Hopkins v Hopkins
[2014] VSC 319
•9 July 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2013 3772
| JOHN HOPKINS | Plaintiff |
| v | |
| JOSHUA HOPKINS | Defendant |
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JUDGE: | DALY AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 February 2014 | |
DATE OF JUDGMENT: | 9 July 2014 | |
CASE MAY BE CITED AS: | Hopkins v Hopkins | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 319 | |
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JUDICIAL REVIEW AND APPEALS — Appeal from VCAT under s 148 of the Victorian Civil & Administrative Appeals Act 1998 (Vic) — Costs — Sections 109, 112, 113 and 114 of Victorian Civil & Administrative Appeals Act 1998 (Vic) — Adequacy of Reasons — Metricon Homes Pty Ltd v Sawyer [2013] VSC 518 considered — Applicability of principles in Calderbank v Calderbank (1975) 3 All ER 33 to settlement offers made in proceedings at VCAT — Remedy where sole error of law is inadequacy of reasons — Overarching obligations under Civil Procedure Act 2010 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Cahill | Peter Cahill |
| For the Defendant | Mr A. Coote | Robertson O’Farrell McMahon |
HER HONOUR:
The appellant, Mr John Hopkins (“Mr Hopkins Snr”), was the applicant in a Victorian Civil and Administrative Tribunal (“VCAT”) proceeding in which he made a number of claims against the respondent, his son, Mr Joshua Hopkins (“Mr Hopkins Jnr”). Mr Hopkins Snr claimed an interest in various properties in Tasmania and Bendigo of which Mr Hopkins Jnr was the registered proprietor, as well as compensation for various works said to have been done by him on some of those properties. Following a two day hearing in 2012, the Tribunal Member rejected Mr Hopkins Snr’s claims that he was entitled to a declaration that one or more of these properties were held on trust by Mr Hopkins Jnr on behalf of both parties by reason of a resulting trust or common intention constructive trust. However, he ordered that Mr Hopkins Jnr pay Mr Hopkins Snr the sum of $29,389 by reason of various payments made and works undertaken with respect to one of those properties. The Tribunal Member gave both parties liberty to apply with respect to the costs of the proceeding.
Both parties made an application in respect of costs. Mr Hopkins Snr sought an order that Mr Hopkins Jnr pay his costs of the proceeding up to and including 14 August 2012. Mr Hopkins Jnr applied for an order that Mr Hopkins Snr pay his costs from 14 August 2012 on a solicitor/client or indemnity basis, and that the parties otherwise bear their own costs.
The initial demand by Mr Hopkins Snr in respect of the claims which were the subject of the VCAT proceeding was made by a letter from his solicitors dated 2 November 2011. Following that time there was substantial correspondence between the solicitors for the parties which failed to resolve the dispute. Mr Hopkins Snr issued the VCAT proceeding on 4 June 2012. An unsuccessful mediation was held on 11 July 2012. On 24 July 2012 the solicitors for Mr Hopkins Jnr sent a letter of offer (“24 July letter”) to the solicitors for Mr Hopkins Snr. In his reasons dated 27 June 2013 (“Reasons”), the Tribunal Member reproduced the relevant contents of the 24 July letter as follows:
(a)the Calderbank letter was headed “Without Prejudice save as to costs”;
(b) the body of the Calderbank letter contained the following:
(i)that [Mr Hopkins Jnr] offered to pay [Mr Hopkins Snr] $37,000 within 60 days from the acceptance of the offer; such amount to be in full satisfaction of the claim commenced by [Mr Hopkins Snr];
(ii)that the offer was open for acceptance for a period of 21 days from the date of the letter, being 14 August 2012;
(iii)that the offer was made on the basis of the principles set out in Calderbank v Calderbank;[1]
(iv) the letter contained the following statement:
In the event that this offer is rejected and the matter proceeds to a hearing and a decision at VCAT is to order an amount which is equal to or less favourable than the terms of this offer, then it will be submitted to VCAT that it is appropriate for an order to be made against [Mr Hopkins Snr] requiring him to reimburse [Mr Hopkins Jnr] for all of his legal costs from the date of the expiration of this offer and furthermore that [Mr Hopkins Snr] be responsible for payment for all of his own legal costs.
[1](1975) 3 All ER 33.
