New South Wales Supreme Court CITATION : Michael Alan WILSON v STATE RAIL AUTHORITY OF NEW SOUTH WALES & Anor [2009] NSWSC 1455 HEARING DATE(S) : Written submissions JUDGMENT DATE : 22 December 2009 JUDGMENT OF : Hidden J DECISION : Plaintiff and 1st Defendant to pay their own costs. CATCHWORDS : COSTS: - proceedings for damages for work related injury - proceedings dismissed - costs governed by Workplace Injury Management and Workers Compensation Act and Workers Compensation Regulation Workplace Injury Management & Workers Compensation Act 1998 Civil Procedure Act 2005 LEGISLATION CITED : Uniform Civil Procedure Rules Workers Compensation Regulation 2003 Workers Compensation Act 1987 Limited Act 1969 CATEGORY : Consequential orders Attileh v State Rail Authority [2005] NSWCA 64, 62 NSWLR 439 CASES CITED : Wilson v SRA & Anor [2009] NSWSC 357 Smith v Sydney West Area Health Service (No. 2) [2009] NSWCA 62 Chubs Construction Pty Ltd v Chamma [2009] NSWCA 98 Michael Alan WILSON (Respondent/Plaintiff) PARTIES : STATE RAIL AUTHORITY OF NEW SOUTH WALES(Applicant/1st Defendant) Robert Arthur REARDON (2nd Defendant) FILE NUMBER(S) : SC 2007/20443 COUNSEL : S Campbell (Respondent/Plaintiff) M Murray (Sol) (Applicant/1st Defendant) SOLICITORS : Carroll & O'Dea (Respondent/Plaintiff) Astridge & Murray (Applicant/1st Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HIDDEN J Tuesday 22 December 2009. 2007/20443 Michael Alan WILSON v STATE RAIL AUTHORITY OF NEW SOUTH WALES & Anor JUDGMENT ON COSTS 1 HIS HONOUR: On 17 June 2009, I published a judgment in which I found that the plaintiff's claim was subject to the procedural requirements imposed by Div 2 of Pt 2 of the Workplace Injury Management and Workers Compensation Act 1998 (the WIM Act), that one of those requirements had not been met and that, accordingly, the proceedings were "of no legal effect": Attileh v State Rail Authority [2005] NSWCA 64, 62 NSWLR 439 at [29]. That being so, I ordered that the proceedings against the first defendant, the SRA, be dismissed: Wilson v SRA & Anor [2009] NSWSC 357. The question of costs remains outstanding, and this has been the subject of written submissions by Mr Murray, solicitor for the SRA, and Mr Campbell SC, for the plaintiff. 2 Mr Murray referred to the discretion in relation to costs conferred by s 98(1) of the Civil Procedure Act 2005, and to the general rule that costs should follow the event enshrined in Pt 42 r 1 of the Uniform Civil Procedure Rules. If that were so, it is not apparent that there would be any discretionary reason to deprive the SRA of an order for costs. 3 However, Mr Campbell brought to my attention the special provisions for costs to be found in the WIM Act and the Workers Compensation Regulation 2003. Section 346 of the WIM Act provides: " 346 Costs (1) This section applies to costs (including disbursements) payable by a party in or in relation to a claim for work injury damages, including court proceedings for work injury damages. (2) The regulations may make provision for or with respect to the awarding of costs to which this section applies. The regulations may provide for the awarding of costs on a party and party basis, on a practitioner and client basis, or on any other basis. (3) A party is not entitled to an award of costs to which this section applies, and a court may not award such costs, except as prescribed by the regulations under this Act or by the rules of the court concerned. (4) In the event of an inconsistency between the provisions of the regulations under this section and rules of court, the provisions of the regulations prevail to the extent of the inconsistency." 4 The relevant regulations for the purpose of that section are to be found in Pt 19, Div 3, Subdiv 3 of the 2003 Regulation: cls 89 – 94. Those clauses deal with the award of costs in several situations, most of which are not relevant for present purposes. Those which are relevant are: " 90 Costs where claimant less successful than insurer's final offer or insurer found not liable (1) … (2) If a claimant does not obtain an order or judgment on a claim (that is, if the court finds the insurer has no liability for the claim), the court is to order the claimant to pay the insurer's costs on the claim assessed on a party and party basis." " 91 Costs in other cases Except as provided by this Subdivision, the parties to court proceedings for work injury damages are to bear their own costs." " 93 Subdivision does not apply to ancillary proceedings This Subdivision does not apply to costs payable in or in relation to proceedings that are ancillary to proceedings on a claim for work injury damages, and a court is to award costs in such ancillary proceedings in accordance with the rules of the court." 