FEDERAL COURT OF AUSTRALIA

Kowalski v Chief Executive Officer of Medicare Australia [2009] FCA 1072

KAZIMIR KOWALSKI v CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA

SAD 81 of 2009

MANSFIELD J

23 SEPTEMBER 2009

ADELAIDE

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

THE COURT ORDERS THAT:

1.         The appeal is dismissed.  (Order made 23 September 2009.)

2.         The applicant pay the costs of the respondent of the appeal and of the amended notice of motion of 4 August 2009 on an indemnity basis.  (Order made 14 October 2009.)

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

REASONS FOR JUDGMENT

1                          There are occasions when the purpose of particular proceedings, in a practical sense, is not apparent.  This provides an example.  For reasons which appear below, the appeal of the applicant from the decision of the Administrative Appeals Tribunal (the Tribunal) given on 2 June 2009 is dismissed.  In addition, the applicant is ordered to pay the costs of the appeal, including the costs of the respondent on its amended notice of motion of 4 August 2009 on an indemnity basis. 

2                          It is necessary to explain why I think it appropriate to make those orders.

3                          On 1 April 2009, the applicant applied to the Tribunal for review of a decision of the respondent (Medicare) described as:

[C]opy of decision dated 11 March 2009 & 25 March 2009 is attached & a copy of my letter dated 17.3.09 is also attached.

4                          It is not clear what decision those letters refer to.  The letter of 11 March 2009 from an officer of Medicare refers to an earlier letter of the applicant of 20 February 2009.  It then continues:

In your letter you stated that you do not accept the Heads of Agreement as a declaration of the terms of settlement of your claims against Mitsubishi Motors Limited as you and your wife signed the document “unconsciously and under duress”.  Unless it is legally determined that this is the case, Medicare Australia is entitled to accept the Heads of Agreement as a declaration of the agreed terms of settlement between the parties.

As outlined in my letter dated 17 February 2009, Medicare Australia does not intend to take further action against Mitsubishi Motors Limited.  This is a matter between Medicare Australia and Mitsubishi Motors Limited.

I remind you that your completed history statement and statutory declaration are due to be returned to Medicare Australia by 18 March 2009.  Once this statement has been received, Medicare Australia can determine whether you may be required to reimburse the Commonwealth for any past paid Medicare and other benefits received in the course of treatment of your compensable injuries.

5                          The applicant’s letter of 17 March 2009, in reply, refers to part of a judgment in proceedings in the Supreme Court of South Australia, and separate proceedings apparently instituted by the applicant against Mitsubishi Motors Australia Ltd (MMAL) in this Court (in respect of which judgment was delivered on 3 September 2009: see Kowalski v Mitsubishi Motors Australia Ltd [2009] FCA 991, from which an appeal has been instituted and is shortly to be heard).  The letter then proceeds to assert that MMAL had failed to comply with s 23 of the Health and Other Services (Compensation) Act 1995 (Cth) (the HOSC Act).  It seeks a reply to those assertions.  The subsequent letter of 25 March 2009, apart from referring to that letter, is in the following terms:

As outlined in my letter dated 11 March 2009, Medicare Australia is entitled to accept the Heads of Agreement as a declaration of the agreed terms of settlement between yourself and Mitsubishi Motors Australia Limited, until it is otherwise legally determined.

At this stage, I am unable to provide you with any further information in relation to this matter.

I remind you that your completed history statement and statutory declaration are now due to be returned to Medicare Australia.

6                          The Tribunal dismissed the application to it on the ground that it did not have jurisdiction to review the matter: see Kazimir Kowalski v Chief Executive Officer of Medicare Australia [2009] AATA 427 at [12].  Following the institution of this appeal, or this purported appeal, the respondent applied by motion that it be summarily dismissed pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) on the grounds that the applicant had no reasonable prospects of succeeding on the appeal.

7                          The jurisdiction of the Tribunal is statutory.  For present purposes, its potential sources of jurisdiction for it to review a decision under the HOSC Act is two-fold, under ss 18(10) and 23D(1) in respect of:

(a)        a decision affirming or varying a decision by Medicare refusing to give a notice under s 18(7) of the HOSC Act; and

(b)        a decision under s 23B of the HOSC Act that a statement provided by a person under ss 18 or 23A of the HOSC Act, or an amended statement provided by a person under s 23B of the HOSC Act, is not substantially correct.

8                          There is obviously some background to the applicant’s claims or issues about which there is no direct evidence in this proceeding.  I infer from the correspondence in evidence that, some time ago, the applicant had a claim for worker’s compensation under Workers Rehabilitation and Compensation Act 1986 (SA) in respect of injury or injuries arising out of or in the course of his employment with MMAL.  Apparently, as a result of disputes, those claims were resolved ultimately by an agreement reached in about 1998 between the applicant and MMAL entitled “Heads of Agreement”.  It is not necessary to refer to its terms, and indeed they are not in evidence.  The issue in the present proceedings is whether the applicant either is obliged to have repaid to Medicare from the moneys received under the Heads of Agreement certain amounts pursuant to ss 18 and 23B of the HOSC Act, or alternatively had made a false statement to Medicare as to the nature and extent of benefits received under the Heads of Agreement.