In making an application for his costs incurred after 14 August 2012 on an indemnity basis, Mr Hopkins Jnr relied upon the 24 July letter, s 112 of the Victorian Civil and Administrative Tribunal Act 1995 (Vic) (“Act”), and the principles in Calderbank v Calderbank.
The “default position” with respect to costs at VCAT is provided for by s 109 of the Act, which provides that, subject to the other provisions of division 8 of Part 4 of the Act (including the specified exceptions in s 109(3) of the Act, and the presumption in s 112 of the Act), each party is to bear their own costs in proceedings brought in VCAT.
Section 112 of the Act provides as follows:
112. Presumption of order for costs if settlement offer is rejected
(1) This section applies if –
(a)a party to a proceeding (other than a proceeding for review of a decision) gives another party an offer in writing to settle the proceeding; and
(b)the other party does not accept the offer within the time the offer is open; and
(c) the offer complies with sections 113 and 114; and
(d)in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.
(2)If this section applies and unless the Tribunal orders otherwise, a party who made an offer referred to in subsection (1)(a) is entitled to an order that the party who did not accept the offer pay all costs incurred by the offering party after the offer was made.
(3)In determining whether its orders are or are not more favourable to a party than an offer, the Tribunal –
(a)must take into account any costs it would have ordered on the date the offer was made; and
(b)must disregard any interest or costs it ordered in respect of any period after the date the offer was received.
In order for an offer to be an offer within the meaning of s 112 of the Act, it must comply with sections 113 and 114 of the Act. Sections 113 and 114 of the Act provides as follows:
113. Provisions regarding settlement offers
(1) An offer may be made –
(a)with prejudice, meaning that any party may refer to the offer, or to any terms of the offer, at any time during the proceeding; and
(b)without prejudice, meaning that the Tribunal is not able to be told of the making of the offer until after it has made its orders in respect of the matters in dispute in the proceeding (other than orders in respect of costs).
(2)If an offer does not specify whether it is made with or without prejudice, it is to be treated as if it had been made without prejudice.
(3) A party may serve more than one offer.
(4)If an offer provides for the payment of money, the offer must specify when that money is to be paid.
114 Provisions concerning the acceptance of settlement offers
(1)An offer must be open for acceptance until immediately before the Tribunal makes its orders on the matters in dispute, or until the expiry of a specified period after the offer is made, whichever is the shorter period.
(2) The minimum period that can be specified is 14 days.
(3)An offer cannot be withdrawn while it is open for acceptance without the permission of the Tribunal.
(4)In deciding whether to give permission, the Tribunal may examine the offer, even if it was made without prejudice.
(5)If the offer was made without prejudice, a member of the tribunal who examines it for the purposes of subsection (4) can take no further part in the proceeding after determining whether or not to give permission.
(6)A party can only accept an offer by giving the party who made it a signed notice of acceptance.
(7)A party may accept an offer even though it has made a counter-offer.
It was common ground before the Tribunal Member and on the hearing of the appeal before me that the letter was an offer within the meaning of s 112(1)(a),(b) and (c) of the Act, notwithstanding that the 24 July letter made no express reference to s 112 of the Act, in that it was in writing, it specified when the money offered was to be paid, the specified time for acceptance of the offer was greater than 14 days, and the party to whom the offer was addressed did not accept the offer. The contentious issue before the Tribunal was whether the presumption of an order for costs in s 112 had been engaged by reason that the orders made by the Tribunal Member that Mr Hopkins Jnr pay Mr Hopkins Snr the sum of $29,389.70 was less favourable than the terms of the offer, given that the offer to pay $37,000 was made on an “all in” basis, that is, inclusive of Mr Hopkins Snr’s costs at the time that the offer was made.
After hearing the submissions of the parties with respect to costs, the Tribunal member delivered written reasons with respect to the question of costs (“Reasons”). At paragraph 27 of the Reasons, the Tribunal member stated as follows:
(a)I consider it fair and proper that [Mr Hopkins Snr] pay to [Mr Hopkins Jnr] costs which I will fix at $21,461.16 being 65% of the claimed costs of [Mr Hopkins Jnr];
(b) I give [Mr Hopkins Snr] a stay of 30 days to pay the costs;
(c)I order that [Mr Hopkins Jnr] can offset the costs order against the moneys I have previously ordered that [Mr Hopkins Jnr] pay to [Mr Hopkins Snr], which leaves an effective sum due to [Mr Hopkins Snr] of $7,728.54, being $29,389.70 less $21,461.16.
