Scicluna and Australian Postal Corporation (Compensation)

[2018] AATA 3973

Scicluna and Australian Postal Corporation (Compensation) [2018] AATA 3973 (23 October 2018)

Division:GENERAL DIVISION

File Number(s):      2015/2114

Re:Peter Scicluna

APPLICANT

AndAustralian Postal Corporation

RESPONDENT

DECISION

Tribunal:Member K Parker

Date:23 October 2018

Place:Melbourne

The Tribunal orders Australian Postal Corporation (APC) to pay Mr Peter Scicluna’s costs in respect of application numbered 2015/2114, save for any costs incurred as a result of the interruption in the course of the hearing as a direct consequence of the adjournment of the hearing on 20 July 2016 until 25 May 2017.  Quantum of costs to be agreed and failing any such agreement, to be taxed in accordance with Practice Direction – Taxation of Costs, issued by the Administrative Appeals Tribunal on 30 June 2015. 

[sgd]........................................................................

Member K Parker

COMPENSATION - COSTS – Tribunal found the applicant entitled to compensation under ss 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) in relation to a psychological injury – whether the hearing of the application was unnecessarily extended or adjournments caused due to conduct by the applicant or his representatives – significance of omission to arrange for updated medical examination of applicant prior to resumed hearing – whether applicant should have withdrawn application before the resumed hearing – costs order made with apportioning of costs

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth), s 42B

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 24, 27, 67(8)

CASES

Cretazzo v Lombardi (1975) 13 SASR 4
Forster v Farquhar (1893) 1 QB 564
Re Kimberley John Hughes v Western Australian Cricket Association (Inc) and ors [1986] FCA 382
Re Phien Au Ly v Australian Postal Corporation [1997] AATA 22

Ritter v Godfrey (1920) 2 KB 47

SECONDARY MATERIALS

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

REASONS FOR DECISION

Member K Parker

23 October 2018

1. On 8 October 2018, the Tribunal handed down a decision in application numbered 2015/2114 which found in favour of Mr Peter Scicluna’s entitlement to compensation under sections 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (Act) in respect of a psychological injury suffered by him of “adjustment disorder with depressed mood”.  The Tribunal also found that Mr Scicluna suffered from a second psychological injury of “aggravation of pre-existing PTSD”, but did not find in favour of him being entitled to compensation for this injury under sections 24 and 27 of the Act, because this condition had not resulted in permanent impairment.

2. Mr Scicluna sought a costs order by the Tribunal under s 67(8) of the Act. In [6] of Mr Scicluna’s closing submissions, his representatives proposed that the Tribunal make a costs order in the following terms:

   The respondent to pay to the applicant, the reasonable costs, and disbursements he has incurred in the proceedings in accordance with section 67 of the SRCA.

3. Australian Postal Corporation (APC) objected to a costs order being made in those terms.  Instead, APC contended that costs to be paid by APC should be limited to one-third of the applicant’s costs in this application.  The basis for APC’s objection was articulated in its closing submissions, as follows:

   COSTS

   46.Even if the Tribunal sets aside the decision under review in determining that  the Applicant was entitled to  Pl compensation,  the  Respondent  submits  that the Tribunal ought not exercise its discretion  under  s67(8) SRCA.  At best (for the Applicant), the Tribunal ought only award  payment  of  no  more  than  a third of the Applicant's costs by the Respondent (in the event, of course, of a "more favourable decision"), alternatively to expressly disallow any costs and disbursements (including Mr Kossmann's fees) not directly attributable to this application. This is a submission rarely made by the Respondent.  It has been precipitated by the unnecessary and wasteful time and money expended by the parties. This has been brought about wholly by the way the matter has been conducted on behalf of the Applicant (it is stressed that no aspersion whatsoever is made with respect to the Applicant's Counsel). The Respondent submits that for the s 67(8) discretion to be exercised favourably to an Applicant, proceedings ought to be conducted in a way that fairly and properly justifies an order for costs being met by the Respondent. The conduct of these proceedings has fallen well short of this standard.

   47.The history of this matter (relevant to the issue of the costs' discretion) is as follows:

   (i)There were initially three Applications listed for determination together.

   (ii)The three Applications were the subject of a compulsory conciliation conference ("CCC") on 22 February 2016. The Respondent attended the CCC with the bona fide intention of attempting to resolve all outstanding matters. None of the matters was resolved.

