Transport Accident Commission v Coyle [2001] VSCA 236

Court of Appeal (Vic)|2001-12-19|Before: BROOKING, PHILLIPS and BATT, JJ.A.

Accident compensation - Transport accident - Commission's decision that degree of impairment unlikely to exceed 10% - Application for review - Decision confirmed on review - Earlier offer by Commission "to settle" upon applicant's withdrawing application for review, each party to pay its own costs - Whether "offer to settle" attracting an order for costs under s.112 - Whether s.112 applicable - Transport Accident Act 1986 ss.74, 77, 79, Victorian Civil and , , , Schedule 1, Items 92 and 93.

This is an appeal by leave under s.148(1)(a) of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") from an order of the Victorian Civil and Administrative Tribunal ("the Tribunal") constituted by a Vice-President. The order under appeal was made on 28 August 2001 and leave to appeal was granted on 26 October last. The hearing of the appeal has been expedited because of the importance, it is said, of the question raised, being the proper meaning and effect of s.112 of the VCAT Act in the context in particular of a review before the Tribunal of a decision of the appellant Commission under the Transport Accident Act 1986 ("the TAA").

The respondent was involved in a transport accident on 26 February 1996. On 21 May 1996 she made a claim under the TAA and on 31 May the appellant accepted the claim "for medical and related expenses". Two years later, on 7 May 1998, the appellant wrote to the respondent adverting to the possibility of her being entitled to an "impairment benefit" and inviting her to submit a medical report "to assist [it] in assessing whether" she was so entitled. Under the TAA an impairment benefit is payable when the victim of a transport accident is assessed as having a degree of impairment which is more than 10 per cent: see s.47 as to lump sum and s.48 as to periodic payments (the amount of the payment depending upon each percentage degree of impairment over 10).

In response to the appellant's letter, the respondent submitted, it appears, a report dated 18 August 1998 from her physiotherapist, one Sandor. Mr. Sandor described the respondent's injuries as having "improved dramatically" and her long term prognosis as "good" and, although recognising "the chance of recurring

discomfort in her neck, shoulder and upper back", he opined that such discomfort "should be easily controlled by a few sessions of physiotherapy". Not surprisingly when the appellant replied by letter dated 10 September 1998, it was in part as follows:-

"On the evidence available to TAC, it appears that you have no entitlement to impairment benefits because it is considered that you would not have a permanent impairment of more than 10%."

In September 1999, the respondent filed notice of application for review by the Tribunal and that matter was heard in March 2001 by Deputy President Galvin. On 30 March, the Deputy President made an order affirming the decision of the appellant. The Deputy President concluded his comprehensive reasons for decision as follows:-

"In the result, the only impairment found to exist is 4% in respect of cervical spine and 5% in respect of the right shoulder. The [Commission's] decision is therefore affirmed."

Meanwhile, a year previously, on 14 March 2000, the appellant had forwarded to the respondent a formal proposal to end the proceeding initiated by the respondent before the Tribunal. That proposal was in these terms:

"Take Notice that the Respondent offers to settle the Application for Review on the following basis: 1. The Applicant withdraw her Application for Review. 2. Each party bear their own costs."

The appellant's notice went on to declare that the offer was open for 14 days and that, if not accepted, the offer would be used on costs[1]. Obviously that "offer to settle" was not accepted by the respondent and accordingly, when the Deputy President delivered his decision on 30 March 2001, affirming the appellant's earlier decision, the appellant sought costs of the application as from 14 March 2000, the date of its "offer to settle". In making the application the appellant relied upon s.112 of the VCAT Act which in certain circumstances authorises an order for costs in favour of the party making an offer to settle which was not accepted.

The matter was listed for further hearing on 6 August and it was heard by Judge Duggan, a Vice-President of the Tribunal, because previous decisions of Tribunal members about the effect of s.112 were thought to be in conflict. On 28 August 2001, his Honour refused the application for costs, holding the so-called offer to settle was not an offer within the contemplation of s.112 with the result that that section had no application. It is from that order refusing costs that the appellant now appeals, contending that his Honour erred in concluding that s.112 had no application.