5 In Smith v Sydney West Area Health Service (No. 2) [2009] NSWCA 62, the Court of Appeal in a joint judgment held at [14]: "The effect of the WIM Act and the WC Reg is that the discretion conferred by the Civil Procedure Act , s 98 does not operate, and costs are governed by the WIM Act and the WC Reg." In Chubs Constructions Pty Ltd v Chamma [2009] NSWCA 98, Matthews AJA, with whom Beasley and McColl JJA agreed, referred to the terms of s 346 of the WIM Act and observed at [13]: "The combined effect of subsections (3) and (4) is that, in a claim for work injury damages, a court can only award costs as prescribed by the regulations or by the rules of court, and in the event of any inconsistency between them, the provisions of the regulations are to prevail." After referring to the clauses of the Regulation relevant to the case, her Honour added at [15]: "These provisions are mandatory in their terms and permit of no discretion. The general fall-back position is asserted in cl 91, namely that parties in proceedings for work injury damages are to bear their own costs." 6 It will be noted that by s 346(1) of the WIM Act, these provisions relate to costs in claims for work injury damages, an expression which is defined in s 250 of the Act. In submissions in reply, Mr Murray argued that the plaintiff's claim did not fall within that definition. Relevantly for present purposes, the definition is as follows: " work injury damages means damages recoverable from a worker's employer in respect of: (a) an injury to the worker caused by the negligence or other tort of the employer, …" 7 Mr Murray submitted that the plaintiff's claim was for "common law damages at large", unaffected by the limitation on the nature of damages which might be recovered introduced by s 151G of the Workers Compensation Act 1987 as that section was recast in 2001: see my principal judgment at [17]. That may be so, but it does not alter the fact that the claim fell within the definition of work injury damages in s 250 of the WIM Act. In the principal judgment I proceeded on that basis: [8]. 8 In the alternative, Mr Murray relied upon cl 93 of the Regulation, providing that the Subdivision does not apply to costs payable in relation to proceedings that are ancillary to proceedings on a claim for work injury damages. The proceedings before me were ancillary, he said, because they were brought merely to determine certain separate questions under UCPR Pt 28 r 2. He argued that, in this respect, they were similar to the proceedings before Malpass AsJ in which the plaintiff obtained leave under the Limitation Act to pursue his claim. 9 The ambit of the word "ancillary" in cl 93 is unclear, and Mr Murray referred me to no authority bearing upon it. However, whatever its ambit might be, the proceedings I heard were anything but ancillary. They led to a finding that the plaintiff's claim faced an insuperable procedural barrier, such that it had to be dismissed. Whether or not a motion under Pt 28 r 2 might generally be classified as ancillary, the effect of the motion before me was the final disposition of the proceedings. 10 Accordingly, I am satisfied that costs in the matter are governed by s 346 of the WIM Act and the relevant clauses of the Regulation. Mr Campbell referred to cl 90(2), providing that a claimant is to pay an insurer's costs if he or she "does not obtain an order or judgment on a claim (that is, if the Court finds the insurer has no liability for the claim) …" He submitted, however, that this case does not attract that subclause because there had been no finding on the question of liability at all. Rather, the proceedings had been dismissed because the plaintiff was unable to comply with a mandatory procedural provision. In his submissions in reply, Mr Murray put no argument to the contrary. 11 That being so, the only relevant provision is that upon which Mr Campbell relied, cl 91. By that clause, there being no other relevant provision in the Subdivision, the parties to the proceedings are to bear their own costs. 12 Accordingly, in the present proceedings the plaintiff and the SRA are to pay their own costs. ********** 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.