   (iii)Mr Kossmann authored reports dated 25/2/15 and 4/11/15.  The Respondent assumes such reports were in the possession of the Applicant's Solicitors well prior to the CCC.

   (iv)The Respondent was unaware of Mr Kossmann's involvement in this matter and the existence of his reports, till it received copies of each report via DX on 10 June 2016.

   (v)The three Applications were listed for hearing from 18-21July 2016.

   (vi) On 18 July 2016, the Applicant foreshadowed his intention to withdraw Application 2014/4164. That Application was formally withdrawn on 21 July 2016.

   (vii)Mr Kossmann was unavailable to give evidence after all in July 2016, and the remaining two Applications were re-fixed for hearing on 25 May 2017. The hearing was truncated as a result of Mr Kossmann's unavailability despite both parties' legal representatives agreeing to the July 2016 hearing dates (4 days). Evidence was only heard on 18 and 20 July 2016 before the hearing had to be adjourned due to Mr Kossmann's unavailability. Member Cremean made a number of comments regarding the conduct of the Applicant's case, including the wastage of resources.[1]

   48. On the resumed hearing date 25 May 2017, the Applicant indicated his intention to withdraw the Application in respect of which Mr Kossmann was going to give evidence. A plain reading of Mr Kossmann's reports together with the evidence adduced in July 2016, demonstrated in any event, that there was no prospect of success of Application 2014/4232 (the evidence disclosed there were no ss16/19 entitlements to date in respect of the left knee, right thumb and wrist conditions. It was acknowledged[2] in Applicant Counsel's opening address that there was no s19 entitlement but there may be a s16 entitlement.[3]

   49. On any view of the evidence, as  matters  stood  as  at  20  July  2016,  and even as late as 25 May 2017, the Applicant had no realistic prospect of  success in the current Pl Application. Applicant's Counsel appropriately acknowledged on 20 July  2016  that  the  psychiatric  opinions  would  be "literally stale"  in the event the hearing of the Pl Application  was to  resume in 2017.[4]

   50. Upon being appraised of changes in the Applicant's circumstances, including a return  to  field  umpiring,  Dr  Epstein  said in  evidence  in July  2016  that  it " ..could well be if (he) reviewed (the Applicant) today or tomorrow that (Dr Epstein) could come to a different opinion."[5] For example, at the time of Dr Epstein's initial examination: The Applicant couldn't run. He wanted to resume umpiring but wasn't confident of being able to do so.[6] The Applicant was not working regular overtime, and had stopped seeing his psychologist Ms Scanlon.[7] Despite this evidence, an update examination by Dr Epstein was not arranged until after the hearing of this Application was adjourned on 25 May 2017.

   [1] Refer Transcript p85, line 25; p86, line 12; p86, line 25 and p86, line 40.

   [2] Refer Transcript p4, line 18.

   [3] Refer Transcript p4, line 27.

   [4] Refer Transcript p78, line 25.

   [5] Refer Transcript p114, line 45.

   [6] Refer Transcript p91, line 33.

   [7] Refer Transcript p91, lines 16, 28.

4. In Mr Scicluna’s closing submissions in reply, his representatives responded to APC’s costs submissions as follows:

   3.        Other issues

   3.1      The Applicant, does not accept the proposition put forth at para 49 of the Respondent submissions: that as matters stood as at 20 July 2016, and as late as 25 May 2017; that the Applicant had no realistic prospect of success in the current application.

   3.2      There was nothing in Dr Epstein’s evidence to the Tribunal during the hearing in July 2016 to suggest that he had any different view that the Applicant had as a consequence of his physical injuries suffered a 10% permanent impairment.

   3.3      Any delays, and the effect of the passage of time may have, in some way has been causative in the need for fresh reports, lies at the feet of the Respondent: not the applicant.

   …

5. The Tribunal listed this matter for a further directions hearing on 22 October 2018 to hear oral submissions from both parties in relation to the issue of costs (costs hearing). 

6. APC’s representative confirmed that APC’s position remained as stated in its closing submission (reproduced above in paragraph [3]).  Essentially, the Tribunal understood APC to be contending, at the costs hearing, that any costs order should be confined to one-third of Mr Scicluna’s costs, because:

   (a)as at 20 July 2016 (or at 25 May 2017 at the latest), Mr Scicluna had no prospects of success on the available evidence and should not have proceeded with his application for compensation under sections 24 and 27 of the Act in respect of any psychological condition; and

   (b)the hearing of this application was unnecessarily extended or delayed on account of:

   (i)the unavailability of Dr Kossmann, hand surgeon, and Mr Scicluna’s representative should have known this when submitting its hearing certificate, and when the matter was listed for hearing in July 2016; and/or

   (ii)given that Mr Scicluna’s circumstances had changed significantly between the hearing in July 2016 and the resumed hearing in May 2017, he (or his representatives) should have arranged for him to have been re-examined before the hearing in May 2017 (by the psychiatrist, who was being called by Mr Scicluna in support of his application).

