CRAMPTON v AUSTRALIAN IRON AND STEEL PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, MEAGHER JJA and ROLFE AJA 3 October 1995 [1995] NSWCA 106 WORKER'S COMPENSATION Application by successful respondent for indemnity costs refused Clarke JA I can see no reason why the usual costs order should not be made in this case. In my opinion Mr Crampton's motion is misconceived. Accordingly, I agree with the orders proposed by Rolfe AJA and, generally, with his Honour's reasons. Meagher JA I agree with Rolfe AJA. Rolfe AJA INTRODUCTION On 29 June 1993 O'Toole CCJ made an award in favour of Graeme Duncan Crampton, ("Mr Crampton"), against Australian Iron and Steel Pty Ltd, ("AIS"), in the Compensation Court of New South Wales. By a Notice of Appeal filed on 14 July 1993 AIS appealed to this Court against that decision, the grounds of appeal being: - "1. Her Honour erred in determining that on or about 1986 the respondent worker suffered an injury to both eyes arising out of or in the course of his employment with the appellant employer. 2. That her Honour erred in determining that since on or about 26 July 1989, the respondent worker was partially incapacitated to perform the normal duties of a shift engineer underground. 3. That her Honour failed to give any or adequate reasons for not accepting the appellant's medical evidence. 4. That her Honour erred in not allowing the appellant employer to present its case in a manner which accords with the rules of natural justice and in particular, by not admitting the evidence of its medical witness on the 29th June 1993. 5. That her Honour's findings were against the evidence and against the weight of the evidence." The appeal papers were settled on 9 September 1993. The appeal was listed for hearing on 16 August 1995 and, on 10 August 1995, AIS delivered its written submissions to this Court and to the solicitors for Mr Crampton. The submissions commenced by advising that at the hearing AIS would seek leave to amend the Notice of Appeal to include "only the following grounds: - "(1) Her Honour erred in law in finding that in about 1986 the respondent worker suffered injury arising out of and in the course of his employment with the appellant employer in the absence of any finding identifying the nature or the category of the injury so found. (2) Her Honour erred in law in failing to give adequate reasons for and/or in failing to adequately or at all reveal in her judgment her reasoning process in finding that in about 1986 the respondent worker suffered injury arising out of and in the course of his employment with the appellant employer. 2 UNREPORTED JUDGMENTS (3) Her Honour erred in determining that in about 1986 the respondent worker suffered injury arising out of and in the course of his employment with the appellant employer." In essence the first proposed amended ground of appeal gathered up and refined the original first ground of appeal, and, as I noted in my reasons for judgment, with which reasons Clarke and Meagher JJA agreed: - "The submissions ultimately made on behalf of the appellant can be stated quite shortly. It was submitted that whilst pterygia is or could be a disease, and while the evidence was capable of establishing that it was caused by dust being blown into the eyes of the respondent, there was no evidence that it caused incapacity, or, alternatively, her Honour did not find that it caused incapacity." On 10 August 1995 the solicitors for Mr Crampton wrote to the solicitors for AIS stating that the amendments to the Notice of Appeal would be opposed and: "We are of the view that both the original appeal grounds and the proposed amendments lack merit, and in the circumstances we have instructions to settle the matter prior to the incursion of substantial further costs on the basis that the appeal be dismissed with costs in favour of the respondent. In the event that your client does not accept this offer and the appeal is dismissed, we will tender this letter on an application for indemnity costs." The offer, in so far as it constituted any offer of compromise, was not accepted and the hearing of the appeal went ahead on 16 August 1995. AIS was granted leave to amend its Notice of Appeal conformably with the notice given to the solicitors for Mr Crampton, the matter was argued on that basis by both parties and on 18 August 1995 the appeal was dismissed with costs. On | September 1995 Mr Crampton caused a Notice of Motion to be filed seeking an order that AIS pay his costs of the appeal, including the costs of the Notice of Motion, on an indemnity basis. The Notice of Motion was supported by the affidavit of his solicitor sworn on 4 September 1995, which annexed AIS's written submissions and the letter from the solicitors for Mr Crampton to the solicitors for AIS to which I have referred, and recited the dates on which Mr Crampton filed and served his written submissions and the appeal was heard and dismissed. On 13 September 1995 the parties were advised that the Court would consider the application on the basis of written submissions and it would only be listed for oral submissions if further argument was required. In the light of the written submissions the Court has come to the view that it is not necessary to hear further submissions. THE SUBMISSIONS It was submitted on behalf of Mr Crampton that AIS is an experienced and professional workers compensation litigant, well able to assess its prospects on appeal I am prepared to assume this is correct. It was submitted that the original grounds of appeal were hopeless, as was recognised by AIS's substantial abandonment thereof. While, in my opinion, certain of the original grounds of appeal may be categorised as being "hopeless", the first ground of appeal has, as I have indicated, been gathered up in the first ground of appeal, which was argued. It was then submitted that the grounds of appeal of which notice was given on 10 August 1995 were hopeless. I do not agree with this description of them. The Court concluded that the appeal should be dismissed. That occurred, however, after detailed submissions by both parties in which the material before her Honour was examined at some length to conclude that this was the proper result. Whilst the judgment makes clear that the URJ CRAMPTON v AUSTRALIAN IRON AND STEEL PTY LTD (Rolfe AJA) 3 Court came to a final conclusion that the appeal should be dismissed it cannot, in my view, be said that that was a result of its being regarded as hopeless. The somewhat bold submission on behalf of Mr Crampton that the appeal "could not succeed" may well be made with the benefit of a judicial finding that it did not succeed. However, I do not think it could have been realistically said, without the benefit of argument and a consideration of all the matters raised, that the appeal "could not succeed". Part of the development of the law occurs from the allowing of appeals which, prior to that development, may have been thought to