Sawyer v TAC [2002] VCAT 86

2. The parties costs in relation to the application for costs are reserved.

For the Applicant: Mr D Pulling of counsel instructed by Maurice

For the Respondent: Mr P Ryan, Solicitor, instructed by TAC Law

1. The applicant is a victim of a transport accident which occurred on 14 April 1999. The applicant made a claim to the respondent on 10 May 1999 and on 5 July 2001, the respondent determined that the applicant had a 5% whole person impairment as a result of injuries she received in the transport accident.

2. On 9 September 2001, the applicant lodged an application for review with this Tribunal. As a result of procedures prescribed by Part 4 Division 3 of the Transport Accident Act 1986 ("the Act"), the respondent held a telephone conference pursuant to s.78(4) of the Act on 5 December 2001. (I heard oral evidence on this point, as a result of the applicant raising a preliminary point which was not ultimately pursued). Subsequently, by a notice dated 17 December 2001, the Commission re-determined the applicant's level of whole person impairment at 21%.

3. The applicant does not wish to challenge this re-determination but seeks costs of the application that was issued in this Tribunal. The respondent submits that as a result of provisions contained in s.77(4) of the Act, under these circumstances there is no power in the Tribunal to award costs.

4. Section 77 of the Act reads as follows:

"(1) A person whose interests are affected by a decision of the Commission may, within 12 months after becoming aware of the decision, apply to the Tribunal for review of the decision.

(4) The Tribunal may fix a date for the hearing of an application but must not commence any proceedings in relation to the application until

(a) notice is received under section 80(2) that the Commission has re-affirmed the decision; or

(b) the Commission is deemed by section 80(3) to have re-affirmed the decision; or

(c) an application is made under section 78(5)".

5. The present form of s.77(4) as recited above came into operation on 1 August 2001 as a result of an amendment in Act No 84/2000 when a scheme was introduced to require the respondent to compulsorily reconsider its decisions after an application had been made to this Tribunal. That requirement was set out in s.78 of the Act :

"(1) The Commission must, within 28 days after receiving a copy of an application under section 77 for review of a decision of the Commission, reconsider the decision or give the applicant a notice under sub-section (2).

(2) For the purposes of reconsidering a decision, the Commission may, by notice given to the applicant, require the applicant to give further and better particulars about the reasons for the application to the Tribunal and such further information relating to the claim as the Commission requires.

(3) An applicant must comply with a notice under sub-section (2) within 90 days of being given the notice.

(4) The Commission must hold a conference or conclude the review within 28 days of receiving the particulars and information required under sub-section (2).

(5) If the Commission has not received the particulars and information required under sub-section (2) within 180 days of giving the notice, the Commission may apply to the Tribunal to have the proceedings dismissed or struck out".

6. It will be noted that s.79(1) and (2) of the Act was not altered as a result of the amendments which were made. Section 79 reads as follows :

"(1) If an applicant fails, without reasonable excuse, to give the further and better particulars or further information requested by the Commission or fails to give those particulars or that information within a reasonable time, the Tribunal may take the failure into account when making an order for costs in respect of the proceedings.

(2) The Tribunal may make such orders as to costs in respect of a proceeding under this Act as it thinks just, including an order requiring a representative of a party who appeared before the Tribunal to pay costs.

(3) This section is subject to sections 112 to 115 of the Victorian Civil and Administrative Tribunal Act 1998".

7. Section 80 provides the machinery by which the respondent can re-affirm, vary or revoke its decision. Section 80 reads as follows :

"(1) If, after reconsidering its decision, the Commission determines that the decision should be varied or revoked, it may vary or revoke the decision accordingly.

(2) Within 14 days of holding a conference or concluding the review under section 78(4), the Commission must give notice in writing to the applicant and the Tribunal that it has determined to -

(b) vary or revoke the decision as specified in the notice.

(3) If the Commission fails to comply with section 78(2) or 78(4) or fails to give notice under sub-section (2), the Commission is deemed to have determined to re-affirm the decision ".

8. By looking at the Act as it applied prior to 1 August 2001, it will be noticed that very significant changes were made to the method of reconsideration of decisions once an application was lodged at this Tribunal. Previously, the relevant parts of the Act read as follows :

"77(4) The Tribunal may fix a date for the hearing of an application but must not commence any proceedings in relation to the application until the expiration of 28 days after a copy of the application has been served on the Commission".

"78(1) The Commission must, within 28 days after receiving a copy of an application under section 77 for review of a decision of the Commission, reconsider the decision.

(2) For the purposes of reconsidering a decision, the Commission may, by notice given to the applicant, require the applicant to give further and better particulars about the reasons for the application to the Tribunal and such further information relating to the claims as the Commission requires".