7. At the costs hearing, the Tribunal understood Mr Scicluna’s representative to be contending that:

   (a)there was no evidence given by Dr Epstein at the hearing in May 2017 that would provide a foundation for the Tribunal to conclude that Mr Scicluna did not have reasonable prospects of success at that time;

   (b)even if the Tribunal accepted APC’s contention that Mr Scicluna did not have reasonable prospects of success at that time, or at any earlier point in time, APC was at liberty to make an application for Mr Scicluna’s application for review to be dismissed on the basis that it was lacking in substance or had no reasonable prospect of success, but did not do so.[8]  Mr Scicluna’s representative stated that it was “outrageous” for APC to be seeking a costs advantage on account of this;

   (c)no Calderbank offers of settlement were made to Mr Scicluna leading up to any of the hearings (this was accepted by APC’s representative); and

   (d)Mr Scicluna’s applications in relation to his physical injuries did not proceed, as he appropriately conceded before the commencement of the resumed hearing on 15 May 2017, that the medical evidence did not support a finding that his permanent impairment resulting from the physical injuries was more than 10%.

   [8] Refer s 42B of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act).

8. Section 67 of the Act provides that where the Tribunal makes a decision 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 s 67, order that the costs of those proceedings incurred by the claimant, or a part of those costs, shall be paid by the responsible authority (in this case being APC).

9. In the written submissions and at the costs hearing, there was no suggestion by APC that the Tribunal’s decision was not more favourable than the reviewable decision. The effect of the reviewable decision was that Mr Scicluna’s claim for compensation under sections 24 and 27 of the Act for his psychological condition was not approved. The effect of the Tribunal’s decision was that Mr Scicluna was entitled to compensation as referred to in paragraph [1] above. The Tribunal finds that it was more favourable. 

10. The Tribunal’s discretion to order costs under s 67(8) of the Act is not expressly qualified in the Act (or in the AAT Act). However, the Tribunal considers that it should observe established principles in relation to the exercise of a power to order costs, as arising from the following cases:

    (a)costs follow the event, unless there are special circumstances justifying a deviation from this general principle – see Ritter v Godfrey (1920) 2 KB 47;

    (b)if the claimant succeeds in relation to only a portion of his or her claim, the circumstances may make it reasonable that he or she bear the cost of that part of his or her claim that was unsuccessful – see Forster v Farquhar (1893) 1 QB 564; and

    (c)it is relevant, but not conclusive, to consider how much time of the hearing was taken up with evidence and submissions relating to those issues on which the claimant failed – see [12] of Re Kimberley John Hughes v Western Australian Cricket Association (Inc) and ors [1986] FCA 382 (Hughes).

11. In relation to the principles set out in paragraphs [10(b)] and [10(c)], the Tribunal also takes in account the “note of cautious disapproval” of Jacobs J in Full Court of the Supreme Court of South Australia decision in Cretazzo v Lombardi (1975) 13 SASR 4 (Cretazzo) at page 16:

    …

    But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law.  The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case.  There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike.  I wish merely to lend no encouragement to any suggestion that a party against whom the judgement goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on the success of those particular issues.

12. In Hughes, Toohey J apportioned costs in that case because he considered that an issue, upon which the applicant had failed, was discrete, both as to evidence and submissions.  In Re Phien Au Ly v Australian Postal Corporation [1997] AATA 22, the Administrative Appeals Tribunal, constituted by three members, was not prepared to apportion costs in that case, because it considered the evidence to be “intricately intertwined” and it was not appropriate in the circumstances for the Tribunal to attempt to apportion the costs.