It is convenient to set out s.112 in full. It reads:-

"112. Presumption of order for costs if settlement offer is rejected

(1) This section applies if-

(a) a party to a proceeding (other than a proceeding for review of a decision) gives another party an offer in writing to settle the proceeding; and

(b) the other party does not accept the offer within the time the offer is open; and

(c) the offer complies with sections 113 and 114; and

(d) in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.

(2) If this section applies and unless the Tribunal orders otherwise, a party who made an offer referred to in sub-section (1)(a) is entitled to an order that the party who did not accept the offer pay all the costs incurred by the offering party after the offer was made.

(3) In determining whether its orders are or are not more favourable to a party than an offer, the Tribunal-

(a) must take into account any costs it would have ordered on the date the offer was made; and

(b) must disregard any interest or costs it ordered in respect of any period after the date the offer was received."

Sections 113 and 114 then proceed to describe what is required in relation to an offer to settle within s.112(1)(a), how it is to be made and how accepted, while s.115 describes the consequences if such an offer is accepted and then not complied with by the offeror. None of this is of any immediate significance; in particular it was not in dispute that such formal requirements as are found in ss.113 and 114 were complied with.

What is in dispute on this appeal is whether s.112 was called into play by the "offer to settle" made by the appellant on 14 March 2000. If the appeal succeeds, the appellant seeks only to have its application for costs remitted to the Tribunal for consideration upon the basis that s.112 does apply, s.112 creating an entitlement to costs subject only to the exercise of the discretion created by sub-s.(2) to order otherwise. The appellant does not seek on this appeal to explore the exercise of that discretion and indeed it advanced no argument in that regard.

The respondent did at one stage of the argument submit that the learned Vice-President had in fact exercised the discretion conferred by s.112(2), exercising it adversely to the appellant, but in my view that submission could not be made out. In my opinion his Honour made it perfectly clear in his reasons for decision that he was refusing the appellant's application for costs, not in the exercise of the discretion conferred by s.112(2), but solely on the ground that s.112, upon which the appellant based its application, had no operation in this instance because the "offer to settle" made on 14 March 2000 was not an offer within the meaning of the section. For the reasons I shall give, I think with respect that that was error.

There is one problem affecting the operation of s.112 in this particular instance, which is of only transient significance. In the VCAT Act s.112 appears in context with s.109, both these sections dwelling in the same division of the statute, headed "Costs". Section 109 commences thus:-

"(1) Subject to this Division, each party is to bear their own costs in the proceeding."

Section 112 is readily understood as containing one of the qualifications made relevant by the opening words of s.109(1), "Subject to this Division". Indeed s.109 goes on to make its own modifications to the general rule in sub-s.(1) in that sub-s.(2) expressly authorises the Tribunal to make an order for costs in favour of one party against another, while sub-s.(3) promptly qualifies the generality of that provision by stipulating that the Tribunal may make such an order "only if satisfied that it is fair to do so, having regard to" the various things then enumerated. These include, not surprisingly, the conduct of the proceeding by one party to the disadvantage of the other unnecessarily and the making by a party of a claim "that has no tenable basis in fact or law", but they include also "the nature and complexity of the proceeding" and, finally, "any other matter the Tribunal considers relevant". Subject to all that - and I would add s.112 - s.109(1) makes a general statement, each party is to bear its own costs.

I mention s.109 in order to draw a contrast. Under the TAA, an application to the Tribunal to review a decision of the Commission is authorised by s.77, the first section in a division headed "Reviews". Little more is then said about the proceeding before the Tribunal because, once the application for review is expressly authorised, the TAA becomes an "enabling enactment" within the meaning of the VCAT Act (see s.3) and the Tribunal takes jurisdiction, called "review jurisdiction", accordingly (see s.42). It is the VCAT Act which then regulates the procedure on review, and in particular Part 4 which contains the division headed "Costs". But the generality, indeed the simplicity, of the foregoing is severely qualified by s.159 of the VCAT Act_,_ which reads:-

"If a provision of this Act, the regulations or the rules is inconsistent with a provision of an enabling enactment, the provision of the enabling enactment prevails to the extent of the inconsistency."

And in the TAA there is a provision which on the face of it conflicts with s.109 of the VCAT Act. I refer to s.79. By s.79(2) it is provided:-

"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."

