FEDERAL COURT OF AUSTRALIA Taylor v Australian Postal Corporation [2004] FCA 1265 PRACTICE AND PROCEDURE – Costs – proceeding settled – no determination on merits – usual exercise of discretion by making no order as to costs – whether all disputes over a procedural course to be followed will have costs consequences, determined on an adversarial basis, where the Court follows the course supported by one party and opposed by the other. Safety, Rehabilitation and Compensation Act (1988) (Cth) s 57 Re Minister for Immigration & Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 followed MIEME TAYLOR v AUSTRALIAN POSTAL CORPORATION NSD 1221 of 2004 LINDGREN J 29 SEPTEMBER 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1221 OF 2004 BETWEEN: MIEME TAYLOR APPLICANT AND: AUSTRALIAN POSTAL CORPORATION RESPONDENT JUDGE: LINDGREN J DATE OF ORDER: 29 SEPTEMBER 2004 WHERE MADE: SYDNEY THE COURT NOTES THAT: 1. There is no order as to costs, to the intent that each party is to bear its own costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1221 OF 2004 BETWEEN: MIEME TAYLOR APPLICANT AND: AUSTRALIAN POSTAL CORPORATION RESPONDENT JUDGE: LINDGREN J DATE: 29 SEPTEMBER 2004 PLACE: SYDNEY REASONS FOR JUDGMENT INTRODUCTION 1 On 1 September 2004 by consent I ordered that the application be dismissed, that costs be reserved and that the parties provide written submissions on costs. They have done so. 2 Where, as here, there has not been a final hearing on the merits, the Court does not attempt to determine what the result of such a hearing would have been. In Re Minister for Immigration & Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 ('Lai Qin'), McHugh J said (at 625): 'If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the Court will make no order as to the cost of the proceedings.' This formulation allows for the making of an order where a party has acted unreasonably. Moreover, even in the absence of unreasonableness, an order for costs may be made where the Court can be confident what the result would have been: Lai Qin at 625. 3 I have reached the conclusion that no order should be made as to costs: neither party appears to have acted unreasonably and I am not confident what the result of a final hearing would have been. FACTS 4 The applicant, Mieme Taylor ('Ms Taylor'), has an entitlement to compensation under the Safety, Rehabilitation and Compensation Act (1988) (Cth) ('the Act'). Apparently, she suffered an injury on 24 May 12993 when she was employed by the respondent, Australian Postal Corporation ('Australia Post'). Her injury has been described as 'soft tissue injury right lower back/buttock area'. She underwent surgery most recently on 21 November 2003, having had previous operations in 1994 and 1995. 5 Ms Taylor's entitlement was suspended from 2 May 2004 to 10 June 2004 because of her failure, said by Australia Post to have been without reasonable excuse, to attend a medical appointment arranged by Australia Post with Dr Pierides on 16 April 2004. The dispute between the parties which gave rise to her non-attendance was that Ms Taylor insisted that Australia Post supply her with cab charge vouchers to cover her travel from her home at Minto Heights to Dr Pierides' surgery in the City and return, but Australia Post refused to do so. 6 By her application filed on 11 August 2004, Ms Taylor sought a declaration that she had a reasonable excuse for refusing to undergo the medical examination, or, in the alternative, a declaration that her entitlement to compensation was not lawfully suspended pursuant to s 57(2) of the Act. 7 Her application was accompanied by an affidavit of her solicitor, Rachel Elizabeth James, sworn 10 August 2004. That is the only affidavit which has been filed in the proceeding. The only other evidence before me consists of certain letters which were annexed to Ms Taylor's written submissions on costs. 8 On 15 March 2004 Australia Post wrote to Ms Taylor advising her that the medical examination had been arranged for her with Dr Pierides in the City on 16 April 2004. The letter advised Ms Taylor that she may be reimbursed for reasonable travel costs incurred as a result of attending the appointment, and that reasonable travel costs would include bus and train travel to and from the appointment. The letter stated: 'Taxi travel will only be considered where your treating doctor has certified this mode of travel necessary and the necessity for taxi travel has been verified by the doctor conducting this examination. Full details, including receipts for travel and/or accommodation, should be forwarded to this office for consideration.' This statement is to be understood in the light of s 57 of the Act which is as follows: Power to require medical examination (1) Where: (a) a notice has been given to a relevant authority under section 53 in relation to an employee; or (b) an employee has made a claim for compensation under section 54; the relevant authority may require the employee to undergo an examination by one legally qualified medical practitioner nominated by the relevant authority. (2) Where an employee refuses or fails, without reasonable excuse, to undergo an examination, or in any way obstructs an examination, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the examination takes place. (3) The relevant authority shall pay the cost of conducting any examination required under this