Anderson v Secretary of the Department of Veterans Affairs [2004] FCA 1594

FEDERAL COURT OF AUSTRALIA

Anderson v Secretary of the Department of Veterans Affairs [2004] FCA 1594

PRACTICE AND PROCEDURE – costs – proceedings settled – no determination as to merits – application for costs – respondent's defence of proceedings not unreasonable or bound to fail – no reason to depart from usual order as to costs – application dismissed with no order as to costs Public Service Act 1999 (Cth) s 29, 29(1), 29(3)(d) Administrative Decisions (Judicial Review) Act 1977 (Cth) Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Quin (1997) 186 CLR 622 applied Taylor v Australian Postal Corporation [2004] FCA 1265 applied DIANE HELEN ANDERSON v SECRETARY OF DEPARTMENT OF VETERANS AFFAIRS NSD 826 OF 2004 HELY J 8 DECEMBER 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 826 OF 2004

BETWEEN: DIANE HELEN ANDERSON

APPLICANT

AND: SECRETARY OF THE DEPARTMENT OF VETERANS AFFAIRS

RESPONDENT

JUDGE: HELY J

DATE OF ORDER: 8 DECEMBER 2004

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application be dismissed. 2. The respondent is to pay the applicant's reasonable costs thrown away by reason of the adjournment of the hearing fixed for 30 August 2004. 3. Otherwise, there be no order as to 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 826 OF 2004

BETWEEN: DIANE HELEN ANDERSON

APPLICANT

AND: SECRETARY OF THE DEPARTMENT OF VETERANS AFFAIRS

RESPONDENT

JUDGE: HELY J

DATE: 8 DECEMBER 2004

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The applicant was employed by the respondent as a ward assistant at the Repatriation General Hospital, Concord. She injured her back in the course of her employment, and underwent surgery in 1989 and again in 1992. The applicant ceased work on 20 October 1992 and has not worked since. 2 Thereafter an issue arose as to whether the Public Service Board should approve the applicant's retirement on the grounds of total and permanent incapacity. The Board refused to approve the application for invalidity retirement, but on 8 March 2001 the Superannuation Complaints Tribunal set aside the Board's decision, and substituted its own decision approving the invalidity retirement of the applicant. 3 Under the legislation which existed at the time, this decision was a necessary precondition to the exercise of the powers conferred on the agency head by s 29 of the Public Service Act 1999 (Cth) ('the PSA'), but it did not amount to an exercise of those powers by the agency head. 4 On 15 March 2002 the applicant's solicitors wrote to the respondent formally asking that this matter be placed before a delegate of the respondent for the purpose of considering the applicant's request that her employment be terminated pursuant to s 29(3)(d) of the PSA. 5 Section 29 of the PSA provides: '(1) An Agency Head may at any time by notice in writing, terminate the employment of an APS [Australian Public Service] employee in the Agency. … (3) For an ongoing APS employee, the following are the only grounds for termination: … (d) inability to perform duties because of physical or mental incapacity.' 6 Thereafter further medical reports were obtained and exchanged. Medical opinion as to the applicant's fitness for work was not uniform. Dr Matalani, for example, expressed the belief that the applicant was not totally and permanently incapacitated. 7 On 21 May 2004 the applicant commenced proceedings in this Court in which review was sought of 'the failure of the Respondent to decide that the applicant's employment with the respondent be terminated pursuant to s 29(3)(d)' on account of her inability to perform duties because of physical or mental incapacity, as well as other relief. On 23 June 2004 a Notice of Objection as to Competency was filed, which was ultimately fixed for hearing on 30 August 2004. 8 On 25 and 26 August 2004 the respondent's solicitors proposed that the most efficient course of action was for the respondent to make a prompt decision in relation to the applicant's request to be 'invalidity retired' under s 29(3)(d) of the PSA, without any concession being made as to the merits of the application then before the Court, or the respondent's contention that there was no 'duty' to make a decision under s 29(3)(d) of the PSA, so as to enliven the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act'). By the same token, acceptance of the proposal would not involve a concession on the part of the applicant to the contrary. 9 The proposal involved the adjournment of the Notice of Objection to Competency until the respondent determined the matter, on the basis that the respondent would bear the reasonable costs thrown away by reason of the adjournment of that hearing. The respondent envisaged that once a decision was made, it would be unnecessary for the proceedings in their present form to continue, although the decision foreshadowed might be the subject of review proceedings. 10 On 19 October 2004 the respondent's delegate decided to refuse to terminate the applicant's employment under s 29(1) of the PSA on the grounds that she is unable to perform duties by reason of physical or mental incapacity. It is common ground that in the light of that decision, further prosecution of these proceedings is pointless, and the proceedings should be dismissed. The only issue is whether the applicant should receive the general costs of the proceedings in addition to the costs thrown away by reason of the adjournment of the hearing scheduled to take place on 20 August 2004. 11 In Taylor v Australian Postal Corporation [2004] FCA 1265 Lindgren J summarised the applicable principles as follows (at [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.' 12 The applicant essentially put her case for costs on the basis that since 1992 she had been seeking to extract a decision from the respondent, which the respondent did not make until after the institution of these proceedings. In the applicant's submission, this lapse of time is sufficient to establish that the respondent acted unreasonably in resisting these proceedings. 13 The applicant's submission in this respect is a distortion of the factual situation, as prior to 8 March 2001 the respondent could not lawfully have given a decision in the applicant's favour. Thereafter the parties were at issue as to whether a decision should be made in the applicant's favour. Sensibly, the parties agreed that the respondent would give a decision on the termination application, effectively without prejudice to their respective contentions as to whether the respondent was obliged to do so. 14 In the light of the decision given, further prosecution of these proceedings has become futile, but this has been the result of a compromise arrangement, rather than as a result of a capitulation on the part of the respondent, and I do not feel able to find that the respondent's defence of these proceedings was unreasonable or bound to fail. 15 By consent, the application is dismissed. The respondent is to pay the applicant's reasonable costs thrown away by the adjournment of the hearing fixed for 30 August 2004. Otherwise I order that the parties should bear their own costs of the proceedings. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.