Shellard and Comcare (Compensation)

[2024] AATA 3517

Shellard and Comcare (Compensation) [2024] AATA 3517 (3 October 2024)

Division:GENERAL DIVISION

File Number(s):2023/4849      

2024/0577

Re:Jonathan Shellard  

APPLICANT

ComcareAnd  

RESPONDENT

INTERLOCUTORY DECISION

Tribunal:Deputy President O'Donovan

Date of Decision:               3 October 2024

Place:Canberra

The Tribunal orders that Comcare pay the applicant’s reasonable costs incurred in proceedings 2023/4849 as agreed or as taxed in accordance with the Tribunal’s Practice Direction on the Taxation of Costs.

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Deputy President O'Donovan

Catchwords

SAFETY, REHABILITATION AND COMPENSATION ACT – reasonable costs incurred in Tribunal proceedings

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)
Safety, Rehabilitation and Compensation Act 1988 (Cth)

Cases

Perry v Comcare (2006) 150 FCR 319

REASONS FOR DECISION

Deputy President O'Donovan

1. This is an application brought by the applicant, seeking a costs order under section 67(8) of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act). The circumstances in which the application has been brought are as follows.

2. On 5 July 2023 the applicant applied to the Administrative Appeals Tribunal (Tribunal) for review of a decision made by Comcare, which denied liability to pay compensation under section 14 of the SRC Act in relation to his adjustment disorder with anxiety (2023/4849). On 8 August 2023 the applicant filed a second application seeking review of a decision dated 14 July 2023 that declined liability for the applicant’s claim for C5/6 and C6/7 disc-degeneration with foraminal stenosis (2024/0577).

3. The applications moved through the Tribunal’s process, initially being dealt with in conference and subsequently in directions hearings.

4. In the formal processes conducted by the Tribunal, the applicant was self-represented. However, in the background he was obtaining ad-hoc assistance from a lawyer in relation to the Tribunal proceedings as well as in relation to other issues he was having with his employer.

5. On 16 May 2024 the respondent made an offer to the applicant to resolve both proceedings. On 20 May 2024 the applicant accepted the respondent’s offer by providing signed terms of agreement. The terms of agreement were submitted to the Tribunal and a decision under section 42C of the Administrative Appeals Tribunal Act 1975 (AAT Act) was issued by the Tribunal. The decision in application 2023/4849 was in the following terms:

   Pursuant to section 42C(2) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal:

   1. sets aside the reviewable decision dated 4 July 2023 and in substitution decides that the:

   a. Applicant suffered ‘adjustment disorder with anxiety’ (the Injury), being a ‘disease’ that was significantly contributed to by his employment with Services Australia, deemed to have been sustained on 17 November 2020; and

   b. Respondent is liable to pay compensation to the Applicant, pursuant to section 14 of the Safety Rehabilitation and Compensation Act 1988 (Cth) in respect of the Injury.

   2. notes, the parties’ agreement that the Respondent must deduct, or pay, from compensation payable under the Safety Rehabilitation and Compensation Act 1988 (Cth) in respect of the Injury:

   a. any monies payable to Medicare Australia under the Health and Other Services (Compensation) Act 1995 (Cth); and

   b. any monies payable to the Department of Family and Community Services and/or Centrelink under the Social Security Act 1991 (Cth).

6. The decision in application 2024/0577 was in the following terms:

   Pursuant to section 42C(2) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal affirms the reviewable decision dated 14 July 2023. Meaning that the Applicant is not entitled to compensation pursuant to the Safety Rehabilitation and Compensation Act 1988 (Cth) in respect of that claim.

7. The question of costs was not explicitly addressed in either of the decisions of the Tribunal or in the correspondence leading to the settlements. The respondent’s email to the applicant on 16 May 2024 did say:

   If you agree to finalise these proceedings on this basis, we would be grateful if you could sign the attached terms of agreement and return them to us for counter-signature and lodging with the Tribunal. The Tribunal will then issue a decision in the agreed terms that will finalise both matters.

8. This indicates that from the respondent’s perspective once the Tribunal issued its decision that would be the end of the matter. The applicant however had a different view. As a consequence of discussions with his lawyer he had formed the view that he would get some payment for his costs. It is also clear from what subsequently occurred that he did not understand the mechanism by which this would be effected. He did not raise the issue with the respondent when the terms of the Tribunal’s decision was agreed to.

9. On 10 June 2024 the applicant wrote to the respondent stating ‘I need to claim my solicitor fees…’. The applicant provided an invoice from Lee Lawyers in the sum of $4,400 to his claims manager in Comcare. On 26 June 2024 the respondent wrote to the applicant stating ‘It is not apparent to Comcare that the costs in the Lee Lawyers invoice are costs payable in either AAT Application…You were not legally represented in either proceeding before the Tribunal and the Tribunal has not made any order regarding costs in either of your applications’.

10. The applicant responded insisting that the invoice be paid. On 9 July 2024 the respondent responded saying ‘in the absence of an order of the Tribunal that costs are payable by Comcare in either of your applications, we are unable to progress negotiation of any particular costs you seek to claim’.

11. The applicant then approached the Tribunal seeking a costs order.

    Tribunal Costs Power

12. In most cases where review of a decision is sought in the Tribunal, the Tribunal has no power to make a costs order. However, express provision has been made for the awarding of costs to successful applicants who seek review under the provisions of the SRC Act. Section 67 confers a discretion on the Tribunal to award costs to successful applicants in the following terms:

    (1)Subject to this section, the costs incurred by a party to proceedings instituted under this Part in respect of that reviewable decision shall be borne by that party.