9                          The Tribunal did not consider that there had been any reviewable decision.  The Tribunal noted that the correspondence did not evidence a finding or decision that any statement by the applicant under ss 18 and 23A of the HOSC Act were not substantially correct, and that the correspondence referred to did not amount to any statement by the applicant under s 18 of the HOSC Act.  Consequently, the Tribunal did not consider that there had been any reviewable decision.

10                        The submissions of the applicant indicate that he considers a number of letters sent by him to Medicare dated 22 January 2009, 23 January 2009 and 17 March 2009 to constitute statements made by him under s 18(1) of the HOSC Act, and that he further considers that the respondent had made a decision under s 23B of the HOSC Act that his statements were not substantially correct.  Copies of those letters were attached to his submission.  The respondent has accepted that it is appropriate to have regard to them.  The applicant was given the opportunity to file further evidence in support of his contentions.  He filed numerous copies of various correspondence which, he said, prove that Medicare Australia CEO has given him a written notice, under s 23B(1) of the HOSC Act, and that his statement under ss 18 or 23A, or his amended statement, was not substantially correct, thereby giving the Tribunal jurisdiction to hear the proceeding.  Of the material the applicant filed, only four letters were potentially capable of constituting such notice, being letters from Medicare to the applicant dated 4 August 2008, 19 January 2009, 17 February 2009 and 1 March 2009.  I do not consider that any of those letters advance the position for which the applicant contends.

11                        In my view, the Tribunal correctly concluded that those letters do not amount to statements of past benefits for the purposes of ss 18(1) of the HOSC Act.  In their terms, they do not specify the professional services (if any) in respect of which a Medicare benefit has been paid, that were rendered in the course of treatment of, or as a result of, the injury or injuries which the applicant claims to have suffered as required by s 17(1)(a); nor do they specify whether nursing home care or residential care had been provided in the course of treatment of, or as a result of, the relevant injury as required by s 17(1)(b); and they were not verified by a statutory declaration as required by s 18(2) of the HOSC Act.  In any event, the correspondence of the respondent in its letters of 11 and 25 March 2009 makes it plain that it had not made a reviewable decision in terms of ss 18, 23A or 23B in respect of those letters.  The terms of the respondent’s letters indicate that, when they were sent, the respondent considered that the applicant had not provided a statement of past benefits pursuant to s 18 and reminded the applicant that his “completed history statement” and his “statutory declaration” were due to be returned.

12                        Nor do the letters constitute or evidence a decision under s 23B of the HOSC Act because, in their terms, they indicate that the respondent did not at that time consider that the applicant had complied with his obligation to provide a statement under s 18(1) of the HOSC Act.  Moreover, s 23B(1) of the HOSC Act requires that, if the respondent were satisfied that a statement under s 18(1) was not substantially correct, the respondent was required to issue a written notice to the applicant specifying that fact, requiring an amended statement that is substantially correct, and providing a period within which the amended statement should be given.  Clearly, neither of the letters of 11 and 25 March 2009 perform that function.  That is because, as the Tribunal found, no decision under s 23B of the HOSC Act had been made.

13                        In my view, the Tribunal correctly concluded that the decision identified by the applicant by reference to the correspondence referred to did not amount to, nor evidence, a reviewable decision, that is a decision reviewable by the Tribunal in accordance with the powers in ss 18, 23A and 23B of the HOSC Act.  It appropriately dismissed the application.  Indeed, as the Deputy President said at the time, when and if the respondent made a decision under s 23B or reached a satisfaction as to the accuracy of a statement given under s 18(1) and thereafter made a decision to take some action with respect to it, then and only then would its jurisdiction to have reviewed such a decision have been enlivened.  It suggested that the applicant await such a decision, if one were made, before seeking its review.

14                        The applicant asserts, in his notice of appeal, that the Tribunal failed to provide adequate reasons for its decision declining to hold that it had jurisdiction in the matter.  Section 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) obliges the Tribunal to include in its written reasons its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.  In my judgment, the Tribunal’s reasons amply indicate why it made the decision which it did.  The relevant legal principle to assess the adequacy of reasons has recently been discussed, together with a number of authorities, in Sagigi v Comcar [2009] FCA 385.  In this matter, the Tribunal’s reasons indicate the material upon which it made its decision that it did not have jurisdiction, it referred to the relevant statutory provisions, and explained its understanding of those provisions, and why it reached the decision which it did.  In my view, there is no failure on the part of the Tribunal to comply with s 43(2B) of the AAT Act.

