Eisenmenger v Lutheran Church of Australia, Queensland District [2006] QIRC 83 (2006) 182 QGIG 302

[Extract from Queensland Government Industrial Gazette, dated 30 June, 2006, Vol. 182, No 10, pages 302-304] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 - s. 335 - application for costs Raymond Alan Eisenmenger AND Lutheran Church of Australia, Queensland District (B/2003/1662) COMMISSIONER FISHER 21 June 2006 Application for costs - Industrial Relations Act 1999 s. 335 - Previous cost decision - Industrial Relations (Tribunals) Rules 2000 r. 66(1)(d) - Costs awarded - Matter referred to parties to confer over quantum - Parties unable to agree on appropriate scale - Supreme Court scale or District Court scale - Commission determines global amount - 50% to be paid within 30 days of decision and balance within further 30 days. DECISION On 23 March 2006 the Commission as currently constituted heard submissions from the parties about whether Pastor Eisenmenger should be awarded costs incurred with respect to the prosecution of his reinstatement application pursuant to s. 335(1)(b) of the Industrial Relations Act 1999 (the Act). At the hearing the primary position argued by Mr Murdoch SC, who appeared for Pastor Eisenmenger, was that indemnity costs should be awarded. Mr Horneman- Wren, who appeared for the respondent, opposed the application. If, however, the Commission decided to award costs, then Mr Horneman-Wren submitted that costs in accordance with the Magistrates Court scale should be awarded. At the conclusion of the hearing Mr Murdoch SC, with the concurrence of Mr Horneman-Wren, proposed a way forward. It was suggested that the Commission should firstly determine whether an order for costs would be made in favour of Pastor Eisenmenger. In the event the Commission was minded to make such an order then the Commission should consider whether indemnity costs should be ordered or alternatively, which of the bases under Rule 66(1) of the Industrial Relations (Tribunals) Rules 2000 would be used to assess costs. It was then proposed that the matter be referred back to the parties to confer on the quantum. In my decision of 21 April 2006 [(2006) 182 QGIG 10] I determined that Pastor Eisenmenger should be awarded costs but the arguments that indemnity costs or costs awarded pursuant to the Magistrates Court scale were both rejected for reasons outlined in the decision. I went on to refer to Rule 66(1)(d) which gives the Commission scope to have regard to any other factor in determining the costs order. I determined that the award of costs "should reflect the nature and complexity of the issues involved in this case as well as the substantial success of the applicant at trial". Further, that the award would be substantial. I went on to determine that certain claims were to be excluded from the calculation but that reasonable costs for the appearance of Senior Counsel would be permitted. The matter was then referred back to the parties to confer over the quantum of costs with liberty to apply being granted to either party in the event agreement was unable to be reached. Finally, I reserved to myself the ability to determine costs on a global basis having regard to the views expressed in the decision, what I considered to be fair and reasonable and any later submissions of the parties. The parties attempted to resolve the matter between themselves but were unable to agree on the basis upon which the assessment was to be made. The applicant's Solicitors contended that the calculation should be made in accordance with the Supreme Court scale and to that end engaged Greg Ryan Legal Cost Consultant to prepare a schedule of costs. In fact Mr Ryan prepared that schedule and another which assessed costs on an indemnity basis. The respondent's solicitors maintained that costs should be assessed in accordance with the District Court scale of costs. In the hearing on 13 June 2006 both Counsel made submissions regarding the particular costs scale for which they were contending. In essence the submissions centred around competing views of the level of complexity of the case at first instance and whether the matter, if dealt with in the civil courts, would have been within the jurisdictional limits of the Supreme or District Court, considering the money amounts involved i.e. the amount of the backpay ordered and the potential future losses. The schedule of costs assessed in accordance with the Supreme Court scale covers the period from 23 February 2004 to 9 May 2006. It is in the amount of $99,436.05. Additional costs have been incurred by Pastor Eisenmenger since the preparation of that schedule. Those further amounts are Counsel's fees for the hearing of 12 June 2006, the professional fees for Mr Ryan's appearance on 12 June 2006 and interest on monies borrowed by Pastor Eisenmenger to meet his legal expenses. Those further amounts are in the order of $11,200. The schedule of indemnity costs prepared by Mr Ryan covers the period 8 May 2003 to 9 May 2006. The total of the assessment of costs shown on the schedule before the additional amounts are added is $114, 926.37. The difference in the time periods is explained by the indemnity costs being assessed from the commencement of the matter whereas