Faulks and BIS Industries Limited (Compensation)

Faulks and BIS Industries Limited (Compensation) [2020] AATA 4357 (2 November 2020)
Division:GENERAL DIVISION
File Number(s): 2017/4493
2017/6915
2019/6495

Re:John Faulks
APPLICANT

AndBIS Industries Limited
RESPONDENT

DECISION
Tribunal:Senior Member D O'Donovan
Member Dr Peter Wilkins
Date:2 November 2020
Place:Canberra

The Tribunal orders that the Respondent is to pay the Applicant’s reasonable costs and disbursements in accordance with section 67 of the SRC Act as agreed or taxed in accordance with the Tribunal’s Practice Direction dated 30 June 2015.
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Senior Member D O'Donovan
Catchwords
COSTS – Workers’ compensation – three reviewable decisions set aside – making a decision in substitution for the reviewable decision that is more favourable to the claimant – whether Tribunal ought to exercise its discretion to order that only part of the claimant’s costs be paid by the responsible authority – whether respondent incurred additional and unnecessary costs as a result of the way the applicant ran his case – respondent ordered to pay applicant’s costs in all three proceedings
Legislation
Safety, Rehabilitation and Compensation Act 1988 s 67(8)(b)
Cases
Faulks and BIS Industries Limited (Compensation) [2020] AATA 2951
GM Global Technology Relations LLC v S.S.S. Auto Parts Pty Ltd (No 2) (Costs) [2019] FCA 1813
Polar Aviation Pty Ltd v Civil Aviation Authority (No 3) [2010] FCA 51
REASONS FOR DECISION
Senior Member D O'Donovan
2 November 2020
INTRODUCTION

