Scott v State of Tasmania
[2000] TASSC 154
•2 November 2000
[2000] TASSC 154
CITATION: Scott v State of Tasmania [2000] TASSC 154
PARTIES: SCOTT, Leonard
v
STATE OF TASMANIA
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 9/2000
DELIVERED ON: 2 November 2000
DELIVERED AT: Hobart
HEARING DATES: 5 September 2000
JUDGMENT OF: Slicer J
CATCHWORDS:
Workers Compensation - Proceedings to obtain compensation - Determination of claims - Costs - Generally - Unfettered discretion conferred by statute - General rule of costs following event - Order for costs against the employee as 7 claims had been independently filed with the Tribunal.
State of Tasmania v Muir-Wilson [2000] TASSC 25, followed.
State of Tasmania v Wylie [2000] TASSC 128; G L & V N Barber Pty Ltd v Ryan [1999] TASSC 5; Sims Knipe Maver & Pereira Pty Ltd v Vince [1999] TASSC 8; Donald Campbell and Company, Limited v Pollak [1927] AC 732; Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685; State of Tasmania v Farrow (1997) 7 Tas SR 127; Unilever Australia Limited v Gunn and Another 143/1998; Societe Anonyme Pecheries Ostendaises v Merchants' Marine Insurance Company [1928] 1 KB 750; Scherer and another v Counting Instruments Ltd and another [1986] 2 All ER 529, considered.
Aust Dig Workers Compensation [155]
REPRESENTATION:
Counsel:
Appellant: C J Bartlett
Respondent: P Turner
Solicitors:
Appellant: Bartletts
Respondent: Director of Public Prosecutions
Judgment Number: [2000] TASSC 154
Number of Paragraphs: 30
Serial No 154/2000
File No LCA 9/2000
LEONARD SCOTT v STATE OF TASMANIA
REASONS FOR JUDGMENT SLICER J
2 November 2000
The appellant was injured during the course of his employment on 13 September 1998. He was certified as unfit for work and made a claim for compensation. He resumed work on light duties between 16 - 23 September. In October 1998, he suffered an accident whilst riding a motor bike on his property, causing a minor back injury. He received medical treatment. Between 13 September and 13 January 1999, he was off work, or placed on light duties, intermittently with back pain. He received compensation either through payment of medical expenses or an adjustment of salary. Thereafter he resumed normal employment.
On 15 November 1999, the appellant consulted his medical practitioner complaining of back pain and was prescribed medication. His condition was reviewed on 22 November and a CT scan revealed a protrusion at "L3/4 level". He was seen again on 8 December and referred to an orthopaedic surgeon. In the opinion of the treating physician, provided to the insurer on 4 January 2000:
"This patient is a well built young male who does not smoke and injured his back late 1998. It is difficult to make a precise diagnosis but he may have suffered some cartilaginous damage in his left lower back, which would account for him feeling better after working for a while.
There are no pre-existing conditions to account for his backache.
He gave no history of any sporting injuries or backache prior to his two injuries in September and October 1998.
I think the injury sustained in late October 1998 when his foot became caught in a cow rut was the major contributor to his disability.
The injury never healed completely and deteriorated November/December 1999. I think his employment is solely the cause of his present disability.
In the future remissions and exacerbations are likely."
On 22 November 1999, a medical certificate was completed and forwarded to the employer certifying the appellant to be incapacitated for work on that date. An account for the fee for the medical examination was sent with that certificate.
The employer, by letter dated 2 December 1999, gave notice to the appellant disputing liability but in reality seeking time to enable it to properly investigate the claim. The letter was in the following terms:
"I refer to the medical certificate and account, both dated 22 November 1999 from Somerset Medical Centre, recently submitted to your employer.
At this stage, your employer is not in receipt of sufficient information to determine whether you are entitled to receive Workers Compensation under the Workers Rehabilitation and Compensation Act 1988 in respect of the claimed expenses.
Due to the time constraints within the Act, your employer must dispute liability to pay
1) Any benefits payable under Division 2 of Part VI in respect of the injury.
The basis of dispute is that:
1) The expense incurred is not reasonable; and
2) The expenses have not been necessarily incurred;
3) The expenses have not been incurred as a result of the worker's said injury;
4) There is insufficient evidence that the worker was incapacitated as certified.
Investigations are underway to resolve these issues, but as with all claims where liability has not been accepted, the matter has been referred to the Workers Rehabilitation and Compensation Tribunal.
The matter will be listed for hearing by the Tribunal and, if still unresolved, a Commissioner will determine whether the basis of the dispute is genuine.
We shall advise you of our final decision once the investigations are completed but, in the interim, invite you to contact us to discuss any concerns or questions you may have.
