KTKY and Comcare (Compensation) - [2016] AATA 77

KTKY and Comcare (Compensation) [2016] AATA 77 (16 February 2016)
DecisionYear: 2016
[2016] AATA 77

Division

General Division

File Number

2013/4143

Re

KTKY

APPLICANT

And

Comcare

RESPONDENT

DECISION

Tribunal
Deputy President Dr Christopher Kendall

Date 16 February 2016

Place Perth
The Tribunal orders that Comcare’s liability for KTKY’s costs in Application No 2013/4143 be limited to:
I.all reasonable and proper disbursements; and

II.75% of all professional costs, including counsel's fees, which would be allowable under the Federal Court scale,

incurred from the date of lodgement of KTKY’s Application for Review with the Tribunal up to and including 27 October 2014.
.......................[Sgd].................................................
Deputy President Dr Christopher Kendall
CATCHWORDS
Compensation – Review by the Tribunal – Costs - Calderbank offer - Discretion under 67(8) of Safety, Rehabilitation and Compensation Act 1988 - Amount of costs reduced due to failure to accept compromise offer not substantially different than final Tribunal decision
LEGISLATION
Administrative Appeals Tribunal Act 1975 – section 34J
Safety, Rehabilitation and Compensation Act 1988 – section 67
CASES
Hronopoulos and Telstra Corporation Limited [2002] AATA 625
Perry and Comcare [2005] AATA 365
KTKY and Comcare (Compensation) [2015] AATA 309
REASONS FOR DECISION
Deputy President Dr Christopher Kendall
16 February 2016
INTRODUCTION

On 8 May 2015, Deputy President Hotop delivered his decision in 3 related matters: Application Nos 2013/0186, 2013/4143 and 2013/6692 (“the 3 KTKY Applications”):

KTKY and Comcare (Compensation)
[2015] AATA 309. In Application Nos 2013/0186 and 2013/6692, the decision under review was affirmed. In Application No 2013/4143,

the decision under review was set aside and a new decision substituted.
These written reasons relate to relate to the costs for Application No 2013/4143. No decision was made in relation to costs by Deputy President Hotop in relation to that Application and the Tribunal has now been asked to do so.
With the consent of the parties the Tribunal has determined this matter without conducting a formal hearing pursuant to s 34J of the Administrative Appeals Tribunal Act 1975. Written submissions were received by both parties and a brief telephone conference in relation to certain aspects of those submissions was held on 29 January 2016.
The respondent in this costs matter, Comcare, accepts that it is liable to pay some of KTKY’s costs in relation to Application No 2013/4143 but argues that Comcare’s liability for costs should cease on 27 October 2014, being the date on which a letter offering to settle the matter was sent to KTKY’s legal representative.
In effect, Comcare says that the offer made on 27 October constitutes a Calderbank offer (the nature of which is discussed in detail below at paragraphs 24 to 26 of this decision) and that KTKY’s right to recover all costs should be limited because the Calderbank offer of 27 October 2015 sought to settle on the same terms as the decision that was ultimately made by Deputy President Hotop. Comcare argues that had KTKY accepted this offer, she would not have incurred further legal costs after 27 October 2014.
In…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading KTKY and Comcare (Compensation)

Details

AGLC: KTKY and Comcare (Compensation) [2016] AATA 77
Case: [2016] AATA 77
Decision Date: 16 February 2016

CaseChat Overview and Summary

The case before the Tribunal involved KTKY, who sought review of a decision by Comcare regarding her incapacity payments under the Safety, Rehabilitation and Compensation Act 1988. KTKY argued that the Tribunal was not bound by Calderbank principles when deciding costs, and that even if it were, the Tribunal should not apply them in this case. Comcare had offered a compromise under Calderbank terms, which KTKY rejected, resulting in a final decision not materially different from the offer. The central legal issue was whether Calderbank principles apply to the Tribunal’s discretion to award costs under section 67(8) of the Safety, Rehabilitation and Compensation Act 1988, and if so, how they should be applied in this case.

The Tribunal found that Calderbank principles are relevant and applicable in proceedings before it when exercising its discretion under section 67(8) of the Act. It concluded that Comcare's Calderbank offer of 27 October 2014 was clear and unambiguous, and thus should be taken into account when making a costs determination. The Tribunal highlighted that KTKY's decision to proceed with the application, despite the offer not being substantially different from the final decision, was not prudent. Therefore, Comcare's liability for KTKY’s costs was limited to 75% of all professional costs and all reasonable and proper disbursements incurred up until the date of the offer. The Tribunal’s decision underscored the importance of considering Calderbank offers in cost determinations, particularly when the final decision aligns closely with the offer.

In conclusion, the Tribunal ordered that Comcare’s liability for KTKY’s costs in the application was limited to 75% of all professional costs, including counsel's fees, which would be allowable under the Federal Court scale, and all reasonable and proper disbursements, incurred from the date of KTKY’s application to the Tribunal up until and including 27 October 2014. This decision reinforces the application of Calderbank principles in the context of the Tribunal's cost determinations, emphasising the need for claimants to carefully consider compromise offers before proceeding with litigation.

