Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Lance Taylor v Fletcher International Exports Pty Ltd (No 2) [2001] NSWIRComm 228 PROSECUTOR: PARTIES : Inspector Lance Taylor DEFENDANT: Fletcher International Exports Pty Ltd FILE NUMBER: IRC2012-2016 of 2000 CORAM: Kavanagh J CATCHWORDS : Application for costs on an indemnity basis following No Case to Answer decision - effect of s14 of Supreme Court (Summary Jurisdiction) Act 1997 with s168 of Industrial Relations Act 1996 - requirement for court to hear evidence as to final costs orders - requirement for court to determine a quantified order as to costs - Court may seek assistance of Registrar who may tax a bill to provide court with assistance in its determination - Court must give reasons for specific Order as to costs Occupational Health and Safety Act 1983 Land and Environment Court Act 1979 LEGISLATION CITED : Industrial Relations Act 1996 Supreme Court (Summary Jurisdiction) Act 1997 WorkCover Authority (NSW) v J L Lennard Foods Equipment (No2) (1999) 92 IR 111 Norbis v Norbis (1986) 161 CLR 513 CASES CITED : Latoudis v Casey (1990) 170 CLR 534 Rosniak v Government Insurance Office 41 NSWLR 608 HEARING DATES: 08/29/2001 EXTEMPORE JUDGMENT DATE : 08/29/2001 PROSECUTOR: Solicitors: Mr T. Plummer Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT: Mr R. Reitano of counsel Solicitors: Mr P. Macken Leigh Virtue & Associates JUDGMENT: - 8 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date : 29 August 2001 IRC2012 of 2000 INSPECTOR LANCE STUART TAYLOR v FLETCHER INTERNATIONAL EXPORTS PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 IRC2013 of 2000 INSPECTOR LANCE STUART TAYLOR v FLETCHER INTERNATIONAL EXPORTS PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 IRC2014 of 2000 INSPECTOR LANCE STUART TAYLOR v FLETCHER INTERNATIONAL EXPORTS PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 IRC2015 of 2000 INSPECTOR LANCE STUART TAYLOR v FLETCHER INTERNATIONAL EXPORTS PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 IRC2016 of 2000 INSPECTOR LANCE STUART TAYLOR v FLETCHER INTERNATIONAL EXPORTS PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 EX TEMPORE JUDGMENT [2001] NSWIRComm228 1 HER HONOUR: These prosecutions were brought by Inspector Lance Stuart Taylor of the WorkCover Authority of New South Wales against Fletcher International Exports Pty Limited under s 15(1) of the Occupational Health and Safety Act 1983 ("the Act"). 2 The charges relate to an alleged breach of the Act which occurred at 2.30 pm on 8 May 1998 when a worker sustained crush injuries and fractures to his left arm and left leg when a storage bench referred to as a "stillage" loaded with meat and weighing approximately three tonnes, fell from the upper level stillage bay of a blast freezer to the floor level. The worker was pinned beneath it. He suffered injuries as a result. 3 Mr T. Plummer, solicitor, appeared for the prosecution and Mr R. Reitano of counsel appeared for the defendant. The defendant pleaded not guilty to the charges. 4 The court conducted a hearing as to liability in these prosecutions and Judgment was delivered from this court on 17 July 2001. The court found at the close of the prosecution's case Fletcher International Exports Pty Limited was not the employer at the site on the day of the accident and it followed [at 52}: . . . the defendant has no case to answer to the charges brought under s15(1). 5 This Application for Costs is brought by the defendant against the prosecutor, the WorkCover Authority of New South Wales. The application is for Costs on an Indemnity Basis. 6 A number of findings of fact, from the evidence, were made in the Judgment many of which were conceded by the defendant, who accepted, as truth, the particulars of the charges as supplied by the prosecution. 7 An examination of the evidence canvassed through paras 14 to 18 of the Judgment led the court to a finding [at 19] as to the issue of "employer": Four of the six persons interviewed identified another corporate identity as the employer, namely, R J Fletcher & Co, rather than the named defendant . . . Also found relevant was the evidence of a Mr David McKay, Manager, Fletcher International Exports Pty Limited who, when asked during the investigation of the accident: Q6 Who employed you on 08-05-98? A. R J Fletcher & Co. Since that time the company has consolidated to become Fletcher International Exports Pty Limited. 8 The court found [at 28]: The Court cannot be persuaded the prosecutor could be taken by surprise by the submission that it had to prove an essential element of the offence, namely, employer. The defendant had entered a 'not guilty' plea some months before. The issue was alive in the prosecutor's own evidence given the content of the statements it tendered in evidence. 9 The defendant in its application for costs relies on the following findings of this court: the prosecution had been given notice of the existence of another corporate identity as the employer, the prosecution had statements it took from witnesses on which it relied to reveal another employer was involved; the finding of the court there was no case to answer to the five charges brought; the considerable expense met by the defendant in preparation for trial to defend the allegations. The defendant submits this court should consider favourably its application in accordance with the principles as enunciated in Latoudis v Casey (1990) 170 CLR 534 given the circumstances of the case. 10 The prosecutor, in reply to the application of the defendant, tendered an affidavit of Norman Abraham Correy of 28 August 2001, which affidavit contains correspondence between the parties prior to litigation. The Prosecution relies on the correspondence to submit it requested particulars from the defendant corporation as to an application made to it by letter of 10 August 2001. No particulars were supplied by the defendant. The letter requested the prosecutor withdraw the charges but any question as to the issue of "employer" was not raised by the defendant. The defendant's solicitor stated in the letter: We have now had the opportunity of considering same and we are of the view that the charges brought against our client by your client are without foundation and we are instructed to defend same and to seek an order for the payment of our client's costs in due course. 