Alternatively, you may seek advice from the Workplace Safety Board or the Workers Rehabilitation and Compensation Tribunal."
The employer took that course because of a perception that the decision of the Full Court in G L & V N Barber Pty Ltd v Ryan [1999] TASSC 5, required each and every claim to be processed separately. For the purpose of this determination it will be accepted, but not decided, that such a course is required by that decision.
The respondent was entitled to further investigate the claim.
The claim, together with notice of objection, was forwarded to the Tribunal in the following terms:
"To the Registrar, Workers Rehabilitation and Compensation Tribunal
Employer The State of Tasmania (Department of Primary Industry Water & Environment)
(Address) GPO Box 192B
Worker Scott Leonard
(Address) PO Box 127, Somerset 7322
Insurer (If applicable) HIH Insurance
1We The State of Tasmania (Department of Primary Industry Water & Environment) being the employer/authorised agent of the employer of Scott Leonard, who has submitted a medical certificate and account for payment in relation to an injury, dispute any liability to pay compensation by way of weekly payments and/or cost of benefits under division 2 of Part VI in respect a medical certificate and account from Somerset Medical Centre, both dated 22 November 1999.
2 I hereby refer the matter to the Tribunal under Section 81A.
3I have notified the worker in writing that I dispute liability to pay compensation and have informed the worker of my reasons for disputing liability.
4Weekly payments are not being made to the worker.
5I enclose the required documents with this referral.
Our reasons for disputing liability to pay compensation are as follows:-
1)The expense incurred is not reasonable; and
2)The expenses have not been necessarily incurred;
3)The expenses have not been incurred as a result of the worker's said injury;
4)There is insufficient evidence that the worker was incapacitated as certified.
Note
The following documents must be lodged with the referral:-
(tick)
Medical certificate and account dated 22 November 1999
Letter to worker under Section 81A
Names of medical practitioners who have or are scheduled to examine the worker and date of any future appointments
3 copies of all required documents including this referral must be lodged.
Dated 2 December 1999"
The Registrar of the Tribunal gave formal notice to the appellant in accordance with the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s45(2), and, on 19 January 2000, forwarded a notice of hearing in accordance with s45(1) fixing 16 February as the date of hearing and advised:
"Your attendance is required at this hearing to present your case."
On 11 February 2000, senior Crown counsel for the office of the Director of Public Prosecutions wrote to the Registrar in the following terms:
"I refer to the abovementioned references which are listed for hearing in Ulverstone at 12 noon on Wednesday 16 February 2000.
I have been instructed to apply for an adjournment of those references on the following grounds:
1The employer has made arrangements to have the worker [sic] by Mr D Jones, orthopaedic surgeon, as soon as possible but unfortunately that will not take place until 24 February 2000. We do, however, expect to receive Mr Jones' report shortly thereafter. The appointment was confirmed by letter of 11 January 2000.
2The employer is still awaiting a medical report from the worker's treating surgeon, Mr A Hanusiewicz, which was sort [sic] by letter of 20 December 1999.
If the matter cannot be adjourned on the basis of this letter I would be grateful if you would list the application before a Commissioner in Hobart as a matter of urgency.
I have forwarded a copy of this memorandum to solicitors for the worker."
The Registrar, by notice dated 15 February 2000, appointed 1 March as the date of adjourned hearing.
On 29 February, counsel for the respondent wrote to the appellant's solicitors seeking a further adjournment for a period of two months for the following reasons:
"1The report from Mr D Jones, Orthopaedic Surgeon, was only received by HIH, the Workers Compensation Manager, at 9.30am on 29 February 2000.
2The employer has a video tape of surveillance of the worker which it wishes to put to Mr Jones. The employer takes the view that the video tape will have a significant impact upon Mr Jones' opinion and diagnosis contained in his report.
3HIH wrote to Mr Hanusiewicz, orthopaedic surgeon, requesting a medical report on 20 December 1999. Mr Hanusiewicz has since advised that he will not provide a report without examining the worker; that he cannot examine the worker until 30 March 2000 and that he will not be able to provide a report until the end of April 2000."
A copy of that letter was forwarded to the Registrar. The application for an adjournment was granted after argument on 1 March, but the Tribunal ordered that the respondent pay the appellant's costs of the appearance. A further hearing date was fixed for 14 March and the necessary notices issued.
On 10 March, the insurer advised the Registrar that:
"DPIWE have accepted liability in relation to all of above referral and request that they be withdrawn from the hearing list on 14 March 2000 and have appropriate made."
