Costs applications and section 81A referrals

The recent decision of Maintenance System Pty Ltd v D [2019] TASWRCT 44 confirms that it is possible for an employer to obtain a costs order against a worker for the party/party costs of preparing for and appearing at a successful section 81A referral hearing in the Workers Rehabilitation and Compensation Tribunal (the Tribunal).

The Tribunal is empowered to use its discretion to make cost orders under section 59(1) of the Workers Rehabilitation and Compensation Act (Tas) 1988.

In this decision, Commissioner Duvnjak relied upon the opinion of His Honour, Cox CJ in State of Tasmania v Muir-Wilson [2000] TASSC 25 noting that “[11] … it does not inexorably follow that the worker should pay the employer’s costs of the Reference merely because the latter demonstrates that there is a genuine dispute within the meaning of s81A.

Commissioner Duvnjak states that ‘something more’ than success on the section 81A referral is required for an employer to obtain a costs order.

Commissioner Duvnjak’s decision further refers to paragraph 12 of the decision of Cox CJ which states the following:

“Where there is a Reference under section 81A, it is not the case that the worker ‘has caused the other party to incur the costs of (that) litigation.’  They are expenses which the employer necessarily incurs in obtaining the relief he seeks. They may be increased by fruitless resistance on the worker’s part and this may justify an order that he pay at least the costs occasioned by that resistance….. it would appear that a significant ground relevant to the issue of the genuineness of the dispute was raised by the appellant and maintained over an adjournment only to be abandoned at the final hearing of the Reference and that the amount of time spent in respect of the issue of delay was minimal.” (emphasis added)

In this recent decision, it was clear that the medical records which contained observations and history from the worker were inconsistent with the details as completed in the Workers Compensation Claim Form as to how and where the claimed injury occurred. At the section 81A referral hearing the worker, despite asserting that further material had been sought, tendered no additional material and the only material which was able to be relied upon was that tendered with the employer’s section 81A reference.  As such, Commissioner Duvnjak determined that the worker’s resistance to the referral was futile.

The worker had been put on notice by a letter from the employer’s solicitors advising that the claim was disputed, inviting a consent to a reasonably arguable case determination, and noting that any dispute by the worker or a failure to concede that a reasonably arguable case existed would be considered to amount to “fruitless resistance”.

Commissioner Duvnjak states in the reasons for determination that where a worker’s conduct amounts to “fruitless resistance”, an exposure to a costs order may arise and whether the Tribunal exercises its discretion to grant costs will depend on the circumstances of each case.

In this case, Commissioner Duvnjak made an order that the worker pay the employer’s costs of and incidental to the hearing of the section 81A referral on a party/party basis to be taxed or agreed, and the incidental costs of that hearing are limited to the preparation for the hearing by Counsel for the employer.

When considering making an application for costs after a successful section 81A referral, it is important to remember:

  • the evidence relied upon must demonstrate a significant ground of dispute;
  • it is necessary to put the worker on notice that a failure to concede to a reasonably arguable case would amount to ‘fruitless resistance’ and a cost order will be sought;
  • a costs order is only likely to be obtained on a party/party basis for the costs of and incidental to the hearing of the Section 81A referral, and not for the actual preparation of the referral; and
  • if a costs application is successful, the commercial reality of the situation may be that it would cost more to enforce such an order than the amount awarded.

If you have any queries or would like any further information about this article, please contact:

Kate Stockford
Senior Associate
T: (03) 6235 5142

Published: 19 February 2020

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