Military Rehabilitation and Compensation Commission v McGuire [2008] FCA 142 (6 March 2008)

COSTS – enforcement of judgments and orders in respect of costs – application of State Act under the Federal Court of Australia Act 1976 (Cth) and Rules – instalment order – default – means inquiry hearing

Federal Court of Australia Act 1976 (Cth) ss 53
Civil Judgments Enforcement Act 2004 (WA) ss 27(1), 29(1), 98

Federal Court Rules O 37 r 7

McGuire v Comcare [2002] AATA 268
McGuire v Comcare [2004] FCA 848
McGuire v Military Rehabilitation and Compensation Commission [2005] FCAFC 52

MILITARY REHABILITATION AND COMPENSATION COMMISSION v ALEXANDER KYLE MCGUIRE
WAD 141 OF 2002

MILITARY REHABILITAITON AND COMPENSATION COMMISSION v ALEXANDER KYLE MCGUIRE
WAD 172 of 2004

MCKERRACHER J
6 MARCH 2008
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 141 OF 2002

BETWEEN:	MILITARY REHABILITATION AND COMPENSATION COMMISSION Applicant/Judgment Creditor
AND:	ALEXANDER KYLE MCGUIRE Respondent/Judgment Debtor

JUDGE:	MCKERRACHER J
DATE OF ORDER:	6 MARCH 2008
WHERE MADE:	PERTH

Unless on or before 17 April 2008, application is made by either party to vary these orders, the following orders will take effect on that date:

1. If the judgment debtor, Alexander Kyle McGuire, has then failed to comply with the Order of this Court made by the Deputy District Registrar and dated 28 September 2007 as amended, by commencing the instalments referred to therein by 17 April 2008, these proceedings are to be re-listed for a directions hearing soon after that date, to consider the question of whether the judgment debtor is in contempt of Court.

2. Unless the judgment creditor applies within 14 days to have its costs taxed, the judgment debtor, Alexander Kyle McGuire, is to pay the costs of the judgment creditor, Military Rehabilitation and Compensation Commission, fixed in the sum of $400.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 172 OF 2004

BETWEEN:	MILITARY REHABILITATION AND COMPENSATION COMMISSION Applicant/Judgment Creditor
AND:	ALEXANDER KYLE MCGUIRE Respondent/Judgment Debtor

JUDGE:	MCKERRACHER J
DATE OF ORDER:	6 MARCH 2008
WHERE MADE:	PERTH

Unless on or before 17 April 2008, application is made by either party to vary these orders, the following orders will take effect on that date:

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 141 OF 2002

BETWEEN:	MILITARY REHABILITATION AND COMPENSATION COMMISSION Applicant/Judgment Creditor
AND:	ALEXANDER KYLE MCGUIRE Respondent/Judgment Debtor

BETWEEN:	MILITARY REHABILITATION AND COMPENSATION COMMISSION Applicant/Judgment Creditor
AND:	ALEXANDER KYLE MCGUIRE Respondent/Judgment Debtor

JUDGE:	MCKERRACHER J
DATE:	6 MARCH 2008
PLACE:	PERTH

1 Mr McGuire is aged 80 years. He has great difficulty in hearing and considerable difficulty in fully understanding the events described in these reasons. Fifty-six years ago while in service with the Defence Forces he sustained a back injury. Relatively recently he claimed against Comcare for compensation in respect of that injury. Compensation was declined. He pursued appeals. They failed. Costs orders were made against him in favour of the Military Rehabilitation and Compensation Commission (the Commission) in lieu of Comcare. He failed to meet any of those costs orders. The Commission has now relied upon State legislation to compel Mr McGuire to make payment of its costs. The main function of these reasons is to collect the history of the matters and the grounds on which the Commission is entitled to rely in seeking relief.

2 On 2 July 2004 Justice Nicholson delivered reasons on an ‘appeal’ (McGuire v Comcare [2004] FCA 848) from a decision of a Senior Member, Mr BH Pascoe, of the Administrative Appeals Tribunal (the Tribunal), given on 18 April 2002 in McGuire v Comcare [2002] AATA 268. In that decision the Tribunal had affirmed the decision of Comcare. It affirmed, on 15 May 2001, a determination made on 31 March 2000 that Mr McGuire was not entitled to a lump sum payment for permanent impairment to his neck and cervical spine.

