Ziade and Australian Postal Corporation (Compensation)
[2024] AATA 3162
•5 September 2024
Ziade and Australian Postal Corporation (Compensation) [2024] AATA 3162 (5 September 2024)
Division:GENERAL DIVISION
File Number(s):2019/7512
Re:Alexander Ziade
APPLICANT
AndAustralian Postal Corporation
RESPONDENT
DECISION
Tribunal:Mr S. Webb, Member
Date:5 September 2024
Place:Sydney
The Tribunal orders Australia Post to pay Mr Ziade’s reasonable party/party costs and disbursements in the proceedings up to 11 October 2023, as agreed or taxed. Thereafter, Mr Ziade is to bear his own costs.
...........…..... [SGD]................................................
Mr S. Webb, Member
CATCHWORDS
WORKERS COMPENSATION – costs – Calderbank offer of compromise settlement prior to hearing – decision not more favourable to the Applicant – limit on order for costs – costs not recoverable from date of compromise offer
LEGISLATION
Safety, Rehabilitation and Compensation Act 1988 s 67
CASES
Perry v Comcare [2006] FCA 33
Calderbank v Calderbank (1976) Fam 93; [1975] 3 All ER 333
Smallacombe & Anor v Lockyer Investment Co Pty Ltd & Anor [1993] FCA 169
Brennan v Comcare [1994] FCA 1147
REASONS FOR DECISION
Mr S. Webb, Member
5 September 2024
Alexander Ziade lodged two applications for review of decisions made by Australian Postal Corporation (Australia Post) in respect of claims for compensation arising from his previous employment as a delivery driver by Star Track Express Pty Ltd (Star Track): applications 2019/7512 and 2023/8320. The applications proceeded to hearing.
On 16 July 2024, the Tribunal issued a decision in the applications: Ziade and Australian Postal Corporation (Compensation) [2024] AATA 2586 (Decision). The Tribunal decided to vary the reviewable decision in application 2019/7512 and it affirmed the decision in application 2023/8320.
The parties were given time in which to make submissions addressing orders in respect of costs in application 2019/7512. Australia Post sought to limit recovery of costs by the Applicant up to the date on which it made an offer of compromise for the purposes of settlement without proceeding to a hearing. Mr Ziade asserts he is entitled to recover costs without being limited to the day on which he refused to accept the offer of compromise.
The matter is to be decided under s 67 of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act), relevantly:
(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 the responsible authority.
The Tribunal’s Decision to vary the decision under review in application 2019/7512 is in the following terms:
The decision under review in application 2019/7512 is varied to the extent that Star Track is liable to pay Mr Ziade compensation in respect of the 6 August 2019 ‘injury’ under s 14, s 16 and Division 3, Part II of the Safety, Rehabilitation and Compensation Act 1988 up to and including 6 November 2019.
The decision under review was in the following terms:
After careful consideration of all the evidence submitted in relation to your claim, I have accepted liability for a closed period under Section 14(1) of the SRC Act 1988 for “Soft tissue injury to the right shoulder from 6 August 2019 to 4 October 2019…
… having considered Dr Ness’ opinion, I hereby determine that Australia Post Group is not currently liable to pay compensation to you under Sections 16 & 19, of the abovementioned Act in respect of “Right shoulder and arm contusion”, (date of injury 08 August 2019) after 4 October 2019.[1]
[1] T41, folio 130.
As can be seen, the Tribunal’s Decision is favourable to Mr Ziade as Australia Post’s liability to pay compensation was extended from 4 October 2019 to 6 November 2019.
Australia Post submits that the Tribunal’s Decision is not more favourable than the terms put to Mr Ziade by Australia Post on 11 October 2023 in an offer of compromise to settle the dispute without a hearing. The offer was put in the following terms:
We are instructed to make the following offer of settlement for the Applicant’s consideration:
In AAT Application 2019/7512, the decision under review dated 1 November 2019 is varied only as follows:
1. The Respondent is not currently liable to pay compensation to the Applicant for medical treatment and incapacity for work under sections 16 and 19 of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) in respect of his accepted claim for ‘right shoulder and arm contusion’ sustained on 6 August 2019 (the injury) as at 6 November 2019.
2. The Respondent will pay the Applicant’s reasonable party/party costs and disbursements under section 67 of the SRC Act, as agreed or assessed.
The effect of the offer is that the “cessation” of liability with respect to the injury is extended from 4 October 2019 to 6 November 2019, being a period of 3 months from the date the injury was sustained.
The offer will remain open for a period of 7 days from the date of this letter.
