Howarth v Rail Corporation New South Wales (No 2) [2013] NSWSC 236

Supreme Court New South Wales

Medium Neutral Citation: Howarth v Rail Corporation New South Wales (No 2) [2013] NSWSC 236 Hearing dates: 21 March 2013 Decision date: 21 March 2013 Jurisdiction: Common Law Before: Beech-Jones J Decision: Pre-judgment interest not payable. Final orders entered. Catchwords: Common law claim by employee against employer - entitlement to pre-judgment interest - s 151M of Workers Compensation Act 1987. Legislation Cited: - Civil Liability Act 2002 - Worker's Compensation Act 1987 - Div 3 Pt 5, s 151M - Workplace Injury Management and Workers Compensation Act 1998 - s 318B Cases Cited: - Corbett v Toll Stevedoring Pty Ltd [2007] NSWSC 749 - Goodman v Impact Hire Australia Pty Ltd *[2009] NSWSC 941 - Howarth v Rail Corporation New South Wales (No 1) [2013] NSWSC 220 Category: Consequential orders Parties: Jodie Nicole Howarth (Plaintiff) Rail Corporation New South Wales (RailCorp) (Third Defendant) Representation: Counsel: D.A. Wheelahan QC, M.J. Maxwell (Plaintiff) N.J. Polin (Third Defendant) Solicitors: Adams & Co (Plaintiff) Hicksons Lawyers (Third Defendant) File Number(s): 2011/037417

