Supreme Court New South Wales Medium Neutral Citation: Perigo v Workers Compensation Nominal Insurer and Anor (No 3) [2013] NSWSC 6 Hearing dates: 8 August 2012written submissions closed 22 August 2012 Decision date: 25 January 2013 Before: McCallum J Decision: Defendants ordered jointly and severally to pay the plaintiff's costs of the proceedings Catchwords: COSTS - where plaintiff successful in personal injuries claim against both employer and third party - where costs recoverable against employer capped by legislation - whether defendants should be ordered to pay costs jointly and severally Legislation Cited: Civil Liability Act 2002 Civil Procedure Act 2005 Environmental Planning & Assessment Act 1979 Workers Compensation Regulation 2010 Cases Cited: Hili v R; Jones v R [2010] HCA 45 Perigo v Workers Compensation Nominal Insurer & Anor (No 2) [2012] NSWSC 830 Rushcutters Bay Smash Repairs Pty Ltd v H McKenna Netmakers Pty Ltd [2003] NSWSC 670 Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 Tsu v Memeth & Anor [2010] NSWCA 29 Category: Costs Parties: Michael Perigo (plaintiff) Workers Compensation Nominal Insurer (first defendant/cross claimant) Waco Kwikform Pty Limited (second defendant/cross defendant) Representation: Counsel: D C Del Monte (plaintiff) D Kelly (1st defendant/cross claimant) JE Maconachie QC with J Chapman (2nd defendant/cross defendant) Solicitors: Maurice Blackburn (plaintiff) Gillis Delaney Lawyers (first defendant/cross claimant) Yeldham Price O'Brien Lusk (second defendant/cross defendant) File Number(s): 2009/297523 Publication restriction: None Judgment 1HER HONOUR: I gave the principal judgment in these proceedings on 16 July 2012: see Perigo v Workers Compensation Nominal Insurer & Anor (No 2) [2012] NSWSC 830. Orders were entered on 8 August 2012 save as to costs. This judgment determines the costs of the proceedings. 2The principal judgment gave a verdict for the plaintiff apportioned as to 25% against the first defendant and as to 75% against the second defendant. The plaintiff seeks an order that the defendants jointly and severally pay his costs. The first defendant is the insurance company standing in the shoes of the plaintiff's former employer. Accordingly, the costs that may be recovered against it are governed by the Workers Compensation Regulation 2010, clause 102 of which caps its costs liability. The second defendant, the head contractor to the employer, contends for an order that the costs to be paid by it be confined to 50% of the plaintiff's costs or, alternatively, 75% of those costs. 3The order sought by the plaintiff was founded on the proposition, described as an aspect of "the indemnity costs rule", that generally in multiple-party litigation, an order that costs be paid by two or more parties to the litigation should create a joint and several liability for the payment of those costs. It was submitted that to order otherwise would imperil the principle that, generally speaking, a successful party is entitled to receive his or her costs from an unsuccessful party or parties to the litigation. 4Support for that approach may be found in the decision of Fisher J in Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 at 244 where his Honour said: The plaintiff as the successful party is prima facie entitled by way of indemnity to its costs of the action, and if one of the defendants is unable or unwilling to meet its share of the obligation, the misfortune should be that of its 'partner in crime' and not of the plaintiff. In so far as I have been able to find any authority, it is in favour of the contrary proposition to that propounded by counsel on behalf of the Morphett Arms. I refer to Dansk Rekylriffel Syndikat Aktieselskab v Snell [1908] 2 Ch 127 at 138, where an order was made against defendants jointly in circumstances where one became bankrupt during the proceedings. In my opinion the conventional order that the two defendants pay the plaintiff's costs should stand. 5It has been suggested that his Honour's use of the expression "partners in crime" was metaphorical and not intended to impose any requirement to establish common delinquency other than loss of the litigation: see Rushcutters Bay Smash Repairs Pty Ltd v H McKenna Netmakers Pty Ltd [2003] NSWSC 670 at [16]. 6The plaintiff also relied on the decision of the Court of Appeal in Tsu v Nemeth & Anor [2012] NSWCA 29 at [69] per Handley AJA; Beazley and Whealey JJA agreeing at [1] and [2] respectively. That was a case in which the plaintiff's home had been damaged as a result of excavation on an adjoining property. The plaintiffs were successful at first instance in obtaining judgment against each of three defendants, apportioned in accordance with s 109Z of the Environmental Planning & Assessment Act 1979 (now s 35 of the Civil Liability Act 2002). His Honour declined, however, to apportion the costs and made a joint and several order against all defendants. The Court of Appeal upheld that decision on the basis that the regime established by s 109Z required the plaintiffs to prove their whole claim against all defendants, including the appropriate apportionment between them, in order to establish their right to a separate judgment against each. The claim against each defendant depended in part upon the claim against the others. 7The analogy between that case and this is strong, but imperfect. In the present case, due consideration must be given to the discrete regime that governs the payment of compensation by employers, importantly including the cap on recoverable costs. The regulation concerning costs stands as an incursion on the indemnity costs rule, presumably reflecting a perceived public interest. 8In my view, it would be wrong to ignore that aspect of the statutory context in which the present issue must be determined. As submitted on behalf of the second defendant, the foundation for legal rules which informed the formation and application of the indemnity costs rule has been radically changed by the differing damages regimes for motor vehicle accidents, medical negligence claims and work injury damages claims. Accordingly I accept, as submitted on behalf of the second defendant, that it would be wrong uncritically to apply the indemnity costs rule as if it fettered my broad discretion under s 98 of the Civil Procedure Act 2005. The vice of elevating a general rule or norm to the status of legal principle was recently exposed in a different context in the decision of the High Court in Hili v R; Jones v R [2010] HCA 45 at [36] to [44] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; and see the separate judgment of Heydon J particularly at [74] to [75]. 9The present application must accordingly be determined having due regard to the competing demands of justice that, on the one hand, the plaintiff has succeeded against both defendants and should be compensated for his costs incurred in doing so and, on the other hand, that Parliament has seen fit to cap the costs recoverable from employers, with a potential for unfairness if that occurs at the expense of a non-employer defendant. 10Consideration must also be given to the circumstances of the individual case including the discrete issues that had to be established as against each defendant and the manner in which the case was defended by each. It may be observed in that context that the employer defendant could not be accused of having unduly expanded the issues raised for the Court's determination, or of having unduly extended the hearing time. The case unfolded very much as a contest between the plaintiff and the second defendant, with the first defendant more or less sitting quietly in the middle avoiding attention. In the circumstance of being a party against which recoverable costs are capped, that was a commendable approach. 11I am mindful of the importance of giving effect to the intention of Parliament expressed in regulation 102. However, having reflected carefully on the course of the hearing before, I have concluded that the appropriate order is that sought by the plaintiff. 12The order is that the defendants jointly and severally pay the plaintiff's costs of the proceedings. ********** 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. Decision last updated: 25 January 2013