004 (NSW).
[26] Legal Profession Act 2004 (NSW) s 711.
[27] Ibid., s 49
The issue for us is whether, by her action or by her conduct in the proceedings, Ms Barmes improperly, unnecessarily or unreasonably incurred costs and, if so, whether this is a relevant matter to consider under s 67(8) and, if so, whether it establishes a sufficient or good reason to discount the award of costs to her client, Mr Ralser.
In this context we note that misconduct in respect of a solicitor is not something that is simply described by notions of legal wrong-doing; as Rich J said in Kennedy v The Council of the Incorporated Law Institute of New South Wales[28]
... a charge of misconduct as relating to a solicitor need not fall within any legal definition of wrong doing. It need not amount to an offence under the law. It was enough that it amounted to grave impropriety affecting his professional character and was indicative of a failure either to understand or to practise the precepts of honesty or fair dealing in relation to the courts, his clients or the public.
[28] (1939) 13 ALJ 563.
The Federal Court Rules 2011 (the Rules) address the issue of costs that have been improperly, unreasonably or negligently incurred at Rule 40.06 and the issue of misconduct and costs at Rule 40.07, as follows:
40.06 Costs improperly, unreasonably or negligently incurred
A party may apply to the Court for an order:
(a)that any costs that have been improperly, unreasonably or negligently incurred be disallowed; or
(b)directing an inquiry whether any costs have been improperly, unreasonably or negligently incurred and providing for the costs of such inquiry.
40.07 Liability of lawyer to their client for misconduct
(1) A party who has reasonable cause to believe that additional costs have been incurred because of the party’s lawyer’s misconduct, may apply to the Court for an order:
(a)that the whole or part of the costs as between the lawyer and the party be disallowed; or
(b)if the lawyer is a barrister — that the whole or part of the costs as between the barrister and the barrister’s instructing lawyer be disallowed; or
(c)that the lawyer pay to the party costs that the party has been ordered to pay to another party; or
(d)that the lawyer indemnify any other party against any costs payable by that party.
(2) For this rule, a lawyer has engaged in misconduct if:
(a)a proceeding or an application is delayed, adjourned or abandoned because of the lawyer’s failure:
(i) to attend or make arrangements for a proper representative to attend a hearing; or
(ii) to file a relevant document; or
(iii) to provide the Court or another party with a relevant document; or
(iv) to be prepared for a hearing; or
(v) to comply with these rules or an order of the Court; or
(b)the lawyer:
(i) incurs costs improperly or without reasonable cause; or
(ii) costs that are unnecessary or wasteful; or
(iii) is guilty of undue delay.
We set out these Rules in full because clause 6.8 of the Guide makes reference to the allowability of professional costs under the Federal Court scale and these are relevant matters for us to consider in relation to the discretion conferred by s 67(8) of the Act.
We accept that Ms Barmes is a solicitor registered and practicing in NSW, even though we have seen no documentary evidence on this point. She represented Mr Ralser and was the solicitor of record in these proceedings, attending conferences and interlocutory hearings on his account. It appears that she and Dr Ward were alerted on at least one occasion by a Tribunal conference registrar to the difficult position she was in as a material witness and as Mr Ralser’s solicitor of record. We assume, but we have seen no evidence to confirm, that Ms Barmes and Dr Ward were properly acting on instructions from Mr Ralser. That being so, the agitation of these matters in relation to costs will come as no surprise to him.
It appears that Ms Barmes has been involved in encouraging and supporting Mr Ralser’s case from the outset. The evidence establishes that immediately following the coffee shop incident in December 2009, Ms Barmes encouraged Mr Ralser to document his version of events and, in January 2010, she took photographs of bruising on Mr Ralser’s right upper limb – these were tendered in evidence[29]. Ms Barmes swore an affidavit that was provided to Comcare on 8 December 2010[30], well before these proceedings commenced on 27 April 2011 with Mr Ralser’s application for review. The application nominates A. L. Wunderlich & Co as Mr Ralser’s legal representative, and it was lodged under a covering letter signed by Ms Barmes.
[29] Exhibit A5.
[30] T44.
Ms Barmes swore another affidavit for the purposes of these proceedings on 7 March 2012[31]. It appears that Ms Barmes permitted Ms Beattie, a long-term friend, to swear an affidavit before her for the purposes of these proceedings on 6 March 2012[32]. These matters were put to her under cross-examination. Ms Barmes filed her own affidavit and that of Ms Beattie under a covering letter dated 14 March 2012, which she signed (these documents were received by the Tribunal on 23 March 2012).
