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Federal Court of Australia |
Last Updated: 4 February 2008
FEDERAL COURT OF AUSTRALIA
Griffiths v Australian Postal Corporation [2008] FCA 19
ADMINISTRATIVE LAW –
administrative tribunals – Administrative Appeals Tribunal (Cth) –
procedure and evidence – costs –
exercise of discretion to award
costs under s 67(8) of the Safety, Rehabilitation and Compensation Act
1988 (Cth)
Held: Error of law in exercise of
Tribunal’s discretion in failing to take account of Calderbank letter
– error was in favour
of rather than against applicant – otherwise
no legal error in exercise of discretion is shown – discretion is
broad.
Safety, Rehabilitation and
Compensation Act 1988 (Cth) s 67
Perry v Comcare [2006] FCA 33; (2006) 150 FCR 319
applied
Lees v Comcare (1999) 56 ALD 84 discussed
Australian Coal and Shale Employees’ Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 cited
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
cited
GEOFFREY
GRIFFITHS v AUSTRALIAN POSTAL CORPORATION
NSD 2416 OF
2006
MADGWICK J
24 JANUARY
2008
SYDNEY
THE COURT ORDERS THAT:
1. The appeal be dismissed.2. Any submission as to costs should not exceed one page and should be forwarded to my associate within 7 days.
Note: Settlement
and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR
MEMBER ALLEN
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BETWEEN:
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GEOFFREY GRIFFITHS
Applicant |
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AND:
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AUSTRALIAN POSTAL CORPORATION
Respondent |
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JUDGE:
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MADGWICK J
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DATE:
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24 JANUARY 2008
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PLACE:
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SYDNEY
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REASONS FOR JUDGMENT
HIS HONOUR
1 This is an appeal pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal (the Tribunal), constituted by Senior Member Allen, that each party pay its own costs. The applicant was successful on the substantive aspects of his claim and seeks to have this Court make a costs order in his favour in place of that of Senior Member Allen.
The legal framework
2 The legal principles governing costs in proceedings brought under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) are found in s 67 of that Act. Greenwood J in Perry v Comcare [2006] FCA 33; (2006) 150 FCR 319 at [65]- [66] made the following observations:
The provisions of s 67 "constitute a code in the area of costs": Riley v Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees (1994) 48 FCR 449 per Beaumont J.
The elements of that code are these. The primary rule, subject to the operation of the section is, "the costs incurred by a party to proceedings instituted under Pt VI before the Tribunal shall be borne by that party": (s 67(1)). Subsections (2) to (12) of s 67 provide specific circumstances where the primacy of s 67(1) might be displaced. (Emphasis in original.)
3 Subsection (8) gives the Tribunal a discretion to make orders as to costs in certain circumstances. That provision is in the following terms:
(8) Where, in any proceedings instituted by the claimant, the Administrative Appeals Tribunal makes a decision:(a) varying a reviewable decision in a manner favourable to the claimant; or
(b) setting aside a reviewable decision and making a decision in substitution for the reviewable decision that is more favourable to the claimant than the reviewable decision;
the Tribunal may, subject to this section, order that the costs of those proceedings incurred by the claimant, or a part of those costs, shall be paid by the responsible authority.
4 According to Greenwood J in Perry [2006] FCA 33; 150 FCR 319 at [76]:
In exercising the discretion, the Tribunal ought have regard to the rule of primacy reflected in s 67(1), the circumstances of the case which gave rise to a decision enlivening the qualification upon s 67(1), the background circumstances concerning the claim, the nature and character of proceedings for the purposes of the SRC Act, the complexity of the claim and the conduct of the parties in relation to the proceeding.(Emphasis added.)
5 There was some argument during the hearing in this appeal as to whether the requirements of s 67(8)(b) had been satisfied in this case. I ordered that the matter be remitted to the Senior Member for clarification as to the nature of the decision made by him. Senior Member Allen then directed the Registrar of the Tribunal to alter the decision such that it now expressly states that the decision under review was set aside and a decision favourable to the applicant was made in substitution.
6 All that now remains in this appeal is to determine whether the Senior Member committed any error of law adverse to the applicant in the exercise of his discretion as to costs.
Background
7 It is now to be taken that Senior Member Allen decided that a reviewable decision should be set aside and that the respondent was liable, pursuant to s 14 of the SRC Act, for a temporary exacerbation of symptoms caused by cervical spondylosis suffered by the applicant.
8 In his reasons for his decision that each party should pay its own costs, the Senior Member referred to a letter from the respondent to the applicant dated 15 August 2006. The letter contained a "Calderbank" offer of settlement. The respondent was prepared to concede that the applicant had suffered an aggravation of an existing condition, and that he was entitled to compensation under ss 16 and 19 of the SRC Act, but only from 27 April 2005 to 8 June 2005 (in reliance on a medical report of Dr Olsen, which stated that any aggravation was temporary). The offer included an undertaking by the respondent to pay the applicant’s costs of the proceedings. No response was received to this letter.
9 The Senior Member referred to Perry [2006] FCA 33; 150 FCR 319 as authority allowing consideration of a "Calderbank letter" in the exercise of the discretion conferred by s 67(8). The Senior Member considered that the letter of offer in this matter satisfied the criteria set out in Perry 150 FCR at 327, 333-5, that it be clear, precise and certain, particularly with respect to the question of costs.