section and is liable to pay to the employee an amount equal to the amount of the expenditure reasonably incurred by the employee in making a necessary journey in connection with the examination or remaining, for the purpose of the examination, at a place to which the employee has made a journey for that purpose. (4) The matters to which the relevant authority is to have regard in deciding questions arising under subsection (3) include: (a) the means of transport available to the employee for the journey; (b) the route or routes by which the employee could have travelled; and (c) the accommodation available to the employee. (5) Where an employee's right to compensation is suspended under subsection (2), compensation is not payable in respect of the period of the suspension. (6) An employee shall not be required to undergo an examination under this section at more frequent intervals than are specified by the Minister by notice in writing. (Emphasis added) 9 It is arguable that Australia Post's liability under s 57(3) was only a liability to reimburse after Ms Taylor had paid, or incurred liability for, the amount of the 'expenditure'. The view taken in its letter, rightly or wrongly, was that it was entitled to insist on seeing receipts for expenditure on travel and considering the opinion of Dr Pierides after his examination of Ms Taylor, before deciding whether to pay the amount of the expenditure. Even if Australia Post was wrong, it did not act unreasonably in taking that position. 10 On 22 March 2004 Ms Taylor wrote to Australia Post asking it to send her two cab charge vouchers so that she could attend the appointment. She enclosed a medical certificate of Dr Rawail S Lall, which stated, relevantly, 'She requires taxi transport to (and back) Sydney to see Dr Pierides'. Dr Lall did not say why Ms Taylor needed to be transported by taxi from her home to and from the City. 11 On 24 March 2004 Australia Post wrote to Ms Taylor acknowledging receipt of her letter and Dr Lall's certificate. Australia Post's letter stated that it was prepared to reimburse Ms Taylor for taxi travel to and from the nearest rail station to her home with a lift. The letter continued: 'If you are considering taxi travel for the entire journey please have your doctor explain why taxi travel through stop start Sydney traffic would be more comfortable than a fast rail service.' The letter invited Ms Taylor to contact Graham Edwards, of Australia Post. 12 On 2 April 2004 Ms Taylor wrote to Mr Edwards indicating that he would be receiving a further doctor's certificate from Dr Bentivoglio, her surgeon, within the next few days. (Apparently she had attended at Dr Bentivoglio's surgery that day, 2 April.) The letter asked Australia Post to ensure that the cab charge vouchers reached Ms Taylor before the date of the appointment, 16 April 2004. Ms Taylor also stated that she was unable to fund the journey herself as she had had no income from any source (including Australia Post and Centrelink) since 25 February 2004. 13 Dr John Bentivoglio's 'certificate' dated 6 April 2004, which I presume Australia Post received on or shortly after that date, stated that Dr Bentivoglio had reviewed Ms Taylor on 2 April 2004. It stated that she was still recovering from her spinal operation and was still 'somewhat incapacitated'. 14 In relation to the appointment to see Dr Pierides on 16 April 2004, Dr Bentivoglio stated that he felt it was 'appropriate' in the light of Ms Taylor's ongoing symptoms, that she should have taxi transport to and from the appointment. Again, beyond the expression of that opinion, the letter did not address the precise question which Australia Post had raised in its letter to Ms Taylor of 24 March 2004. 15 The next matter to note in this chronological account is that on 6 April 2004 a sum of $29,430.65 was deposited into Ms Taylor's 'Streamline Account' with the Commonwealth Bank, taking the credit balance in that account up to $29,435.85. The amount of $29,430.65 had been paid by Australia Post for 'medical expenses and incapacity payments'. Within two days, $30 and $29,400 were withdrawn so that the credit balance fell to $5.85. The amount of $29,400 withdrawn was used to repay amounts which Ms Taylor had borrowed for the purpose of the surgery on 21 November 2003. 16 On 15 April 2004, the day prior to the medical appointment with Dr Pierides, Ms James spoke to Mr David Viqueret of Australia Post. Mr Viqueret refused to send the cab charge vouchers as he did not accept that Ms Taylor could not use any other means of transport to attend the appointment with Dr Pierides, and, in any event, considered that there was no statutory obligation to prepay travel expenses. Mr Viqueret informed Ms James that if Ms Taylor did not attend the appointment the next day, her entitlement would be suspended under s 57 of the Act. Ms Taylor did not in fact attend the appointment on 16 April 2004. 17 On 17 April 2004, Australia Post wrote to Ms Taylor giving an outline of the facts and stating reasons why Australia Post did not accept that she could not reasonably travel by taxi to the nearest railway station with a lift and then by rail to the City, with a corresponding return journey. The letter also asserted that the Act did not require prepayment of travel expenses. 