Comcare v Wuth

Federal Court of Australia (Full Court)|2018-04-18|Before: Mr P, Mr J, Perry J, Perry JJ

This case concerned the appropriate costs orders after Comcare partially succeeded in its appeal against a workers compensation decision. The Full Court held that each party should bear their own costs because each succeeded on one of two key issues that took similar time and effort, and because Comcare had abandoned a major argument on appeal causing the case to change complexion. The Court also ordered that on remittal to the Administrative Appeals Tribunal, the parties should not be confined to particular tables of the medical guidelines but could lead evidence on any tables enabling 'clinical judgment' assessment. Comcare's application for indemnity costs was refused because it failed to lead proper evidence.

The appeal is allowed in part.
Order 1 of the primary judge made on 27 April 2017 is set aside. In substitution, it is ordered that: a. The appeal is allowed. b. Decision 2 made by the Administrative Appeals Tribunal in application 2014/4007 on 9 December 2015, to set aside the appellant's decision and substitute another decision, is set aside. c. The matter is remitted to the Tribunal, differently constituted by reason of the expiry of the term of the presiding member, for reconsideration according to law. d. In reconsidering the matter: i. the Tribunal is to give the parties an opportunity to lead evidence and make submissions directed to the "clinical judgment" assessment methodology provided by Section 1.5 of the fifth edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment (AMA5); and ii. in so doing, the Tribunal is not to confine the parties to any particular table or tables of the AMA5.

INTRODUCTION 1 On 3 April 2018, we made orders allowing Comcare's appeal in part: Comcare v Wuth [2018] FCAFC 13 (Wuth (No. 1)). Order 2(a) of those orders also afforded the parties the opportunity to file written submissions as to the orders otherwise required to give effect to our reasons, and as to the costs below and on appeal, in the absence of agreement between the parties. 2 In the event, the parties were unable to reach agreement as to final orders and the appropriate orders as to costs. For the reasons set out below, final orders in the terms proposed by Comcare should be made, save that the parties should bear their own costs of the court below and on the appeal to this Court. 3 The issues on the appeal and their disposition were summarised in the reasons of Perry J in Wuth (No. 1) as follows: 34. On 27 February 2007 the respondent, Ms Nicole Wuth, suffered an injury, being a chronic daily headache, arising out of her employment with the Commonwealth Department of Finance and Administration (the Department). Comcare's liability to pay compensation under s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) is not in dispute. 35. Comcare appeals against the decision of a judge of the Federal Court dismissing its appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) from a decision of the Administrative Appeals Tribunal (the Tribunal), and allowing a cross-appeal by Ms Wuth (Wuth (FCA)). The issues before the primary judge concerned the quantum of workers compensation entitlements payable to Ms Wuth by way of incapacity compensation and permanent impairment compensation under the SRC Act. 36. Three issues are raised on the appeal: (1) the meaning of Net Weekly Earnings (NWE) in s 8(1) of the SRC Act for the purposes of calculating the quantum of workers compensation entitlements payable to Ms Wuth (Grounds 1, 1A and 2, amended notice of appeal); (2) whether the primary judge erred in holding that the Tribunal had power to assess the degree of permanent impairment suffered by Ms Wuth under s 24 of the SRC Act using its own lay "clinical judgment" (Grounds 4 and 5, amended notice of appeal); and (3) whether the primary judge erred in finding that the Tribunal did not deny Comcare procedural fairness in assessing, without prior notice, the degree of Ms Wuth's permanent impairment using its own "clinical judgment" by undertaking a comparison between her impairment and similar conditions with similar impairment by reference to rating Tables 13.2 and 13.3 in the 5th edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment (AMA5) (Ground 6, amended notice of appeal). 4 The Full Court allowed the appeal on Grounds 4, 5 and 6 of the amended notice of appeal. The appeal was otherwise dismissed.