13. The Tribunal will deal first with the contention by APC that Mr Scicluna’s application should not have proceeded beyond July 2016, or at the latest by May 2017, because at those times he had no reasonable prospects of success.  The Tribunal does not accept as a matter of principle that a successful applicant in a matter before this Tribunal, should be denied costs in an application following a backward-looking exercise of assessing whether there was a point in time during the progression of their matter that it could be said that their evidence did not stack up sufficiently to enable them to satisfy the Tribunal that he or she had, at all times during the course of the application, met the standard of reasonable prospects of success. This imposes an onerous requirement on s 67(8) of the Act which this provision does not expressly call for. Further, the Tribunal does not consider it appropriate to impose any such requirement on s 67(8), given that an application for costs under this provision will arise, in almost all cases, where the person has been successful in establishing an entitlement to compensation for a work-related injury.

14. It is relevant to the Tribunal’s consideration, as suggested by Mr Scicluna’s representative, that APC was at liberty to make an application for orders to dismiss the application in July 2016 (or in May 2017, or at any point in between), but did not do.  In that regard, even if the Tribunal were to agree there was a point in time that Mr Scicluna did not have reasonable prospects of success or his application was lacking in substance, the continuation of the application took place on account of two contributing factors: the first was because Mr Scicluna did not withdraw the action; and the second was because APC failed to make an application, when it could have done so, to seek orders dismissing the application. 

15. In those circumstances, given both parties contributed to the continuation of the application, the Tribunal is not satisfied that this constitutes a good reason to justify why certain of Mr Scicluna’s costs should be disallowed.  Further, the Tribunal considers that  special circumstances do not exist to justify a deviation from the usual principle that costs follow the event.

16. The Tribunal is also not satisfied that it is obvious, based on the evolution of evidence in this application from the time of lodgement to the conclusion of the hearing, that Mr Scicluna’s application was without reasonable prospects of success or lacking in substance.  The Tribunal does not accept the meaning that APC’s representative sought to attribute to the oral evidence of Dr Epstein given at the hearing in May 2017; or that his evidence should lead the Tribunal to a conclusion that Mr Scicluna had no reasonable prospects of success. 

17. In Dr Epstein’s oral evidence at the resumed hearing in May 2017, he agreed that the injury that had led to a substantial loss of function in Mr Scicluna’s dominant hand was likely to continue to play a role in the maintenance of his psychological condition.[9]   In particular, the Tribunal notes Dr Epstein’s answers to the following questions:

    Mr Wallace:     Would the umpiring go to a matter of an effect on the activities of daily living that Mr Scicluna could undertake as opposed to going to the application of the terms of Table 5.1 for 10 per cent?

    Dr Epstein: Yes, in Table 5.1, 10 per cent – the person is capable of performing activities of daily living without supervision or assistance.

    Mr Wallace:      Yes, that is what goes to ---?

    Dr Epstein: That’s what I said before and obviously football umpiring makes no difference to it.

    [9] Refer transcript p118, line 15 onwards.

18. It was open to the Tribunal to have accepted Dr Epstein’s evidence.  On this basis, the Tribunal is satisfied that as at May 2017, Mr Scicluna’s application had reasonable prospects of success and was not lacking in substance.  Further, prior to this date, Mr Scicluna was relying upon the 2015 medical report by Dr Epstein expressing his medical opinion that Mr Scicluna had suffered a 10% permanent impairment in respect of his psychological condition.

19. The Tribunal does not consider it appropriate to disallow any fees caused as consequence of the adjournment of the resumed hearing in May 2017.  This adjournment was directed by the Tribunal on account of the medical evidence before it (being relied upon by both parties, not only Mr Scicluna), being “out of date”.  The oral evidence provided by Mr Scicluna at the hearing on May 2017 revealed that his personal circumstances had altered, in that the activities he was engaged in had changed since the previous hearing in July 2016 and importantly, since he was last examined by the medical experts.  Adjourning the hearing to allow for Mr Scicluna to be re-examined (and up to date medical reports provided), was an appropriate course as it would have been erroneous for the Tribunal to rely upon medical opinions based on a history provided as to the situation Mr Scicluna was in as at August/October 2015,[10] being different from the situation he was in as at May 2017.  

    [10] At the time of the May 2017, the last examination of Mr Scicluna by Dr Epstein took place in August 2015 and by Dr White took place in October 2015.

1. With the benefit of hindsight, both parties might have foreseen this difficulty prior to May 2017, due to the significant lapse of time, and arranged for those review medical examinations and for up to date reports to be provided to the Tribunal, prior to the resumed hearing.  Given that both parties contributed to the problem that presented itself at the hearing on May 2017, and also because the hearing was adjourned at the motion of the Tribunal, the Tribunal considers it inappropriate to disallow a part of Mr Scicluna’s costs on this basis.