"80(1) If, after reconsidering its decision, the Commission determines that the decision should be varied or revoked, it may vary or revoke the decision accordingly.

(2) The Commission must give notice in writing to the applicant of a determination to vary or revoke its decision".

9. Mr Pulling submitted that the power to award costs given to the Tribunal by section 79(1) and (2) of the Act was not altered by the amendment and that that section gave the Tribunal very wide power in review proceedings pursuant to s.77 of the Act. Section 77(1) was also not altered by the amendment. In TAC v O'Reilly [1998] VSCA 106; (1999) 2 VR 436, Tadgell J observed that the power to award costs in the case of proceedings for review by the AAT (the forerunner of VCAT) of decisions of the TAC was wide and general. His Honour stated :

"It is to my mind very clear that diverse and disparate powers of the AAT to award costs were generally not to be assimilated to those of courts of law. Moreover, so far as appears from its own decisions to which we have been referred, the AAT was never disposed to proceed as though they were. In particular, it seems perspicuously plain that the AAT's powers to award costs were not designed pre-eminently to create or justify any expectation by a successful party to be compensated by an order for costs against an unsuccessful party or otherwise. This was, in my opinion, especially so in the case of proceedings for review by the AAT of decisions of the Transport Accident Commission, notwithstanding the width and generality of the power to award costs conferred by s.79(2) of the Transport Accident Act in cases to which it applied".

10. Mr Pulling for the applicant submitted that save in the instance of an offer of compromise, the amendments to the Act which came into being on 1 August 2001 did not affect the wide and general discretion to order costs in respect of review proceedings pursuant to the Act by this Tribunal.

11. To support this proposition he relied on two extracts from Mr Cameron the Minister for WorkCover in his Second Reading Speech in Parliament on 5 October 2000. In those extracts the Minister stated :

"The bill contains some amendments that are designed to improve dispute resolution and ensure that, as much as possible, disputes can be resolved without the need for formal review by the Victorian Civil and Administrative Tribunal.

The Act currently requires the TAC to conduct an informal review of a decision within 28 days after an application for review by VCAT is lodged. It can be difficult for a claimant or their representative to provide TAC with appropriate evidence within 28 days so that the Commission can review its decision effectively. This results in the TAC being obliged routinely to sustain its original decision, shifting the onus for the disclosure of information associated with a review to VCAT and so increasing costs and prolonging disputes.

The bill enables TAC to use a more extensive process to conduct an informal review of decisions by allowing a longer period for the claimant to provide information. It also provides for a conference to try to resolve disputes before drawing on the resources of VCAT. If a dispute cannot be resolved informally, claimants can still proceed with a claim before VCAT".

12. Later on in his speech, the Minister continued:

"The amendments also make it clear that provisions of VCAT legislation that relate to the making of offers of compromise apply to reviews under the Transport Accident Act.

This will mean that if TAC makes an offer of compromise in relation to a review of impairment, then the applicant for the review will have to exceed the offer made or be required to meet the costs incurred by TAC after making the offer.

The VCAT legislation sought to apply these provisions when it was enacted, but it was not clear that the provisions applied in all cases as they were inconsistent with the provisions of section 79 of the Transport Accident Act, which enable VCAT to award costs at its absolute discretion.

This provision will be subject to the VCAT Act, in line with the original intention".

13. There were similar words used by Ms Gould, the Minister for Industrial Relations, in her Second Reading Speech in the Legislative Council on 31 October 2000.

14. However, Mr Ryan who appeared for the respondent pointed out that the Shadow Minister Ms Asher, in her speech of 25 October 2000, stated as follows :

"The bill also institutes a mandatory, informal review process prior to any appeal to the Victorian Civil and Administrative Tribunal (VCAT). There are mixed views on this, which generally fall into two categories : non-lawyers such as me think it sounds reasonable, but a number of people in the legal profession think it is a denial of process. We think the informal review process suggested by the TAC - we think but we do not know, because the minister will not give us the review - may well help to reduce costs for the TAC and add to the process rather than detract from it.

Another point I want to clarify concerns the issue of costs, particularly legal costs. The bill deals with the notion of controlling and/or reducing the legal costs and disbursements payable to solicitors as a result of action taken on behalf of persons who are injured in motor vehicle accidents. The general thrust of the discussion on the issue is that controls not only need to be there but need to be constantly reviewed to address the voracious behaviour of some solicitors acting on behalf of persons who are unfortunately injured in motor car accidents".

15. It is noted, that the Bill passed with bipartisan support in both Houses and the Minister thanked the Opposition for their overall support of the Bill. In my view, looking as the Speeches as a whole, it is impossible to discern from them any intention or otherwise to allow an applicant his or her costs in a situation such as the present. It is clear that the Act was amended for cost saving purposes, but whether or not an applicant was intended by the words used in the Speech to have his or her costs in this situation cannot be ascertained from the Parliamentary speeches.

