Industrial Court of New South Wales CITATION: SAS Trustee Corporation v Hazlewood (No 2) [2010] NSWIRComm 8 PARTIES: SAS Trustee Corporation (Appellant) Henry Hazlewood (Respondent) FILE NUMBER(S): IRC 2293 of 2008 CORAM: Boland J President; Walton J Vice-President; Staff J COSTS - appeal - appellant successful on appeal - importance of questions determined in appeal to future administration of Police Superannuation Scheme - appeal brought to clarify proper construction of a section of Police Regulation (Superannuation) Act - balancing of public interest - each party to bear their costs on appeal and at first instance CATCHWORDS: APPEAL - costs - appellant successful on appeal - importance of questions determined in appeal to future administration of Police Superannuation Scheme - appeal brought to clarify proper construction of a section of Police Regulation (Superannuation) Act - balancing of public interest - each party to bear their costs on appeal and at first instance Industrial Relations Act 1996 Police Regulation (Superannuation) Act 1906 LEGISLATION CITED: Suitors' Fund Act 1951 Superannuation Administration Act 1996 Workers' Compensation Act 1987 CASES CITED: SAS Trustee Corporation v Henry Hazelwood [2009] NSWIRComm 157 HEARING DATES: Written submissions: 6 October 2009, 4 December 2009, 8 December 2009 DATE OF JUDGMENT: 4 February 2010 Mr T Ower of counsel (Appellant) SAS Trustee Corporation LEGAL REPRESENTATIVES: Mr B Gross SC (Respondent) Walter Madden Jenkins Solicitors JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: BOLAND J, President WALTON J, Vice-President STAFF J Thursday 4 February 2010 Matter No IRC 2293 of 2008 SAS TRUSTEE CORPORATION v HENRY HAZLEWOOD Application by SAS Trustee Corporation for leave to appeal and appeal against a judgment of Justice Marks given in Hazelwood v SAS Trustee Corporation [2008] NSWIRComm 215 JUDGMENT OF THE COURT [2010] NSWIRComm 8 1 This matter concerns an application by the appellant for costs arising from the judgment of the Full Bench in SAS Trustee Corporation v Henry Hazelwood [2009] NSWIRComm 157. 2 In SAS Trustee Corporation v Hazlewood the Court made the following orders: 1. Leave to appeal is granted. 2. The appeal is upheld. 3. The decision of Marks J that Mr Hazelwood was successful in his appeal pursuant to s 88 of the Superannuation Administration Act 1996 is quashed. 4. Costs are reserved. 5. Any submissions by the appellant on costs shall be filed within 14 days. The respondent will have a further 14 days to file submissions on costs and unless either party applies to be heard on costs, the Full Bench will determine any issues on the papers. 3 In written submissions dated 6 October 2009, the appellant sought orders that the respondent pay its costs at first instance on appeal. In seeking this order, the appellant proposed that the respondent be granted a certificate under the Suitors' Fund Act 1951 in respect of his costs of the appeal to the Full Bench. 4 The grounds relied upon by the appellant were: 1. The appeal was upheld and the decision of Marks J was quashed. 2. Costs should follow the cause. 3. The respondent sought and obtained funding for the appeal from the Police Association of New South Wales. 5 In written submissions dated 4 December 2009, the respondent opposed the orders sought by the appellant and submitted that each party should bear their own costs of the original proceedings and the appeal. The reasons advanced were: (i) The appellant provided no submissions in support of its costs application; (ii) the power to order costs is clearly discretionary and any application for a costs order should be supported with proper submissions; (iii) the respondent to the appeal is in a fiduciary relationship with the appellant and to seek costs from him would be acting contrary to their fiduciary obligations: s 49 Superannuation Administration Act 1996; (iv) the appellant, acting prudently as a fiduciary, was obliged to properly characterise the date of injury and to seek information from the Commissioner of Police relevant to that date, so that it could make a proper determination on the evidence; (v) the appellant failed to take into account the provisions of the Workers' Compensation Act 1987 as to the deemed date of injury in respect of claims for compensation in respect of a disease or aggravation of the disease. By failing in its duties as a fiduciary, the appellant created a situation where unnecessary litigation ensued before Marks J and, ultimately the Full Bench. It has created the need for the respondent to now commence again to have both the appellant meet its obligations as a fiduciary and the Commissioner of Police to meet his obligations in relation to providing correct