    …

    (8)Where, in any proceedings instituted by the claimant, the Administrative Appeals Tribunal 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 Tribunal may, subject to this section, order that the costs of those proceedings incurred by the claimant, or a part of those costs, shall be paid by [Comcare].

13. In relation to the applicant’s application concerning his cervical spine (2024/0577), the preconditions for the exercise of the costs discretion are not satisfied so no costs order can be made in relation to those proceedings.

14. In relation to the application concerning the applicant’s adjustment disorder (2023/4849) the decision under review was set aside and a more favourable decision was made. Consequently the pre-conditions for the exercise of the discretion are satisfied.

15. Before turning to the question of whether or not the discretion should be exercised in this case, it is helpful to note how the Federal Court has described the framing of this particular discretion. In Perry v Comcare[1] (Perry), Justice Greenway noted that the discretion is conferred expressly subject to the section which recognises that in the ordinary course of events, the costs incurred by a party to proceedings before the Tribunal shall be borne by that party and that the discretion in either of the events identified in section 67(8) is subject to the prohibition in section 67(11) and (12).[2] His Honour notes that in exercising the discretion, the Tribunal ought have regard to the rule of primacy reflected in section 67(1), the circumstances of the case which gave rise to a decision enlivening the qualification upon section 67(1), the background circumstances concerning the claim, the nature and character of proceedings for the purposes of the SRC Act, the complexity of the claim and the conduct of the parties in relation to the proceeding.[3]

    [1] (2006) 150 FCR 319 at 76.

    [2] Which are not material in this case.

    [3] Perry v Comcare (2006) 150 FCR 319 at 76 (Perry).

16. Not all of these are significant in this case.

17. Justice Greenway also noted that the circumstances which enliven the discretion are not just conditions giving rise to the discretion but are also considerations informing the exercise of the discretion to displace the rule stated in subsection (1) having regard to the circumstances of the particular case. In other words, the facts which enliven the discretion are also relevant to the exercise of the discretion.

18. Consequently, it is significant that the applicant as a result of his application to the Tribunal did receive a decision in his favour. The refusal to pay compensation in the original decision under review was reversed and his position was vindicated. This is a very powerful discretionary factor weighing in the applicant’s favour. The justice in giving this factor very significant weight is summed up in the shorthand phrase familiar to lawyers practising in civil litigation that ‘costs follow the event’. In other words, if you win, you can expect to get your costs. That is not the end of the matter, but it remains a sensible starting point.

19. Against this factor the respondent has raised a number of discretionary matters which it says should be given weight. First, the respondent was unaware that the applicant was represented and incurring costs. Second, the proposal was that the proceedings be resolved in full without any order as to costs and the basis for that resolution should not be disturbed. Third, there are costs which the applicant wishes to pursue that are not appropriately sought from the respondent as they relate to other matters. Fourth, there is unlikely to be any utility in a costs order as the evidence does not establish that any of the costs incurred relate to application 2023/4849. Fifth, the terms of the costs order sought if granted would involve an unlawful outcome. Sixth, there is no unfairness if each party bears its own costs.

20. Having considered these matters, I am not satisfied that any of these factors outweigh the more significant fact that the applicant incurred costs in having a decision which is now accepted to be incorrect overturned. It would of course have been preferable for the question of costs to have been dealt with at the point of resolution of the principal issues in dispute. However, as the respondent accepts, that is not a legal barrier to the award of costs. If the applicant was represented directly in the negotiations by a lawyer and it was agreed that the consent orders ‘finalised’ both matters, I may take a different view of the applicant’s failure to raise the question of costs and the significance of the respondent’s view that the whole of the matter had been finalised. In the present case, it is clear that the applicant was unaware of the proper process for claiming costs. His failure to address the issue is excusable and it involves no unfairness as far as the respondent is concerned in raising it now. The respondent did not suggest that it would have behaved differently in resolving the matter if it was aware that it may have to pay costs and in the absence of prejudice of that kind there does not appear to be anything unfair in considering the question of costs separately from the merits of the decision. The failure of the parties to communicate clearly on the costs issue is regrettable but does not provide any reason of substance for or against the exercise of the discretion.

21. In relation to the scope of the order which the applicant has indicated that he wants, the applicant’s inexperience accounts for the breadth of the order which he seeks and the range of costs he is seeking to recover. The fact that the applicant may not ultimately be able to recover the costs he wants does not provide a consideration against making a costs order in appropriate terms which is subject to taxation. To the extent that the applicant is seeking costs which are not recoverable and relate to matters other than 2023/4849, that is an issue that can be addressed by the taxing process. The terms of the order granted is a matter for the Tribunal.

22. Finally, I am not satisfied that there is a lack of utility in the costs order. The material before me suggests that the applicant incurred at least some costs in relation to the application in which he was successful. Exactly how much is a matter for the taxing officer.

23. I am satisfied that in the circumstances where the applicant was wholly successful in overturning the original decision to deny liability, the discretion to order a costs payment should be exercised in his favour.

    Decision

24. The Tribunal orders that Comcare pay the applicant’s reasonable costs incurred in proceedings 2023/4849 as agreed or as taxed in accordance with the Tribunal’s Practice Direction on the Taxation of Costs.

25.     I certify that the preceding 24 (twenty-four) paragraphs are a true copy of the reasons for the decision herein of Deputy President O’Donovan.

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Associate

Dated: 3 October 2024

Date of interlocutory hearing:	2 October 2024
Applicant:	Self-represented
Solicitor-advocate for the Respondent:	Ms Lindsay Cooper