SCOPE OF REMITTAL TO THE TRIBUNAL 5 As a result of the manner in which the appeal was resolved, the parties agree that the Tribunal's decision must be set aside and the matter remitted to the Tribunal for reconsideration according to law. As a part of that task, the parties agreed that it will be necessary for the Tribunal to afford the parties an opportunity to lead evidence and make submissions with respect to the "clinical judgment" assessment methodology in Section 1.5 of the 5th edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment (AMA5). The main point of difference between the parties is whether, as submitted by Ms Wuth, the Tribunal should afford the parties an opportunity to lead evidence and make submissions limited to whether Chapter 13 of the AMA5 (including Tables 13.2 and 13.3) enables the "clinical judgment" comparison to be undertaken, or whether, as submitted by Comcare, the Tribunal ought not to confine the parties to any particular chapter or tables of the AMA5. 6 We agree with Comcare's submissions on this issue. Comcare's suggested approach allows for the possibility that, if the expert evidence demonstrates that Tables 13.2 and 13.3 in Chapter 13 of the AMA5 do not enable a "clinical judgment" comparison, then as a matter of fairness the parties ought to be afforded the opportunity to lead expert evidence directed to whether any other tables or chapters of the AMA5 enable the "clinical judgment" comparison to be undertaken and, if so, the degree of impairment (if any) which should be ascribed to Ms Wuth's impairment.

3.1 The parties' submissions 7 On the question of costs, Ms Wuth submitted that Order 4 of the primary judge's orders awarding Ms Wuth her costs of the appeal from the Tribunal should be confirmed, and that Comcare should pay her costs of the appeal to the Full Court. 8 Comcare, on the other hand, proposed the following orders as to costs: 3. Order 4 of the primary Judge [sic] made on 27 April 2017 is set aside. In substitution, it is ordered that: (a) Ms Wuth is to pay Comcare's costs of the appeal; (b) Comcare is to pay Ms Wuth's costs of the cross-appeal. 4. Ms Wuth is to pay 50% of Comcare's costs of the appeal to the Full Court. 5. Ms Wuth is to pay Comcare's costs of filing and serving its written submissions, in compliance with order 2(a) made on 3 April 2018, on an indemnity basis. 9 In support of these orders, Comcare submitted that: (1) Ms Wuth defended the appeals to the primary judge and the Full Court even though it should have been apparent to her that Comcare would enjoy at least some degree of success in those appeals and despite the fact that she had not asked the Tribunal to proceed in the manner in which it ultimately assessed the claim (i.e. by reference to Tables 13.2 and 13.3 in Chapter 13 of the AMA5); and (2) even though "it might be said that the Tribunal proceeded on something of a frolic of its own", there is no reason to depart from the usual position that a successful party is entitled to its costs in circumstances where Ms Wuth nonetheless sought to defend the Tribunal's approach. 10 For these reasons, Comcare submitted that it should be awarded its costs of the appeal to the primary judge but did not oppose Ms Wuth receiving her costs of the cross-appeal to the primary judge. As to the Full Court appeal, Comcare submitted that it should be awarded 50% of its costs because the appeal was allowed in part, there were two key aspects of the case which broadly occupied the same amount of time and effort on the part of the parties, and Comcare was successful on one of those key aspects.