On 14 August 2020, the Tribunal set aside the reviewable decisions in respect of Tribunal Applications 2017/4493, 2017/6915 and 2019/6495 and, in substitution, made decisions more favourable to the applicant (Faulks and BIS Industries Limited (Compensation) [2020] AATA 2951) (the Decision).
In the Decision, the Tribunal stated that unless the respondent advises the Tribunal that it wishes to be heard on the question of costs, the Tribunal would order that the costs of the proceedings be paid by the respondent.
On 3 September 2020, the respondent advised that it wished to be heard on the question of costs and sought further time to provide a written submission or, in the alternative, to be heard orally.
The Tribunal granted the parties time to provide written submissions on the question of costs. The Tribunal received written submissions from the respondent on 30 September 2020 and from the applicant in reply on 14 October 2020.
The applicant seeks an order that the respondent pay the applicant’s reasonable costs and disbursements.
The respondent seeks an order that the respondent only pay part of the applicant’s costs of the proceedings, namely, reasonable party/party costs and disbursements incurred by the applicant up to and including 15 November 2019, plus one additional day for counsel to prepare written submissions.
LEGISLATION
Section 67(8) confers on the Tribunal a discretion to order that the costs incurred by an applicant, or part of those costs, be paid by the responsible authority. It relevantly provides:
(8) Where, in any proceeding instituted by the claimant, the Administrative Appeals Tribunal makes a decision:
(a) …
(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.
[emphasis added]
The definition of responsible authority in section s67(1A) includes a licensee.
The issue to be considered by the Tribunal is whether it should exercise its discretion to order that the costs of the three proceedings be paid by the respondent or whether the respondent ought to pay only part of those costs.
SUBMISSIONS
The respondent submits that it should only be liable to pay the applicant’s reasonable party/party costs and disbursements up to and including 15 November 2019, plus one additional day for counsel to prepare written submissions. The respondent makes that submission on the basis that the respondent incurred additional and unnecessary costs as a result of:
(a)neurosurgeon, Mr Yanni Sergides, giving oral evidence on 15 November 2019 as to the effect of the applicant’s Trendelenburg gait on his left L5/S1 disc injury which was ‘radically’[1] different to his written report. Mr Sergides’ report did not comment on the impact of the applicant’s altered gait on his L5/S1 injury. In oral evidence, Mr Sergides opined that:[2]
the surgery that was required in 2017 for L5/S1, was much more likely to be linked with the events of the change of posture in 2009 and 2011 than, you know, anything so far.
…
Because over the period of time, walking like that is very likely to give you problems with your back.
(b)the applicant putting forward a belated case theory that his left L5/S1 disc bulge was caused by the nature and conditions of his employment with BIS Industries; and
(c)the applicant advancing a number of case theories which unnecessarily prolonged the hearing and complicated the evidential matrix, and on which he was ultimately unsuccessful.
[1] Transcript of Proceedings, 15 November 2019, at 147 – 148.
[2] Transcript of Proceedings, 15 November 2019, at 125 – 126.
The respondent further submits that additional unnecessary costs were incurred as a result of the respondent having to obtain a supplementary report to respond to Mr Sergides’ ‘radically different’ opinion and, on the advice from the applicant’s solicitor, having to make Dr McGill available for cross examination at the resumed hearing on 16 January 2020.
The applicant submits that, as a necessary consequence of the applicant being totally successful in all three proceedings and following the ordinary rule that costs follow the event, the respondent ought to pay the applicant’s reasonable party/party costs and disbursements in full. He further submits that, the respondent has not articulated any basis on which the applicant should be disentitled to recover reasonable costs that were incurred post 15 November 2019 including, but not limited to costs relating to:
(a)considering the literature provided by the Tribunal on 19 November 2019;
(b)the appearance on 16 January 2020 which the Tribunal recognised as being beneficial;
(c)obtaining a supplementary report from Mr Sergides which was relied on in the Decision and was commissioned as a result of Dr McGill exceeding the basis upon which leave was sought and given; and
(d)considering the respondent’s various submissions and preparation of the applicant’s submissions in reply.
In reply to the three main submissions put by the respondent, the applicant argues that:
(a)In respect of Mr Sergides’ ‘radically different’ oral evidence, the issue of the effect of the applicant’s altered gait on his L5/S1 injury was known by the parties, articulated in the respective Statements of Facts, Issues and Contentions filed in the proceedings, and responded to by the respondent’s experts. In addition, the costs incurred by obtaining further evidence from Dr McGill in response to the oral evidence was done at the request of the respondent where in its correspondence dated 28 November 2019, the respondent argued it should be granted an opportunity to obtain a supplementary report from Dr McGill and the doctor should be granted an opportunity to give oral evidence at the resumed hearing. The applicant strongly opposed this course of action. On 5 December 2019, in response to the respondent’s application for leave to obtain further evidence, the applicant advised that:
…if the Tribunal does grant leave to the Respondent to serve a further report of Dr McGill the doctor’s evidence should be limited to only a further report. There is no right to call a doctor where we have not asked for the doctor to be available for cross examination.
Notwithstanding this, the Tribunal made a direction on 9 December 2019 requiring the respondent to make Dr McGill available for cross examination on the basis that the Tribunal would be assisted by the opportunity to ask Dr McGill questions concerning the literature which implicates gait in degenerative disc disease. The applicant therefore submits that the additional costs associated with Dr McGill’s further evidence and having been made available for cross examination have been wrongly attributed to the applicant. In making that submission, the applicant rejects the respondent’s submission that the applicant’s solicitors advised the respondent that he required Dr McGill for cross examination.
