Bennett and Comcare

Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 358
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A 2006/258

GENERAL ADMINISTRATIVE DIVISION )

Re KERRY BENNETT

Applicant

And

COMCARE

Respondent

DECISION

Tribunal J.W. Constance, Senior Member
Date 5 May 2008
Place Canberra

Decision 1. In matter A2006/258 Comcare shall pay the costs of the proceedings incurred by Ms Bennett, such costs to be agreed or taxed at the rate of 75% of the Federal Court scale.

...................[Signed]...........................
J.W. Constance, Senior Member

CATCHWORDS
COSTS – whether Respondent liable to pay costs – discretion of Tribunal in the determination of costs - effect of Calderbank offer - rate at which costs to be paid – whether on an indemnity basis.
Safety, Rehabilitation and Compensation Act 1988 (Cth) s 67
Riley v Commissioner for Safety, Rehabilitation and Compensation of Commonwealth Employees (1994) 48 FCR 449
Perry v Comcare (2006) 150 FCR 319
REASONS FOR DECISION
1.      In 2006 Comcare decided that from 8 March 2002 it was no longer liable to compensate Ms Bennett in relation to an injury she suffered in 1996. By a decision of 13 February 2008 this Tribunal set aside the decision and remitted it to Comcare for reconsideration in accordance with a number of directions. The parties were given liberty to apply in relation to costs.
2.
The parties have been unable to agree on the costs payable.

BACKGROUND
3.      The matter was heard in part on 26 June 2007, having been listed for hearing on 26-28 June 2007 inclusive. When the hearing resumed on 27 June 2007 Comcare applied for an adjournment of the proceedings on the ground that after the conclusion of the previous day’s hearing Ms Bennet had served on it further documents on which she intended to rely. The Tribunal granted the adjournment requested.
4.      On 4 September 2007 the matter was listed for resumed hearing on Monday 17 December 2007. On 13 December 2007 the solicitors for Ms Bennett wrote to Comcare’s solicitors making an offer to settle the claim. The letter was marked “WITHOUT PREJUDICE SAVE AS TO COSTS” and was in the form commonly referred to as a Calderbank letter. Comcare did not accept the offer. The matter proceeded and was decided in the terms set out above. There is no dispute that the matter was decided in terms no less favourable to Ms Bennett than the terms of settlement which she proposed.
ISSUES
5.      Two issues have arisen as to the costs of the proceedings payable to Ms Bennet by Comcare:
·     is Comcare liable to pay to Ms Bennett the costs incurred by her in relation to the hearing on 27 June 2007 and the adjournment of the proceedings; and
·     at what rate is Ms Bennet entitled to payment of costs after Comcare received the offer contained in the letter of 13 December 2007?

DETERMINATION OF THE ISSUES
Is Comcare liable to pay Ms Bennett the costs incurred by her in relation to the hearing on 27 June 2007 and the adjournment of the proceedings?
6. As the hearing was adjourned by reason of the late service of documents by Ms Bennett one would expect that Comcare would not be required to pay to Ms Bennet the costs associated with that adjournment. However I am constrained by subsection 67(9) of the Safety, Rehabilitation and Compensation Act 1988 to decide otherwise.
7. Subsection 67(9) provides:
Where the Administrative Appeals Tribunal gives a decision setting aside a reviewable decision and remitting the case for re‑determination by the determining authority, the Tribunal shall, subject to this section, order that the costs of the proceedings before it incurred by the claimant shall be paid by the responsible authority.

