The State of South Australia v Van Hattem - [2020] SASC 26

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
THE STATE OF SOUTH AUSTRALIA v VAN HATTEM
[2020] SASC 26
Judgment of The Honourable Justice Parker
24 February 2020
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
In November 2019, a Judge of this Court granted permission for the State of South Australia to appeal against the decision of the Full Bench of the South Australian Employment Tribunal. The respondent, by interlocutory application, seeks that the order granting permission to appeal be varied to attach a condition that the appellant pay the respondent’s reasonable costs of and incidental to the appeal.
The respondent was employed as a teacher and suffers from a psychiatric injury. Because her injury is psychiatric, the issue to be decided by the Full Court is whether her “employment was the significant contributing cause of the injury” within the meaning of s 7(2)(b)(i) of the Return to Work Act 2014 (SA) (“the RTW Act”). This issue gives rise to an important question concerning the proper construction of the RTW Act and its operation in cases of psychiatric injury. The significance of the question extends well beyond the respondent’s individual case.
Held, allowing the application:
1. Whether or not a condition requiring an appellant to meet a respondent’s costs in any event should be attached to the grant of permission to appeal will depend upon the issues to be decided in an appeal and the circumstances of the particular case.
2. Consistently with the approach adopted by the High Court in CSR Limited v Eddy and by the NSW Court of Appeal in State of New South Wales v Corby, I consider that the grant of permission to appeal should be varied so as to add the condition as to the payment of costs sought by the respondent.
3. The respondent is not well positioned to meet an adverse costs order on the point being tested. She succeeded in the SA Employment Tribunal at trial and on appeal before the Full Bench.
4. The appellant is a large and recurrent litigant. The resolution of the point to be decided in this appeal is important to the State and to its emanation, the Return to Work Corporation.
5. It is appropriate to attach the condition sought by the respondent.
Return to Work Act 2014 (SA), referred to.
Corporation of South Australia v Brealey [2018] SASCFC 4; CSR Limited v Eddy (2005) 226 CLR 1; Oshlack v Richmond River Council (1998) 193 CLR 72; State of New South Wales v Corby (2010) 76 NSWLR 439, applied.
Department of Education v van Hattem [2019] SAET 193, discussed.