3 The Tribunal concluded that Mr McGuire had suffered an injury to his cervical spine in November 1951 which may have been aggravated in 1952 and which occurred in compensable circumstances. However the question was whether or not the injury resulted in permanent impairment of 10% or more and whether that impairment became permanent after 1 December 1988. On the evidence of Mr McGuire and the medical evidence the Tribunal was satisfied that the impairment caused by the 1951 injury was less than 10% under the Guide and became permanent well prior to 1 December 1988. The Tribunal held that further impairment had been a result of degeneration of the cervical spine resulting from congenital fusions exacerbated by degenerative osteoarthritis of the thoracic spine and rotator cuff tear.

4 The ‘appeal’ his Honour heard was pursuant to the provisions of s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) and s 64 of the Safety, Rehabilitation and Compensation Act 1988 (Cth). By that decision his Honour dismissed the ‘appeal’ and ordered Mr McGuire to pay Comcare’s costs of the application. His Honour observed that Comcare’s case before the Tribunal had been that whatever impairment was suffered by Mr McGuire as a result of his injury in 1951 while he was enlisted with the Army, the impairment had stabilised long before 1 December 1988 and any impairment since 1 December 1988 was unrelated to the original injury.

5 His Honour found no error of law or, indeed any error in the determination of the Tribunal and dismissed the ‘appeal’ with costs.

6 This then led to an appeal to the Full Federal Court on 11 April 2005, (McGuire v Military Rehabilitation and Compensation Commission [2005] FCAFC 52). After canvassing the history, the Full Court concluded that Mr McGuire’s notice of appeal disclosed no identifiable legal issues and his submissions did not assist in elucidating the matter further. In addition, after considering the evidence and the legislative framework the Full Court concluded that for its part it could discern no legal error in the approach taken nor in the ultimate conclusion made by the primary judge. The Full Court also dismissed that appeal with costs.

7 The consequence of those two adverse determinations in this Court was that Mr McGuire was required to pay costs to each of the successful respondents.

8 On 28 June 2006 (in WAD 172 of 2004) a sealed certificate of taxation was issued certifying that the Commission’s costs were allowed at $13,700. On 30 June 2006 (in WAD 141 of 2002) the Court issued a certificate of taxation certifying that Comcare’s costs were assessed and allowed at $8,465.

9 On 4 July 2006, a letter of demand seeking payment of the amounts of $8,465 and $13,700 within 14 days was forwarded to Mr McGuire at his address for service in Forrestfield, Western Australia. Further demands were sent to Mr McGuire on 17 August 2006, 12 September 2006 and 8 January 2007 seeking payment of $8,465 and $13,700. There was no response to any of those letters.

10 There were obvious questions about Mr McGuire’s capacity to meet costs orders. The Commission chose in both matters to adopt the practice available under the Civil Judgments Enforcement Act 2004 (WA) (the CJE Act) to ascertain the capacity of Mr McGuire, if any, to meet the costs orders.

13 On or about 2 May 2007 the Commission filed a request for Means Inquiry summons in both matters pursuant to the CJE Act. Section 27(1) provides that a judgment creditor may apply for a means inquiry to be held in respect of the judgment debtor. Section 29(1) states in effect that the court may issue either or both of the following:
(a) a summons to attend a means inquiry to give oral evidence;

(b) a summons to attend and produce to the court, for use in the inquiry, any record or thing that is or may relate to the matters listed in section 26 and that is detailed in the summons.

14 On 15 June 2007 the matters were listed for a Means Inquiry hearing. The hearing proceeded but was subsequently adjourned to 29 June 2007. Mr McGuire completed a Form 38, being a Statement of Financial Affairs which appeared at that stage to demonstrate that he had a total of some $23,000 in various bank accounts and $13,000 in a burial fund. In addition, he had an income of some $13,000 per annum. As against that, as will be seen, the total owing in costs exceeds the amount of Mr McGuire’s assets, with the exception of his burial fund.