(b)In respect of the nature and conditions claim theory and the number of case theories advanced by the applicant, the applicant submits that the respondent has failed to articulate what, if any, additional or unreasonable costs were incurred such as to disentitle the applicant to recover costs post 15 November 2019. He submits that the proceedings were not in any way unnecessarily extended in duration or over complicated by the number of case theories advanced.
CONSIDERATION
The terms of section 67(8) confer on the Tribunal a broad discretion to award costs when, as here, the reviewable decision is set aside and a more favourable decision is substituted. The usual rule applied in these circumstances is that costs follow the event. What the respondent seeks is a variation from the usual rule such that the applicant receives only one additional day’s costs after the third day of hearing on 15 November 2019.
The respondent submits that the Tribunal should depart from the usual rule in the present circumstances for the three reasons outlined above.
In relation to the first submission we accept that as a matter of fact Mr Sergides did in his oral evidence alter the basis on which he said the applicant’s need for surgery in 2017 was linked to his employment with the respondent.
It is however important to note that:
(a)The theory proffered by Mr Sergides had already been advanced, although less convincingly, by the applicant’s treating surgeon Dr Day. Accordingly, the causal link proposed was not a new issue in the proceedings although its significance did increase following Mr Sergides’ oral evidence;
(b)Had the calling of witnesses proceeded in the most common way, this altered view could have been dealt with by the respondent’s experts in their oral evidence - however, in order to accommodate the schedules of a number of doctors, Mr Sergides gave evidence after both of the respondent’s expert witnesses had given theirs;
(c)In light of the fact that the respondent did not have the opportunity to respond to Mr Sergides, the Tribunal was compelled to offer the respondent an opportunity to respond to the more elaborate theory put forward. The respondent took that opportunity with the result that more evidence was filed by the respondent on the issue and ultimately responded to by the applicant;
(d)Following the close of the first three days of hearing the Tribunal sought comments from the parties on an article which dealt with the question of the relationship between an altered gait and the aggravation of lumbar disc disease.
In those circumstances it would be unfair to conclude that it was primarily the change of position by Mr Sergides that led to greater focus on the question of the relationship between the applicant’s gait and the need for surgery at the L5/S1 level. A key reason for the extended focus on that issue is the inquisitorial nature of the Tribunal’s function which allowed it greater scope to pursue the issue with the parties. Ultimately, it was the Tribunal’s interest in the state of the scientific evidence on the relationship between gait and lumbar disc disease which was the primary driver of the increased exploration of the issue. It would not be appropriate to deprive the applicant of the additional costs incurred as a consequence of the Tribunal’s interest in that issue.
In relation to the second contention, the Tribunal does not accept that the applicant put forward the nature and conditions claim belatedly. The applicant in its amended statement of facts issues and contentions relied upon Dr Bentivoglio who expressed the view that the applicant’s condition was consistent with the history of someone with ‘pre-existing degenerative disease in the lumbar spine, which was made worse by the sort of work that he was doing…’. In the Tribunal’s assessment, that can only be understood as a nature and conditions claim.
While that position was not ultimately accepted, that fact would not justify cutting off the applicant’s access to recovering most of the costs he incurred post -16 November 2019.
In relation to the third contention, that the applicant advanced a number of case theories which prolonged the hearing, the Tribunal accepts that the applicant proffered more than one basis on which liability could be accepted. That is however a common feature of Tribunal litigation particularly where a complex medical issue lies at the centre of proceedings. While proffering multiple bases for establishing liability is not a practice which the Tribunal wishes to encourage, the reality is that in advance of a hearing it is often difficult to determine which of a number of well supported theories best explains an applicant’s condition. The fact that the Tribunal accepts one over another should not in every case result in a discount being applied. In the present case it was not unreasonable for the applicant to advance the arguments he did and it is not obvious that doing so unreasonably added to the costs of the conduct of the matter. Therefore the Tribunal is not persuaded that the modified costs order proposed by the respondent should be made.
In relation to the costs associated with the making of Dr McGill available in January 2020, it is clear that the applicant was not responsible for the incurring of those costs.
In addition to the matters noted above, it is also worth noting that the post-15 November 2019 costs in the Tribunal’s assessment, were primarily directed to the issue which decided the matter against the respondent – whether the applicant’s altered gait, caused by his compensable injury, resulted in the need for his 2017 surgery. The modified costs order proposed by the respondent would work an injustice against the applicant by depriving him of costs which related to work done to advance the successful argument. For this additional reason, the order urged by the respondent is not appropriate.
Accordingly, the Tribunal orders that the Respondent is to pay the Applicant’s reasonable costs and disbursements in accordance with section 67 of the SRC Act as agreed or taxed in accordance with the Tribunal’s Practice Direction dated 30 June 2015.

25. I certify that the preceding 24 (1-24) paragraphs are a true copy of the reasons for the decision herein of Senior Member D O’Donovan.

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Associate
Dated: 2 November 2020

Date(s) of hearing: On the papers

Solicitor for the Applicant:
Mr Aadil Ahmed, Gerard Malouf and Partners

Counsel for the Applicant:

Solicitor for the Respondent:

Counsel for the Respondent

Mr Karl Pattenden

Ms Claire Tota, HBA Legal

Mr John Wallace

[2020] AATA 4357

2 November 2020

Key Legal Topics

Areas of Law

Employment Law

Statutory Interpretation

Legal Concepts

Costs

Remedies

Procedural Fairness

Statutory Construction