3.2 No order as to costs should be made 11 The Court has a broad discretion under s 43(2) of the Federal Court of Australia Act 1976 (Cth) when determining appropriate costs orders. That discretion is to be exercised judicially: Hughes v Western Australian Cricket Association (Inc) [1986] FCA 382; [1986] ATPR 40-748 at 48,136 (Toohey J). Ordinarily, costs will follow the event but, in some cases, there will be circumstances which justify some other order: see Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at 234-5 (Black CJ and French J). In this regard, it is well accepted that in exercising the discretion to award costs, the Court may have regard to the issues in respect of which each of the parties has been successful and apportion costs in this way: Shord v Commissioner of Taxation (No 2) [2018] FCAFC 27 at [18] (Siopis and White JJ). 12 We do not agree with Ms Wuth's submission that the order awarding her costs in the Court below should not be disturbed and that Comcare should pay her costs of the appeal to the Full Court. That submission fails to take account of the fact that Comcare was partly successful on the appeal against the primary judge's decision and the matter must, as a result, be remitted to the Tribunal. Furthermore, contrary to the suggestion in Ms Wuth's submissions, it was not the case that the appeal succeeded on a different argument which was not put to the primary judge. Rather, the appeal succeeded on an argument that assumed a different emphasis due to the abandonment by Comcare on appeal of one of its arguments below: Wuth (No. 1) at [88]. Moreover, while the Tribunal acted in breach of procedural fairness in using its own "clinical judgment" by undertaking a comparison based on Tables 13.2 and 13.3 without advance notice to the parties, nonetheless Ms Wuth had submitted before the Tribunal (although without reference to Tables 13.2 and 13.3) that it should undertake its own clinical evaluation: Wuth (No. 1) at [58] and [101]. Ms Wuth also chose to defend the Tribunal's decision in the Court below and on the appeal. 13 Nor do we agree with the orders sought by Comcare. Rather, we consider in all of the circumstances, that the interests of justice are best served by an order that each party should bear their own costs of the appeal and cross-appeal below and on the appeal to this Court. We make this finding for the following reasons. 14 First, each of the parties was successful in respect of one of the two key aspects of the case. 15 Secondly, as Comcare submits, the two key aspects of the case broadly occupied the same time and effort by the parties, including in written and oral submissions. 16 Thirdly, Perry J (with whose reasons, as well as those of Flick J, Siopis J agreed) held in Wuth (No. 1) that: 88. … both before the Tribunal and the primary judge, Comcare's arguments regarding Chapter 18 of the AMA5 and the application of Section 1.5 were intertwined. It was therefore in the context of finding that Chapter 18 of the AMA5 was intended to result in a principled qualitative (and not a quantitative) assessment, and that the Tribunal had therefore not misconstrued Chapter 18 of the AMA5, that the primary judge found that the Tribunal was entitled to use its own "clinical judgment" to assess Ms Wuth in accordance with Chapter 18 of the AMA5 (Wuth (FCA) at [76] - [79]). On appeal Comcare abandoned its argument regarding Chapter 18 of the AMA5. 17 As such, Comcare did not seek to press on the appeal a significant plank of its case before the primary judge on which it was unsuccessful. Furthermore, as Perry J also found, "[a]s a consequence, the argument regarding the Tribunal's application of 'clinical judgment' assumed a different emphasis on the appeal from that before the primary judge." (at [88]). Thus, while this is not a case where the successful party succeeded on a ground not argued at first instance, nonetheless Comcare's case assumed a different complexion with the abandonment of a previously intertwined argument. 18 Fourthly, as Ms Wuth submitted, it can be inferred that the issues litigated by Comcare on its appeal are of precedential value to Comcare. 19 Finally, Comcare sought an order for indemnity costs for the costs of preparing its written submissions dated 6 April 2018 in compliance with Order 2(a) made on 3 April 2018. No submissions were made by Comcare addressing the basis on which the order was sought. However, an email to Ms Wuth on 4 April 2018 was attached to Comcare's submissions foreshadowing this possibility in the event that the Court made orders consistent with Comcare's then proposed orders or made orders more favourable to Comcare. 20 However, the Court's orders made on 3 April 2018 affording the parties an opportunity to file submissions on the issue of costs did not provide for the parties to file evidence, and Comcare did not apply to vary those orders so as to grant leave for the parties to lead evidence on this issue. To receive the evidence in these circumstances would not accord with the requirements of procedural fairness. Nor, in any event, would an email unattached to, and unexplained by, any affidavit be a sufficient basis on which to make so serious an order. In those circumstances, the application for indemnity costs must be refused. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis, Flick and Perry.

Outcomeappellant

Disposition:

Appeal allowed in part; Tribunal's decision set aside and remitted for reconsideration; each party to bear their own costs of appeal and cross-appeal below and of appeal to Full Court

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