Judgment - ex tempore 1On 20 March 2013 I gave judgment in these proceedings. I determined that the provisional total for the plaintiff's claim for past and future economic loss was $1,380,238 (Howarth v Rail Corporation New South Wales (No 1) [2013] NSWSC 220 at [84]; (Howarth (No 1)). 2I noted that the plaintiff had accepted that, by virtue of the operation of the relevant legislation, she could not recover her costs, and thus the appropriate order would be that each party pay their own costs. I stated that I could not at that time enter judgment for the provisional total, because there was outstanding the question of whether interest was payable on any part of the judgment sum. The parties indicated they needed a short amount of time to gather material to address that issue. To their credit, the following morning they compiled the necessary evidence. They have argued the question of whether or not the plaintiff is entitled to interest on any part of the judgment this afternoon. 3The entitlement or otherwise of the plaintiff to interest is governed by s 151M of the Worker's Compensation Act 1987 which provides: "Payment of interest (1) Limited statutory entitlement A plaintiff has only such right to interest on damages as is conferred by this section. ... (4) (a) Interest is not payable (and a court cannot order the payment of interest) on damages unless: (i) information that would enable a proper assessment of the plaintiff's claim has been given to the defendant and the defendant has had a reasonable opportunity to make an offer of settlement (where it would be appropriate to do so) in respect of the plaintiff's full entitlement to all damages of any kind but has not made such an offer, or (ii) the defendant has had a reasonable opportunity to make a revised offer of settlement (where it would be appropriate to do so) in the light of further information given by the plaintiff that would enable a proper assessment of the plaintiff's full entitlement to all damages of any kind but has not made such an offer, or (iii) the defendant has made an offer of settlement, the amount of all damages of any kind awarded by the court (without the addition of any interest) is more than 20% higher than the highest amount offered by the defendant and the highest amount is unreasonable having regard to the information available to the defendant when the offer was made. (b) The highest amount offered by the defendant is not unreasonable if, when the offer was made, the defendant was not able to make a reasonable assessment of the plaintiff's full entitlement to all damages of any kind. (c) For the purposes of this subsection, an offer of settlement must be in writing. (5) Calculation of interest If a court is satisfied that interest is payable under subsection (4) on damages: (a) the amount of interest is to be calculated for the period from the date of the death of or injury to the worker until the date on which the court determines the damages, and (b) the amount of interest is to be calculated in accordance with the principles ordinarily applied by the court for that purpose, subject to this section. (6) Rate of interest The rate of interest to be used in any such calculation is three-quarters of the rate prescribed for the purposes of section 101 of the Civil Procedure Act 2005 for the period concerned. (7) Judgment debts Nothing in this section affects the payment of interest on a debt under a judgment or order of a court." 4It is apparent from the section that in order for the plaintiff to recover any interest, she must satisfy at least one of ss 4(a)(i), (ii) or (iii). Sub-section 4(a)(ii) deals with the circumstance of a revised offer of settlement. It assumes that a written offer has already been made. Sub-section 4(a)(iii) deals with a comparison of an amount so offered and the amount recovered by the plaintiff. It also assumes that a written offer has been made. As I will explain, in this case there was no such offer. Accordingly, the relevant provision to consider is s 151M(4)(a)(i). 5In February 2011 the plaintiff filed the so-called "pre-filing material". It included what was, in effect, a draft statement of claim, as well as a statement of particulars of her injuries, heads of damages and the list of documents served on the defendants. With one possible exception, the material that was filed reflected the case that she made at the hearing before me. The exception concerns some recent reports of Dr Adler and some reports of a psychiatrist, Dr Jungfer (see Howarth (No 1) at [53] and [65]). 6Despite that material only being prepared, and then provided, recently, I am satisfied that the plaintiff previously provided RailCorp with information that would have enabled it to make a proper assessment of her claim. The most recent reports of Dr Adler are merely confirmatory of the contents of his report of December 2009 and of the report of Dr Bodel from May 2010 which were served prior to the commencement of proceedings. 7The reports of Dr Jungfer were of perhaps more significance. It was Dr Jungfer's reports that addressed and responded to the earning capacity assessment report provided to RailCorp which opined that the plaintiff had a residual earning capacity (Howarth (No 1) at [65]). However, given that their significance was really by way of response to a matter raised by RailCorp, I do not think that their absence detracts from the conclusion that sufficient information was provided to RailCorp to make a proper assessment of the plaintiff's claim. 8From beginning to end, the plaintiff's claim was that she was completely disabled from resuming any occupation that would have a realistic chance of earning her any income from now into the future. The material she supplied at the outset sought to demonstrate that. The material from Dr Jungfer only confirmed that position. 9RailCorp nevertheless contends that s 151M(4)(a)(i) is not engaged because, in the circumstances, even if they had the information to enable it make a proper assessment and make an offer, it was nevertheless not "appropriate" for it to do so. 10The basis for this contention is that it was apparent, so RailCorp says, that the plaintiff was not prepared to entertain a settlement offer from it alone, absent some contributions from the other defendants who were dismissed from the proceedings on the first day of the hearing (see Howarth (No 1) at [3]). To explain this, I need to add some further background. 11On 25 July 2011 there was a mediation conference. Subsequent to that conference, a certificate was issued under s 318B of the Workplace Injury Management and Workers Compensation Act 1998 concerning the outcome of that conference. The certificate records that the parties failed to resolve the dispute and did not reach a settlement at the mediation. It records that the mediation was attended only by the representatives of the plaintiff and RailCorp, and not the other defendants. It also states that "due to the absence of third party defendants, neither party made any offer in the mediation". 12RailCorp's solicitor swore an affidavit that was read before me. He states that an informal settlement conference was held on 9 May 2012. He records that, at that settlement conference, there was an attendance by the legal representatives for the plaintiff, RailCorp, and the then legal representatives for the other defendants. He states that an offer was made on behalf of the plaintiff for a total figure which, together with costs, represented the amounts sought against all the defendants. He states that the offer was calculated in accordance with the damages regime provided for under the Civil Liability Act 2002. A comparison of the amount that was offered with the amounts that were in issue in Howarth (No 1) suggests that that conclusion is correct. 13The solicitor states that at some point he was advised that the plaintiff had left the settlement conference and her lawyers' instructions had been withdrawn. He states that further attempts were made to arrange informal settlement conferences but that they were unsuccessful. As I stated in the first judgment, it was not until the first day of the hearing that the first and second defendants were let out of the proceedings. 14Against the above background, it seems to me that RailCorp could reasonably have understood that the plaintiff's position was that she was not prepared to entertain a separate settlement with it representing only her entitlements calculated in accordance with Division 3 of Part 5 of the Workers Compensation Act 1987. 15Instead, from the mediation on July 2011 through to the time of the settlement conference on 9 May 2012, it would have appeared to any reasonable observer that the plaintiff was only interested in pursuing an all-up settlement against all the defendants on the basis of her recovering damages calculated in some manner or other in accordance with the Civil Liability Act 2002. There is nothing to indicate that that position changed at least up until the first day of the hearing. 16In those circumstances, the question arises as to whether it could be said that it was appropriate for RailCorp to have made a written offer. I can see some force in the proposition that a party in RailCorp's position should, in the ordinary course, be expected to make some offer reflecting its exposure. However, in the end I cannot conclude that a party should be put in the position of it being "appropriate" for it to make an offer when it would have been apparent that the plaintiff was not interested in receiving and settling upon any separate offer that it could make. 17Without needing to traverse the differences in the decisions in Corbett v Toll Stevedoring Pty Ltd [2007] NSWSC 749 and Goodman v Impact Hire Australia Pty Ltd [2009] NSWSC 941, in my view that conclusion has the consequence that the plaintiff has not established what she must in order to satisfy s 151M(4)(a)(i). 18I find that the plaintiff does not have an entitlement to recover interest on any part of her damages. 19Accordingly, I will now enter judgment for the Plaintiff against the Third Defendant in the sum of $1,380,238. 20I make no orders as to costs.