THE STATE OF SOUTH AUSTRALIA v VAN HATTEM
[2020] SASC 26

PARKER J: In November 2019, a Judge of this Court granted permission for the State of South Australia to appeal against the decision of the Full Bench of the South Australian Employment Tribunal in Department of Education v van Hattem.[1] The appeal is soon to come before the Full Court. The respondent, by interlocutory application, seeks that the order granting permission to appeal be varied to attach a condition that the appellant pay the respondent’s reasonable costs of and incidental to the appeal.
[1] [2019] SAET 193.
Prior to the grant of permission to appeal, the respondent’s solicitor had written to the appellant’s solicitor seeking agreement for the attachment of a condition that the appellant pay the respondent’s costs of the appeal. That letter was not answered. Subsequently, the Judge granted permission to appeal “on the papers” without being informed of the condition sought by the respondent.
The respondent was employed as a teacher and suffers from a psychiatric injury. Because her injury is psychiatric, the issue to be decided by the Full Court is whether her “employment was the significant contributing cause of the injury” within the meaning of s 7(2)(b)(i) of the Return to Work Act 2014 (SA) (“the RTW Act”). This issue gives rise to an important question concerning the proper construction of the RTW Act and its operation in cases of psychiatric injury. The significance of the question extends well beyond the respondent’s individual case. That fact formed one of the grounds advanced by the appellant for the grant of permission to appeal.
The respondent relies upon the decision of the Full Court in Return to Work Corporation of South Australia v Brealey.[2] In that case the Full Court, comprising Kourakis CJ and Blue and Parker JJ, granted the Return to Work Corporation permission to appeal on condition that it pay the reasonable costs incurred by the respondent in the appeal. The Full Court did not specify why it had adopted this approach.
[2] [2018] SASCFC 4.
The appeal in Brealey concerned the proper construction of the phrase “employment was a significant contributing cause of the injury” in s 7(2)(a) of the RTW Act. That phrase applies where a worker has suffered an injury other than psychiatric injury.
The respondent submits that, in so far as costs are concerned, the circumstances of her case are relevantly indistinguishable from those in Brealey. Counsel for the respondent also informed the Court that the respondent is impecunious and could not afford to meet the costs of the appeal from her own resources, particularly if the matter should be decided against her.
The appellant submitted that there was no evidence before the Court of the respondent’s financial circumstances other than a statement in an affidavit affirmed by her solicitor to the effect that she did not have the financial capacity to cover her own costs of the appeal nor those of the appellant. In that light, I directed that the respondent file an affidavit providing greater detail about her financial circumstances.
That affidavit has now been received. The appellant’s solicitor has deposed that she has been instructed that the respondent has returned to work as a student support officer rather than in her former role as a teacher. That has caused her salary to decrease by some $25,000 per annum. Her husband is currently not working due a physical injury and is receiving income support payments at a rate considerably less than his pre-injury earnings. If he remains incapacitated, those payments will cease in less than 15 months. The respondent and her husband have a substantial mortgage commitment. The respondent has only very limited savings. If her income ceases, she and her husband will be unable to meet their mortgage payments and they may lose their house.
The appellant has submitted that the Court should only make an order in the terms sought by the respondent in special circumstances. The mere fact that there is a public interest in this litigation is not, of itself, a special circumstance. Counsel referred to several authorities in support of that submission.[3]
[3] Kronen v Commercial Motor Industries Pty Ltd (No 2) [2016] SASCFC 23; Channel Nine v Police (No 2) [2014] SASCFC 119 and Rundle v Tweed Shire Council (1989) 69 LGRA 21.
I have considered the authorities referred to by counsel for the appellant. They do support the appellant’s contention that the fact that there is a public interest in litigation is not, of itself, a special circumstance that warrants departure from the ordinary rule that costs follow the event. However, in my view, none of those authorities are directly relevant to the question of whether the Court should attach a condition to the grant of permission to appeal that requires the appellant to meet the appeal costs of the respondent in any event.
In Oshlack v Richmond River Council, Gaudron and Gummow JJ referred to the practice whereby the High Court may require an applicant for special leave to appeal to give an undertaking that they will meet the costs of the other party to the appeal in any event.[4]
[4] (1998) 193 CLR 72 at [42].
In CSR Limited v Eddy the appellant challenged the basis upon which damages were to be assessed in a case where the plaintiff was rendered unable to continue providing gratuitous personal or domestic services for another because of their personal injury. A condition had not been attached to the grant of special leave requiring the appellant to meet the respondent’s costs. Gleeson CJ and Gummow and Heydon JJ made the following observation in relation to the question of costs:[5]
It is common in this Court in cases were the resolution of a point is desirable from the point of view of a large and recurrent litigant, whether corporate (for example, an insurance company) or governmental (for example, the Commissioner of Taxation or the Australian Competition and Consumer Commission), but the other party to the litigation is not a recurrent litigant and is not well positioned to meet adverse costs orders on the point being tested, that the grant of special leave be made conditional on appellant’s paying the other side’s costs in any event and on appellants not seeking to disturb costs order in the courts below which were favourable to the other side.
[5] (2005) 226 CLR 1 at [81].
McHugh J dissented and stated:
A decision on an insurance policy may have an effect on numerous insurance policies issued by insurers. But so far, this Court has not adopted the practice of ordering an appellant-insurer to pay the costs of both parties in this Court and in the courts below. From time to time, the Court may make it a condition of the grant of special leave that an insurer in this Court and not disturb the costs orders made in the courts below. A different area is reached when special leave has been granted without such a condition and the insurer succeeds in the appeal. Unless the insurer has been guilty of some misconduct, the usual order for costs is that costs follow the result.
Callinan J agreed with McHugh J that the appellant should not be required to pay the respondent’s costs. His Honour distinguished the approach often adopted in taxation matters as, in this case, offers had been made for a commercial resolution and the question of law raised by the appeals was far from settled.
In State of New South Wales v Corby Basten JA held, with Beazley and Tobias JJA agreeing, that on a question relating to the operation of the Civil Liability Act 2002 (NSW), the appeal should be subject to a condition that the appellant pay the respondent’s reasonable costs in any event.[6] Basten JA stated there were three reasons for that approach. First, there was uncertainty as to the correct outcome because of a lack of clarity in the legislation. Secondly, there were other cases which would turn on the outcome of this case, in each of which the State was a defendant. His Honour also referred to a third consideration based upon the Suitors’ Fund Act 1951 (NSW). That consideration is not relevant in this State.
[6] (2010) 76 NSWLR 439 at [9].
Consistently with the approach adopted by the High Court in Eddy and by the NSW Court of Appeal in Corby, I consider that the grant of permission to appeal should be varied so as to add the condition as to the payment of costs sought by the respondent. I do so because, first, the respondent is not well positioned to meet an adverse costs order on the point being tested. Secondly, she succeeded in the SA Employment Tribunal at trial and on appeal before the Full Bench. The appellant is a large and recurrent litigant. The resolution of the point to be decided in this appeal is important to the State and to its emanation, the Return to Work Corporation.
Whether or not a condition requiring an appellant to meet a respondent’s costs in any event should be attached to the grant of permission to appeal will depend upon the issues to be decided in an appeal and the circumstances of the particular case. I have simply found in this case that it is appropriate to attach the condition sought by the respondent.
Order
For the preceding reasons, I make the following order:
1The order granting permission to appeal made on 5 November 2019 by Peek J be varied so that permission is granted on the condition that the appellant pay the respondent’s reasonable costs of and incidental to the appeal.