On 13 March, the Chief Commissioner of the Tribunal, upon the reading of the written application of the employer, ordered:
" … that the employer:-
(a) make weekly payments from the date of incapacity in accordance with the Act, and
(b) pay the cost of any benefits payable under Division 2 of Part VI of the Act."
The solicitors for the appellant advised the Registrar that an application for costs would be made at the hearing. A further notice was given fixing 31 March as the date of the adjourned hearing. The application for costs was made and argued by counsel at a further hearing conducted on 31 March. Throughout this period it would appear, in the words of the Commissioner made at the hearing on 1 March, that the claims related to:
" … a day off here or there some two months ago and some medical accounts that were incurred late last year."
There followed in March, April and May, correspondence between the parties and the Registrar in relation to the issue of costs, including the supply of written submissions. A further hearing date was fixed for 1 June 2000. The parties were content to rely upon the written submissions already supplied and did not attend the hearing. On 6 June, the appellant's application for costs was dismissed.
This process was repeated with respect to six further claims. Details of the claims which gave rise to extensive correspondence and processing are:
Number
Date
Item
Amount
2442/99
2 December 1999
Medical account
$31.50
2623/99
10 December 1999
Medical account
$63.00
2625/99
9 December 1999
Medical account
$31.50
85/00
12 January 2000
Radiology account
$275.10
178/00
20 January 2000
Medical account
$31.50
200/00
2 February 2000
Physiotherapy
$243.00
343/00
15 February 2000
Unspecified
¾
Each claim required a separate objection, notification, allocation of hearing dates, copies of documentation and the like. At a later stage some correspondence encapsulated a number of matters, but nevertheless the documentation comprised in the appeal papers amounted to some 160 pages.
The process was made more complex by a failure to simply forward the accounts, permit referral and wait until the employer had decided on its position. The parties contend that such was a consequence of the decision of G L & V N Barber Pty Ltd v Ryan (supra) in that each invoice constituted a separate claim. That question and the options open to an employer who needs time to consider its position have been touched upon by the learned Chief Justice in the decision of State of Tasmania v Wylie [2000] TASSC 128.
The Tribunal refused to award costs to the appellant. The Tribunal stated in part that:
"It has been a practice of the Tribunal not to award costs in respect of Section 81A proceedings solely on the basis of the general rule that costs follow the event. It is considered that these matters have different considerations and fall outside the general rule illustrated in various decisions of the Supreme Court of Tasmania. These matters come to the Tribunal by reason of the statutory scheme imposed upon the parties. The 14 day limit makes it understandable that employers on many of [sic] occasions require extra time to investigate the claim that has been made. I do not believe that the general intent or purpose of the Act, particularly the scheme as to a dispute of liability (S 81A), favours the award of cost based upon any general rule that might be applicable to other applications which are made under the Act. To do otherwise would be to the prejudice to both parties eg; an employer who disputes a claim but later satisfies itself as a result of investigations, or a worker who makes a claim to which a genuine dispute is determined. The test of whether or not a genuine dispute exists is a far less onerous test than that applicable to other applications made under the Act, and it is not one that ought determine a right to costs. There will however always be circumstances in which such an award of costs may be appropriate and such circumstances have been illustrated in previous decisions of the Tribunal eg; where an employer does not comply with the Act, or either party raises a patently feeble argument involving unnecessary hearing and determination."
It relied on a decision of this Court in State of Tasmania v Muir-Wilson [2000] TASSC 25. In that case, the appellant employer had unsuccessfully sought an order for costs where it had disputed liability in order to preserve its statutory rights, but conceded liability once it had made its own examination of the claim. In the course of his reasons for judgment, at par10, the learned Chief Justice observed:
"A workers compensation claim cannot be equated with an action where both parties can maintain a measure of control in bringing it to a final conclusion. There is no equivalent of an application for summary judgment on the grounds that the defendant has no defence nor an application to strike out a claim for want of prosecution. There is no provision for discontinuance nor for listing a claim for hearing after a finding of genuine dispute if the worker chooses not to file a Reference. It is possible that some workers who unsuccessfully oppose orders in favour of an employer under s81A may never list the claim for final determination and thus, it is submitted by the appellant, deprive an employer of any opportunity to recover the costs he has incurred in respect of an unmeritorious claim. In an action, on the other hand, the defendant has a number of options available for achieving finality and obtaining costs orders. In actions, it is often the case that a party may succeed on an interlocutory application without obtaining an order as to his costs.",
continuing at pars11 - 12:
"While workers compensation claims do not proceed in the same procedural way as actions, I think it is a valid observation that in respect of an interim step in which the employer only has to show an arguable basis for disputing the claim, it will often not be possible to see on which side justice requires that the burden of the costs of that step should ultimately fall. I conclude that the discretion being unfettered, it does not inexorably follow that the worker should pay the employer's costs of the Reference merely because the latter demonstrates that there is a genuine dispute within the meaning of s81A.