10 However, the Senior Member was of the opinion that the agreement proposed by the letter, which was to be the basis for a proposed consent decision of the Tribunal, did not constitute a decision open to the Tribunal to make. This was due to the principle in Lees v Comcare (1999) 56 ALD 84 which prevents the Tribunal from exercising any powers or discretions which were not available to the authority making the reviewable decision. The reviewable decision had affirmed the original decision that there was no liability under s 14 of the SRC Act, which deals with liability for injury. The offer of compromise dealt with compensation under ss 16 and 19, which relate to compensation for medical expenses and incapacity respectively. The Senior Member held that the Calderbank letter "was of no effect".
11
In deciding that nevertheless each party should bear its own costs, he relied instead on the applicant’s Statement of Facts and Contentions. According to the Senior Member the Statement claimed relief in terms far broader than liability simpliciter under s 14. The hearing was, in his opinion, extended unnecessarily as a result and, therefore, each party should bear its own costs.
Consideration
12 Perry 150 FCR at [89] makes it clear that it is not necessary that a Calderbank offer must conform to the principles dictating the validity of such an offer for it to be considered by the Tribunal in the exercise of its discretion under s 67(8). This is because the Tribunal is to have regard to the "circumstances of the case", and any such offer, regardless of validity, forms part of these circumstances. As outlined above, the Senior Member held that the Calderbank offer would not have been capable of being confirmed by the Tribunal, due to the principle in Lees 56 ALD 84. However, he seems to have reasoned that this prevented him from taking the offer into consideration when exercising his discretion as to costs. Such reasoning is incorrect in the light of Perry [2006] FCA 33; 150 FCR 319. This was an error of law in the exercise of the Tribunal’s discretion, but it was an error in favour of, rather than against, the applicant. Even though the Senior Member purported not to consider the offer while exercising his discretion, he clearly outlined how he would have taken the letter into account, had he considered himself able to do so. Such treatment would not have been favourable to the applicant.
13 The Senior Member went on to consider the circumstances of the case generally, including the parties’ conduct with respect to the proceeding. In short, he took the view that the applicant had sought to, and had, litigated issues going beyond those which could lawfully result in useful relief. The decision under review had dealt only with the respondent’s liability to pay compensation to the applicant and, being negative, had not dealt with the quantum of any compensation that would be payable (on the basis of computation of the compensation payable). Very inconveniently for all concerned, that appears to be the state of the law in the workers’ compensation cases governed by the SRC Act, as a result of the decision in Lees 56 ALD 84. (In the course of the hearing, I suggested that the statutes should be amended to do away with this considerably inconvenient and expensive need for multiple considerations of a single claim.) The applicant had embarked on a lengthy investigation of the duration of his incapacity, though the Tribunal could not lawfully determine that issue in the instant proceeding.
14 The principal contention of the applicant was that, having won the case, he should have his costs. The respondent had not simply offered to concede liability but sought, itself, to tie that concession to a determination favourable to itself of an issue that was not lawfully before the Tribunal. In some cases, where no party has objected, the Tribunal has been willing in a commonsense way to determine both liability and quantum issues where the primary decision maker denied the respondent’s liability: small wonder that the applicant, without dissent from either the respondent or the Senior Member, had sought to litigate both issues.
15 If this Court were free to review the Tribunal’s discretion as to costs as on a re-hearing de novo, there might well be something to be said for this view. However, that is not the case. An error of law must be shown. Where the exercise of a discretion is involved, this usually involves the application of some legally mistaken principle. In matters of practice and procedure and, perhaps especially, costs in a well-trodden field such as workers’ compensation litigation, such an error ought not lightly be inferred, because the discretion is a broad one, confined only by considerations relevant to the case at hand: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 per Gaudron & Gummow JJ at [22].
16 The principles governing the exercise of the discretion in a case such as this were articulated in a passage in Perry 150 FCR at [90]:
[The] discretion was not fettered by any rule, policy or binding principle. The fundamental obligation of the Tribunal in the exercise of the discretion was to do justice between the parties according to its assessment of the circumstances of the case. Whether, in exercising the discretion, if conferred upon it, the Court might have taken a different view about the allocation of costs or circumstances influencing whether the respondent might be ordered to pay the costs or a part of the costs, is not to the point. The question of whether, in all the circumstances, the applicant acted reasonably is a question of fact to be determined by the Tribunal and it is not open to the Court to substitute its own view of those facts or the exercise of the discretion.
17 I do not understand the Senior Member to have overlooked the
general rule of primacy that successful claimants are to have their costs
paid, to be deduced from s 67(8), but rather to have considered
that, as
against that, the proceedings had been unduly prolonged as a result of the
applicant’s conduct of them. The Tribunal
then, in a broad brush way,
made the costs order it did to reflect those competing considerations. The
Senior Member had the benefit
of being apprised in detail of the conduct of the
parties throughout the course of the proceedings and of the general standards of
conduct by parties in similar litigation before it. The full transcript of
proceedings was not before this Court. The facts that
are before the
Court
are not such as to justify a conclusion that the Tribunal erred as a matter of
law in a way that was contrary to the interests
of the appellant.
18 In my opinion no error of law such as might have assisted the applicant before the Tribunal has been demonstrated. Although there was an error of law by the Senior Member, its correction could only worsen, not improve, the applicant’s position.
19 Accordingly the appeal will be dismissed.
Associate:
Dated: 24
January 2008
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Solicitor for the Applicant:
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Counsel for the Respondent:
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Solicitor for the Respondent:
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Date of Hearing:
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Date of Judgment:
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