New South Wales Supreme Court CITATION : Omar Baghdadi by his tutor Sami Kouri & Ors v P & M Quality Smallgoods Pty Ltd; Austec Panel Systems Australia Pty Limited; Vidual Pty Limited; Kaybron (No 5); and Kaybron (No 5) Pty Ltd v Vidual Pty Ltd; Austec Panel Systems Australia Pty Ltd; P & M Quality Smallgoods Pty Ltd. [2008] NSWSC 566 HEARING DATE(S) : 5 June 2008 JUDGMENT DATE : 5 June 2008 JUDGMENT OF : Patten AJ at 1 DECISION : See paragraph 12 LEGISLATION CITED : Workers Compensation Act 1987 Omar Baghdadi by his tutor Sami Kouri - First Plaintiff Sami Kouri - Second Plaintiff Judith Cohen - Third Plaintiff P & M Quality Smallgoods Pty Ltd - First Defendant Austec Panel Systems Australia Pty Ltd - Second Defendant PARTIES : Vidual Pty Ltd (in Liquidation) - Third Defendant Kaybron (No 5) Pty Ltd - Cross Defendant and Kaybron (No 5) Pty Ltd - Plaintiff Vidual Pty Ltd (in Liquidation) - First Defendant Austec Panel Systems Australia Pty Ltd - Second Defendant P & M Quality Smallgoods Pty Ltd - Third Defendant FILE NUMBER(S) : SC 20105 of 2005;; 13906 of 2007 Mr B Hull - Plaintiffs Mr S Campbell SC with Mr P Perry - P & M Quality Smallgoods Pty Ltd COUNSEL : Mr S Donaldson SC with Mr D O'Dowd - Austec Panel Systems Australia Pty Ltd Mr P Webb QC with Mr G Hickey - Vidual Pty Ltd Mr C Parker - Kaybron (No 5) Pty Ltd George Mallos Lawyer - Plaintiffs (action 20105 of 2005) Home Wilkins Lowry Lawyers - P & M Quality Smallgoods Pty Ltd SOLICITORS : James Tuite & Associates - Austec Panel Systems Australia Pty Ltd Moroney Lawyers - Vidual Pty Ltd Turks Legal - Kaybron (No 5) Pty Ltd IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION CIVIL LIST Patten AJ 5 June 2008 No. 20105 of 2005 Omar Baghdadi by his tutor Sami Kouri & Ors v P & M Quality Smallgoods Pty Ltd Austec Panel Systems Australia Pty Ltd; Vidual Pty Ltd; Kaybron (No 5) Pty Ltd and No. 13906 of 2007 Kaybron (No 5) Pty Ltd v Vidual Pty Ltd Austec Panel Systems Australia Pty Ltd P & M Quality Smallgoods Pty Ltd. JUDGMENT 1 Several matters, some requiring decision arising out of the reasons for judgment delivered on 24 May, were debated before me today. 2 The first concerns the costs of the action by Kaybron. Kaybron, the employer of Omar Baghdadi, sued under section 151Z(i)(e) of the Workers Compensation Act for recovery of compensation paid by it. In its further amended statement of claim, filed in court on 26 October 2007, Kaybron sought $5,678,991.63 plus interest of $1,295,158. In the result, according to my findings, it was held entitled to recover $4,834,461, plus interest of $687,421. 3 The defendants submitted that it should not be entitled to its costs and indeed, that it should pay the defendants' costs. The basis of this contention, as I understand it, is that it was always conceded that Kaybron was entitled to recover the bulk of the payments made by it, either from the defendants or from Omar Baghdadi. 4 It is true that Kaybron, being put to proof, did not establish its entitlement to the whole of the sum claimed and there was a significant deduction. However, it did succeed in establishing liability on the part of the defendants, which was always hotly contested, and, in so doing, had the benefit of recovery of interest on the payments made, albeit at a lower rate than the rate contended for. 5 Kaybron was not joined as a party in the original proceedings, although two of the three defendants brought cross-claims against it. It may be that it could have brought cross-claims but I see no reason for it to be penalised by bringing a separate action that cannot, in any significant way, have increased the costs of the proceedings. The particular expenses identified by Mr W S Wade in his affidavit sworn today were applicable to Kaybron's claim, however constituted. 6 Despite Mr Parker's submission to the contrary, I regard the question whether an order for costs should be made in Kaybron's favour as open for consideration. However, in the circumstances, I do not think there is any justification for some other order within the meaning of Rule 42.1. In my view, costs should follow the event and the defendants should be ordered to pay Kaybron's costs. 