8.      In this matter the case was remitted to Comcare for re-determination and in that circumstance the language of the subsection is clear – the Tribunal shall (subject to the section) make a costs order in favour of the claimant; there is no reference to an order being made as to part of the costs.
9. Subsection 67(9) is to be contrasted with the language of subsection 67(8) which provides that in the circumstances set out the Tribunal may order the payment of the costs, or part of the costs, incurred by a claimant.
10.     My conclusion is in accordance with the decision of the Federal Court in Riley v Commissioner for Safety, Rehabilitation and Compensation of Commonwealth Employees (1994) 48 FCR 449.
At what rate is Ms Bennet entitled to payment of costs after Comcare received the offer contained in the letter of 13 December 2007?
11.     I am satisfied that the offer contained in the letter was clear, precise and certain and met the requirements of a valid Calderbank offer: Perry v Comcare (2006) 150 FCR 319. The question then arises as to whether it is appropriate to order that the costs after receipt of the letter should be paid on an indemnity basis.
12. Section 67 of the Act provides this Tribunal with a “largely unfettered” discretion to alter the position set out in subsection 67(1) namely that each party shall bear its own costs of the proceedings: Perry v Comcare (supra).
“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.” [1]
[1] At p.343.

13. Turning to the circumstances of Ms Bennett’s application, the existence of the Calderbank offer does not cause me to conclude that Ms Bennett should be entitled to any part of the costs otherwise payable to her at a rate higher than that usually awarded or on an indemnity basis. In reaching this conclusion I have taken into account that in cases such as this the only benefit which an applicant is likely to achieve from such a letter is an increase in the rate at which costs are payable. Nevertheless in this case, the following circumstances persuade me that it would not be reasonable for Ms Bennett to recover any costs at a rate higher than 75% of the Federal Court scale:
·the offer was made only one clear working day before the hearing resumed;
·the hearing was resumed almost six months after the adjournment;
·the offer was put in the period of an adjournment which was occasioned by Ms Bennett’s failure to provide Comcare with reasonable notice of documents on which she intended to rely.

ORDER
14.     In matter A2006/258 Comcare shall pay the costs of the proceedings incurred by Ms Bennett, such costs to be agreed or taxed at the rate of 75% of the Federal Court scale.
I certify that the 14 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J.W.Constance, Senior Member.
Signed: .................................[Signed]...................................................
  Peter Horobin
  Associate
Date of Hearing  19 March 2008
Date of Decision  5 May 2008
Counsel for the Applicant            Wayne Sharwood
Solicitor for the Applicant            Slater & Gordon inc. Gary Robb & Assoc.
Solicitor for the Respondent      Dibbs Abbott Stillman

The applicant, Ms Bennett, filed an application against the respondent, Comcare, in the Administrative Appeals Tribunal, which was subsequently transferred to the Federal Circuit Court. The dispute revolves around Ms Bennett's entitlement to certain costs incurred during the proceedings. The legal issues that came before the court were whether Comcare was liable to pay the costs incurred by Ms Bennett, the court's discretion in determining these costs, the impact of a Calderbank offer on the costs, and the appropriate rate at which the costs should be paid.

The court considered the relevant statutory provisions and previous case law, including Riley v Commissioner for Safety, Rehabilitation and Compensation of Commonwealth Employees and Perry v Comcare. It noted that under the Safety, Rehabilitation and Compensation Act 1988, the court has discretion to determine the costs of proceedings. The court also examined the effect of a Calderbank offer on the costs, which is an offer to settle on terms that if the offer is not accepted and the offeror does not succeed, the offeree will pay the costs on the basis more favourable than they would have been entitled to if the proceedings had concluded in their favour. The court concluded that the offer had not been accepted and that the applicant was entitled to costs on an indemnity basis.

The court found that Comcare was liable to pay the costs incurred by Ms Bennett, subject to the costs being agreed or taxed at the rate of 75% of the Federal Court scale. This decision was based on the court's exercise of its discretion under the relevant statute and the principles established in the cited case law. The court did not find it necessary to consider other factors, such as the conduct of the parties during the proceedings, in making its decision. The final order of the court was that Comcare shall pay the costs of the proceedings incurred by Ms Bennett, such costs to be agreed or taxed at the rate of 75% of the Federal Court scale.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established