Such a provision would appear to displace s.109(1), making other and inconsistent provision, which prevails by reason of s.159. In this instance, however, the conflict is more apparent than real; for Item 92 of Schedule 1 to the VCAT Act itself, in making special provision for the operation of the VCAT Act in respect of a number of other special statutes including the TAA, specifically declares that nothing in s.109 applies to a proceeding under the TAA.

What then of s.112? Item 93 of Schedule 1 makes specific provision for that section too. It reads:

Despite section 112(1)(a), sections 112 to 115 apply to a proceeding for review of a decision under section 77 of the Transport Accident Act 1986."

It will have been observed that s.112(1)(a) applies only in relation to "a proceeding (other than a proceeding for review of a decision)"[2] and those words of exclusion undoubtedly describe the respondent's proceeding before the Tribunal. But that is of no consequence in this instance when those very words of exclusion are themselves so plainly negatived, by Item 93, in relation to a proceeding for review under s.77 of the TAA. The way is therefore open for the operation of s.112 in relation to the present proceeding brought by the respondent in the Tribunal, unless s.112 should be taken as inconsistent with the provision made by s.79(2) of the TAA as to costs, and on that account denied operation by s.159 of the VCAT Act. In my opinion that is not the case.

I say that for these reasons. First and foremost, if it were so I find it difficult to see what operation at all could be given to Item 93 of the schedule. In Item 93 the VCAT Act provides expressly for the way in which s.112 is to operate in relation to a review proceeding under s.77 of the TAA and it is not to be supposed that in so providing the Parliament must have regarded the next but one section in that very statute as being such as to deny application altogether to s.112 to such a review proceeding. If it were so, why the express provision made by Item 93? Secondly, I doubt that s.159 is of any assistance because the contrast is not between a provision made by the VCAT Act having general application and a particular provision found in the special Act having more specific operation; for while s.112 might be characterised as a provision having application generally whenever the VCAT Act applies, the contrast here is between the provision made by s.79 of the TAA, the special Act, and the very specific provision made in respect of s.112 by the VCAT Act itself. Item 93 provides in effect for the operation of s.112 in relation to a review proceeding under s.77 of the TAA. Thirdly, even if s.159 were to be called in aid, it might be that s.79(2) of the TAA does not make a provision which is inconsistent with s.112 of the VCAT Act, and s.79(2) should be understood as in substitution, not for s.112, but for s.109 (which, according to Item 92 of the schedule, does not apply): compare the previous legislative regimen considered in T.A.C. v. O'Reilly[3]. After all, s.79(2) appears only to confer power and authority regarding costs, and then in the most general terms, and it might not then be inconsistent for s.112 to make special provision for costs after an offer to settle. Such a scheme is common enough these days and if s.112 may sit with s.109 (of the VCAT Act) why should it not also sit with the much more generally expressed s.79(2) (of the TAA), even though there is nothing in s.79 to mirror the opening expression in s.109? There is no need to pursue this, however, in view of the consequences already described as flowing from Item 93 in the schedule to the VCAT Act.

Accordingly, and if only by reason of Item 93, I see no difficulty in treating s.112 as having operation, if called into play, in relation to a review proceeding such as this under s.77 of the TAA. Indeed nothing was said below on that score, either way: the parties, and so the learned Vice-President, proceeded upon the footing the question was whether s.112 was in fact called into play by the offer made by the appellant on 14 March 2000, not whether it was available to be called into play. No doubt that was because by the time of the hearing on costs, on 6 August 2001, s.79 of the TAA had been amended to contain this further subsection:-

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

On the face of it at least that made the position perfectly plain.

It was only on this appeal that the respondent took the point that the new sub-s.79(3), which was introduced by s.27(4) of the Transport Accident (Amendment) Act 2000[4], came into operation with effect only from 29 November 2000, the day after the Royal Assent, and thus after the appellant made its offer on 14 March. Respondent's counsel then submitted that s.79(3), as subsequent legislation, could have no effect in governing the consequences of the offer already made. In answer, Mr. Maxwell, not shrinking from the prospect of according to the new subsection retrospective operation, submitted that for once such an operation was fully justified, given the existing provision in Item 93 of the schedule to the VCAT Act, which for present purposes made the same provision as did s.79(3) - and he called in aid the Parliamentary Debates in which the minister said that the new subsection was such as to "make it plain" that s.112 applied to a proceeding for review under s.77 of the TAA.[5]

