FEDERAL COURT OF AUSTRALIA

Tisdall v Blazow [2005] FCAFC 213

DR PETER THOMAS TISDALL v JUDY BLAZOW (in her capacity as the Determining Officer appointed pursuant to section 86 of the Health Insurance Act 1973) AND THE PROFESSIONAL SERVICES REVIEW TRIBUNAL (constituted by the Honourable A R Neaves, Professor D Tiller and Dr P Joseph)

VID 45 OF 2005

HEEREY, SUNDBERG and NORTH JJ

29 SEPTEMBER 2005

MELBOURNE

THE COURT ORDERS THAT:

1. The appellant pay the first respondent’s costs on the basis that such costs are to include all costs except in so far as they are of an unreasonable amount or were unreasonably incurred so that, subject to such exceptions, the first respondent will be completely indemnified by the appellant for its costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                    This is an application by the first respondent for indemnity costs following the decision of this Court on 7 September 2005 in Tisdall v Blazow [2005] FCAFC 190 (the ‘Full Court decision’), in which the respondents were successful. The Full Court decision concerned an appeal under the Health Insurance Act 1973 (Cth), and an application for review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) in relation to a determination of the Professional Services Review Tribunal. Both the appeal and the application were dismissed. The judgment in the Full Court decision sets out all the relevant facts and findings. The first respondent was granted leave to apply for indemnity costs. Pursuant to that leave, the first respondent filed and served an application together with her written submissions in support of the application. On 21 September 2005 the applicant filed written submissions in response.

2                     By virtue of ss 43(1) and (2) of the Federal Court of Australia Act 1976 (Cth) (the Act) the Court has the power to make costs orders at its discretion. This power is unfettered; but is to be exercised judicially. Generally, costs should be ordered on a party and party basis, unless the particular circumstances of the matter possess special or unusual features so as to warrant a departure from the general approach: Re: Wilcox; Ex parte Venture Industries Pty Ltd (No. 2) (1996) 72 FCR 151 at 152 per Black CJ; Abbott v Random House Australia Pty Ltd [1999] FCA 1540 per Beaumont, Drummond and Miles JJ at [5]; and Saizeriya Co Ltd and Anor v Peregrine Management Group Ltd Pty and Ors [2005] FCA 1174 per Kenny J at [32].

The First respondent’s Arguments

3                     The first respondent submits that this matter possessed a number of sufficiently special or unusual features to justify the award of indemnity costs.

4                     The first feature is that on appeal, the applicant effectively sought to re-litigate two grounds raised before and dealt with by Tamberlin J in Tisdall v Health Insurance Commission [2002] FCA 97 (grounds 2.3 and 3.1). The first ground dealt with a finding that the Committee members were not required to disclose their thought process and the second ground was in relation to the treatment of Dr Tisdall’s notes by the Committee: see [11] and [40] of the Full Court decision. These grounds were also the subject of an appeal by Dr Tisdall from the decision of Tamberlin J to the Full Court. However the applicant did not pursue the appeal, and consented to its dismissal, during the course of the hearing of the appeal: Tisdall v Health Insurance Commission [2003] FCAFC 198. The first respondent refers to the decision of Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & Ors (1988) 81 ALR 397, where his Honour noted at 401:

…it is appropriate to consider awarding “solicitor and client” or “indemnity” costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion.

5                     The first respondent also submits that ground 1 was abandoned at the commencement of the hearing of the appeal; ground 4 was not formally abandoned, but was not the subject of submissions; and ground 5 did not reflect the oral argument on appeal, which, in any event, failed.

6                     The first respondent notes that the effect of ss 124A and 106V of the Health Insurance Act 1973 (Cth), as applicable at the relevant time, is that the institution of an appeal to the Federal Court stays the effect of a final determination. The first respondent submits that these provisions confer a benefit on the appellant, and imply a duty to conduct the appeal responsibly. According to the first respondent the pursuit of an appeal on grounds that have already failed, or are so weak that they have no prospect of success justifies an order for costs on an indemnity basis.

The Applicant’s argument

7                     The applicant submits that the arguments put to the Full Court were not the same as those decided by Tamberlin J, there was no estoppel and the applicant was entitled to exercise his right of appeal in the matter. Further, the applicant was entitled to withdraw the appeal from Tamberlin J’s decision in order to allow the present appeal to be the vehicle to decide the issues. The applicant then indicates that he did not regard the grounds of appeal as without merit and he should not be punished for pursuing an appeal that failed. The submissions conclude:

The Appellant’s conduct has always supported the view that he firmly believes in the matters he had raised and that they are worthy of an appeal – a right which he has that is given by our system of justice. To punish him for losing, it is submitted, would be unfair.

Consideration

8                     We accept the first respondent’s submission that this proceeding exhibits sufficient special or unusual features as to warrant an order for costs on an indemnity basis. Quite apart from the applicant’s abandonment of a number of grounds of appeal on the day of the hearing, the grounds which were pursued were of so little merit that the applicant should have appreciated that they had no chance of success. The order for costs on an indemnity basis is not made to punish the applicant, but to indemnify the first respondent against the costs of an appeal which was unreasonably instituted and pursued.

Associate:

Dated: 29 September 2005