Collins and Military Rehabilitation and Compensation Commission
[2005] AATA 877
•8 July 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 877
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2004/406
GENERAL ADMINISTRATIVE DIVISION ) Re JEFFREY COLLINS Applicant
And
MILITARY REHABILITATION AND COMPENSATION COMMISSION
Respondent
DECISION
Tribunal Senior Member M D Allen Date8 July 2005
PlaceSydney
Direction Tribunal directs that the taxation of the Applicant’s Bill of Costs in this matter be returned to the Deputy Registrar taxing the said Bill with the direction that she is to rule on all disputed items in accordance with these reasons.
(Sgd) M D Allen
..............................................
Senior Member
CATCHWORDS
TAXATION OF BILL OF COSTS – Calderbank letter – whether consent decision was an agreement to pay costs in total or whether costs incurred after the date of the letter should be disallowed on taxation – matter returned to Deputy Registrar with the direction that there should be no allowance for items incurred after the date of the Calderbank letter.
Safety, Rehabilitation and Compensation Act 1988 ss 67(8)
Re Hronopoulis and Telstra Corporation Limited (2002) 68 ALD 419; 35 AAR 349
Re Perry and Comcare [2005] AATA 365
Calderbank v Calderbanks [1976] Fam 93
REASONS FOR DECISION
8 July 2005 Senior Member M D Allen 1. This matter came on before me by way of reference from a Deputy Registrar following the presentation to her of a Bill of costs for Taxation.
2. The reference to me was pursuant to paragraph 6 of the Tribunal’s General Practice Direction of 1 July 1998 which reads:
“Costs may be agreed between the parties. Where there is no agreement, a Registrar of the Tribunal will tax the bill, but may refer any question for the direction of the Tribunal. Either party may apply to the Tribunal for a direction on any question related to costs, before the taxation is concluded.”
3. On 28 February 2005 Senior Member Kelly signed a decision pursuant to s42C(1)(a) of the Administrative Appeals Tribunal Act 1975 setting aside the reviewable decision of the Respondent and substituting in lieu thereof the Tribunal’s decision that the Applicant suffered a 30 per cent whole person impairment. Paragraph 3 of the decision read:
“The Respondent is to pay the Applicant’s legal costs and disbursements as agreed or assessed/taxed.”
4. I note in passing that as the words of paragraph 3 do not refer to “reasonable costs”, section 69A AAT Act does not apply notwithstanding the view expressed in Re Dive and Comcare (1997-98) 48 ALD 753.
5. The Respondent submits that following a series of communications between its solicitor and the solicitor for the Applicant, an offer to settle the matter was made and that the decision of 28 February 2005 was not more favourable to the Applicant than the settlement offer, therefore the Applicant should be deprived of his costs from the date of what is referred to as a “Calderbank letter” sent to his solicitors.
6. Subsection 67(8) SRC Act 1988 reads:
“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 then the reviewable decision;
The Tribunal may, subject to this section, order that the costs of those proceeding incurred by the claimant, or a part of those costs, shall be paid by the responsible authority.”
7. This Tribunal has held in Hronopoulis and Telstra Corporation Limited (2002) 68 ALD 419; 2002 35 AAR 349 and in Re Perry and Comcare [2005] AATA 365, that a successful Applicant can be deprived of part of his/her costs that ordinarily would have been awarded pursuant to ss 67(8) SRC Act in circumstances where a firm offer of settlement has been made and the resulting Tribunal decision has not been more favourable to the Applicant than the offer of settlement.
8. In this matter the history is set out in a statement (with annexure) by the solicitor of the Australian Government Solicitor’s Sydney Office who had carriage of the matter for the Respondent. That statement plus annexure became Exhibit C1. No contrary material was tendered by the Applicant nor was it sought to cross examine the Respondent’s solicitor. I therefore accept her version of events.
9. On 11 January 2005 a letter was forwarded by facsimile from the Respondent’s solicitors to the Applicant’s solicitors. That letter stated inter alia:
“We refer to the above matter and to the hearing on 22 February 2004. We note that, could simply, the Respondent’s evidence and case is the Applicant suffers from no more than a 20% whole person impairment (for which he has received compensation) and the Applicant’s evidence is now (as per Dr Lambeth) that he suffers from a 40% whole person impairment under Table 5.1,noting that he doubts the applicability of Table 13.1.
Accordingly, and in the spirit of compromise, our client is prepared to settle the matter on the basis that the agreed level of impairment is now 30% whole person impairment, this being the middle position of the parties’ evidence. Your costs would also be payable. We are instructed that the amount to payable to your client, being the difference between a 20% and 30% would be a total of $15,914.46, comprising $13,401.67 under s 24 and $2,512.82 under s 27A. Failing agreement on this, our client will proceed to hearing and defend its position that there is a 20% whole person impairment.”