Please note that, if this offer is not accepted, Australian Postal Corporation proposes to rely upon the terms of this letter on the question of costs in the event that the matter proceeds to hearing.
In particular, if the offer is not accepted and the Applicant does not achieve an outcome in the Tribunal proceedings which is materially better than the terms of Australian Postal Corporation’s offer, as set out in this letter, Australian Postal Corporation will, in due course:
a. oppose the Applicant being awarded costs on and from the date of this letter; and
b. apply to have any costs the Applicant would otherwise be awarded up to the date of this letter reduced by the amount of costs Australian Postal Corporation incurs from the date of this letter.
This offer is made in accordance with the principles of Calderbank v Calderbank (1976) and without any admission on the part of our client.
Mr Ziade did not accept the offer of settlement and the matter proceeded to a hearing on 28, 29 and 30 May 2024.
Australia Post relies on the 11 October 2023 letter in seeking to limit to that date orders under s 67(8) of the SRC Act for it to pay Mr Ziade’s party/party costs and disbursements in application 2019/7512, as agreed or taxed.
Mr Ziade opposes this application and urges the Tribunal to order Australia Post to pay his legal costs, as agreed or taxed. Mr Ziade argues the Tribunal’s decision is favourable to him, and it is no less favourable than the offer Australia Post made on 11 October 2023. In Mr Ziade’s submission, Australia Post permitted the litigation to continue after 11 October 2023 as it “could have made an "own motion" determination at any time prior to the hearing of the Application, thereby bringing the proceedings to an end” but chose not to do so. Mr Ziade argues it is inappropriate now to consider he was in a position to determine the risks and merits of proceeding with the hearing “having regard to the medical evidence only heard during the hearing”. He asserts there is no evidence he approached the proceedings or permitted them to continue in a manner which was frivolous or vexatious or which put Australia Post to costs unnecessarily. Mr Ziade observes he started “from a position of having compensation denied” and he had evidence to support “his application of injury arising out of the workplace thereby giving him an entitlement to be paid compensation” which he reasonably believed he would recover. For these reasons, in the context of beneficial legislation, Mr Ziade contends he should be entitled to recover his costs in the proceedings without orders being limited to the period prior to 11 October 2023.
Section 67 of the SRC Act sets out a code in respect to costs of proceedings. The primary rule in s 67(1) is that each party to proceedings under Part VI of the SRC Act ‘shall’ bear their own costs. The primacy of this rule is subject to operation of the section, including subsections (2) to (12) which specify circumstances where the primary rule might be displaced.
The discretion in s 67(8) to depart from the primary rule is broad and unfettered. The discretion is enlivened by an outcome in the particular proceedings that is more favourable to a claimant than the decision under review. Exercise of the discretion to alter the balance struck by s 67(1) is not determined by the preconditioning factor alone. The relevant circumstances should be considered, and a test of reasonableness applied with an eye to justice and fairness. In Perry v Comcare (Perry),[2] Greenwood J set out the matters which should be considered where the discretion in s 67(8) is enlivened:
76. … In exercising the discretion, the Tribunal ought have regard to the rule of primacy reflected in s 67(1), the circumstances of the case which gave rise to a decision enlivening the qualification upon s 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.
[2] [2006] FCA 33.
An otherwise successful applicant may be deprived of his or her costs of proceedings if it is appropriate to do so in the circumstances. In this context, a letter setting out an offer of settlement consistent with the principles enunciated in Calderbank v Calderbank [3] may be appropriately considered by the Tribunal in relation to an award of costs in particular proceedings. It is not controversial that the policy informing the discretion in s 67(8) in respect of a Calderbank offer requires the offer to be clear, precise, certain and capable of acceptance, leaving no reasonable doubt as to the nature and extent of what is being offered and presenting its recipient with a clear choice, namely, to settle on the specified terms or proceed to determination at hearing and assume the risk of not doing better.[4] The timing and duration of the offer are also relevant considerations.[5]
[3] (1976) Fam Law 93; [1975] 3 All ER 333.
[4] Perry at [49].
[5] Smallacombe & Anor v Lockyer Investment Co Pty Ltd & Anor [1993] FCA 169 at [38].
Considering these matters, I am satisfied the 11 October 2023 letter was clear and precise in its terms, including in respect of the risk non-acceptance posed to any order for costs. Mr Ziade was confronted with a clear choice. The timing of the offer was shortly prior to a Tribunal hearing in the proceedings, then listed to commence on 16 October 2023 (which was subsequently vacated). The offer was stated to be open for 7 days. I am satisfied this was a reasonable period for Mr Ziade’s lawyer to obtain instructions and reply.
