District Court New South Wales Medium Neutral Citation: Ortlipp v Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer (No 3) [2014] NSWDC 161 Hearing dates: 20 June 2014 Decision date: 20 June 2014 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Order that the defendant's notice of motion (filed 27 May 2014) be dismissed. (2) Order that the defendant pay the plaintiff's costs of the motion noting that they should be governed by regulation 102 and Schedule 7 of the Workers Compensation Regulation 2010. Catchwords: COSTS - application to amend orders - late tender of mediation certificate - caution to be exercised - no explanation of failure to raise matters Legislation Cited: Uniform Civil Procedure Rules 2005, r 36.16, r 42.1, r 42.7 Workers Compensation Regulation 2010, reg 102, reg 105, reg 108, sch 7 Cases Cited: Aktas v Westpac Banking Corporation Ltd [No 2] [2010] HCA 47 Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand and Anor v the Macedonian Orthodox Community Church St Petka Inc and Anor (No 2) [2007] NSWCA 142 Rockcote Enterprises Pty Ltd v Fs Architects Pty Ltd (No2); Carelli v Fs Architects Pty Ltd (No 2) [2008] NSWCA 205 Category: Costs Parties: Patricia Anne Ortlipp (plaintiff) Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer (defendant) Representation: Ms E Welsh (plaintiff) Mr A B Parker (defendant) Brydens Compensation Lawyers (plaintiff) Edwards Michael Lawyers (defendant) File Number(s): 2013/177741 Publication restriction: None ex tempore Judgment 1On 17 April 2014 I gave a judgment in which I made the following orders: "1. The plaintiff's notice of motion is dismissed. 2. The plaintiff to pay the defendant's costs of the notice of motion. 3. In the event that no submissions are received by 4pm on 1/5/14 opposing dismissal of the proceedings or costs, the proceedings will be dismissed with the plaintiff to pay the defendant's costs of the proceedings. If submissions are received, the matter will be re-listed." 2Subsequently, submissions were received in respect of costs. On 21 May 2014 in a written judgment I made the following orders: "(1) Confirm orders 1 and 2 made on 17 April 2014. (2) Order that the costs of the motion be limited to the costs set out in Schedule 7 of the Workers Compensation Regulation 2010 in accordance with regulation 102. (3) Dismiss the proceedings generally. (4) Order that the parties are to bear their own costs of the proceedings, including any costs incurred after the dismissal on 17 April 2014 of the notice of motion." 3On 22 May 2014 the solicitor for the insurer wrote to the legal representative of the claimant, and to my associate, in the following terms: "The Defendant proposes to seek by Notice of Motion that Order 2, relating to the costs of the ancilliary s.151D application, be varied pursuant to UPCR [sic] 36.16 by deleting the limitation of the costs ordered to be paid by the Plaintiff to those provided by Reg.102 and Sch.7 of the Workers Compensation Regulation 2010. The point, which was not addressed by the parties in their submissions relating to costs, will require some argument". 4The question whether the point was addressed was considered before me in argument and ultimately the insurer seemed to accept that, as was the case, the limitation imposed by the statute was raised by the claimant's submissions and was considered in argument. 5On 27 May 2014 the insurer filed a notice of motion seeking the following orders: "1. That Order 2 made by his Honour Judge Taylor SC on 21 May 2014 be set aside pursuant to UCPR Rule 36.16. 2. That Order 4 made by his Honour Judge Taylor SC on 21 May 2014 be set aside and varied pursuant to UCPR Rule 36.16 with the following Order to be substituted: 'That the Plaintiff pay the Defendant's costs of the proceedings pursuant to Regulation 105 of the Workers Compensation Regulation 2010 with such costs to be assessed and determined in accordance with Schedule 7 of the said Regulation.' 3. Such further or other Order as the court thinks fit." 6It might be noted that paragraph 2 of this new application was not foreshadowed in the earlier letter quoted above. 7The insurer sought to tender evidence of a certificate of offer made at a mediation. I allowed that tender provisionally, the matter of its admission to be finally determined as part of these reasons. The issues raised by the application are: (1)whether the Court can and should set aside the orders previously made and entered; and (2)whether the orders sought in the application should be made. 8As the appropriateness of the orders sought on the application may impact upon whether the court should set aside the orders previously made, I propose to consider generally that question first. 