That letter was headed “without prejudice save as to costs.”
10. Copies of file notes annexed to the solicitor’s statement evidence that the Respondent’s solicitor attempted to contact the Applicant’s solicitor on 21, 28, 31 January and 2 and 4 February. On 14 February 2004 the Respondent’s solicitors again wrote to the Applicant’s solicitor. That letter read inter alia:
“We refer to the above matter and to our offer to settle the application, contained in our facsimile of 11 January 2005…
Please note that the respondent proposes to rely upon the terms of our earlier correspondence on the question of costs in the event the matter proceeds to hearing. In particular, if the offer is not accepted and the applicant does not achieve an outcome in the proceedings which is materially better than the terms of our offer, the respondent will, in due course:
- oppose the applicant being awarded costs on and from the date of this letter;
- apply to have any costs the applicant would otherwise have been awarded up to the date of this letter, reduced by the costs the respondent incurs from the date of this letter.”
11. To my mind the letter of 14 February 2005 clearly sets out the Respondent’s intention and the fact that an offer of settlement would be raised when and if any order for costs was sought by the Applicant.
12. The Applicant’s solicitor replied to the letter of 14 February 2005 by letter dated 16 February 2005. That letter read:
“We note you have been on notice for some time that we were seeking our client’s instructions with respect to your offer. You were further aware of our client’s psychological difficulty.
On 9 February 2005 we were instructed not to accept your offer.
We now have to hand your facsimile of 14 February 2005. We are seeking our client’s instructions. You will appreciate given the above, that there may be some delay. “
13. Both parties prepared for the hearing of the matter which was set down to commence in Newcastle on 22 February 2005. On the day of the hearing, prior to the commencement of the hearing, terms of agreement were entered into, those terms being reproduced in the formal decision dated 28 February 2005 by Senior Member Kelly.
14. I consider that the letter of 11 January 2005 was enough to put the Applicant’s solicitors upon notice as to the intentions of the Respondent. Apparently, they did not respond to this correspondence. The unequivocal letter of 14 February 2005 should therefore have been acted upon expeditiously and I see no grounds for determining that any period of grace should be extended during which the matter of settlement could be considered.
15. I find that the letter of 14 February 2005 is clearly a “Calderbank” letter and put the Applicant and his solicitors upon notice. In any event, an award of costs pursuant to ss67(8) of the SRC Act is discretionary and the fact that reasonable offers of settlement have been made and rejected is a matter that can be taken into account when making any order for costs pursuant to that subsection.
16. I further take into account a file note in the file of the Tribunal respecting this matter. According to that file note, Senior Member Kelly’s associate contacted the Applicant’s solicitors on 16 February 2005 and was informed that the matter was proceeding and that Counsel had been briefed.
17. It therefore seems to me that the real question in this matter is whether the agreement which became the consent decision signed by Senior Member Kelly was an agreement to pay the Applicant’s costs in total as per the Bill of Costs dated 4 March 2005 (which I note does not descend into particularity), or whether costs incurred after 14 February 2005 can be disallowed on taxation.
18. Annexure L to Exhibit C1 is a photocopy of the Respondent’s solicitor’s file notes at the time of settlement. They read:
“Consent terms drafted – 30% WPI
Costs as agreed or taxed – can’t agree today due to Calderbank
AAT will make order in acc.with terms
We offered $5,000 for costs
App. rejected – offered $10,000
We reject - $6,000 final
Rejected. Did not move from $10k
Will deal with costs on taxation as can’t agree today”
19. Given no material contradicting that file note was produced by the Applicant’s solicitors, I find that the agreement entered into chose a formula regarding costs that allowed the parties to argue the effect of the letter of 14 February 2005 at taxation.
20. As stated above, the purport of the letter was quite clear and in the taxation of the Applicant’s Bill of Costs there should be no allowance for items incurred after 14 February 2005.
21. At this time it is not possible to lay down any specific ruling as to individual items. I note that this matter was set down for hearing at a call over held on 3 November 2004. Quite clearly Counsel was entitled to regard himself as having been engaged for that day and to charge a cancellation fee if the matter had not proceeded. Likewise, I would have thought it proper and prudent to have delivered Counsel’s brief prior to 14 February 2005. But these matters are for the determination of the taxing officer.
22. My direction is therefore that the taxation of the Applicant’s Bill of Costs in this matter is returned to the Deputy Registrar taxing the said Bill with the further direction that she is to rule on all disputed items in accordance with these reasons.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen
Signed: (E.Pope) .....................................................................................
AssociateDate of Hearing 27 June 2005
Date of Decision 8 July 2005Solicitor for the Applicant Mr L Forner, Forners Solicitors (instructed by Bale Boshev & Associates)
Counsel for the Applicant Mr G Elliott
Solicitor for the Respondent Australian Government Solicitor