The practice of the Tribunal cannot dictate the order which was appropriate in this case if that practice is erroneously based. However, it should be remembered that the employer had no option but to refer the matter to the Tribunal if it wished to be relieved of the acceptance of liability which the Act otherwise imposes, whether or not the worker was prepared to concede the genuineness of the employer's resistance."
His Honour concluded at 13:
"It may be that in some cases justice can be done by reserving the question of costs and giving the parties the opportunity to resolve it after the claim has been litigated or, if the worker fails to pursue the claim, after a reasonable time has elapsed. In some cases, the proper course will be not to make any order as to costs. In the present case, the circumstances were such that the Tribunal's decision not to make an order as to costs cannot be said to have resulted from an erroneous exercise of its discretion. The appeal is dismissed."
I agree with that reasoning and conclusion, although those statements of principle do not necessarily resolve an issue where an employee makes a claim which, although initially contested pending investigation, is ultimately conceded.
The grounds of appeal claim error in:
"1That the Learned Chief Commissioner erred in law in failing to determine that the Appellant should have the costs of an incidental to the employer's Applications.
2That the learned Chief Commissioner erred in law in determining that costs should not follow the event.
3That the learned Chief Commissioner erred in law and misapplied the principles annunciated [sic] in the Supreme Court of Tasmania in the case of State of Tasmania v Muir Wilson [2000] TASSC 25."
The Tribunal concluded that the respondent acted reasonably in adopting the procedure which it did, stating at pars12 - 14:
"The Employer in this case was entitled to believe that its obligation to make worker's compensation payments had concluded given that it had been some 12 months prior to the further claim, the subject of these referrals. In those circumstances it is entitled to have a concern as to the worker's entitlement and to investigate those claims. Given the strict time limits set out in the Act, the Employer was obliged to lodge the referral in order to enable appropriate investigations to be conducted. The Employer is entitled to seek an independent medical opinion given that the treating orthopaedic surgeon expressed a wish to re-examine the worker prior to providing a report, and indications were that this would result in an unacceptable delay. Up until this time I have no reason to doubt that the Employer's conduct was other than reasonable, and carried out in accordance with the rights that it had under the Act.
I am not satisfied that anything occurred in the initial stages apart from the Employer exercising its rights in accordance with the statutory scheme and carrying out an investigation for the purposes of determining whether or not it ought accept liability in respect of these further claims for compensation. I do not consider that it would be an appropriate exercise of my discretion to award the costs against the employer merely on the basis that it disputes a claim under Section 81(A) but after conducting appropriate investigation was prepared to concede the worker's claim.
I am not satisfied that there is any aspect of the Employer's conduct up until the time of the second adjournment that warrants the making of an order for costs against it. There was on the face of the document submitted to the Employer reason for concern given the gap since the last payment of compensation and the Employer was entitled to further investigate those concerns. When those concerns were allayed by that investigation it conceded the claims that were in dispute. The period of unnecessary delay as part of that investigation has already been addressed by an order for costs."
The Tribunal had made an order for costs in relation to the appearance on 1 March and the adjournment. It was open to the employee, having forwarded the claims, to accept the respondent's stated wish to be afforded time to properly consider its position in relation to acceptance or rejection of those claims. He did not do so, although he followed, with strictness, the letter of the law. In doing so he gained little. It was submitted that, since he was liable for the payment of the medical expenses and can be sued by the providers, he was required to pursue resolution by reason of self-interest or protection. But the accounts were those of service providers engaged in the area of workers compensation. Some of the providers were aware that a further examination was required in order to ascertain whether the claims arose out of the original compensable event. The respondent had clearly made known its position to the appellant.
The Act, s59, provides:
"(1) Except as provided in sub-section 2, the Tribunal may make such order as to costs as it considers appropriate in any proceedings before it.
(2) The Tribunal may not order costs in respect of a conciliation conference conducted under section 43A unless it appears to the Tribunal that a party to the conciliation conference has unreasonably obstructed or prolonged proceedings."
It is significant that Parliament intended to deprive an obstructive party in a conciliation process from any opportunity to claim costs occasioned by that obstruction. Sub-section (1) contains the words "as it considers appropriate". A specialist tribunal is ordinarily aware of the everyday practice within its jurisdiction. Here the Tribunal was made aware that the appellant, or his solicitor, was lodging copies of accounts simply requiring the legislative response to be made in each case. It was entitled to conclude that the procedure adopted by the appellant did not provide for an efficacious disposal of the matter. It was entitled to decline an award of costs in favour of the party who could have collected the accounts and sent them at one or two instances, or waited until the respondent had made a considered evaluation of the claim. The Tribunal was permitted by statute to make such order as to costs as it considered appropriate.