18 The letter concluded by advising Ms Taylor that from the date of the letter, 17 April 2004, her rights and entitlements under the Act were suspended pursuant to s 57(2) of the Act, and that the suspension would remain until Ms Taylor did attend an appointment with Dr Pierides so that he could provide a report on her current condition. Because of an overpayment which Australia Post was willing to allow Ms Taylor to retain, in fact she was paid up to 1 May 2004. 19 On 6 May 2004 Ms Taylor's solicitors asked Australia Post to reconsider the matter. 20 On 17 May 2004 Australia Post replied, advising that the matter had been reconsidered but the view reached that the decision was justified. 21 Ms Taylor attended for an examination by Dr Pierides on 10 June 2004. Dr Pierides recorded in his report that her son had apparently 'put himself out' to bring her to the appointment. 22 On 24 June 2004 Australia Post wrote to Ms Taylor's solicitor enclosing a copy of Dr Pierides' report dated 16 June 2004. The letter advised that payments would be resumed from 10 June 2004, and the suspension lifted accordingly. 23 This proceeding was commenced on 11 August 2004 and the application was given a return date of 1 September 2004. 24 On 31 August 2004, the day before the return date, Australia Post wrote to Ms Taylor referring to the decision of 17 April 2004 and advising that, because the cost of defending the proceeding would outweigh the cost of lifting the suspension, it had been decided to lift it, with the result that Ms Taylor would receive weekly compensation payments for the period from 2 May 2004 to 9 June 2004. The letter invited Ms Taylor to discontinue this proceeding. 25 As Ms Taylor points out in her submissions, if she had done so, she would have become liable to pay Australia Post's costs: see Federal Court Rules O 22 r 3(1). 26 Later on 31 August, the parties' solicitors discussed costs. Australia Post's solicitor suggested that each party pay its own costs. Ms Taylor's solicitor did not agree. 27 Yet later on 31 August 2004 Ms Taylor's solicitors suggested that the question of costs be dealt with by written submissions, but Australia Post's solicitor did not agree, asserting that Australia Post would press for a hearing of the costs issue in my directions list the following morning. 28 It was not practicable for me to hear and determine the issue of costs on 1 September 2004, and, as indicated earlier, I directed the filing of written submissions on costs. REASONING 29 I have said enough to indicate that both parties in my view acted reasonably in commencing, pursuing and defending the proceeding. If further evidence had been filed and cross-examination had taken place, the result may have become clear, but on the present state of the evidence, it is not clear which party would have won. 30 In addition to the prepayment issue turning on the proper construction of ss 57(2) and (3) of the Act, the Court would have had to decide whether Ms Taylor had a 'reasonable excuse' under s 57(2) for not attending the medical appointment on 16 April 2004. There would have arisen issues as to Ms Taylor's medical condition and as to the reasonableness of her not having retained out of the sum of $29,430.65 a sufficient sum to pay for the taxi. The existing evidence is not all the evidence that would have been before the Court on these questions. No doubt Ms Taylor would have sworn an affidavit and there would have been detailed evidence from one or both of her doctors. There would also have been the evidence to be adduced by Australia Post. Finally, there would have been cross-examination. 31 The more difficult question is whether either party acted unreasonably in relation to the conduct of the matter on 31 August and 1 September. I have come to the view, however, that neither did. Whether there was to be a discontinuance or a dismissal, the question of costs had to be either argued or reserved on 1 September 1004. As a practical matter, appearances by the parties on that date was unavoidable. Moreover, parties had to prepare their submissions on costs, whether the submissions were to be made orally on 1 September or in writing. It is conceivable that Ms Taylor's counsel would not have been retained on her behalf if Australia Post had agreed that the costs issue be addressed in written submissions. But in that event, her solicitor's costs would have been greater than they in fact were (counsel prepared Ms Taylor's written submissions on costs). 32 Importantly, it cannot be said to have been unreasonable for Australia Post to have urged that the question of costs be decided on 1 September 2004. It should not be thought that on any occasion on which parties are in dispute over a procedural step, there will be costs consequences, determined on an adversarial basis, where the Court takes the course which was being supported by one party and opposed by the other. CONCLUSION 33 In the result, I will exercise my discretion in the manner foreshadowed at the outset. 34 There is no order as to costs to the intent that each party is left to bear its own costs. I certify that the preceding thirty-four (34 numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 1 October 2004 Counsel for the Applicant: Mr D Richards Solicitor for the Applicant: Slater & Gordon Lawyers Solicitor for the Respondent: Mr L Forner of Forners Solicitors Date of Hearing: 1 September 2004 and subsequent written submissions Date of Judgment: 29 September 2004