Whitley and Military Rehabilitation and Compensation Commission

[2005] AATA 1301

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1301

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/1063

GENERAL ADMINISTRATIVE DIVISION		)
Re		DAVID WHITLEY

Applicant

And MILITARY REHABILITATION
AND COMPENSATION
COMMISSION

Respondent

DECISION

Tribunal Ms M J Carstairs, Member

Date23 December 2005  

PlaceBrisbane

Decision The Tribunal orders that the respondent pay the applicant’s costs, taxed if necessary by the District Registrar, excepting the costs associated with proceedings on 28 February 2005 and 15 September 2005.  

..................[Sgd]..............................

M J Carstairs
  Member

CATCHWORDS

COMPENSATION — Commonwealth employees — Costs — Tribunal decision varying reviewable decision

Safety, Rehabilitation and Compensation Act 1988 (Cth) s 67

Whitley and Military Rehabilitation and Compensation Commission [2005] AATA 919
Australian Postal Corporation v Oudyn (2003) 73 ALD 659  

REASONS FOR DECISION

23 December 2005   Ms M J Carstairs, Member

1.      The Tribunal handed down the decision ReWhitley and Military Rehabilitation and Compensation Commission [2005] AATA 919, without making an order as to costs at the time of the decision. The Tribunal was originally constituted by two members, one of whom, Dr K Kennedy, has since retired from the Tribunal.

2.      The Tribunal decided as follows:

The Tribunal varies the decision under review, namely the decision dated 7 March 2005, to provide that on 29 March 2003 Mr Whitely suffered an aggravation of cervical spondylosis, which is an injury within the meaning of the Safety Rehabilitation and Compensation Act 1988.

3.      The Tribunal issued an order on 18 October 2005 directing that the applicant be awarded costs as agreed between the parties or as taxed by the District Registrar.  The respondent then sought the opportunity to make submissions on the issue of costs.  A hearing on costs was held on 28 November 2005 at which the parties made oral submissions.

4. Section 67 of the Safety, Rehabilitation and Compensation Act 1988 deals with the costs of proceedings before the Tribunal. Section 67(8) provides:

(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 the responsible authority.

5. Section 67(8) of the Act makes it clear the power to award costs is a discretionary one. Successful parties are not entitled to costs as a right. Even so, the Tribunal would ordinarily make an order in favour of a successful applicant.

6. The applicant says that as a result of the Tribunal’s decision, he achieved a more favourable decision than he had obtained in the reviewable decision dated 11 December 2003, which originally brought him to the Tribunal, and the decision that was substituted for it on 7 March 2005 after the Tribunal had remitted the reviewable decision for reconsideration under s42D of the Administrative Appeals Tribunal Act 1975. The decision dated 7 March 2005 became the decision on review before the Tribunal.  

7.      The respondent submits that the Tribunal decision merely varied the description of the injury and that, properly understood, this was not a favourable outcome, as is required for an applicant’s costs to be paid under the Act.

8.      I do not accept the submission that Mr Whitely did not have a favourable outcome.  The Tribunal’s decision was not one that simply substituted the words cervical spondylosis for neck strain, where these were no more than two different terms for the same condition.  It seems well recognised in the compensation jurisdiction that the term strain carries an implication of prospective reversion to the original state of health, after a period of recovery time.  On the other hand a diagnosis such as spondylosis implies that there has been an underlying physiological change.  The difference in having a diagnosis merely of strain, rather than a more permanent change, can have significance for a claimant if further injury is sustained or where a condition deteriorates.  This is so regardless of whether the original compensation entitlement arose from a straight injury or from the aggravation of an underlying condition.  I was satisfied that the Tribunal’s decision, confirming that the applicant suffered an aggravation of underlying cervical spondylosis in March 2003 had a substantive effect, and was a decision favourable to the claimant as contemplated by s67(8) of the Act.

9.      On the question of costs, the applicant further submitted that a critical date in the progress of the proceedings at the Tribunal was the date of 24 May 2005 when Senior Member McCabe conducted a Directions Hearing on 24 May 2005.    Senior Member McCabe issued Directions, including that the applicant and the respondent were to file and exchange Statements of Issues.   This Directions Hearing had been preceded by an earlier Directions Hearing on 28 February 2005 when Senior Member McCabe determined that:

§  a neck injury sustained in 1997,

§  headaches, and

§  permanent impairment

were not matters on review before the Tribunal as part of the application in Q2003/1063.  Mr O’Gorman conceded that the applicant was not entitled to the costs of the failed application on 28 February 2005, which, had the applicant been successful in it, would have extended the scope of matters on review beyond the injury sustained in March 2003.  The Senior Member, through that Directions Hearing, had also remitted to the respondent the reviewable decision dated 11 December 2003 which had “ceased liability” for neck injury.  As a result of the remittal, the decision was set aside by a delegate on 7 March 2005 and the decision was substituted with a form of words that avoided any suggestion that there was no liability for compensation for the applicant’s neck condition.  This was done to comply with the Federal Court decision in Australian Postal Corporation v Oudyn (2003) 73 ALD 659.

