Kelk and OSM Australia Pty Ltd (Compensation)

[2024] AATA 2733

Kelk and OSM Australia Pty Ltd (Compensation) [2024] AATA 2733 (2 August 2024)

Division:GENERAL DIVISION

File Number(s):      2021/2959

Re:Shane Kelk

APPLICANT

AndOSM Australia Pty Ltd

RESPONDENT

DECISION

Tribunal:Member Lee Benjamin

Date:  2 August 2024

Place:Brisbane

The Tribunal orders OSM Australia Pty Ltd to pay Mr Shane Kelk's costs in respect of application 2021/2959, the quantum of costs to be agreed and failing such agreement, to be taxed in accordance with the Tribunal’s Practice Direction - Taxation of Costs, issued by the Tribunal on 30 June 2015.

................................[SGD]........................................

Member Lee Benjamin

Catchwords

COSTS - Application for costs of and incidental to appeal - where Applicant successful party in substantive application before Tribunal - Respondent contends costs unjust - where costs appropriate in present case - costs to be agreed and failing such agreement to be taxed

Legislation

Seafarers’ Rehabilitation and Compensation Act 1992 (Cth)

Cases

Knowles v Secretary, Dept of Defence (2021) 174 ALD 61

Northern Territory v Sangare (2019) 265 CLR 164

Secondary Materials

Administrative Appeals Tribunal, Practice Direction - Taxation of Costs, issued 30 June 2015

REASONS FOR DECISION

Member Lee Benjamin

2 August 2024

1. On 30 April 2024, the Tribunal handed down a decision in application 2021/2959, which found in Mr Shane Kelk’s favour in relation to a claim for (i) compensation; and (ii) permanent impairment and non-economic loss, both under the Seafarers’ Rehabilitation and Compensation Act 1992 (Cth) (the Act). The Tribunal decided that:

   (a)Mr Kelk’s application for compensation regarding aggravation of pre-existing asymptomatic osteoarthritis of the right hip, and aggravation of pre-existing asymptomatic lumbar spine pathology was approved;

   (b)Mr Kelk was assessed with an impairment of 14%;

   (c)Mr Kelk was assessed with non-economic loss of 52%; and

   (d)Mr Kelk’s claim for economic loss was to be assessed.

2. On 8 May 2024, Mr Kelk made an application to the Tribunal, pursuant to section 92 of the Act, for an order that OSM Australia Pty Ltd (OSM) pay Mr Kelk’s costs of, and incidental to, the appeal to be agreed or, failing agreement, to be taxed.[1]

   [1] I note that Mr Kelk did not raise the issue of costs at the hearing or otherwise in closing submissions.

3. On 9 May 2024, the Tribunal invited OSM to file submissions on Mr Kelk’s application.[2]  

   [2] The Tribunal requested that OSM file their submissions by 16 May 2024. On 13 May 2024, OSM requested an extension of time to 23 May 2024 to file their submissions. On 22 May 2024, OSM filed their submissions. On 24 May 2024, Mr Kelk requested seven days to file reply submissions. On 29 May 2024, Mr Kelk filed his reply submissions.

4. On 22 May 2024, OSM filed submissions opposing Mr Kelk’s application for costs. OSM contends that:

   … [Mr Kelk] should not be awarded any costs incurred in respect of the hearing as there were numerous inconsistencies with [his] evidence, 18 in fact which warranted independent review, albeit all 18 inconsistencies were found in favour of [Mr Kelk].

   In the course of its decision, the Tribunal advised that there were issues in [Mr Kelk’s] evidence, and it appears evident from the decision that the tribunal simply decided to side with [Mr Kelk’s] evidence of events over that of the Respondent which included acknowledging that [Mr Kelk] had given an incorrect history to Dr Journeaux…

   [OSM] does not concede that costs should be awarded in these circumstances as it has been made more than clear that there were numerous genuine concerns held by the employer including [Mr Kelk] providing incorrect information to doctors that warranted this matter progressing to a hearing.

5. Generally, OSM’s submissions focus on the merits of the Tribunal’s decision, ventilating what appear to be appeal points, a matter that OSM themselves acknowledge:

   Whilst the… issues may sound like the respondent is making submissions for an appeal… in the circumstances it appears unjust to additionally penalise the Respondent for costs involved in clarifying the Applicant’s contradictory evidence.

6. Mr Kelk agrees that OSM’s submission sound as if it is (and indeed it is) making appeal submissions rather than submissions as to costs. Mr Kelk says that OSM has misapprehended the purpose of costs, and the question before the Tribunal.

7. Section 92 of the Act provides (in part):

   Costs of proceedings before AAT--when costs payable by employer

   (1)  If, in any proceedings instituted by the claimant, the AAT 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 than the reviewable decision;

   the AAT may, subject to this section, order that the costs of those proceedings incurred by the claimant, or a part of those costs, are to be paid by the employer.

   (2)  If the AAT gives a decision setting aside a reviewable decision and remitting the case for re-determination by the employer, the AAT must, subject to this section, order that costs of the proceedings before it incurred by the claimant are to be paid by the employer.

   …

8. In sum, section 92 of the Act empowers the Tribunal to award costs where an applicant has success, on terms more favourable to the applicant than the reviewable decision. In my view, section 92 of the Act is engaged in this application.

9. Mr Kelk contends that he had a complete, unmitigated success in his application before the Tribunal. He further contends that OSM has not provided a probative reason as to why costs should not be awarded to Mr Kelk in this application. I accept these submissions.

10. It is a well-established principle in the exercise of discretion on costs that costs ordinarily should follow the event and be awarded to the successful party.[3] In my view, that is what should happen here.

    [3] See Knowles v Secretary, Dept of Defence (2021) 174 ALD 61 at [78].

11. I should say that I do not accept OSM’s submission that a costs order would additionally penalise them. The purpose of a costs order is to compensate the person in whose favour it is made, not to punish the person against whom the order is made.[4]

    [4] Northern Territory v Sangare (2019) 265 CLR 164 at [25].

12. In conclusion, I am satisfied that it is appropriate in the circumstances of this case to make an order that OSM pay Mr Kelk’s costs in respect of this application. I note that Mr Kelk’s     8 May 2024 application for costs sought an order that OSM pay Mr Kelk’s costs of, and incidental to, the appeal to be agreed or, failing agreement, to be taxed. However, Mr Kelk’s 29 May 2024 reply submission requested an order that costs be fixed at $100,000. Under the circumstances, I consider it more appropriate for costs to be agreed and failing any such agreement, to be taxed in accordance with the Tribunal’s Practice Direction - Taxation of Costs issued on 30 June 2015.

    DECISION

13. The Tribunal orders OSM to pay Mr Kelk's costs in respect of application 2021/2959, the quantum of costs to be agreed and failing such agreement, to be taxed in accordance with the Tribunal’s Practice Direction - Taxation of Costs, issued by the Tribunal on 30 June 2015.

    I certify that the preceding 13 (thirteen) paragraphs are a true copy of the reasons for the decision herein of Member Lee Benjamin

    ..............[SGD].....................

    Associate

    Dated: 2 August 2024