Allen v Lillian Martin Home
[2004] TASSC 37
•3 May 2004
[2004] TASSC 37
CITATION: Allen v Lillian Martin Home [2004] TASSC 37
PARTIES: ALLEN, Cindy
v
LILLIAN MARTIN HOME
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 123/2003
DELIVERED ON: 3 May 2004
DELIVERED AT: Hobart
HEARING DATES: 28 April 2004
JUDGMENT OF: Blow J
CATCHWORDS:
Contracts – General contractual principles – Construction and interpretation of contracts – Implied terms – Other cases – Compromise of damages action and workers compensation appeal – Later application for costs of workers compensation proceedings at first instance – Whether implied term precluding worker from applying for costs.
Aust Dig Contracts [109]
REPRESENTATION:
Counsel:
Appellant: M A Ryan
Respondent: P L Jackson
Solicitors:
Appellant: Avery Partners
Respondent: Jackson & Tremayne
Judgment Number: [2004] TASSC 37
Number of Paragraphs: 14
Serial No 37/2004
File No LCA 123/2003
CINDY ALLEN v LILLIAN MARTIN HOME
REASONS FOR JUDGMENT BLOW J
3 May 2004
This is an appeal from a determination of the Workers Rehabilitation and Compensation Tribunal ("the Tribunal"), by which an application for costs was refused. The circumstances are unusual. The appeal raises the question whether the appellant's right to apply for the costs of proceedings before the Tribunal was, for practical purposes, extinguished by consent orders that were made in Supreme Court proceedings, or by a contract which gave rise to the making of those consent orders.
Under the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s49(1)(a), the Tribunal is not bound by the rules of evidence and "may inform itself on any matter in such manner as it thinks fit". In this case, the learned commissioner informed himself by allowing counsel for each party to "give evidence from the bar table" as to the relevant events. The information before him as to the history of the parties' litigation was substantially as follows. The appellant was injured at work in November 1998, and commenced to receive weekly payments of compensation pursuant to the Act. In May 2000, those payments were terminated and the appellant referred to the Tribunal the question whether she remained entitled to receive such payments. On 18 October 2001 the Tribunal made a determination in her favour, ordering that the payments be resumed. That determination followed a five-day hearing, at which the appellant was represented by a Tasmanian barrister briefed by Messrs Simon Parsons & Co. The barrister did not get paid by that firm. The employer (the present respondent) appealed from the Tribunal's determination to this Court. At some stage, the appellant had brought an action against the respondent in this Court seeking common law damages in respect of the injury to which the Tribunal proceedings and the employer's appeal related. A settlement conference took place in or about early March 2002. By then the appellant was no longer represented by Messrs Simon Parsons & Co or the unpaid barrister, but had engaged her present solicitors. The question of the costs of the Tribunal proceedings was not mentioned at that conference. The parties reached an agreement at the conference that (a) the employer's appeal would be dismissed with no order as to costs, and (b) judgment would be entered by consent in the damages action for the worker against the employer for $110,000 plus $10,000 costs. Consent orders were made accordingly in both proceedings in early March 2002. Nothing was done by the appellant or her new solicitors about applying for a costs order in the Tribunal proceedings until June 2003. On 12 June 2003 the appellant's present solicitors wrote to the respondent's solicitors foreshadowing an application for costs. In that letter they said that the unpaid barrister's former wife, to whom the debt for his unpaid fees had apparently been assigned, had sued for those fees, and that the appellant had been joined as a third party in those proceedings.
Before the learned commissioner, counsel for the respondent submitted that the effect of the settlement of March 2003 was such as to preclude the appellant from making or pursuing an application for costs in respect of the proceedings before the Tribunal concerning the restoration of weekly payments. The learned commissioner upheld that submission, saying the following:
"6 As I have noted, the employer urges the Tribunal to determine that both parties intended that the two judgments entered in the Supreme Court finalised the settlement of all matters between the parties so that any entitlement that the worker may have had to costs upon the s86(4) proceedings merged with and formed part of that settlement. I have come to the view, having considered all of the evidence, that this submission should be upheld.