have but little chance of success. It was submitted on behalf of Mr Crampton that on the appeal certain evidentiary questions were argued on which there was no prospect of success. Whilst that is correct there was none-the-less a central argument arising out of the first ground of appeal as finally argued, which required appropriate consideration by the Court, and of which the Court could not be cursorily dismissive. Mr Crampton submitted that the inference to be drawn is that the appeal was pursued to put pressure on him to compromise rights, which had already been established by the decision of O' Toole CCJ. There is no evidence to support any such inference. It was suggested that in Huntsman Chemical Co Ltd v International Pools Australia Pty Ltd (1995) 17 ATPR 41-403 at 40462-40463 I said something which would support the drawing of such an inference. In fact I said: - "There is no evidence, and I would certainly not draw an inference, that the appellants used the Notices of Appeal and the appellate process as a bargaining lever in the hope of obtaining some commercial advantage in the particular circumstances of this case." T also said: - "T do not infer that the purpose of maintaining the appeal was to seek to bring about a settlement,...". It is convenient, at this stage, to put Huntsman into its proper perspective. That was a case in which I concluded it was appropriate to order indemnity costs because the only inference to be drawn from the abandonment of the appeal, on the morning it was called on for hearing, was that it had come to the attention of the legal representatives of the appellant that it was a hopeless appeal, a matter which should have exercised their minds at a far earlier date, and that the respondent, having been put to the expense of preparing for the appeal right up to the point of the hearing, should be indemnified fully In the reasons of the President and Mahoney JA there was some support for the view I expressed in the particular circumstances of that case. However, in the result, their Honours concluded it was not appropriate to order indemnity costs, although Kirby P suggested that if they were to be sought some prior notice of such an application should be given. No doubt the solicitors for Mr Crampton wrote the letter of 10 August 1995 having regard to what the President said. The notice given in the present case was very short notice and it did not lead to an abandonment of the appeal. Nor do I think the amendment of the grounds of appeal is a matter which, generally speaking, should attract an award of indemnity costs I come to that conclusion because there is an advantage in amending grounds of appeal for the purpose of the better expressing, refining and defining the issues to be determined on the appeal, which is of benefit to the parties and the Court. I venture to suggest there would be few Notices of Appeal, which do not contain grounds, which are subject to amendment on the hearing, and which do not contain grounds, which are not pursued on the hearing. The 4 UNREPORTED JUDGMENTS Notice of Appeal must be filed within a short time after the hearing at first instance and I think, understandably enough, the draftsperson, whilst doing the best to make the Notice of Appeal accurate, labours under certain difficulties. As the appeal is prepared other ways of expressing the grounds, which more accurately define the issues, emerge. I would not wish to restrict or inhibit parties from taking the sensible course of so amending grounds of appeal or abandoning grounds, which cannot, on reflection, be sensibly argued, by making a costs order which may discourage such courses. Mr Crampton has submitted AIS has given no such explanation in evidence for its pursuit of the appeal, which has been a waste of the Court's time and resources as well as his. The submission continued that hopeless appeals in workers compensation cases should not be permitted "without some additional protection for respondent workers beyond party-party costs". The submission really proceeds on the basis that the appeal was hopeless, which I reject, and that, accordingly, it has wasted time and resources. Finally, the submissions refer to the decision in Premier Woodworking Co Pty Ltd v Sigarisucu (Court of Appeal - 30 November 1989 - unreported) In that case, on the appeal being called on, the appellant withdrew it and the respondent sought an order for indemnity costs. The Court declined to make that order notwithstanding a strongly expressed view, albeit no doubt prima facie, that the grounds of appeal were either without substance or, looking at the one said to be susceptible of "some rational argument", "plainly doomed to early defeat". In those circumstances the Court concluded that the order for costs should be on a solicitor and client basis. Samuels AP, who gave the judgment of the Court, was of the view that whilst some took the view that appeals with such weaknesses as that one disclosed should be discouraged, the Court was not satisfied that the making of special orders for costs was the proper way of achieving that result. Further, his Honour noted that the Court's function, basically, is to determine cases. What I have said is not to be interpreted, for my part, as any retreat from the view I expressed in Huntsman. As I have sought to point out Huntsman was, in my judgment, a different and special case. The proper inference was the appeal was hopeless and, hence, it was withdrawn Had more timely attention been given to it its hopelessness would have been obvious far earlier with the consequential saving in costs, which the respondent incurred. It was the hopelessness of the appeal, thus inferred, and the failure to appreciate it at a far earlier time, which led me to the view that the prosecution of the appeal, after a reasonable time for consideration, constituted a form of abuse of process of the Court, such as to constitute conduct, which could be described as wrongful, which justified an award of indemnity costs. For the reasons I have given the present is not such a case and, of course, it must be remembered that my decision, on this point, did not find favour with the majority in any event. CONCLUSIONS In the result, and in the exercise of my discretion, I consider that the present is not an appeal in which it is appropriate to make a special order for costs. Hence the Notice of Motion must be dismissed. I also consider that the consequence of that is that Mr Crampton must pay AIS's costs thereof. The orders I propose are that: - 1. Notice of Motion filed by Graeme Duncan Crampton on 1 September 1995 be dismissed. URJ CRAMPTON v AUSTRALIAN IRON AND STEEL PTY LTD (Rolfe AJA) 5 2. Graeme Duncan Crampton pay the costs of Australian Iron and Steel Pty Limited of the Notice of Motion. COUNSEL: 5 Claimant: Mr SD Rares and Miss JS Gleeson Opponent: Mr JN Gleeson QC and Mr GJ Ballard SOLICITORS: 10 Claimant: Abelitis and Co Opponent: Sparke Helmore Withycombe