10.     I agree with the applicant’s concession that he is not entitled to any of the costs associated with the Directions Hearing on 28 February 2005, particularly in view of the evidence (exhibit 2) that on 21 September 2004 the respondent had offered to seek a by-consent Direction from the Tribunal to remit the reviewable decision for reconsideration.  The applicant’s solicitors did not avail themselves of that offer.

11.     I do not accept, however, the respondent’s submission that because it was only from that date that the issues between the parties crystallised the applicant is disentitled to costs before 24 May 2005.  The respondent’s Statement of Issues dated 28 January 2004 clearly identified as the matter in issue whether there was an injury as claimed in the relevant compensation claim (lodged in April 2003).  When required to state the issues following the Tribunal’s Direction dated 24 May 2005, the respondent re-stated that the issue was whether the respondent suffered an injury during his defence service.  (I took into account that the reconsideration decision dated 8 March 2005 had been made between the filing of these two Statements of Issues by the respondent.)  The expression may have changed a little in the respondent’s second Statement of Issues, but the meaning remained essentially the same as was conveyed by the first.

12.     Commonsense must inform the outcome here.  Whatever the applicant’s solicitors may have done to seek to extend the issues beyond the ambit of the original compensation claim, it seems to me that the respondent clearly understood from the outset that that matter had commenced with a claim for compensation made in April 2003 which related to an accident that occurred in March 2003.  The parties were preparing each of their cases, seeking medical evidence, and discussing those issues in conferences in contemplation of the exploration of any connection with employment, and with a view to seeking medical commentary on any current incapacity.  It seems to me that it would be artificial to attempt to apportion or separate out parts of proceedings that took place before 24 May 2005 where the applicant might have been exploring other issues such as permanent impairment.   All these questions can be quite intertwined.  Clearly some issues were being progressed well before 2005 and the reconsideration decision in March 2003 is itself evidence of that.

13.     Hence I do not accept that the applicant is disentitled to the costs of the proceedings prior to 24 May 2005 – excepting, as agreed, that the applicant is not entitled to the costs associated with the unsuccessful application made at the Directions Hearing on 28 February 2005.   

14.     The other matter that is relevant to costs is that the hearing was listed for two days in August 2005.  The applicant’s solicitors made an application for adjournment the day before the hearing.  This late application, and dealing with it on the first day of hearing, amongst other things, led to the matter requiring re-listing for a third day.  In my view the applicant is not entitled to the costs of the third day of hearing on 15 September 2005.

15.     The Tribunal’s General Practice Direction provides in relation to recoverable costs:

The Tribunal has the power under the Safety, Rehabilitation and Compensation Act 1988, the Seafarers Rehabilitation and Compensation Act 1992, the Freedom of Information Act 1982, the Mutual Recognition Act 1992 the Lands Acquisition Act 1989 to order or recommend that the respondent pay the costs, or part of the costs, of a successful applicant, or where the application has been instituted by the Commonwealth. Under the Safety, Rehabilitation and Compensation Act 1988, the Tribunal may also award costs to a person where the application has been instituted by the Commonwealth.

Unless the order determines otherwise, the costs payable may include:

witness expenses at the prescribed rate;

all reasonable and proper disbursements; and

75 percent of all professional costs, including counsel’s fees, which would be allowable under the Federal Court Scale.

Costs will be assessed on a party and party basis.

Costs may be agreed between the parties.  Where there is no agreement, a Registrar of the Tribunal will tax the bill, but may refer any question for the direction of the Tribunal.  Either party may apply to the Tribunal for a direction on any question related to costs, before the taxation is concluded.

16.     In accordance with these reasons, the Tribunal orders that the respondent pay the applicant’s costs, taxed if necessary by the District Registrar, excepting the costs associated with proceedings on 28 February 2005 and 15 September 2005.

I certify the 16 preceding paragraphs are a true copy of the reasons for the decision herein of Member M J Carstairs.

Signed:         Denise Burton
  Administrative Assistant

Date of Hearing on Costs         28 November 2005       
Date of Decision  23 December 2005
Counsel for the Applicant         Mr D O’Gorman
Solicitor for the Applicant          Gilshenan and Luton
Solicitor for the Respondent     Mr P Crethary, Dibbs Abbott Stillman