Mr Hopkins Snr obtained leave to appeal on the following questions of law:
1.The learned Tribunal Member failed to give adequate reasons for his conclusion in paragraph 21 of his reasons, on the grounds that the conclusion there expressed is:
(a) a bare conclusion;
(b) not otherwise explained; and
(c) is inconsistent with the findings he makes in paragraph 26.
2.The only reasonable conclusion open to the Tribunal on the basis of the findings in paragraph 26 was that an order for costs would have been made in favour of [Mr Hopkins Snr] at the date of the letter of offer.
Before turning to the written and oral submissions advanced by both parties, given the nature of the grounds of appeal, it is necessary to look at the Reasons in some detail. To some extent, the Reasons need to be read in the context of the Tribunal Member having heard and determined the substantive issues in the proceeding (and produced a written judgment), thus eliminating the need for any significant recitation of the background to the costs application.
In the Reasons, which run to some 27 paragraphs, the Tribunal Member:
(a) sets out the orders sought by the parties;
(b) provided a brief chronology of the dispute and the proceeding, noting that the proceeding was issued on 4 June 2012 after some seven to eight months of correspondence between solicitors, a mediation was held on 11 July 2012, and the sending of the 24 July letter;
(c) reproduced the relevant sections of the 24 July letter;
(d) noted Mr Hopkins Jnr’s contentions that his legal costs from 14 August 2012 (the date the offer in the 24 July letter expired) to 17 May 2013 (the date of the hearing of the costs application) amounted to $33,077.12;
(e) noted the submissions on behalf of Mr Hopkins Jnr that, notwithstanding the lack of any direct reference to ss 113 and 114 of the Act, the terms of the 24 July letter complied with the requirements of those sections, thus triggering the operation of s 112 of the Act;
(f) noted that Mr Hopkins Jnr also contends that the 24 July letter constituted a Calderbank offer;
(g) noted that Mr Hopkins Jnr acknowledged that the formal requirements of s 112 of the Act had been met by the 24 July letter, but regarded as contentious the question of whether or not the orders made by the Tribunal in the proceeding were not more favourable to the other party than the offer contained in the 24 July letter;
(h) at paragraph 17 of the Reasons, the Tribunal Member summarised the other arguments raised by Mr Hopkins Snr as follows:
(a)That the First Named Respondent’s offer was an “all in or inclusive of costs” offer. The onus of establishing the quantum of the offer lies with the party making the offer;
(b)That the offer was made subsequent to a mediation and before discovery. Discovery was an important issue in this matter and no party could have made a proper assessment of the strengths and weaknesses of their position prior to discovery;
(c)The complexity of the case and the types of issues raised and argued should mean that each party should bear their own legal costs pursuant to Section 109 of the Victorian Civil and Administrative Tribunal Act 1998;
(d)That pursuant to the principles set out in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No.2) (2005) VSCA 289 that the Applicant has not acted imprudently in refusing to accept the First Respondent’s offer.
(i) accepted that the letter of offer met the first three conditions of s 112 of the Act had been met;
(j) in considering the fourth condition, that is, the requirements that the offer was more favourable than the orders made by the Tribunal, the Tribunal Member noted the requirement under s 112(3) that in determining whether its orders are or are not more favourable to a party than the terms of an offer, the Tribunal must take into account any costs it would have ordered on the date the offer was made; and
(k) the Tribunal Member referred, in the context of the question of whether any of the parties would have been entitled to any costs on the date that the offer was made, to s 109 of the Act, and the “general rule” that the Tribunal will order that each party bear their own costs unless the Tribunal considers it fair to do otherwise.
Paragraphs 21 to 26 inclusive of the Reasons contain the critical elements of the Tribunal Member’s decision, and as such, are reproduced in full below:
21.In this matter I do not consider that the proceeding comes within any of the specific matters that the Tribunal should have regard to in Section 109(3) of the Victorian Civil and Administrative Tribunal Act 1998.
22In the circumstances the Tribunal would not have ordered any costs for either party up to the date that the offer of settlement was made.