Orders

Orders of the court

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Background

Background to the litigation

In written and oral submissions to this Tribunal, KTKY’s solicitors contended in effect that the Tribunal is not bound by Calderbank principles by virtue of section 67 of the Safety, Rehabilitation Act 1988 (the “SRC Act”). They further contended that, in the event that the Tribunal is inclined to adopt Calderbank principles, the Tribunal should not do so here. Specifically, it was contended at paragraphs 2 and 3 of their Written Submissions that the decision of Deputy President Hotop:… substituted a new decision and a component of that new decision was that the Applicant was entitled to her “normal weekly earnings” to be calculated under Section 8 of the SRC Act from 29 October 2010 at 36.75 hours per week. The Respondent’s offer …. with respect to the period from 29 October 2010 was for pre-injury hours of 36.45 hours. The difference between 36.45 hours and 36.75 hours may appear minimal but the Applicant has a life expectancy of 35 years. The Applicant is currently 53 years old and would be entitled to normal weekly earnings for a further 12 years or 624 weeks which over that period of time the difference of .30 hours per week will result in the Applicant receiving a significant benefit. FACTUAL BACKGROUND The Tribunal repeats below the summary provided at paragraphs 3-15 of Comcare’s Written Submissions, with which KTKY’s solicitors did not disagree. KTKY receives incapacity payments from Comcare in relation to her accepted conditions of “right trapezius pain, exacerbation of pre-existing condition, major depressive disorder, recurrent episode, chronic pain syndrome and disorders of bursae and tendons shoulder region (bilateral)”. The Tribunal was advised that prior to the events referred to below, the incapacity payments received by KTKY pursuant to s 19 of SRC Act were based on normal weekly earnings (NWE) of 20 hours per week, which had been reduced pursuant to s 8(10) of the SRC Act. At the time of her injury on 17 March 1997, KTKY had been working “full time hours of 36:45 hours per week” (read as 36 hours and 45 minutes per week). On 19 February 2013, a delegate of Comcare made a determination that KTKY’s incapacity entitlements under s 19 of the SRC Act should be reduced pursuant to s 8(10) of the SRC Act, because she had voluntarily reduced her hours for child care reasons to 20 hours per week. By letter dated 17 April 2013, KTKY sought review of this determination. A delegate of Comcare affirmed the determination on 26 June 2013 (the “Reconsideration Decision”). On 13 August 2013, KTKY lodged an Application with the Tribunal seeking review of the Reconsideration Decision. On 13 February 2014, the Full Court of the Federal Court delivered its decision in Comcare v Simmons [2014] FCAFC 4 (“Simmons”). On the basis of the decision in Simmons, on 23 July 2014 Comcare wrote to KTKY and offered to resolve the application consistent with the reasoning in the Simmons decision. On 27 October 2014, Comcare wrote to KTKY again offering to settle the matter on the following terms:The reviewable decision of 26 June 2013 be set aside and substituted with a new decision that, for the purpose of calculating the compensation payable by the Respondent to the Applicant, pursuant to s 19 of the Safety, Rehabilitation and Compensation Act 1988, the Applicant's Normal Weekly Earnings are to be calculated on the basis that the Applicant's Normal Weekly Hours are as follows:·in the period from the date of injury to 3 September 2000, full time hours of 36:45 hours;·in the period from 4 September 2000 to 30 January 2005, 25 hours;·in the period from 31 January 2005 to 28 October 2010, 20 hours; and·in the period from 29 October 2010, pre-injury hours of 36:45 hours.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

In relation to KTKY’s matter, the Tribunal notes that Comcare also provided extensive submissions in relation to the effect of Deputy President Hotop’s analysis of certain concessions made by Comcare throughout the course of these proceedings. In effect, Comcare argued that KTKY would not have been successful but for concessions made by Comcare and that, as such, Comcare’s actions should be taken into account by the Tribunal in determining whether or not to exercise its discretion to award costs pursuant to section 68 of the SRC Act. The Tribunal does not find it necessary in the circumstances of this matter to analyse this particular line of argument. Having found that Calderbank principles do apply and that the terms of this Calderbank letter are unambiguous in a situation where KTKY received a decision not materially different from what was offered in that letter, it is not necessary to explore this other contention. DECISION For the reasons outlined above, the Tribunal is satisfied that Calderbank principles are relevant in proceedings before this Tribunal in which it is asked to exercise its discretion under section 67(8) of the SRC Act. Further, Comcare’s Calderbank offer of 27 October 2014 to KTKY was clear and should be taken into account when making a costs determination. To again quote Senior Member McCabe in Re Perry, KTKY “chose to go on. With the benefit of hindsight, it is obvious [s]he should not have done so.” In the circumstances, the Tribunal orders that Comcare’s liability for KTKY’s costs in application 2013/4143 is limited to:III.all reasonable and proper disbursements; andIV.75% of all professional costs, including counsel's fees, which would be allowable under the Federal Court scale,incurred from the date of KTKY’s application to the Tribunal up to and including 27 October 2014.

Ratio Decidendi

Legal Principle Established

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Division	General Division
File Number	2013/4143
Re	KTKY
APPLICANT
And	Comcare
RESPONDENT

Tribunal	Deputy President Dr Christopher Kendall
Date	16 February 2016
Place	Perth