and relevant evidence to the respondent; (vi) the appellant's failures have unnecessarily postponed the correct resolution of the respondent's entitlement, and created the need for the respondent himself to incur legal expenses which should have been avoided. It followed, so it was submitted, that the appellant should not be awarded its legal costs before either Marks J or the Full Bench; (vii) the appellant would be assisted greatly by the judgment on appeal as it instructs them as to their obligations in future similar matters; (viii) the respondent also relied on s 21(9) of the Police Regulation (Superannuation) Act 1906. This section provides: 21 Determination by District Court (9) The District Court shall not order the payment of costs under subsection (8) by the applicant for a determination under this section unless satisfied that the application was frivolous or vexatious or was made fraudulently or without proper justification. 6 We agree with the appellant's contention that s 21(9) does not apply. 7 In submissions in reply, the appellant acknowledged that this Court has a discretion to award costs: s 181 of the Industrial Relations Act 1996. However, it submitted that there was no reason why costs should not follow the event. The appellant rejected the contention of the respondent that the STC had failed in its duties as a fiduciary. The appellant observed that the respondent had been provided with a certificate which was the subject of litigation against the Commissioner in the District Court of New South Wales. Although the respondent had expert psychiatric support for the proposition that the psychological infirmities already certified were hurt on duty infirmities, the respondent had preferred to adjourn the District Court proceedings while he sought to have further infirmities certified by this Court. 8 The appellant contended that therefore, on one view, his litigation in the Industrial Court of New South Wales may have been unnecessary and that the respondent should, therefore, bear some costs. Consideration 9 There is much in what the appellant has argued, that being that the usual rule should apply and that costs should follow the event and the appellant receive its costs with respect to both the appeal proceedings and the proceedings before Marks J. 10 However, we are mindful of the manner in which the appellant constructed its case, particularly in respect of the question of leave to appeal. In this respect, Mr Ower of counsel, who appeared for the appellant, submitted that the appeal involved the proper interpretation and application of s 10B(2) of the Police Regulation (Superannuation) Act. Counsel submitted 'the questions to be determined in the present appeal are of great importance to the future administration of the Police Superannuation Scheme. Appellate guidance of the "notice" requirement contained in s 10B(2)(a) within the context of post traumatic stress disorder would be invaluable'. 11 A second issue raised in the appeal involved the proper construction of s 66 of the Superannuation Administration Act 1996. It was submitted that the approach adopted by the trial judge in applying s 66 'has far reaching consequences for all STC Schemes and, therefore, is an important question of public interest for which leave to appeal should be granted.' 12 It follows that the appeal was brought with a view to clarifying the proper construction of a section of the Police Regulation (Superannuation) Act and to clarify the application of s 66 of the Superannuation Administration Act. Each of these issues had general significance for the appellant and the respondent had no real option but to defend the appeal. 13 Bearing in mind, in particular, these matters, we are of the firm view that we should order that each party bear their own costs of the first instance proceedings and the appeal. 14 We wish to make it clear that in reaching this conclusion we are not suggesting that, the mere fact that the SAS Trustee may challenge a first instance decision involving the construction of an Act, this would result in a Full Bench, in the future, approaching such proceedings in any other way than that costs would following the event. However, in our view, the nature of the issues debated here, their importance, which has resulted in a clarification of the legislation, together with balancing the public interest, has led us to conclude each party should pay its own costs. ORDERS 15 The Court orders as follows: 1. Each party is to bear its own costs of the proceedings before his Honour Justice Marks in matter No IRC 453 of 2007. 2. Each party is to bear its own costs of the appeal. _________________________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.