7 At paragraph 5.9.3 of my reasons, I assess the notional damages to which Omar Baghdadi would have been entitled against Kaybron for the purposes of section 151Z(ii)(d) of the Workers Compensation Act. In that assessment I included interest on past wage loss of $16,149. It was submitted by Mr Parker that such interest should not have been allowed, by virtue of section 151M of the Workers Compensation Act, there being no evidence that the conditions set out in that section had been met. 8 It was submitted on behalf of the defendants that, as Kaybron was not sued by Omar Baghdadi, section 151M does not apply. It seems to me that in making the notional assessment under section 151Z(ii)(d), Kaybron should not be regarded as being in a different position than it would have been if sued. Accordingly, for interest to be included in the assessment there must, in my opinion, be evidence which would trigger the operation of the right to award interest under section 151M. 9 Arguably, this matter does not fall within the slip rule 36.17, but the amount involved is small, it was not subject to any submissions prior to publication of my reasons on 24 May and, in the circumstances, I hold that it was an accidental slip within rule 36.17, with the consequence that $16,149 is excluded from my assessment of the notional damages to which Omar Baghdadi would have been entitled against Kaybron. 10 It has been agreed that Omar Baghdadi is entitled to $1.23 million for management of his verdict. In my view, a proportion suggested at 10 per cent should be allowed of that sum, in the notional assessment of damages to Kaybron. The question is whether it falls within the expression "damages for past economic loss due to loss of earnings" and "damages for future economic loss due to the deprivation or impairment of earning capacity" as those expressions appear in section 151G. The phrase "due to" is wide. It is perhaps a matter of expression but, given that the legislature must have contemplated the situation of a very seriously injured plaintiff, I think the expression is wide enough to encompass funds management where the negligence of the employer creates the need for the management, as occurred in this case. 11 Another matter which was drawn to my attention this morning, but was not disputed by the parties, was that in paragraph 587 of my reasons for judgment, I misapplied section 151Z(ii)(e), in that the deduction should have been 10 per cent of the damages assessed against Kaybron which, having regard to my conclusion in respect of interest, would have been 10 per cent of $884,129.00, namely, $88,412.90 and that is the sum which should have been deducted from the damages assessed in paragraph 587, in lieu of my taking 90 per cent of the damages assessed. ORDERS 12 By consent I make these orders in action 20105/05: (1) Verdict for the first plaintiff, Omar Baghdadi against all three defendants, in the sum of $16,874,868. (2) Verdict for the second plaintiff, Sami Kouri, against all three defendants, in the sum of $219,940. (3) Verdict for the third plaintiff, Judith Cohen, against all three defendants, in the sum of $347,625. (4) Order that the defendants pay the plaintiffs' costs. (5) Declaration as between themselves that the defendants are liable to contribute equally to the verdicts and the plaintiffs' costs. (6) Verdict for the first defendant, P & M Quality Smallgoods Pty Ltd against the cross-defendant to the sixth cross-claim, Kaybron No 5 Pty Ltd, in the sum of $15,585.50. (7) Order that Kaybron No 5 Pty Ltd pay the first defendant's costs of the sixth cross-claim. (8) Verdict for the second defendant, Austec Panel Systems (Australia) Pty Ltd against the first cross-defendant to the second cross-claim, Kaybron No 5 Pty Ltd in the sum of $15,585.50. (9) Order that Kaybron No 5 Pty Ltd pay the second defendant's costs of the third cross-claim. (10) Verdict for the third defendant, Vidual Pty Ltd (In liquidation) against the third cross-defendant to the third cross-claim, Kaybron No 5 Pty Ltd in the sum of $15,585.50. (11) Order that Kaybron No 5 Pty Ltd pay the third defendant's costs of the second cross-claim. (12) All other cross-claims filed in the proceedings are dismissed with no order as to costs. (13) Order that all monies payable to the first plaintiff, Omar Baghdadi, be paid to the Protective Commissioner to be dealt with by him in accordance with law. In action No 13906/07, Kaybron No 5 Pty Limited v Vidual Pty Ltd (in liq) & Anor, I make these orders: (1) Verdict for the plaintiff against all three defendants in the sum of $5,825,758.40, plus interest of $845,738.73, a total of $6,671,497.13. (2) Declaration that any satisfaction by defendants of the verdict ordered in (1) above shall, pro tanto, satisfy the verdict ordered in favour of the first plaintiff in proceedings 20105/05. (3) The defendants to pay the plaintiff's costs. (4) Declaration as between themselves that the defendants are liable to contribute equally to the verdict and costs. Liberty to any party to apply through any Judge of this court upon 48 hours' notice to the others. oOo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.