16. Mr Pulling also submitted that s.77(1) was all empowering and if it was intended to remove the power of the Tribunal to award costs where TAC varied its decision as a result of s.78, s.80 and s.77(4) being the reconsideration process, the legislation would have contained explicit provisions. While s.77(4) did not contain explicit provisions relating to costs, it is abundantly clear on its wording that proceedings can only be commenced in the circumstances described in s.77(4)(a), (b) or (c).

17. As I observed during the hearing, if the words "that the Commission has re-affirmed the decision" were omitted from s.77(4)(a) of the Act, there would be no problem whatsoever in relation to this Tribunal awarding costs in a situation such as the present or conducting a hearing where the respondent had varied its decision as a result of a consideration but such variation was not to the applicant's satisfaction. It seems to me that those words have been deliberately inserted into the section and must be given an effect. Further, s.77(1) must be read as being subject to s.77(4).

18. From an examination of the Act as a whole, in my view, it is clear that to hear and determine an application for costs in this situation would be commencing and conducting a proceeding in a manner that is not prescribed by s.77(4)(a) (b) or (c). That section is very explicit as to the circumstances in which a proceeding can be commenced in relation to an application such as this. The meaning of "proceeding" was considered by Smart J of the Supreme Court of New South Wales in Blake v Norris (1990) 20 NSWLR 300 at 306 where his Honour stated :

"The defendant relied on the definition of 'proceeding' in the Shorter Oxford English Dictionary On Historical Principles, 3rd ed (1933) at 1677. He referred to part of that definition and relied on part of the second meaning given : 'A particular action or course of action; a piece of conduct or behaviour; a transaction. Usu in pl' and part of the third meaning given. I set out in full the third meaning :

'3.spec. The instituting or carrying on of an action at law; a legal action or process; any act done by authority of a court of law; any step taken in a cause by either party'.

Reference was also made to the definition in the Macquarie Dictionary. It is apparent from the meaning given in the Oxford Dictionary that 'proceedings' can mean either the action itself or a step taken in such action.

In Stroud's Judicial Dictionary, 5th ed, vol 4 at 2029-2035, some fifty-five instances are given of the use of the words 'proceeding' or 'proceedings' in legislation, rules of court or documents having legal significance. The meaning depends on the context in which the word is used. In some cases it is equivalent to 'an action' whereas in others it may mean a step in an action. Sometimes it may include a counter claim. The Oxford Companion To Law (1980) by Professor Walker states (at 1002-1003) that 'proceedings' is sometimes used as including, or meaning, an action or prosecution, and sometimes as meaning a step in an action. The word 'proceeding' is capable of such a variety of meaning that dictionary definitions as to its ordinary or natural meaning are not of much use. They tend to highlight the number of meanings which the word can bear.

Any assistance as to its meaning has to be derived from the statutory context and the objects of the legislation in question".

19. In my view, if anything is clear from the object of the amending legislation is that Parliament endeavoured to save costs and thus save any further proceeding. Thus, in my view, Parliament has intentionally taken away the power to claim costs in a matter such as this.

20. In Braeside v Brignell [1996] VicRp 3; (1996) 1 VR 17 Tadgell JA at p.20 considered the definition of "proceeding" in Chapter 1 of the Rules of the Supreme Court. He there stated :

"The new Ch. I contained and still contains in r.1.13 its own definition of 'proceeding' for the purposes of the rules, namely :

... any matter in the Court commenced by writ or originating motion or as otherwise provided by or under any Act or these Rules.

That definition, however, is not inconsistent with the definition of 'proceeding' contained in s.3 of the Supreme Court Act 1986. The Act and rules are intended to be complementary one to the other, and to operate in tandem, for the purpose of defining the civil jurisdiction of the Supreme Court and regulating the procedure to be followed in the invocation of the jurisdiction.

It appears to me to be clear that the word 'proceeding', as defined in s.3 of the Supreme Court Act 1986, is used as a generic expression to embrace what was formerly comprehended individually and respectively by the expressions 'action', 'cause' and 'matter'. The expression 'matter in the court' in the definition of 'proceeding' in s.3 refers on that assumption to a proceeding in the sense of a vehicle by which the jurisdiction of the court is invoked and not to the subject matter of a justiciable dispute. That conclusion is, I think, rendered inescapable by a consideration of the Supreme Court Act 1986 as a whole, and especially of a large number of sections therein containing a reference to a 'proceeding', in which the word is quite obviously used in the sense I have indicated".

21. In my view, the word "proceeding" as used in s.77(4) could not be construed in any other way other than "action", "cause" or "matter" as Tadgell JA did in Braeside's case.