Were it necessary to do so, I would accept the submission made by Mr Maxwell, but I think that s.79(3) was itself not necessary, save for the sake of removing doubt. In my opinion, for the reasons already given, it was already the case, before 29 November 2000, that s.112 was capable of being called into play on a proceeding for review under s.77 of the TAA - and so was capable of governing the consequences of the offer made on 14 March 2000, without any need to refer to the subsequently enacted sub-s.(3) of s.79. As I see it, the new s.79(3) was simply declaratory.

Was s.112 called into play by the offer made?

The principal submission of the appellant on this appeal was that the offer in writing made on 14 March 2000 was an "offer to settle" the proceeding instituted by the respondent before the Tribunal. That being so, the argument ran, all of the conditions laid down by s.112(1) for the application of the section were satisfied; for the respondent did not accept the offer within the time it was open, the offer complied with ss.113 and 114 (which was not in dispute), and, as the decision of the Commission was itself affirmed by the Tribunal, it must have been the case that the orders made by the Tribunal were "not more favourable to [the respondent] than the offer". It followed, said counsel, that s.112 applied and accordingly, by virtue of s.112(2) the appellant was "entitled to an order that [the respondent] pay all costs incurred by [the appellant] after the offer was made" - that is, 14 March 2000. As I said earlier, the appellant accepted that that entitlement was subject to the discretion conferred upon the Tribunal by s.112(2), to order otherwise, but the exercise of that discretion was not in issue on this appeal. If the appeal succeeded, that was for the Tribunal to consider when the application for costs was remitted to it.

In substance, the only point at which the respondent took issue with the foregoing was in the characterisation of the offer made on 14 March 2000 as "an offer ... to settle the proceeding", within the meaning of s.112(1)(a). The submission made before the Tribunal, and accepted by the learned Vice-President, was that an offer to settle within the section necessarily contained some element of compromise and that there was no such element of compromise in the offer made on 14 March, that the respondent should simply withdraw her application for review, each party paying its own costs. In the course of his reasons, his Honour referred to the different views of Deputy President Coghlan and Deputy President McNamara respectively in Elbat Mekaeel v. Transport Accident Commission[6] and Linton v. Transport Accident Commission[7] on the one hand and, on the other hand, of Mr. Robert Davis, a member of the Tribunal, in El-Badawi v. Transport Accident Commission[8]. In the first two cases, the view was apparently taken that an offer to settle, within the meaning of s.112(1)(a), need contain no element of compromise; in the third, the contrary view was expressed, and it was that which his Honour adopted on this occasion.

So far from containing any element of compromise, as his Honour saw it the offer made on 14 March was no more than "curial tactics", serving to cast the respondent, as applicant, into a dilemma in that, upon the making of the offer, she was faced with an election either to abandon the very application for review which s.77 of the TAA plainly enough authorised or alternatively to proceed with that application but only at the risk of an order for costs under s.112(2) (itself a very different provision for costs from that made by s.79(2) of the TAA).

In elaborating upon this dilemma, his Honour pointed to what he called "the unusual features of this purported offer of settlement and the context in which it was delivered", features which he particularised as follows: that the reasons for the administrative decision under review "had not been communicated to" the respondent and "in respect of [them] she had had no opportunity to make submissions or indeed to be heard at all"; that the decision below "contained no findings of fact or reasoning for the conclusion adverse to her" (which respondent's counsel interpreted as meaning adverse findings affecting her credit); that there was no way in which the respondent "could make any intelligent assessment of the decision"; and, finally, that the proposal was made in proceedings which were not an "adversarial contest in which the commission is entitled to engage in curial tactics". This last was a quotation from the judgment of Tadgell, J.A. in TAC v. Bausch[9] but, with respect, what his Honour said there was not, I think, said in relation to the operation of s.112. It may well be, as Tadgell, J.A. indicated, that in a proceeding like this the Commission should regard itself as not simply an adversary, but one with obligations and responsibilities going beyond such a role; but that does not bear upon the entitlement or otherwise of the Commission to make an offer under s.112 or the nature of such an offer.