[31] Exhibit A3.
[32] Exhibit A2.
That being so, there is no doubt that Ms Barmes was acting as the solicitor of record for her partner, Mr Ralser, while also giving supporting evidence as a material witness in the proceedings. There is no evidence of any exceptional circumstance, necessitating or otherwise justifying this conduct, even though it gives rise to significant and obvious difficulties. As we said in the substantive decision[33], the great risk of a solicitor acting in this manner is that relevant evidence may be tainted and, in consequence, discounted, contrary to the interests of his or her client, thereby rendering it more difficult for the interests of justice to be served in the particular case[34].
[33] Re Ralser and Comcare [2012] AATA 510
[34] Ibid. at [106].
It appears to us that Ms Barmes’ conduct did not fully comply with the Legal Profession Rules although, as we have said, this is not for us to determine. There are serious questions whether the costs incurred by Ms Barmes in this manner are costs that were improperly, unreasonably or negligently incurred to the extent that they may be disallowed under the Federal Court Rules. Under s 498 of the Legal Profession Act, conduct that contravenes the Legal Profession Rules is capable of being found to be unsatisfactory professional conduct or professional misconduct.
On balance, considering the discretion conferred by s 67(8) of the Act and all of the relevant matters to be taken into account in its exercise, the interests of fairness and justice weigh against ordering Comcare to pay all professional costs incurred by Ms Barmes. The professional costs she incurred acting as the solicitor of record from the outset of the proceedings brought by her client, Mr Ralser, were incurred when she was a material witness in those proceedings. This was done despite being alerted to the potential difficulty of this arrangement by an officer of the Tribunal. It appears to us that Ms Barmes acted for Mr Ralser in the full knowledge that her evidence was material to his case and that doing so may lead to difficulties.
The proposition that Ms Barmes could simply navigate around the Legal Profession Rules by stepping out of her professional role as the solicitor of record in order for another solicitor to instruct Dr Ward during the hearing cannot be accepted. The cloak of counsel, albeit with an early brief, does not assuage this point. Ms Barmes gave material evidence to Comcare, well before the commencement of proceedings in the Tribunal. She gave material evidence in the course of the Tribunal proceedings, filing her own affidavit and one Ms Beattie swore before her under the same covering letter in March 2012, well before the ultimate hearing in July 2012. And yet Ms Barmes acted for Mr Ralser from the commencement of the Tribunal proceedings to just before the ultimate hearing. Sailing close to the wind within the Legal Professional Rules is one thing, acting as the solicitor of record while being a material witness for her client, is entirely another.
Mr Ralser was entitled to obtain legal representation and, having partly succeeded in his action, in the usual course, he may anticipate recovering some of those costs. But we are satisfied that the arrangement for legal representation by Ms Barmes is not one that accords with the usual course. It appears to us that, under this arrangement, Ms Barmes’ professional costs may not have been properly or reasonably incurred. In the absence of exceptional circumstances, professional costs incurred in likely contravention of the Legal Profession Rules are costs that are not properly or reasonably incurred.
No issues have been raised in respect of any public interest; but it appears to us that the proper conduct of solicitors representing clients in proceedings of this kind is a matter of public interest. It is for this reason that the Legal Profession Rules are promulgated as instruments of legislation, within a nationally agreed framework. There is a powerful public interest in the service of justice, and the service of justice may be impeded or compromised if the Legal Profession Rules are not adhered to.
On balance, being mindful of the requirement to deliver a fair and just result, we are satisfied that it is not appropriate in the circumstances to order Comcare to pay Mr Ralser for Ms Barmes’ professional costs in these proceedings.
Conclusion
It is appropriate to exercise the discretion under s 67(8) and to order Comcare to pay part of Mr Ralser’s reasonable costs of the proceedings, being costs that are attributable to his psychological injury claims.
As we have said, it is not appropriate to order Comcare to pay Mr Ralser’s costs in relation to Dr Bentivoglio or the professional costs of Ms Barmes. Excluding those costs, Comcare will be ordered to pay 50 percent of Mr Ralser’s remaining reasonable costs of these proceedings as agreed or taxed.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Presiding Member, Dr B. Hughson, Member ...........................[sgd]......................................
Associate
Dated 24 August 2012
Dates of hearing 23 to 25 July 2012 Date final submissions received 15 August 2012 Solicitors for the Applicant A. L. Wunderlich & Co, Solicitors and Attorneys
Fabiani Solicitors
Solicitors for the Respondent Australian Government Solicitor
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