23I do not consider that a party cannot make a settlement offer under the Victorian Civil and Administrative Tribunal Act 1998 which is an “all in” offer. In that respect I accept what was said by Senior Member Walker in Sawyer v Metricon Homes Pty Ltd (Domestic Building) 2012 VCAT 1971 at paragraph 13.
24I regard the First Respondent’s offer as a valid offer of settlement pursuant to the Victorian Civil and Administrative Tribunal Act 1998. I also accept the offer as also being a Calderbank offer.
25a I consider that the Applicant is therefore liable to pay costs of the First Respondent. In Section 112(2) of the Victorian Civil and Administrative Tribunal Act 1998 it says that unless the Tribunal orders otherwise, the party who did not accept the offer should pay all costs incurred by the offering party after the offer was made;
bI accept what was said by then Deputy President Macnamara in Nguyen v Nguyen (Real Property) 2010 VCAT 2129 at paragraph 11 being that Section 112 gives the Tribunal a wide discretion with respect to costs irregardless of what view is taken of the phrase “all costs”. Costs effectively involve initially a consideration of the provisions of s109 of the Victorian Civil and Administrative Tribunal Act 1998. The relevant considerations contained with Section 109 for the purposes of this matter are Section 109(3)(c), (d) and (e).
26 With respect to the provisions of Section 109(3) I find:
aThat the proceeding was complicated both from an evidentiary aspect and also a legal view;
bThat discovery had to properly and fully occur before parties could make a proper and realistic assessment of their situation;
cThat there is no evidence before me of any follow up by the Applicant and the First Named Respondent’s offer or counter offer by the Applicant following discovery;
dThat the success or otherwise of either party depended inherently on findings by the Tribunal;
eThat all parties conducted themselves fairly and responsibly with respect to all arguments raised in the proceeding.
In the outline of submissions filed on behalf of Mr Hopkins Snr in support of his appeal, the solicitor for Mr Hopkins Snr submitted, in summary, as follows:
(a) he noted that the specific issue before the Tribunal Member at the hearing of the costs application was whether the orders made by the Tribunal in the proceeding were more favourable or not to Mr Hopkins Snr than the terms of the offer contained in the 24 July letter;
(b) where an offer was an “all-in” offer (as in the current case) the Tribunal should have before it evidence as to the amount of any costs that may have been ordered in favour of Mr Hopkins Snr;
(c) the onus is upon the offerer (in this case Mr Hopkins Jnr) to establish if any costs were payable and what the quantum of such costs would be;
(d) in determining whether or not the Tribunal would have made any costs order in favour of Mr Hopkins Snr at the time the offer was made, having regard to the provisions of s 109 of the Act, the Tribunal Member was required, in accordance with s 117 of the Act, to give reasons for his finding that he would have made no order for costs at the time that the offer contained in the 24 July letter was made;
(e) relying upon the decision of Beach J in Dimatos v Coombe & Ors,[2] such reasons should identify the issues in dispute, deal with the substantive points raised, include findings of material facts, refer to the evidence on which such findings are based and explain the process of reasoning that has led the Tribunal from the evidence as to the findings and from the findings to the ultimate conclusion;
(f) the Tribunal Member’s statement at paragraph 21 of the Reasons that the proceedings do not come within any of the matters that the Tribunal is to have regard to by reason of s 109(3) of the Act was a bald assertion unsupported by any findings of fact or path of reasoning, and thus the Reasons are inadequate and amount to an error of law; and
(g) there is a clear inconsistency between the statement in paragraph 21 of the Reasons referred to above and the Tribunal Member’s findings at paragraph 26 of the Reasons that the proceeding were complicated both from an evidentiary aspect and a legal view and that full and proper discovery had to take place before the parties could make a proper and realistic assessment of their position. These findings undermined the finding made in paragraph 21 of the Reasons.
[2][2011] VSC 619, at [20].
The solicitor for Mr Hopkins Snr submitted that the appeal ought to be allowed, the order that Mr Hopkins Snr pay Mr Hopkins Jnr’s costs be set aside, and the question of costs be determined by this Court, in order to save the parties the costs of having the matter remitted to VCAT. He submitted that the appropriate order for costs (in respect of the proceeding at VCAT) would be that each party bear their own costs.