15 On 28 September 2007 a Deputy District Registrar of the Court made the instalment order of $15 per week on the $8,465 payable in W141 of 2002 and ordered $1800 additional costs. A Default Summons was issued on 13 November 2007 for the $8,465 and $1800 in previous enforcement costs totalling $10,265. Also on 28 September 2007 an instalment order was made of $15 per week on the $13,700 payable in W172 of 2004 and $1800 additional costs also ordered. A Default Summons was issued on 13 November 2007 for the $13,700 and $1800 previous enforcement costs totalling $15,500.

16 Therefore a total of $30 per week was ordered to be paid in respect of both matters (totalling $22,165). An additional $3,600 costs was ordered against Mr McGuire with no instalment rate. The total debt owing is $25,765.

17 Although the Commission has pressed Mr McGuire for recovery of the costs no payments have been made.

18 The Commission has now filed Summonses to a Judgment Debtor under the CJE Act, Pt 4 Div 2 in both matters. The summonses confirm the history but do not seek specific orders.

19 Section 98 of Civil Judgment Enforcement Act 2004 (WA) relevantly provides:

20 The orders of the Court that the Commission’s costs be paid by instalments are ‘judgments to which "this Division applies"...’ by reason of s 53 of the Federal Court of Australia Act and O 37 r 7 of the Federal Court Rules.

21 Mr McGuire appeared before the Court on 6 December 2007 and the matter was adjourned to be heard on 6 February 2008 when he also appeared. The Court appointed pro bono counsel and on 7 December 2007, Mr David McKenna as pro bono counsel advised Mr McGuire. On the morning of 6 February 2008 Mr McKenna informed the Court that he had advised Mr McGuire in detail of the potential consequences of failure to comply with the Court’s orders. Mr McKenna emphasised that Mr McGuire has great difficulty in understanding how it can be that he can sustain an injury while serving in the armed forces and that later in life does not receive the benefit of compensation in respect of that injury. His difficulty might well be understood. That issue, however, has now been ventilated on a number of occasions and after detailed analysis, it has been concluded that his current condition is not such as to qualify him for compensation for the reasons expressed in detail by the Tribunal, by Nicholson J and by the Full Court.

22 If Mr McGuire is surprised that he is not entitled to compensation, he might also be surprised that the Commission is apparently determined to pursue him for the costs incurred in defending his appeals. That, however, is a policy issue and something on which I express no view.

23 In the absence of any specific orders being sought I have asked counsel for the Commission to indicate precisely what relief is sought against Mr McGuire. The response from the Commission in both matters is, relevantly, as follows:

24 The Court has now been informed through counsel that Mr McGuire does not object to an order in terms of par 1 of the minute. Although the Court was originally informed that there was no opposition to par 2 of the minute, the position has been clarified that the costs orders to the effect of 1,000 in each of the matters is opposed.

25 It is not appropriate for me to revisit any costs orders previously made nor am I asked to do so by either party. Further the weekly instalments, having regard to the financial circumstances of Mr McGuire, appear to be reasonable. There was no suggestion made by Mr McGuire or by counsel on his behalf that his financial circumstances have significantly changed since previous orders were made.

26 Given the totality of litigation which has ensued, the amount of costs involved is in modern terms not surprising, but the extensive number of appearances, judgments and rulings means that the full amount owing by Mr McGuire now exceeds the apparent current totality of his assets (his ‘burial fund’ excluded).

27 I urge the parties to reconsider whether there is some more flexible means of ensuring that the Commission is paid some contribution in due course to its costs.

28 In the circumstances, I will make the orders sought by the Commission, subject to an expansive liberty to apply period. These orders do no more than reinforce to Mr McGuire that the Commission is entitled to its costs which he must pay or risk being in contempt of Court.

29 As to costs, I do not consider that costs of $1,000 in each matter are warranted. My view is that a more modest allowance is appropriate. I have allowed a total of $800 rather than a total of $2000 but if that amount is not acceptable to the Commission it may apply within 14 days to have its costs taxed.

I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Counsel for the Applicant/Judgment Creditor:	I McCormick

Solicitor for the Applicant/Judgment Creditor:	Australian Government Solicitor

Pro Bono Counsel for the Respondent/Judgment Debtor:	D McKenna

Date of Hearing:	6 February 2008

Date of Judgment:	6 March 2008