9The insurer's argument has three aspects. First, that the mediation certificate shows an offer which is more favourable to the claimant than the dismissed proceedings and therefore certain costs consequences are said to follow. Regulation 105 of the Workers Compensation Regulation 2010 provides: "105 Costs where claimant less successful than insurer's final offer or insurer found not liable (1) If a claimant obtains an order or judgment on a claim that is less favourable to the claimant than the terms of the insurer's final offer of settlement in mediation under the 1998 Act as certified by the mediator under section 318B of the 1998 Act, the court is to order the claimant to pay the insurer's costs on the claim assessed on a party and party basis. ..." 10Thus, the insurer submits that the claimant has obtained an order "less favourable to the claimant" than the terms of the insurer's final offer of settlement and because the proceedings were dismissed, so the insurer says it is entitled to an order for the costs of the proceedings. 11Secondly, the insurer submits that reg 105(2) has application. It provides: "(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." 12Thus, the insurer submits that it has no liability because of the dismissal of the proceedings and is thus entitled to a costs order for the proceedings. 13Thirdly, the insurer says that reg 108 is effective to provide that costs for ancillary proceedings are not confined by reg 102 and sch 7. In argument, the insurer on this point felt compelled to accept that the non-application of "the subdivision" was of no assistance to it since reg 102 is not in the same subdivision. But the insurer embraced the suggestion that by providing for costs to be "in accordance with the rules of the court", reg 108 thereby falls within the terms of "except as otherwise provided by this Part" in reg 102. 14Turning to the argument based on reg 105, the difficulty with the argument is that sub-reg (1) of reg 105 is premised on a claimant "[obtaining] an order or judgment", and sub-reg (2) is premised on a claimant who "does not obtain an order or judgment". Thus, it seems to be that there is no overlap between the provisions: a matter cannot fall under both. 15It seems difficult to construe the events that have occurred where the proceedings have been dismissed as a circumstance where the claimant has obtained an order or judgment, and reg 105(1) is inapplicable. 16In respect of reg 105(2), the claimant submits that it applies only to the failure of a claimant to obtain an order or a judgment given after the matter has been determined on the merits. The parenthetical reference in sub-reg (2) raises the question: has the Court found that "the insurer has no liability for the claim"? I reserved that question on 17 April 2014. 17No submissions were received on that matter and so in accordance with the previous proposed order the proceedings were dismissed. In my view, it is not at all clear that reg 105(2) applies to proceedings that have been precluded from being commenced by reasons of the s 151D limitation point upon which the claimant lost on 17 April 2014. 18The third point raised by the insurer concerns reg 108, submitted to be a contrary provision to reg 102. Some aspects of this issue are of concern. First, the primary purpose of reg 108 seems to be to overcome the effect of provisions in the subdivision in which reg 108 is placed, such as reg 106 (which provides for each party to bear their own costs) rather than reg 102 which is in another subdivision. In other words, reg 108 is concerned with what costs are awarded rather than the assessment or amount of those costs, which is the principal concern of sch 7 and reg 102. 19Secondly, reg 105 provides for costs to be assessed on a party/party basis. This is a provision that deals with the matter of assessment and thus seems more amenable to being a contrary provision to reg 102 and sch 7. However, the insurer disavowed any argument that reg 105 "provided otherwise" within the exception of reg 102. If reg 105 does not provide otherwise to the amount of maximum costs provided for in reg 102 and sch 7 by referring to an assessment "on a party and party basis", it seems difficult to see how reg 108 could be read as doing so when it makes no reference at all to the quantity of costs or assessment. Rather, there seems no particular reason why the sch 7 maximum amount of costs cannot sit comfortably with a costs order made in accordance with the rules of court, even a party/party costs order (as would arise under reg 105). Neither party suggested that reg 102 imported an entitlement to indemnity for costs up to the sch 7 maximum. 20Finally, what might be awarded "in accordance with the rules of the court" is not altogether clear. Although r 42.1 of the Uniform Civil Procedure Rules 2005 imports a general rule that costs follow the event, what is the event may be a matter for argument. Rule 42.7 indicates that as a general rule costs of interlocutory applications are to be costs of the proceedings, see generally His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand and Anor v the Macedonian Orthodox Community Church St Petka Inc and Anor (No 2) [2007] NSWCA 142 at [16] to [32]. 21All of these matters might impact on what would be the appropriate costs orders if the matter were to be re-ventilated, and thus the appropriate costs order in the circumstance is far from clear. 