Counsel for Mr Hopkins Jnr conceded that the Reasons could have been more fulsome, but otherwise submitted that they were adequate, in that the path of reasoning is sufficiently revealed in the Reasons. In any event, counsel for Mr Hopkins Jnr submitted that an appellate court should rarely interfere with a costs order made at first instance. He submitted that the jurisdiction of this Court to interfere with the Tribunal Member’s costs order would not even be enlivened unless it can be shown that the Tribunal:
(a) erred in principle;
(b) took into account irrelevant considerations;
(c) left out of account relevant considerations;
(d) gave improper weight to some factors at the expense of others;
(e) gave too little weight to some factors relative to others; or
(f) otherwise the order was just so obviously unreasonable that the discretion must have miscarried.[3]
[3]See Daulizio v Trust Company of Australia & Ors [2005] VSCA 215, at [6] per Nettle JA.
Counsel for Mr Hopkins Jnr submitted that the criticism of the Tribunal Member’s approach to determining whether the offer continued in the 24 July letter complied with s 112 of the Act were simply beyond the scope of this appeal, given that the leave granted was limited to the adequacy of the Tribunal’s reasons and the apparent inconsistency of the Tribunal Member’s findings at paragraphs 21 and 26 of the Reasons. Further, while his primary submission was that the Reasons were inadequate, if there was to be a finding that the Reasons were inadequate, it would be unfairly prejudicial to Mr Hopkins Jnr to simply allow the appeal and set aside the costs order in his favour. Rather, the matter should be either remitted to the same Tribunal Member, on the basis that there was no feature of the Reasons or other conduct of the Tribunal Member which would either be unfair or appear to be unfair to Mr Hopkins Snr in the event that the matter was remitted.[4] Alternatively, if the appeal were to be allowed, and this Court was to consider the matter afresh, there ought to be an adjournment to enable the parties to put further evidence and submissions before the Court as to what orders ought to be made.
[4]Counsel referred to the decision of Kyrou J in Vegco Pty Ltd and Victorian Workcover Authority v Gibbons and Ors [2008] VSC 363, at [33].
In relation to the question of the adequacy of the Reasons, counsel for Mr Hopkins Jnr noted that:
(a) the Tribunal Member noted that the 24 July letter complied with the first three conditions set out in s 112 of the Act;
(b) the Tribunal Member correctly identified that, in determining whether the offer made by Mr Hopkins Jnr bettered the outcome Mr Hopkins Snr received at trial, he needed to make an assessment of what costs the Tribunal would have ordered on the date of the offer, and that assessment required an examination of the matters referred to in s 109(3) of the Act;
(c) the Tribunal Member concluded that the proceeding did not attract the relevant provisions of s 109(3) of the Act, which was a finding which was well and truly open to him; and
(d) having found that the offer complied with the requirements of s 112 of the Act, the Tribunal Member noted this created a presumption in favour of a costs order in favour of Mr Hopkins Jnr, unless the Tribunal ordered otherwise. In order to determine whether he would otherwise order, the Tribunal Member again, properly directed himself to the provisions of s 109(3) of the Act and decided, for the reasons set out at paragraphs 26 of the Reasons, that the presumption with respect to costs contained in s 112 of the Act would remain undisturbed, that is, he would not “otherwise order”.
Both parties relied upon the findings of Garde J in Metricon Homes Pty Ltd v Sawyer,[5] in relation to the operation of s 112 and the assessment of the costs that would have been payable at the time that an offer is made in the context of an “all in” offer. The Tribunal Member’s decision in this proceeding pre-dated the decision by Garde J, although the Tribunal Member made reference to the findings of Senior Member Walker at first instance,[6] in particular, his view that an “all in” offer could comply with s 112 of the Act.
[5][2013] VSC 518.
[6]Sawyer v Metricon Homes Pty Ltd [2012] VCAT 1971.
In Metricon Homes Pty Ltd v Sawyer, Garde J allowed an appeal from Senior Member Walker’s orders that the respondent in the proceeding below (Metricon) pay the applicant’s costs of the proceeding, notwithstanding Metricon’s contentions that it had made an “all in” offer that bettered the outcome that the Sawyers received at trial, taking into account the legal costs expended by the Sawyers to that date. Despite request, the Sawyers had refused to provide either Metricon or the Tribunal with evidence of their legal costs, and accordingly, the Senior Member found that while Metricon’s offer might have bettered the ultimate outcome at trial, Metricon had failed to discharge the onus upon it to prove that the offer complied with all of the conditions imposed under s 112 of the Act.