11 The prosecutor submits it was not on notice that "employer" was in issue and it should not carry the burden of costs in criminal charges. 12 In the alternative the prosecutor submits if orders are made by the court as to the nature of the orders sought by the defendant, the prosecutor also makes submissions. The prosecutor relies on an authority of Caltex Refining Company Pty Limited v Maritime Services Board of New South Wales (1995) 36 NSWLR 552 which authority examines the effect of a provision of the Land and Environment Court Act 1979, s52, which refers to "just and reasonable costs". The prosecutor submits it should not have to meet an indemnity costs order in the circumstances. AS TO JURISDICTION FOR COSTS 13 The Supreme Court (Summary Jurisdiction) Act 1967 applies to a prosecution for an offence under the Occupational Health and Safety Act 1983 taken before the Industrial Relations Commission in Court Session. Section 168(1) of the Industrial Relations Act 1996 and s47(1)(b) of the Occupational Health and Safety Act 1983 are also applicable. Section 47(1)(b) of the Occupational Health and Safety Act 1983 states: 47. Summary procedure for offences (1) Proceedings for an offence against this Act or the regulations shall be dealt with summarily: (a) . . ., or (b) before the Industrial Relations Commission in Court Session. (c) . . . 14 Section 168(1) of the Industrial Relations Act 1996 states: 168. Criminal procedure (1) Proceedings for any offence in respect of which proceedings are taken before the Commission in Court Session are to be dealt with summarily by the Commission. (2) The Supreme Court (Summary Jurisdiction) Act 1967 applies to any such proceedings in the same way as it applies to proceedings that may be taken before the Supreme Court in its summary jurisdiction. (3) For the purposes of subsection (2), a reference (however expressed) in the Supreme Court (Summary Jurisdiction) Act 1967: (a) to the Supreme Court (except in s15) is taken to be a reference to the Commission in Court Session, and (b) to rules is taken to be a reference to rules of the Commission, and (c) to the Prothonotary is taken to be a reference to the Industrial Registrar. (4) The provisions applied by this section prevail over any other provisions of this Part for the purposes of proceedings for an offence. Section 14 of the Supreme Court (Summary Jurisdiction) Act 1967 is in the following terms: Judge may order payment of costs 14. (1) Where a judge: (a) convicts any person of an offence punishable in the summary jurisdiction of the Court; (b) makes an order dismissing the charge for any such offence; or (c) makes an order under section 10 of the Crimes (Sentencing Procedure) Act 1999 in respect of any such offence, the judge may, in and by conviction or order, order the defendant, in the case of a conviction or order referred to in paragraph (a) or (c), to pay to the prosecutor, or, in the case of an order referred to in paragraph (b), order the prosecutor to pay to the defendant, such costs as to the judge seem just and reasonable. (2) The amount so ordered to be paid for costs shall in all cases be specified in the conviction or order. (3) Subsection (1) does not empower the judge to order costs to be paid in proceedings for an offence referred to in section 475A(1) of the Crimes Act 1900." 15 The power of the court to award costs is therefore conditional upon a Judge of the Court or the Commission making an order dismissing the charge. This court has made that order in finding a no case to answer to the charge. 16 The discretionary power of the Industrial Relations Commission of New South Wales has been considered in the matter of WorkCover Authority of NSW (Insp Ankucic) v J L Lennard Foods Equipment (No 2) (1999) 92 IR 111 (at 112-113). 17 The relevant principles which must be applied to the exercise of the court's discretion do not suggest any fettering of this discretion but are in the form of principles or guidelines (see Norbis v Norbis (1986) 161 CLR 513 (at 519)). 18 The principles relating to the use of the discretionary power to order costs have been enunciated by the High Court in Latoudis v Casey (1990) 170 CLR 534 (per Mason CJ at 540-544; per Toohey J at 564-565 and per McHugh J at 569-570). The High Court, in adopting the view as expressed in Norbis's Case, acknowledged in the conferral by statute of a power to award costs when proceedings terminate in favour of a defendant, there is evidence of a legislative intent to abrogate the traditional rule that costs are not awarded against the Crown. These principles may be shortly stated as follows: (a) The conferral by statute on courts of summary jurisdiction of a power to award costs when proceedings terminate in favour of a defendant, evidence a legislative intent to abrogate the traditional rule that costs are not awarded the Crown; (b) In ordinary circumstances it would not be just or reasonable to deprive a defendant who has secured the dismissal of a criminal charge brought against him or her of an order for costs; (c) In exercising its discretion to award or refuse costs the Court should look at the matter primarily from the perspective of the defendant per Mason CJ at 542. To do so conforms to fundamental principles. 