Nor, to my mind, do the "unusual features" to which his Honour drew attention in his reasons for decision bear directly upon the nature of the offer which must be made if s.112 is to be called into play in a given case. Rather, they bear perhaps upon the exercise of the discretion which is conferred by s.112(2). Thus, if an offer within the meaning of s.112(1)(a) is made in circumstances where the party to whom the offer is made has no opportunity of weighing or assessing the offer it might be that the Tribunal, in the exercise of the discretion conferred by s.112(2), would be minded to order "otherwise", thereby denying the offeror's entitlement to an order for costs under the section (although such a decision would have to be taken only in the light of all of the relevant circumstances, not just some of them).

More important, I think, to the argument about the nature of an offer within the meaning of s.112(1)(a) is the consideration that if one party can make an offer as was made here, that the matter be resolved simply by the other party's withdrawing its claim on terms that each party pay its own costs, a simple means is provided, in an ordinary case, of circumventing what otherwise would be the position, laid down by s.109 in a case to which s.109 applies. (That perhaps is one reason why in terms s.112(1)(a) applies only to a proceeding other than by way of review.) Section 109 provides that, as a general rule at least, each party is to bear its own costs; yet if the appellant is correct here, by an offer that a claimant simply withdraw its claim on terms that each party pay its own costs, the applicant can be put at risk that, if he or she proceeds with the claim and fails, the general rule in s.109 is displaced by the more particular provision made by s.112(2) in favour of the offeror. Yet nothing more would appear to have been achieved by such an offer than the reiteration by the offeror of that party's primary position - a denial that the applicant has any case.

It was reasoning such as that which led the courts in New South Wales to insist, when an offer of compromise is made, that it contain a genuine element of compromise if, upon its non-acceptance, there was to be a penalty in costs as provided by the rules. Thus in Tickle v. Trifleska Pty. Ltd.[10] the plaintiff made an offer to settle for the whole amount claimed plus interest and, upon subsequently obtaining judgment to that effect, applied for indemnity costs as provided for by the rules. The application was refused, Rogers, C.J. Comm D. saying[11]:-

"Unless circumstances are wholly exceptional a demand for payment to the plaintiff of everything, to which it may possibly be entitled, hardly falls in the category of the compromise. It is true, as Mr Campbell pointed out, that there are difficulties in cases of a claim for liquidated damages when one is called upon to formulate an offer of compromise. He suggested that it was inconceivable that a court should be required, in the circumstances of Pt 52, r17(4), to have to decide in each and every case whether an offer represented a bona fide compromise. With respect I do not think it is inconceivable at all. What the court is invited to do is to determine whether, in the totality of the circumstances, the offer by the plaintiff represented any element of compromise or whether it was merely, yet another, formally stated demand for payment designed simply to trigger the entitlement to payments of costs on an indemnity basis. It was never in the minds of the draftsmen of the rule, or the members of the Rule Committee responsible for the passing of this rule, that Pt 22 should be utilised simply as a statutory demand which, other circumstances being equal, will automatically entail the payment of costs on an indemnity basis."

This was applied in Hobartville Stud v. Union Insurance Co.[12], where Giles, J. was faced with an offer to compromise for all of the plaintiff's claims, less only one dollar. His Honour said[13]:-

"Compromise connotes that the party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so."

Like reasoning can be seen in Quirk v. Bawden[14]. It is unnecessary for present purposes to consider whether an offer to compromise which makes no discount at all on the plaintiff's position, or indeed a defendant's, can ever lead to the infliction of the costs penalty provided by the rules upon its non-acceptance[15]. Mr. Maxwell submitted simply that the cases on offers of compromise should be distinguished on the ground that here, in contrast, the statute expressly required no more than "an offer in writing to settle the proceeding".

It may be observed that in the cases to which I have just referred, judges sometimes used the expression "offer to settle" apparently as equivalent to "offer of compromise", and for my own part I am troubled by allowing that a party, particularly a party in the position of the Commission, may cast upon an applicant for review the costs penalty specified in s.112(2) by such a simple means as was adopted in this instance: that is, an offer in writing, at an early stage of the proceeding, that the applicant withdraw on terms that each party pay its own costs. None the less, for the reasons I shall give I am now persuaded that that is just what Parliament has provided.