22Another relevant matter is that if the insurer could have raised these matters on the previous occasion and did not, as was the position, it is likely that the claimant may be entitled to the costs of today by reason of that failure by the insurer. However, if those costs are also in respect of an ancillary matter, and are limited by sch 7, there may be a question as to whether they provide any benefit for the claimant since sch 7 seems to provide an amount of nil costs (see sch 7, Work Injury Costs Table A, Stage 8). That circumstance would be taken into account in determining what is the appropriate costs order under the rules. 23I turn to the second aspect of the application that is whether the court can and should set aside the orders previously made and entered. Rule 36.16(3A) provides as follows: "(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered." 24This power is not subject to limitations such as those contained in other subrules of r 36.16. The power conferred is subject only to the limitations imposed by the general law on the power to set aside or vary a judgment or order prior to that judgment or order being entered. See Rockcote Enterprises Pty Ltd v Fs Architects Pty Ltd (No2); Carelli v Fs Architects Pty Ltd (No 2) [2008] NSWCA 205 at [10] per Campbell JA, see also [1] per McColl JA and [58] per Handley AJA. On the other hand, at [9] in Rockcote, Campbell JA stated that: "Courts have traditionally exercised great restraint concerning setting aside or varying a judgment or order that has been made, but not entered." 25His Honour referred to Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 at 302 and quotes the following passage from Mason CJ: "the jurisdiction is to be exercised with great caution, having regard to the importance of the public interest in the finality of litigation...generally speaking it will not be exercised unless the applicant can show that by accident and without fault on his part he has not been heard...However, it must be emphasised that the jurisdiction is not to be exercised for the purpose of reagitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to reargue their cases." See also Aktas v Westpac Banking Corporation Ltd [No 2] [2010] HCA 47 at [6]. 26The arguments advanced by the insurer reflect matters that were available to be made by the insurer as part of the previous costs hearing but were not advanced, either in the written submissions provided or in the oral submissions made. The mediation certificate was, apparently, available but not tendered, and the insurer made no reference to reg 105(1) or reg 105(2). The insurer did make a passing reference to reg 108 but made no submission that reg 102 was excluded by the concluding words of reg 108. 27The insurer tendered no evidence to explain these omissions. Rather, I was told that the matters had been overlooked. By reason of the authorities referred to, that circumstance does not, in my view, warrant a reagitation of the matter. The insurer was given an opportunity to be heard, and was heard, both in writing and orally on the matter. Further, the earlier submissions of the insurer specifically referred to discretionary matters in making an order for costs that, on the argument now put before me, would not be available because reg 105 is said to require a certain costs outcome. 28It is also not irrelevant that the orders that are sought to be revisited are orders in respect of costs, principally the costs of an interlocutory application, and to allow the argument on the matter further increases the impact of the costs upon the parties. 29Although the arguments about the impact of regs 105 and 108 have some merit, the insurer has provided no explanation sufficient to persuade me that this is a case where the discretion should be exercised to revisit those matters, particularly in circumstances where, if I were to revisit the matters, there would be adverse costs consequences to the insurer by reason of its failure to raise these matters earlier. 30In my view, the existing order should not be disturbed, notwithstanding the submission that had these other matters been raised, different orders might have been made. 31Accordingly, I propose to order that the application be dismissed. Consistent with the position of the claimant that reg 102 and sch 7 applies to all costs orders and my earlier decision that any costs order in favour of the claimant must also be limited by sch 7. However, sch 7 indicates that the quantum of costs payable to a claimant unsuccessful in the proceedings generally would be nil. Notwithstanding that, I propose to make the following orders: (1)Order that the defendant's notice of motion (filed 27 May 2014) be dismissed. (2)Order that the defendant pay the plaintiff's costs of the motion noting that they should be governed by regulation 102 and Schedule 7 of the Workers Compensation Regulation 2010. ********** 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: 09 October 2014