On appeal, Garde J upheld the Senior Member’s determination that “all-in” offers could be effective for the purposes of s 112 of the Act, and that the onus of proof with respect to whether the relevant offer complies with s 112 of the Act lies with the party asserting that the presumption with respect to costs under s 112 of the Act applies, including the burden of proving the quantum of any costs relevant to that determination. However, Garde J allowed the appeal, on the basis that, in circumstances where the information and evidence regarding the quantum of costs lies with the party to whom the offer was made, the Tribunal needs to take active steps to ensure that relevant and accurate information regarding costs is available to the Tribunal, either by way of discovery, an assessment by the Costs Court, or by requiring the recipient of the offer to provide a draft bill of costs.
In the current proceeding, while this question was outside the scope of the Notice of Appeal, the solicitor for Mr Hopkins Snr submitted that the Tribunal Member should have adjourned the costs hearing to enable those steps to be undertaken and an accurate assessment of the costs made. In response, counsel for Mr Hopkins Jnr relied upon Metricon Homes v Sawyer for the proposition that an “all-in” offer is effective for the purposes of s 112 of the Act, but that proceeding was distinguishable from the current case, on the basis that in Sawyer v Metricon Homes, the Senior Member had determined that he would have made an order for costs at the time that the offer was made. In the current case, the Tribunal Member had determined that he would not have made an order for costs, such that quantum of the costs was not relevant, or, using the language of s 112 of the Act, the “costs it would have ordered on the date the offer was made” amounted to nil.
Strictly speaking, given that the scope of the appeal is limited to attacking the alleged inadequacies of and inconsistencies in the Tribunal Member’s reasons, the above discussion is not relevant to the determination of this appeal, but they may well be relevant to determining what is to follow should the appeal be allowed.
I accept the submissions advanced on the part of Mr Hopkins Jnr that a superior court should be reluctant, and indeed loath, to disturb the discretion of the judicial officer who has heard and determined the application or proceeding with respect to costs. I also agree with the proposition that the standard and level of detail required of reasons can vary markedly, depending upon the context. One would ordinarily not require, expect, or consider it to be an efficient use of judicial time for a tribunal member in a costs ruling arising out of a modest commercial dispute to produce lengthy and/or elaborate reasons.
However, in my view there is a minimum standard, below which a judicial officer is vulnerable to a finding that the reasons provided fall short of what is adequate. This proposition is well expressed by Nettle JA in Hunter v Transport Accident Commission &Anor,[7] where he said:
Furthermore, while the extent of the reasons will depend upon the circumstances of the case, the reasons should deal with the substantial points which have been raised; include findings on material questions of fact; refer to the evidence or other material upon which those finding are based; and provide an intelligible explanation of the process of reasoning that has led the judge from the evidence to the findings and from the findings to the ultimate conclusion.
[7][2005] VSCA 1, at [21], see also Dimatos v Coombe & Ors [2011] VSC 619 per Beach J at [20].
In the current case, there was limited evidence as such before the Tribunal on the question of costs, the application largely proceeding by way of written and oral submissions. Therefore, the task facing the Tribunal Member was to identify the competing considerations and submissions in the context of the statutory framework. Regrettably, the Tribunal Member’s reasons did not adequately fulfil this task.