22. It should be noted that the Act itself does not define "proceeding" and the Victorian Civil and Administrative Tribunal Act 1998 ("VCAT Act") pursuant to s.3 defines "proceeding" in a way that includes matters such as inquiry, compulsory conference, mediation and rehearing pursuant to the Guardianship and Administration Act but otherwise does not assist in the definition of "proceeding". In my view, having defined "proceeding" in this way in the VCAT Act, it is intended to have the wide meaning that Tadgell JA suggested it had pursuant to the Rules of the Supreme Court. It should further be noted, that the issue of costs is a substantive rather than a procedural matter (see Linton v TAC (unreported) 7 December 1998 VCAT Macnamara DP at p.7) and as such comes within the words "action, cause or matter" as used by Tadgell JA.

23. In response to Mr Pulling's submission, Mr Ryan suggested that s.79(2) should be read together with s.77(4). I agree with this submission, reading the Division in this way in my view avoids the alleged ambiguity which Mr Pulling suggested existed by the fact that the Tribunal's general power to grant costs was not affected by the amendments which were made. Looked at in this way, s.77(4) regulates the exercise of the power vested in the Tribunal pursuant to s.79(2) by staying the application and prohibiting the commencement of any proceeding in relation to the application until one of the three criteria in (a), (b) or (c) are satisfied. Until one of those three criteria are satisfied, the Tribunal's power in relation to an application such as this is strictly limited to the procedural step of fixing a date for the hearing of the application

24. Mr Pulling submitted that interpreting s.77(4) in a strict sense would lead to absurd results. He stated, in my view correctly, that on the interpretation suggested by the respondent, the Tribunal cannot strike out or dismiss or in any other way deal with the proceeding, even though the issues may have been resolved between the parties. In the event of an applicant not being satisfied with the respondent's re-determination, a further proceeding would have to be issued and again the applicant may strike the same problem. Finally, he submitted, it is simply not fair that an applicant who has properly issued an application in this Tribunal and being successful should not at least have an arguable case for costs. I do not disagree with what Mr Pulling has said, however, in my view, s.77(4) is clear on its face and, if it creates a situation like that described by Mr Pulling, it is undoubtedly very inconvenient for litigants and the Tribunal but nonetheless it must be something to which Parliament intended, particularly, as I have stated, the words "that the Commission has reaffirmed the decision" have been inserted in s.77(4)(a). If those words were to be removed, in my view, it would more than likely cure the problems to which Mr Pulling alluded. However, those words do appear in the section and they must be given a meaning accordingly rather than ignored.

25. In my view, the obvious prohibition against continuing the proceeding means, that unless a situation falls within the meaning of s.77(4)(a), (b) or (c), the Tribunal may not do anything further. Thus, once a certificate has been filed as in this case, pursuant to s.80(2) which redetermines the applicant's level of impairment, the proceeding will by operation of law become forever stayed. This is in line with what Macnamara DP considered in Tanfara v TAC (VCAT unreported 3 October 01 at p.2) when the Deputy President, referring to the previous s.78, stated:

"The operation of that review procedure was affected by s.78 of the statute, which then provided for an effective stay of 28 days upon the proceedings to enable the Commission to reconsider its decision before the matter proceeded further in the Tribunal".

26. Mr Pulling submitted that giving the interpretation that the respondent has submitted would have the effect of rendering s.79(1) irrelevant. However, when one looks at the provision contained in s.78(2), it becomes quite clear that if an applicant fails to comply with a notice given pursuant to that sub-section, then, it may be something to which a Tribunal could give consideration to on an application for costs by the respondent.

27. In my view, s.77(4) is clear on its face and that, in an application pursuant to Part 4 Division 3 of the Act, the Tribunal is forbidden from commencing any proceeding except as therein referred to. That must necessarily mean that any application for costs in these circumstances cannot be entertained by the Tribunal as it would be commencing a proceeding in relation to the application. Thus, the applicant's application for costs must be dismissed for want of jurisdiction.

28. While I have come to the conclusion which I have on what I believe to be a correct basis of law, in my view, it is a conclusion which is likely to lead to further difficulties both to litigants and to the Tribunal. Without being able to make a specific order on a file, it is going to be very difficult for the Registry staff at this Tribunal to determine whether or not that file is finished. Thus, it may stay on the active list of proceedings for a considerable period of time when that is unnecessary. An even greater problem is created to an applicant, when the applicant is dissatisfied with the re-determination by the respondent. Under those circumstances, the applicant would have no choice but to commence a further proceeding. He or she may find themselves faced with the same problem again and again and thus never be able to get their case on for hearing. Even though these are problems which give rise to grave concern, they are not problems that can be solved by this Tribunal because, in my view, the legislation is clear and unambiguous and, as a consequence, should be interpreted as it stands.