2. The Tribunal accepts APC’s contention that some of the delay in the progress of this application, specifically, the reason why the hearing was unable to be concluded in July 2016, was on account of the unavailability of one of the medical experts, Mr Kossmann, who was to give medical evidence in relation to the previous applications relating to Mr Scicluna’s physical injuries.  The Tribunal accepts that it was wholly unsatisfactory for this adjournment to have been necessary.  The Tribunal has in place a structured process for the submission by each party to an application for review, of hearing certificates prompting due inquiries to be made by them about the availability of all medical witnesses to be called to give oral evidence at the hearing. 

3. There was no indication in Mr Scicluna’s closing submissions in reply or by his representative at the costs hearing, as to whether there was a good reason for the inaccuracy of the information provided in the hearing certificate or alternatively, the circumstances surrounding Dr Kossmann’s unavailability to give evidence at the hearing in July 2016.  In the absence of any such explanation, the Tribunal infers that this occurred as a consequence of an administrative oversight on the part of Mr Scicluna’s representatives.

4. The Tribunal must consider whether part of Mr Scicluna’s costs should be disallowed on account of this administrative oversight.  The Tribunal considers it appropriate to disallow any costs incurred as a result of the interruption in the course of the hearing consequential upon it being adjourned from 20 July 2016 until 25 May 2017.  The Tribunal expects that this part of Mr Scicluna’s costs would be minimal and confined to any additional costs incurred by Mr Scicluna’s counsel or solicitors in needing to undertake further preparation or familiarisation with the brief leading up to the resumed hearing in May 2017.  It may also include any additional preliminary conferences that Mr Scicluna was required to have with his representatives or counsel prior to the resumed hearing on 25 May 2017.  

5. The Tribunal does not accept APC’s contention that only those part of Mr Scicluna’s costs up to the July 2016 hearing should be recoverable, because if the adjournment in July 2016 had not occurred, the further adjournment in May 2017 would not have occurred, which APC contends constituted a “life line” for Mr Scicluna and was the only reason why he subsequently accrued reasonable prosects of success in this application.  The Tribunal considers there to be an insufficient nexus between an administrative oversight by Mr Scicluna’s representatives and the way the application evolved from that point forward as contended for by APC.  As mentioned above, the Tribunal is not satisfied that Mr Scicluna’s application previously lacked reasonable prospects of success and that it was only by reason of this adjournment, that his application was “saved”.  The Tribunal will not disallow Mr Scicluna’s costs in the manner contended for by APC. 

6. It was not contended by APC that part of Mr Scicluna’s costs should be disallowed on account of the Tribunal’s finding that one of his two psychological injuries had not resulted in permanent impairment.  The Tribunal has nevertheless considered whether it should do so, in light of the principles set out in paragraph [10] to [12].  Given Mr Scicluna’s application was framed by his representatives and presented to the Tribunal by dealing with the two injuries in a “rolled up” manner, and noting that APC responded to his claim in a similar way (as did the medical experts for that matter when it came to assessing the degree of permanent impairment), the Tribunal considers that those two issues, and the evidence and submissions led by the parties in relation to each, were intricately intertwined, and the costs relating to each are not readily severable. 

7. Taking into account the observations of Jacobs J in Cretazzo and the matters set out above specific to this particular case, the Tribunal considers is inappropriate to disallow any of Mr Scicluna’s costs on account the Tribunal finding that his more recent psychological injury did not result in permanent impairment sufficient to ground an entitlement to compensation under sections 24 and 27 of the Act.

8. In conclusion, the Tribunal is satisfied that it is appropriate in the circumstances of this case to make an order that APC pay Mr Scicluna’s costs in respect of application numbered 2015/2114, save for any costs incurred as a result of the interruption in the course of the hearing as a direct consequence of the adjournment of the hearing on 20 July 2016 until 25 May 2017.  Costs to be agreed and failing any such agreement, to be taxed in accordance the Tribunal’s Practice Direction – Taxation of Costs issued on 30 June 2015.[11]

   [11] Refer certify that the preceding twenty seven (27) paragraphs are a true copy of the reasons for decision of Member K Parker

   [sgd]………………………………………

   Associate

   Dated: 23 October 2018

   Counsel for the Applicant:  Mr John Wallace of Counsel

   Solicitors for the Applicant:  Maurice Blackburn

   Counsel for the Respondent:  Mr Joe Ferwerda of Counsel

   Solicitors for the Respondent:  Clarke Legal

   Date of the costs hearing:         22 October 2018