7 It is clear from the evidence that after the settlement conference no steps were taken by the worker during a period extending over 15 months to pursue an order for costs upon her successful s86(4) reference. This inaction on the worker's part, to my mind, is strongly consistent with the conclusion that the worker intended that all her litigation arising from her work injury had been finalised in the terms of the agreement reached at the conference and that this agreement included the finalisation of the issue of costs, both with respect to the damages claim and the proceedings in the Tribunal. In this regard it is pertinent to note that by the settlement, provision was made for $10,000 to be paid to the worker as costs. It is also pertinent for me to note that it was not submitted on the worker's behalf that this amount was intended to represent the worker's costs exclusively of the damages action. I consider it also to be clear from the evidence, most notably from the text of that letter which I have set out above, that the trigger for this cost [sic] application made by the worker was the action initiated by the wife of the worker's counsel to recover his professional fees. Had this action not been taken, then it is in my opinion reasonable for me to infer, given the worker's 15 month period of inaction to that point, that this cost [sic] application would not have been made.
8 It may be that at the time of the settlement conference the worker's liability for her counsel's fees had been overlooked so that the amount provided for as costs at the time of the settlement conference is now inadequate. If correct, this does not in my opinion entitle the worker to recover further costs in that circumstance where I am satisfied that the agreement reached at the settlement conference was intended by both parties to finalise all matters, including costs. For the worker in that circumstance to now pursue an order for costs of her s86(4) referral is, in my opinion, unreasonable, if not improper. It is for these reasons that I consider this to be an instance where I should deviate from the ordinary rule that costs follow the event. Instead I consider the appropriate order to be that there be no order as to costs."
Paragraph 6 of the learned commissioner's reasons touches on the doctrine of merger in judgment. The effect of a judgment is that "the very right or cause of action claimed or put in suit has … passed into judgment, so that it is merged and has no longer an independent existence": Blair v Curran (1939) 62 CLR 464 per Dixon J at 532. However the doctrine of merger in judgment applies only to causes of action, whereas a statutory right to apply for an order for costs is not a cause of action. Under the Supreme Court Civil Procedure Act 1932, s12(1), this Court has "jurisdiction to award costs in all causes and matters whatsoever … instituted in the Court or brought before the Court or a judge thereof". However the institution of the damages actions did not result in the Court having any jurisdiction to make an order for costs in respect of the Tribunal proceedings. It follows that the right of the appellant to seek an order of the Tribunal as to the costs of those proceedings could not in any sense properly be regarded as having merged in the judgment in the damages action.
The position in relation to the employer's appeal is a little more complicated. The right to appeal is conferred by the Act, s63. Under s63(2), an appeal under s63 is required to be determined in accordance with the provisions of the Supreme Court Civil Procedure Act and the rules of court made under it. By virtue of the Supreme Court Rules 2000, rr709(1) and 693(8), this Court, in determining an appeal from the Tribunal, may make any order that it considers should have been made by the Tribunal, or any other order that it considers appropriate. On that basis, this Court had the power, when making orders determining the employer's appeal, to make an order as to the costs of the proceedings before the Tribunal as to the continuation of weekly payments. However the power to make any order as to such costs was discretionary. In a situation where the Tribunal has made a determination, no application has been made as to the costs of the proceedings leading to that determination, there has been an appeal from that determination, and orders have been made disposing of that appeal, the right to seek an order for costs from the Tribunal in relation to the original proceedings will survive unless the parties agree otherwise or the Court, when disposing of the appeal, makes some determination or order as to the costs of the Tribunal proceedings. When orders are made disposing of an appeal from the Tribunal, and no order or determination is made or sought as to the costs of the proceedings before the Tribunal, it cannot be said in any sense that the right to apply for the costs of the Tribunal proceedings has merged in the Court's final orders.