The background to the proceedings and Mr Ziade’s claim are set out in the Tribunal’s Decision. Mr Ziade experienced shoulder symptoms and he claimed compensation. The claim was accepted, and Mr Ziade was paid compensation for a period. Importantly, Mr Ziade had long-standing physiological changes in his right shoulder and a history of right shoulder symptoms for which he obtained medical treatment which were not fully disclosed. Notwithstanding this, Mr Ziade obtained a decision in the Tribunal proceedings which was more favourable than the decision under review. However, the Tribunal decision was not materially better or more favourable to Mr Ziade than the offer of settlement Australia Post made on 11 October 2023. That being so, the risk to costs Australia Post clearly foreshadowed in the letter crystallised.
I have no reason to believe Mr Ziade was not fully apprised of the offer of settlement and the express risk to recovery of costs by his lawyer. No contrary assertion has been made and there is no material basis on which such a finding could be made. In these circumstances, it was for Mr Ziade to decide to accept the offer and conclude the matter or proceed to a hearing knowing the risk to his recovery of costs should he not obtain a more favourable outcome.
I do not accept, for Mr Ziade to act reasonably in assessing the prospects and risks he faced proceeding to a hearing, it was necessary for him to hear and assess medical evidence given orally at the hearing. At the time, Mr Ziade had a substantial body of medical material to consider when weighing his options, including expert reports by Dr Ness, Associate Professor Haber, Associate Professor McGill, Dr Bodel and Dr Kwong. Some of this material was favourable to him, some was not. Further medical materials were obtained after the settlement offer was made, namely, reports of Dr Duckworth. Dr Duckworth’s reports addressed the same issues as the other medical experts. The doctor’s reports buttressed other expert opinions without introducing novel or additional issues.
I am satisfied Mr Ziade acted reasonably in refusing the offer Australia Post made and, in consequence, the risks he accepted, including in respect of costs, are his to bear.
With regard to Mr Ziade’s submission Australia Post permitted the proceedings to continue by not making ‘an “own motion” determination, this cannot be accepted. While s 62 of the SRC Act authorises a determining authority to reconsider a ‘reviewable decision’ on its own motion, s 26 of the Administrative Appeals Tribunal Act 1975 restrict the powers of a decision maker once an application for review by the Tribunal is made, such that the decision under review ‘may not be altered otherwise than by the Tribunal on the review’ unless specific exclusions are met (which are not applicable in this case). Even if Australia Post had proceeded in the manner suggested by Mr Ziade, it is highly unlikely doing so would have brought the Tribunal proceedings to an end for the simple reason Mr Ziade had already refused to accept the terms of the offer made and, in that circumstance, it would have been open for him to argue the Tribunal’s jurisdiction was not exhausted or overtaken by such an own motion reconsideration decision.
The proposition Mr Ziade started from the position of having compensation denied is also not entirely accurate. Mr Ziade’s claim for compensation in respect of the right shoulder injury at the heart of these proceedings was accepted by Australia Post. A subsequent determination was made to refuse specific compensation at a point in time as Australia Post found the ‘injury’ had resolved. It was this issue which threaded the subsequent review actions and the proceedings in the Tribunal, and was determined in the Tribunal Decision relating to application 2019/7512.
Mr Ziade’s reference to Brennan v Comcare[6] in support of the assertion the SRC Act is beneficial legislation which should be construed and applied liberally does not assist his case. No issue of construction arises. The beneficial nature of the legislation is not firm ground on which to argue the Tribunal’s discretion to order costs departing from the primary rule in s 67(1) should be exercised in Mr Ziade’s favour, over the Calderbank offer of settlement he decided to refuse.
[6] [1994] FCA 1147.
I am satisfied it is appropriate under s 67(8) of the SRC Act to order Australia Post to pay Mr Ziade’s reasonable party/party costs and disbursements in the proceedings up to 11 October 2023, as agreed or taxed, when the Calderbank offer of settlement was made. Thereafter, Mr Ziade is to bear his own costs.
DECISION
The Tribunal orders Australia Post to pay Mr Ziade’s reasonable party/party costs and disbursements in the proceedings up to 11 October 2023, as agreed or taxed. Thereafter, Mr Ziade is to bear his own costs.
I certify that the preceding 24 (twenty-four) paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member
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Associate
Dated: 5 September 2024
Date of hearing: On the papers Counsel for the Applicant: Mr D Steiner Solicitors for the Applicant: Gerard Malouf & Partners Solicitor-advocate for the Respondent: Mr M Hawker Solicitors for the Respondent: Sparke Helmore
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