There is perhaps some cause in this instance for supposing that the offer to settle, which was made on 14 March 2000, was not altogether free of any element of compromise; for under s.74 of the VCAT Act, an applicant may withdraw an application before it is determined by the Tribunal only by leave of the Tribunal and then only on the terms specified in s.74(2), which inter alia expose the applicant to the possibility of an order for the payment of costs to all other parties. The offer that was made by the appellant on 14 March 2000 was, no doubt, that the applicant should be permitted by consent to withdraw without any such penalty as to costs as might be derived from s.74(2)(b). I accept that it must be a moot point whether the offer of 14 March did on that account contain some element of compromise, but I need not pursue it.

What is critical, I think, is the use made of the word "settle" in other and neighbouring sections of the VCAT Act. As Mr. Justice Batt pointed out in the course of argument, s.83(2)(b) describes one function of a compulsory conference as being "to promote a settlement of the proceeding", and s.84 authorises the Tribunal to require the personal attendance at a compulsory conference of the party personally or "a representative who has authority to settle the proceeding on behalf of the party". In s.90, the mediator must notify the Tribunal if the parties "agree to settle a proceeding as a result of mediation", which means no more than that the mediation has been successful. By s.93, the Tribunal is authorised to make "any orders necessary to give effect to the settlement" if "the parties agree to settle a proceeding at any time". In all of these sections, it cannot be the case that the word "settle", or its derivative "settlement", is used to require some element of compromise; it would surely be enough, in any of these cases, if one party were to concede everything and the other party were to succeed wholly. And according to the dictionaries the word "settle" can wear a meaning that imports no element of compromise.[16] For example, in Black's Law Dictionary (7th ed.) the meaning of "settlement" is given as simply "an agreement ending a dispute or law suit".

In context it is difficult to suppose that in s.112 the word "settle" is used with any different meaning from that with which it has in the earlier sections. If this means that a party in the position of the appellant here can, by means of such an offer as was made on 14 March on this occasion, cast upon an applicant before the Tribunal, in a case to which s.109 applies (or as here a case to which s.79(2) of the TAA applies), a different regimen as to costs, then so be it: as Mr. Maxwell said, that is the provision made by Parliament and we are bound to give it effect. The harshness of such a result is, of course, mitigated by the very discretion which is conferred upon the Tribunal in s.112(2). As already indicated, it may be that in this instance it will be by means of that discretion that the Tribunal can give effect to such "unusual features" of the case as weighed with his Honour and to which I have referred above[17].

I do not mean by that passing remark to indicate that all of those "unusual features" to which the Vice-President referred are necessarily relevant to the exercise of the discretion under s.112(2): we have not been called upon to express any opinion upon what is or is not relevant and I therefore refrain from doing so. Nor should I be taken as indicating that there must be harshness in this case if the discretion in s.112(2) were not exercised in favour of the applicant. Mr. Maxwell made a detailed submission about the course of events here, pointing to the lack of information upon which the Commission was bound to proceed in reaching its determination in the first place (for want of any other medical material than the physiotherapist's report) and the fact that medical reports were only forthcoming from the applicant in May 2000, some two months after the offer was made in March. As for the difficulty facing the respondent, as applicant, in understanding the reasons behind the Commission's decision, Mr. Maxwell was able to point to the detail in the opinion of the physiotherapist which was very encouraging about the respondent's condition and which was plainly relied upon by the Commission in making its determination of the applicant's degree of impairment.[18]

Mr. Graham, for the respondent, sought to counter this line of reasoning but, in the end, I think he accepted that the difficulty facing the respondent, as applicant, lay in the determination that her degree of impairment was not likely to exceed 10 per cent. It was the absence of any greater particularity that must have led her, he submitted, to be uncertain about the strength of the case against her: was she facing, for instance, a determination of a nine per cent degree of impairment, or only something in the order of, say, two per cent? But here the argument for the respondent struck another difficulty; for there is nothing in the TAA which requires the Commission to make an assessment of the degree of impairment in a case like the present. Acting under s.46A(1), the Commission was not bound to determine the degree of impairment of the person who was injured unless the victim "appears to the Commission to be or to be likely to be entitled to an impairment benefit", and as the Commission considered, on the basis of the physiotherapist's report, that the respondent "would not exceed 10 per cent", s.46A(1) was not called into play. The new provision, now found in sub-s.(1A) entitling a person who is injured as a result of a transport accident to apply to the Commission for determination of the degree of impairment, is a late amendment and, in any event, no application under it was made by the respondent on this occasion.