It is possible, having regard to the Reasons, the transcript of the submission of the parties in the hearing of the costs application, the structure and content of the relevant sections of the Act, and the written and oral submissions advanced by counsel on behalf of Mr Hopkins Jnr at the hearing of the appeal, to identify the logic behind the decision made by the Tribunal Member with respect to costs. The Tribunal Member noted that he was satisfied that the letter of offer met the first three pre-conditions of s 112 of the Act, and that the main issue was whether or not the orders made by him in the primary proceeding were more favourable to Mr Hopkins Snr than the terms of the offer. In my view, while the Tribunal Member correctly identified the question of whether in fact he would have made a costs order at all at the time the offer was made as a relevant matter in determining whether the presumption in s 112 was triggered, and correctly identified the matters in s 109(3) of the Act as matters to be taken into account when making that determination, the Reasons are merely conclusionary, and did not elaborate at all upon the reasons why he came to that conclusion. This is a significant matter, because once he had made this determination, the question of quantum, and the issues facing Senior Member Walker in Sawyer v Metricon Homes, fell away.[8]
[8]In his judgment in Metricon Homes Pty Ltd v Sawyer, Garde J referred to s 112(3)(a) of the Act as being directed to the amount of costs that the Tribunal would have ordered rather than being directed to the character of the costs order that the Tribunal would have made. In my view, that statement was directed at emphasising the need for the Tribunal to turn its attention to ascertaining the quantum of any costs it would have ordered in the event that the Tribunal found that it would have made a costs order at the time that the relevant order was made (as was the case in that proceeding). In my view, however, it does not absolve the Tribunal from the requirement to determine whether it would have, in fact, made a costs order at all.
Having come to the conclusion that he did regarding the costs order that would have been made at the time that the offer was made, it then being self-evident that the value of the offer exceeded the value of the outcome at trial, the Tribunal Member then correctly turned to the question of whether the presumption in favour of awarding costs against the party that had refused that offer had been displaced for some reason. Once again, the Tribunal Member turned, correctly in my view, to the provisions of s 109(3) of the Act in order to establish whether there had been any “disentitling” conduct on the part of Mr Hopkins Jnr, or some other relevant consideration which would deprive Mr Hopkins Jnr of the benefit of the presumption, concluded there had not, and made orders in favour of Mr Hopkins Jnr.
The difficulty is that the logical path of decision making undertaken by the Tribunal Member is not readily apparent from the Reasons, standing alone, without close analysis. As noted by Nettle JA in Hunter v Transport Accident Commission,[9]
… reasons are not intelligible if they leave the reader to wonder which of a number of possible routes have been taken to the conclusion expressed. A fortiori they are inadequate when they leave out altogether discussion and resolution of major issues and the role if any which they have been accorded in the ultimate determination.
[9]Ibid, at [35].
As noted above, the logical decision-making path adopted by the Tribunal Member was correct. However, while the Tribunal Member’s decision was “only” concerned about costs, the statutory regime governing the question of costs in the context of settlement offers does not lack complexity, as evidenced by the decision of Garde J in Metricon Homes Pty Ltd v Sawyer and, indeed, the fact of this appeal. Indeed, the decision in this proceeding highlights a particular complexity in respect of timing: the assessment of costs which may have been payable by a party needs to be assessed at the time of the making of the offer, and, while it is not expressly apparent from the terms of s 112 of the Act, the assessment of whether the Tribunal “should otherwise order” should be made at the conclusion of the proceeding. On both occasions, the Tribunal must have regard to the matters set out in s 109(3) of the Act. Again, in the current case, the approach of the Tribunal Member was fundamentally correct, but the Reasons did not clearly identify the task before him, and the apparently contrasting findings in paragraphs 21 and 26 of the Reasons have caused confusion. While the reasons for the differing findings in these two paragraphs is comprehensible to those familiar with the framework of the Act, after some close analysis and discussion, on their face, they are quite puzzling.
Finally, no reasons are given at all for the Tribunal Member’s finding at paragraph 24 of the Reasons that: “… I also accept the offer as also being a Calderbank offer” or the consequences of that finding for his ultimate decision. Indeed, given the Tribunal Member’s findings at paragraph 26 of the Reasons:
…
aThat the proceeding was complicated both from an evidentiary aspect and also a legal view;
bThat discovery had to properly and fully occur before parties could make a proper and realistic assessment of their situation; …
one could easily form the view that notwithstanding the offer in the 24 July letter purported to be made relying upon Calderbank principles, it was not, at that time, unreasonable for Mr Hopkins Snr to refuse the offer. However, the Reasons do not address this matter at all.
Again, the issue of the deployment of Calderbank offers in VCAT proceedings is not without its complexity. In particular, it does not appear to me to be settled law whether the common law principles which follow from Calderbank v Calderbank and subsequent authorities such as Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No.2)[10] are applicable when determining the costs consequences of settlement offers in VCAT proceedings, or rather, whether the statutory regime in ss 112, 113 and 114 of the Act is intended to “cover the field”.