15                        As I have otherwise found that the Tribunal did not err in law in deciding that it did not have jurisdiction to entertain the application, the applicant has failed to make out any error of law on the part of the Tribunal.  I do not consider that the particulars in paras 2.2-2.7 of his proposed notice of appeal, expressing the same point in a number of different ways, advance the matter.

16                        There is no reason why costs should not follow the event.  The power to make costs orders is contained in s 43 of the FCA Act.  It is a discretionary power which must be exercised judicially.

17                        There are circumstances in which it is appropriate to order that the costs be recoverable other than on the usual party and party basis.  Where indemnity costs might be awarded is discussed by Sheppard J in the oft-referred to passage in Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 at 232-4.  In my view, the present circumstances warrant departure from the usual course as to costs.  Particular features of the matter justify the Court departing from that usual course and add colour to the matter in this instance.  The first is, in my view, that a plain reading of the two letters of 11 and 25 March 2009 indicates that Medicare had not made a decision about the character of the payments under the Heads of Agreement with MMAL, and had not decided that the applicant had not complied with ss 18, 23A or 23B of the HOSC Act.  That is so plain that, apart from considering that the proceedings should be summarily dismissed because the contention is unarguable, it was in my view capricious of the applicant to have instituted the proceeding in the first place.  It was further made plain by the Tribunal in its reasons. 

18                        The applicant, moreover, was warned of the possible consequences by the respondent when pointing out the futility of the proceedings in correspondence immediately following the institution of the appeal.

19                        There is a further reason.  When the matter first came on for directions, it was stood over to enable the respondent, Medicare, to indicate whether it regarded the Heads of Agreement between the applicant and MMAL as indicating the payment of some amount by way of medical costs which might be recoverable or might have been declared to Medicare and might have been recoverable from the applicant.  In fact, subsequently on 30 July 2009, the solicitors for Medicare wrote to the applicant on that topic.  That correspondence indicated quite clearly that Medicare considered that the moneys paid to the applicant by MMAL are “compensation” for the purposes of s 4 of the HOSC Act, so that the moneys paid to the applicant by MMAL as compensation are amounts in respect of which Medicare might seek reimbursement under the HOSC Act.  However, by a letter a few days earlier, on 27 July 2009, Medicare informed the applicant that it did not intend to take any further action against him under the HOSC Act to recover the moneys paid by MMAL under the Heads of Agreement.  It pointed out then that the proceeding appeared to be entirely unnecessary.  That is self-evident.  It invited the applicant to discontinue the proceeding.  It foreshadowed an application for indemnity costs if the proceeding was not discontinued.  Whilst that letter of 30 July 2009 might indicate that, now, Medicare has made a decision by giving notice under s 23B(1) of the HOSC Act that Medicare considers that the applicant’s statement to Medicare under s 23A is not substantially correct (because it asserted that no compensation had been paid pursuant to the Heads of Agreement), that was not the state of affairs at the time of the Tribunal’s decision.  The applicant has nevertheless pursued the claim, even though it is apparent that, for whatever reason, there is now no requirement upon him to repay moneys payable under the Heads of Agreement.

20                        For those reasons, it is appropriate in the circumstances to depart from the usual order as to costs and order that the applicant pay the respondent’s costs of the appeal and of the amended notice of motion of 4 August 2009 on an indemnity basis.

Associate:

Dated:         23 September 2009

ADDENDUM TO REASONS

21                        When judgment was delivered in this matter, the applicant asked for an opportunity to make submissions in relation to costs.  I indicated that, although I had formed the views expressed in [16]-[29] of the reasons, I was prepared to accommodate his request and to withdraw that part of the reasons dealing with costs, and not to make the costs order contained with the reasons, until his submissions had been considered.  I indicated I would reconsider the question of costs in the light of the proposed submissions.

22                        Written submissions on costs have now been exchanged, and I have considered them.  I have not changed my view as to the appropriate order for costs.  The applicant contends that the Court does not have jurisdiction to make an order for costs in a proceeding such as the present, because the Tribunal itself has no power to award costs, and s 43 of the FCA Act excludes proceedings where there is another Act which provides that costs should not be awarded.  However, this proceeding is not a proceeding of the Tribunal, but of the Court.  The contention of the applicant has previously been rejected: see Kowalski v Repatriation Commission [2009] FCA 47 at [10] and Kowalski v Repatriation Commission [2009] FCAFC 107 at [24]-[28] per Spender, Graham and Gilmour JJ.  I am bound to follow the decision of the Full Court.  The Court plainly has the power to make an order for costs in this type of proceeding under s 43 of the FCA Act.  I have explained in the published reasons why I propose to exercise the costs discretion to order the applicant to pay the respondent’s costs of the appeal and of the amended notice of motion of 4 August 2009 on an indemnity basis.

Associate: 

Dated:         14 October 2009