Comcare v Power

1. Save in relation to ground 3 of the notice of appeal, in respect of which each party should bear its or her own costs, the applicant pay half the respondent's costs as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT 1 Shiree Power is, or was at all relevant times, a Commonwealth employee. She claimed workers compensation from Comcare for an injury to her lower back and an adjustment disorder. Her entitlement to compensation was disputed but on appeal to the Administrative Appeals Tribunal her claims were largely accepted. Comcare appealed from the Tribunal's decision. Four grounds of appeal were pressed, which challenged the decision-making process in relation to both claims. I dismissed three grounds but held that the Tribunal's finding that the pain Ms Power experienced from the back injury contributed to a significant degree to the development of her adjustment disorder was infected by legal error. I made orders allowing the appeal in part and remitting the matter to the Tribunal for hearing on a limited basis. In my reasons for judgment I expressed some provisional views about costs but reserved the question to give the parties the opportunity to make submissions should they wish to argue for a different order. I foreshadowed making an order that Ms Power pay half of Comcare's costs excluding some particular costs which I considered wasteful. 2 On 15 January 2016 I received submissions from Ms Power's solicitors. Those submissions contained a proposal that orders be made to the effect that Comcare pay half of Ms Power's costs and that each party bear its or her own costs with respect to the appeal ground upon which Comcare succeeded (ground 3). 3 Ms Power noted that I had held that the Tribunal did not apply the correct test for determining whether Ms Power's employment had contributed "to a significant degree" to her adjustment disorder. Ms Power submitted that, as the error was "entirely one of the Tribunal" to which she had made no contribution, it would be "unfair [if] she [were] required to meet the financial burden of the Tribunal's error", particularly if she were ultimately successful on the re-hearing (the first submission). 4 Ms Power also submitted that on 4 December 2015, through her solicitors, she had indicated that she was prepared to resolve the appeal "on an 'in principle' basis" in which the Tribunal's decision in relation to her lower back injury would not be disturbed but that, by consent, the decision in respect of the adjustment disorder would be remitted to the Tribunal for further hearing (the second submission). 5 The first submission must be rejected. In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [61]-[62] Campbell JA (Young and Meagher JJA agreeing) observed: 61 It is an inevitable part of our legal system that on occasions a judge will act in error. If the error of the judge is not one that has been brought about by one of the parties … the costs of rectifying that error should, prima facie, be treated as one of the vicissitudes of litigation. Therefore, the costs of rectifying the error should prima facie follow the event. 62 This principle is well established in the basis upon which appellate courts make costs orders. Allegations that a judge has made an error make up the daily diet of the Court of Appeal. However, if such an allegation turns out to be correct, the fact that it was a judge who made the error provides no reason for the Court of Appeal to make no order for the costs involved in remedying that error. … The Full Court cited these remarks with approval in Vata-Meyer v Commonwealth of Australia (No 2) [2015] FCAFC 167 at [10]. While this is an appeal from an administrative tribunal, not a court, there is no reason why the principle to which Campbell JA referred in Jaycar would not apply equally to an appeal of this kind. 6 As Ms Power also indicated in her submissions, however, it is open to the Court on the application of an unsuccessful respondent to grant a costs certificate in respect of the appeal stating that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under the Federal Proceedings (Costs) Act 1981 (Cth) in respect of the costs incurred by the respondent in relation to the appeal. Section 6 so provides in relation to a "Federal appeal" that succeeds on a question of law. "Federal appeal" is defined in s 3(1) of the Act to include an appeal to this Court from the Tribunal. Ms Power sought such a certificate if her proposal were rejected. Ordinarily, I would be disposed to grant such a certificate in a case such as this. But for the following reasons, Ms Power's primary proposal should be accepted instead. 7 Despite the absence of evidence to support the second submission, there appears to be no issue that Ms Power's solicitors made an approach to Comcare to settle the appeal on the basis outlined in the submission but that Comcare was not prepared to do so. I gather it is for this reason that, in its own submissions on costs, Comcare agreed to Ms Power's proposal. 8 The Court has a very wide discretion with respect to costs. Section 43(2) of the Federal Court of Australia Act 1976 (Cth) states that "[e]xcept as provided by any other Act, the award of costs is in the discretion of the Court or Judge". I have some misgivings about the proposal. It may lead to further disputation about which portion of the costs should be attributable to the successful ground of appeal in respect of which the parties would bear their own costs. That was a course I sought to avoid by the order I foreshadowed. 9 Nevertheless, despite my misgivings, I am prepared to make orders to give effect to the agreement. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.