[10](2005) 13 VR 435.
In Metricon Homes Pty Ltd v Sawyer, Garde J[11] appeared to presume that it was open to the Tribunal to consider whether the Calderbank principles should influence its discretion with respect to costs, but it is not apparent from the judgment that this question was squarely before him. My own researches have not been able to locate any authority of this Court dealing directly with this question. In VCAT itself, in Fasham Johnson Pty Ltd v Ware,[12] Senior Member Cremean expressed his doubts that it was open to the Tribunal to consider offers expressed to be in accordance with Calderbank principles in view of the statutory scheme provided for by ss 112, 113, 114 and 115 of the Act. However, Deputy President McNamara (as he then was) expressly rejected such a submission in Mildura City Council v Victorian Workcover Authority.[13] In other proceedings[14] some tribunal members appear to have assumed that Calderbank principles are applicable to offers made in VCAT, while others[15] have taken Calderbank offers into account as a “relevant matter” under s 109(3) of the Act. There is dicta of the Court of Appeal in Velardo & Anor v Andonov,[16] that Calderbank principles may apply where an offer does not comply with s 112 of the Act, but that does not establish whether the common law regime and statutory regimes can apply concurrently.
[11]At [70].
[12][2004] VCAT 1708, at [24].
[13][2006] VCAT 2366, at [31].
[14]See, for example, Coryule Pty Ltd v Westernport Regional Water Authority [2010] VCAT 1230 and H.F.K Cement Rendering v Mina [2005] VACT 551.
[15]See Krongold Constructions (Aust) Pty Ltd v Worsfold [2008] VCAT 1480 and Body Corporate Strata Plan No. 405967 no.1 v Brady Constructions Pty Ltd [2008] VCAT 2305.
[16][2010] VSCA 38, at [47].
It is not the task of this Court in the context of this appeal to reconcile the apparent inconsistencies in approach referred to above. However, those inconsistencies, along with the moderately complex statutory framework in which the costs application was decided, does highlight the need for the Tribunal’s reasons to clearly identify the relevant principles upon which the application was decided, including, where the authorities are unsettled, which approach that particular Tribunal Member prefers, and why. Further, in circumstances where the Tribunal Member is required to make a series of discretionary judgments along the decision making path, as was required (and done) here, the matters relevant to each of those discretionary judgments ought to be expressly identified, even if only briefly, as well as the reasons for those judgments, again, even if only briefly, and in a manner which is intelligible to all, not just those familiar with the relevant statutory framework and common law principles.
Having found that the Reasons are inadequate, the question remains as to what follows from that finding. In my view, considering the amounts at stake, it would not be in the interests of the parties or the efficient administration of justice to remit the matter to the Tribunal for further consideration. For completeness, I should add that this is not an example of a situation where, if it were to be remitted, it should be remitted to a different Tribunal Member.[17] I see no reason why, having the Tribunal Member’s reasons for decision in the primary proceeding, and the transcript and written submissions for the hearing of the costs application, I could not, with the benefit of some additional evidence and (brief) written and/or oral submissions decide the costs application myself. Such an approach is allowed by s 148 of the Act, and would be consistent with the overarching purpose of the Civil Procedure Act 2010 (Vic) to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. For completeness, any additional evidence and/or submissions should address the following matters:
[17]See Vegco Pty Ltd and Victorian Workcover Authority v Gibbons & Ors [2008] VSC 363.
(a) whether, having regard to the matters set out in s 109(3) of the Act, the Tribunal would have made any orders as to costs at the time the offer in the 24 July letter was made;
(b) if the Tribunal would have made an order for costs at that time, the likely quantum of those costs (on both a “party-party” and/or indemnity basis);
(c) in the event that the offer in the 24 July letter complied with s 112 of the Act, whether there was any grounds for the displacement of the presumption that costs would be ordered in Mr Hopkins Jnr after that date; and
(d) to the extent that 24 July letter relied upon Calderbank principles, and having regard to the decision of the Court of Appeal in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority, whether it was reasonable for Mr Hopkins Snr not to accept the offer contained in the 24 July letter (presuming that it is open for such principles to be taken into account in proceedings brought in VCAT).
Given the above, in my view, the question of the costs of this process, and the costs of the appeal generally, ought await the making of final orders in this appeal.
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