The principles governing the award of indemnity costs are that ordinarily they should follow the event. However, the rule is not absolute (Sims Knipe Maver & Pereira Pty Ltd v Vince [1999] TASSC 8) and a party who "has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense" (Donald Campbell and Company, Limited v Pollak [1927] AC 732, Viscount Cave at 809, citing Ritter v Godfrey [1920] 2 KB 47, Atkin LJ), might be deprived of a costs order (see generally Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685, State of Tasmania v Farrow (1997) 7 Tas SR 127, Unilever Australia Limited v Gunn and Another 143/1998). Here the position is analogous to that considered by the English Court of Appeal in Societe Anonyme Pecheries Ostendaises v Merchants' Marine Insurance Company [1928] 1 KB 750, a case in which the reasonableness of costs incurred during a period in which a stay of proceedings had been ordered. The referral by the respondent was made in order to enable it to investigate the issue of causation and did not constitute a rejection of the claim. A useful summary of the principles relating to an award of costs has been provided by Buckley LJ in Scherer and another v Counting Instruments Ltd and another [1986] 2 All ER 529, when he stated at 536:
"From the cases which we have cited and from Ottway v Jones [1955] 2 All ER 585, [1955] 1 WLR 706, Baylis Baxter Ltd v Sabath [1958] 2 All ER 209, [1958] 1 WLR 529 and William C Parker Ltd v F J Ham & Son Ltd [1972] 3 All ER 1051, [1972] 1 WLR 1583, which were also referred to by counsel, we derive the following propositions. (1) The normal rule is that costs follow the event. That party who turns out to have unjustifiably either brought another party before the court or given another party cause to have recourse to the court to obtain his rights is required to recompense that other party in costs. But, (2) the judge has under s 50 of the 1925 Act an unlimited discretion to make what order as to costs he considers that the justice of the case requires. (3) Consequently, a successful party has a reasonable expectation of obtaining an order for his costs to be paid by the opposing party but has no right to such an order, for it depends on the exercise of the court's discretion. (4) This discretion is not one to be exercised arbitrarily: it must be exercised judicially, that is to say in accordance with established principles and in relation to the facts of the case. (5) The discretion cannot be well exercised unless there are relevant grounds for its exercise, for its exercise without grounds cannot be a proper exercise of the judge's function. (6) The grounds must be connected with the case. This may extend to any matter relating to the litigation and the parties' conduct in it, and also to the circumstances leading to the litigation, but no further. (7) If no such ground exists for departing from the normal rule, or if, although such grounds exist, the judge is known to have acted not on any such ground but on some extraneous ground, there has effectively been no exercise of the discretion. (8) If a party invokes the jurisdiction of the court to grant him some discretionary relief and establishes the basic grounds therefor but the relief sought is denied in the exercise of discretion, as in Dutton v Spink & Beeching (Sales) Ltd and Ottway v Jones, the opposing party may properly be ordered to pay his costs. But where the party who invokes the court's jurisdiction wholly fails to establish one or more of the ingredients necessary to entitle him to the relief claimed, whether discretionary or not, it is difficult to envisage a ground on which the opposing party could properly be ordered to pay his costs. Indeed, in Ottway v Jones [1955] 2 All ER 585 at 591, [1955] 1 WLR 706 at 715 Parker LJ said that such an order would be judicially impossible, and Evershed MR said that such an order would not be a proper judicial exercise of the discretion, although later he expressed himself in more qualified language (see [1955] 2 All ER 585 at 587, 588-589, [1955] 1 WLR 706 at 708, 711). (9) If a judge, having relevant grounds on which to do so, has on those grounds, or some of them, made an order as to costs in the exercise of his discretion, his decision is final unless he gives leave to a dissatisfied party to appeal. (10) If, however, he has made his order having no relevant grounds available or having in fact acted on extraneous grounds, this court can entertain an appeal without leave and can make what order it thinks fit."
The Tribunal was entitled to exercise its discretion on the basis that it believed the process adopted by the appellant, notwithstanding an interpretation of G L & V N Barber Pty Ltd v Ryan (supra) was unnecessary in the circumstances and occasioned unnecessary litigation and expense. It made an interim costs order to indemnify the appellant with respect to costs occasioned by the adjournment but its exercise of discretion in relation to the costs order for the whole of the seven proceedings did not miscarry.
The appeal ought be dismissed.
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