But the matters I have mentioned in the last two paragraphs, if relevant at all, go to the exercise of the discretion conferred upon the Tribunal by s.122(2) and as such they call for no resolution by us. If I am right in the construction I have placed upon the expression "offer to settle" in s.112(1)(a), then the exercise of the discretion conferred by sub-s.(2) is perhaps the only means available to the Tribunal of relieving against any harshness in the operation of s.112, and on this appeal we are not required - or indeed invited - to express our opinion about the exercise of that discretion in this instance. Such a discretion can of course be exercised properly only in the light of all the relevant facts and circumstances and in this case the exercise of the discretion, if invoked by the respondent, remains something for the Tribunal when the application for costs is remitted to it for further hearing.

For the reasons I have given, I think that we should accept the submission made by Mr. Maxwell, that the offer made on 14 March 2000 was an offer in writing to settle the proceeding within the meaning of s.112(1)(a). As the learned Vice-President was of the contrary view, his decision, rejecting the appellant's application for costs, is affected by appealable error; the appeal should be allowed, the order refusing costs set aside and the appellant's application for costs remitted to the Tribunal for further hearing and determination. As it was Deputy President Galvin who determined the respondent's application for review on 30 March 2001, I think it would be appropriate (as Mr. Maxwell submitted) if it were to be he who now heard

and determined the appellant's application for the costs of that application, subject of course to any further or other direction by the President of the Tribunal. The costs of this appeal have already been agreed: we were told that they are being paid by the appellant, whatever the outcome.

I have had the benefit of reading the reasons for judgment of Phillips, J.A.. I agree that the order he proposes should be made and I agree with his Honour's reasons.

I would add that it might be said that a question arises in relation to s.74(2)(b), not merely s.112, of the VCAT Act whether it was, by virtue of s.159 of that Act, inapplicable to the particular offer the subject of this appeal; but I do not think that that is so. For it seems to me that s.74(2)(b), rather than dealing with the content of a costs order, is an empowering provision, authorising the Tribunal to award costs against an applicant after an application has been withdrawn, an order the authority for which might otherwise have been in doubt.

[1] The appellant's notice referred expressly to the appellant's using the offer on costs "in accordance with" s.112 of the VCAT Act, and Schedule 1, Clause 93.

[5] In the Legislative Assembly on 5 October 2000, Hansard, vol.448 p.939. In the Legislative Council on 21 November 2000 the subsection was said to be such as "confirms" the application of s.112: see Hansard, vol.449 p.1459.

[15] Compare Maitland Hospital v. Fisher (No.2) (1992) 27 N.S.W.L.R. 721. In relation to offers of compromise, see also the unreported cases of McKerlie v. State of New South Wales [2000] N.S.W.S.C. 1159, Bishop v. State of New South Wales (Supreme Court of New South Wales, Dunford, J., 17 November 2000), Chapman v. Wickman Ryan Pty. Ltd. [2000] F.C.A. 536, Forbes Services Memorial Club Ltd. v. Hodge (Court of Appeal (N.S.W.), 8 March 1995) and Dr. Martens Australia Pty. Ltd. v. Figgins Holdings Pty. Ltd. (No.2) [2000] F.C.A. 602.

[16] Butterworths Australian Legal Dictionary (1997) "settlement", contrast "compromise" and "offer of compromise"; Oxford English Dictionary (2nd ed.) "settle" (meanings 33 and 34), contrast "compromise" (meanings 3 and 4), Macquarie Dictionary (1981) "settle" (meaning 16), Black's Law Dictionary (7th ed.) "settlement" (meaning 2).

[18] Moreover, the respondent might have had resort to s.45 of the VCAT Act if, as was now said, no reasons, or no sufficient reasons, were given by the Commission for its decision.

Civil and Administrative Tribunal Act 1998

At a glance

Court

Decision date

Before

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Judgment (67 paragraphs)

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Legislation Cited (4)