'If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the cost to which he or she has been put by reason of the legal proceedings.' per Mason CJ at 543.1. (d) The reasonableness of the prosecution is not a relevant consideration in deciding whether or not to award costs to a successful defendant; per Toohey J at 564. (e) A successful defendant in summary proceedings has a reasonable expectation of obtaining an order for costs against the informant; per McHugh J at 566. (f) The rationale of the order in favour of successful parties to proceedings (both for professional costs and out-of-pocket expenses reasonably incurred in connection with the litigation) is that it is just and reasonable that the party who has caused the other party to incur the cost of litigation should reimburse that party for the liability incurred; per McHugh J at 567.1. (g) Whether or not a prosecutor has a strong case is not a ground for depriving the defendant of his or her costs; per McHugh J at 569.4. (h) The only relevant circumstances in which a successful defendant would be deprived of the usual order for costs would be if there was specific conduct which either, induced the informant to think that a charge could be successfully brought against the defendant or there was conduct (such as prolonged cross-examination) which occasioned unnecessary expense in the conduct of the proceedings; per McHugh J at 569.6. 19 The Supreme Court (Summary Jurisdiction) Act 1967 states the court may make an order for the payment of costs: 14(1)(c) . . . such costs as to the judge seem just and reasonable. And: 14(2) The amount so ordered to be paid for costs shall in all cases be specified in the conviction or order. 20 In Caltex Refining Company Pty Limited v Maritime Services Board of New South Wales (1995) 36 NSWLR 552, the Court of Appeal as to the court's consideration as to costs found a court must exercise the power personally and make the actual order; the requirement such an order be both "just and reasonable" entails both that there be a fair hearing on the merits of the application for the order and the terms of the order finally made be, in itself, reasonable; the court is entitled and bound to receive any relevant evidence presented in admissible form by any party wishing to be heard as to the terms of the final costs order; the court is entitled to any other assistance lawfully available, including the assistance of the Registrar of the Court who may tax a bill of costs as a prelude to the court making the final costs order with the assistance of the results of taxation; the court may not make an unquantified costs order, leaving it to someone else to fix the quantum of the order; in reaching a final decision, the court must act judicially, demonstrating a clear and sufficiently exposed process of reasoning to reach its quantum as to costs. 21 Five charges were brought against this defendant. An essential element of an offence under s15(1) of the Act requires proof as to "employer". The prosecution from its own investigation was on notice this was an issue. I find this is an appropriate matter to order costs to the defendant. 22 I reject the submission the order be for costs on an indemnity basis. In Rosniak v Government Insurance Office 41 NSWLR 608 (at 616), Mason P held after canvassing many of the authorities related to costs orders: Later cases have emphasised that the discretion to depart from the usual "party and party" basis for costs is not confined to the situation of what Gummow J described as the "ethically or morally delinquent party" ( Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412 at 415): see Baltic Shipping Co v Dillon, "Mikhail Lermontov " (1991) 22 NSWLR 1 at 34; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233-234). His Honour continues: . . . the Court requires some evidence of unreasonable conduct albeit that it need not rise as high as vexatious. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. 23 I cannot find, on the evidence, there is evidence of unreasonable conduct on the part of the prosecutor such as to attract an indemnity cost order. The early statement revealing the existence of another employer was misread. The letter from the defendant's solicitor did not reveal "employer" was a ground of challenge to the charge. In the primary hearing the prosecutor, with regularity, submitted they "were taken by surprise". I do not believe there is evidence of unreasonable conduct on the part of the prosecution but I do believe the prosecution carries the onus to prove an essential element of an offence. 24 Accordingly, the court Orders the Prosecution to pay the defendant's costs on a party/party basis. 25 The court Orders the parties to meet in relation to this Order for party/party costs in favour of the defendant. In accordance with the view expressed in the Caltex Refining Case, this court is obliged to give specific orders related to costs. I require the parties to conciliate on this issue. If the parties are in dispute I advise the parties to seek the assistance of the Registrar of the Court as a prelude to this court making any final cost orders as to the quantification of costs which are "just and reasonable". 26 I grant leave to the parties to re-list the matter on short notice. 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