Consent orders are sometimes the product of binding contracts and sometimes not: Chandless-Chandless v Nicholson [1942] KB 321; Siebe Gorman & Co Ltd v Pneupack Ltd [1982] 1 All ER 377; Cliffs Robe River Iron Associates v Dravo Pty Ltd [1988] WAR 322; Baines v State Bank of New South Wales (1985) 2 NSWLR 729 at 738; R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 88 ALR 134; Four Oaks Enterprises Pty Ltd v Clark (No 2) [2003] TASSC 70. Here, it is quite clear that the consent orders were the product of a compromise between the parties, and thus the product of a binding contract. The critical question for the learned commissioner, therefore, was whether the appellant was bound by the terms of that contract not to make an application for the costs of the Tribunal proceedings. There was no evidence before the learned commissioner of an express term to the effect that the appellant would make no such application, nor of an express term to the effect that the consent orders agreed upon were to constitute a final "settlement of all matters between the parties", to use the learned commissioner's words. He should therefore have considered whether the parties' contract contained an implied term to any such effect. If it had, the making of the costs application would have been an abuse of the process of the Tribunal.
The essential criteria for a term to be implied were listed in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 as follows:
"… for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract."
The learned commissioner was told by counsel for the appellant that no attention had been paid at the settlement conference to the matter of costs in the Tribunal, that the applicant became aware only in 2003 of the liability that had been incurred in that regard, and that she was not aware of that liability at the time of the settlement. Those assertions were neither admitted nor contradicted. Because of the way the learned commissioner proceeded, I think he was obliged to treat them as either true or possibly true. In my view it follows that the learned commissioner could not properly have concluded that an implied term that the consent orders were to constitute a settlement of all matters between the parties was reasonable and equitable.
Further, I do not think it would have been open to the learned commissioner to conclude that the implication of a term to such effect was necessary to give business efficacy to the contract between the parties. Leaving alive the right of the appellant to seek an order for the costs of the Tribunal proceedings would not deprive the parties' contract as to the compromise of the damages claim and the disposition of the appeal of its efficacy. The contract was effective without such a term, despite the fact that a contract disposing of the question of costs of the Tribunal proceedings would have been preferable to one that did not. This was certainly not a situation where, without the suggested implied term, the parties' compromise was not capable of sensible operation. See Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 241; Vita Pacific Ltd v Heather (2001) 10 Tas R 334 at 344.
The learned commissioner did not refer to the law as to implied terms. He based his decision on a conclusion as to the inferred or imputed intentions of the parties. The imputed intentions of the parties are relevant to the issue of whether their contract contained any particular implied term. However the learned commissioner took into account the conduct of the appellant after the making of the settlement contract, and that was not relevant to the question whether the contract contained an implied term: Prenn v Simmonds [1971] 3 All ER 237 at 241, [1971] 1 WLR 1381 at 1385; Vita Pacific Ltd v Heather (supra) at 341 – 342.
The appellant's notice of appeal contains only one ground of appeal. It reads as follows:
"The Learned Commissioner erred in law in holding it was now unreasonable and improper for the worker to pursue an order for costs."
The Act, s63(1) permits a party to appeal to this Court only if that party is "aggrieved by any determination, order, ruling or direction of the Tribunal in point of law". The ground of appeal does not specify any error of law that is said to have led to the conclusion that it was unreasonable and improper for the appellant to pursue an order for costs. However the respondent does not appear to have suffered any prejudice as a result of any such irregularity in the wording of the ground of appeal. Plainly the appellant contends that errors of law were made in the relatively simple reasoning that led to the learned commissioner's conclusion as to unreasonableness and impropriety. I therefore think the appropriate course is to determine the appeal on its merits.
The question whether a contract contains an implied term is a question of law: Re Comptoir Commercial Anversois v Power Sun & Co [1920] 1 KB 868; Heimann v Commonwealth (1938) 38 SR(NSW) 691 at 695.
In my view the learned commissioner erred in law (a) by taking into account evidence as to the conduct of the appellant after the making of the settlement contract; and (b) by basing his decision on a finding to the effect that the settlement contract effected a settlement of all matters between the parties in their litigation, when it was not open to him to find that there was an express term to that effect, and the evidence compelled a conclusion that there was no implied term to that effect. It follows that this appeal should be allowed. The evidentiary material before the Tribunal was somewhat meagre. I therefore think the most appropriate course is to set aside the learned commissioner's determination and remit the matter to the Tribunal for determination by another commissioner. There will be orders accordingly.
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