costs in accordance with the Supreme Court scale were assessed from the conciliation conference before Brown C where the parties agreed on a course of action to try to resolve the matter. The failure of the respondent to adhere to its agreement resulting from this conference was determined to be an unreasonable act in connection with the application and founded the Commission's decision to award costs. -- 1 of 2 -- 2 In support of his position that costs should be awarded in accordance with the District Court scale Mr Horneman-Wren referred to the decision in Marriage & Ors v Devine Limited [(2005) 178 QGIG 118] where Asbury C was dealing with an application for costs made by the respondent. There, itemised assessments of costs had been made on a party and party basis by reference to the Supreme Court scale and the Federal Court scale. In considering the application Asbury C accepted the submission of the respondent that the Commission was not constrained by the Magistrates Court scale and noted that Rule 66 gives the Commission wide discretion with respect to determining costs. She determined that "given the quantum of the claims as formulated, and the complexity and length of proceedings, the appropriate reference point is the scale of costs applicable to matters in the District Court". Mr Horneman-Wren urged me to consider awarding a similar proportion of the costs as awarded by Asbury C, while noting that there, unlike this case, the award was being made against the applicants. I have considered the various submissions that have been put as to how costs should be assessed and I have had regard to the affidavits and other evidence that has been presented. I consider that the interests of justice would be best served were costs to be awarded having regard to any other relevant factor, as provided by Rule 66 (1)(d). This means I am not disposed to assess costs either in relation to the Supreme Court scale or the District Court scale but will assess costs on a global basis having regard to the factors identified in my decision of 21 April 2006 as well as what is fair and reasonable in the circumstances. This is consistent with the position I referred to in my decision of 21 April 2006. The factors already identified included the nature and complexity of the case as well as the substantial success of the applicant at trial. To these, I particularly add the aspect of reputation. Mr Murdoch SC submitted, and I accept, that much more was at stake for the applicant in these proceedings than for most applicants in reinstatement proceedings. While reputation is no doubt important for all applicants who take reinstatement matters to hearing, in this case the applicant was a Pastor of the Lutheran Church as well as a teacher, who had been dismissed as a result of the acceptance by the Church of serious allegations made as to his treatment of children in his care. Because of the refusal of the Lutheran Church to accept the outcome of the agreed process Pastor Eisenmenger was put to substantial cost in an attempt to defend and retrieve his reputation. Those reputational issues were not confined to him as a teacher but extended to him as a man of the Church as shown by Pastor Jaensch's evidence. He said information was given to prospective parishes (where Pastor Eisenmenger would only be performing religious duties) as well as schools of the events surrounding Pastor Eisenmenger's dismissal from St Peter's Lutheran School. For reasons explained in my decision of 21 April 2006 I said the award would be substantial. Nothing has been said in the latest hearing to dissuade me from this view. Taking all the relevant factors into account and with a view to determining a sum which is fair and reasonable in all of the circumstances I have decided to award a global sum of costs in the amount of $88,000. This is less than the assessment according to the Supreme Court scale and less than the actual costs incurred by Pastor Eisenmenger. He is still left with a substantial outlay. The amount is however more than the outcome from the calculation suggested by Mr Hornemen-Wren. Given the amount is discretionary and falls between the various calculations I have decided not to particularise the award. I have considered the award to cover the period from 23 February 2004. It does not include the component for the interest on sums borrowed by Pastor Eisenmenger but does include provision for the fees of Senior Counsel in this hearing. No submissions were put to me about the period in which the amount ordered should be paid. In this respect I have taken into account the size of the sum ordered and the nature of the respondent. In the circumstances I consider that 50% should be paid within 30 days of the date of release of this decision and the balance to be paid within a further 30 days. If a formal Order is required the applicant should contact my Associate. Order accordingly. G.K. FISHER, Commissioner. Hearing Details: 2006 13 June Released: 21 June 2006 Appearances: Mr J. Murdoch SC instructed by Mr M. Ryan (Ryan Kruger) for the applicant. Mr A. Horneman-Wren (Barrister) instructed by Mr J. Naughton (Allens Arthur Robinson) for the respondent. Government Printer, Queensland The State of Queensland 2006. -- 2 of 2 --