Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Toll Pty Ltd v Harradine (No 2) [2017] NSWCA 75 Hearing dates: On the papers Decision date: 10 April 2017 Before: Meagher JA, Sackville AJA, Schmidt J Decision: 1. In lieu of Orders 1 and 2 made by the primary Judge on 3 March 2016 make the following orders: (1) Judgment for the plaintiff (Worker) in the sum of $660,898.00. (2) Note that the defendant (Toll) is entitled to a credit of $71,631.00 for workers compensation payments already made to the Worker. (3) Note that Toll is further entitled to a credit of $400,000.00 pursuant to an order made by McLoughlin DCJ on 4 April 2016. (4) No order as to the costs of the District Court proceedings, with the intent that each party should bear his or its own costs. 2. No order as to the costs of the appeal with the intent that each party should bear his or its own costs. Catchwords: COSTS – proceedings unsuccessfully claiming damages under the Motor Accidents Compensation Act 1999 (NSW) – consequence is that damages are assessed under the Workers Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIM Act) – whether proceedings "in relation to a claim for work injury damages" within s 346(1) of the WIM Act Legislation Cited: Civil Procedure Act 2005 (NSW), s 98 Interpretation Act 1987 (NSW), s 30(1)(c), (e) Motor Accidents Compensation Act 1999 (NSW) Workers Compensation Act 1987 (NSW), Pt 5 Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 346, Pt 6 Workers Compensation Regulation 2003 (NSW), reg 91 Workers Compensation Regulation 2010 (NSW), reg 104 Workers Compensation Regulation 2016 (NSW), regs 94, 96, Sch 8 cl 39(1) Cases Cited: Chubs Constructions Pty Ltd v Chamma (No 2) (2010) 78 NSWLR 679; [2010] NSWCA 225 Fox v Wood (1981) 148 CLR 438; [1981] HCA 41 Smith v Sydney West Area Health Service (No 2) [2009] NSWCA 62 Toll Pty Ltd v Harradine [2016] NSWCA 374 Category: Costs Parties: Toll Pty Ltd (Appellant) Jay Anthony Harradine (Respondent) Representation: Solicitors: BBW Lawyers (Appellant) Herbert Weller (Respondent) File Number(s): 2016/87874 Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Date of Decision: 3 March 2016 Before: McLoughlin DCJ File Number(s): 2013/8504 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. THE COURT: On 21 December 2016, this Court made the following orders: [1] (1) Appeal allowed. (2) Set aside the judgment for the respondent in the sum of $1,070,499.00 given on 3 March 2016. (3) Set aside the costs order made against the appellant by the primary Judge on 4 March 2016. (4) Direct the parties to bring in agreed short minutes of order on or before 25 January 2017 giving effect to these reasons for judgment. (5) If the parties are unable to agree, each should file short minutes of order proposed together with brief written submissions not exceeding four pages on or before 25 January 2017. 1. The purpose of inviting the parties to reach agreement on short minutes of order was to enable the calculations required to give effect to the Court's reasons. In particular, it was necessary to determine the adjustments required by reason of the finding in the Principal Judgment that the primary Judge erred in concluding that the respondent (Worker) would have earned $1,661.00 net per week at the date of the trial but for his injuries. [2] The Principal Judgment concluded that the primary Judge's calculations should be modified by substituting $1,350.00 as the Worker's net weekly earnings at the date of the trial instead of $1,661.00. [3] 2. The parties each filed written submissions, although not in conformity with the original timetable. The last submissions were filed on 28 March 2017. 3. The parties are agreed that the damages for loss of future earning capacity should be $470,408.00, inclusive of $46,592.00 for loss of future superannuation entitlements. [4] (The primary Judge appears to have awarded $614,801.25 under this head, inclusive of loss of future superannuation entitlements. [5] ) 4. The parties are also agreed that the appellant (Toll) is entitled to a credit of $71,631.00 for workers compensation payments already made. 5. The parties disagree as to the calculation of damages for past loss of earning capacity. The Worker says that the primary Judge's assessment (apparently $183,018.00 before allowances for superannuation and the Fox v Wood [6] component [7] ) should not be disturbed. Toll says that the assessment should be reduced to take account of the substitution of $1,350.00 as the Worker's net weekly earnings but for the accident instead of $1,661.00. 6. Although the Principal Judgment referred to an adjustment to the Worker's net weekly earnings (but for the accident) at the date of the trial, an adjustment must also be made to the assessment of damages for past loss of earning capacity. On this basis, the Worker does not dispute Toll's calculations which are as follows: $ Past loss of earnings 158,099.00 Loss of superannuation 17,391.00 Fox v Wood 15,000.00 TOTAL: 190,490.00 1. It follows that judgment should be entered for the Worker in the sum of $660,898.00 (that is, $470,408.00 plus $190,490.00). A notation should be made that Toll is entitled to a credit of $71,631.00 for workers compensation payments that have already been made. 2. The Worker submitted that the costs of the District Court proceedings fall to be determined in accordance with the Workers Compensation Regulation 2016 (NSW) (WC Regulation) reg 94, which provides as follows: "If a claimant obtains an order or judgment on a claim that is no less favourable to the claimant than the terms of the claimant'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 insurer to pay the claimant's costs on the claim assessed on a party and party basis." Toll was asked by the Court to state whether it agreed with this submission and in supplementary written submissions Toll accepted that reg 94 would apply if the Worker was awarded work injury damages no less than $600,000.00. [8] 1. It is common ground that the Worker's final offer at a mediation held on 13 July 2015 was: "$600,000 – clear of workers compensation paid to date, plus costs". 1. The outcome of the appeal is that judgment is to be entered for the Worker in the sum of $660,898.00 and Toll is entitled to a credit for $71,631.00 for workers compensation payments. Neither party has informed the Court as to the amount of workers compensation paid as at the date of mediation. Nor have the parties explained how the sum of $71,631.00 has been calculated, bearing in mind that the judgment entered by the primary Judge noted that $309,667.00 was to be credited to the amount of the judgment "owing to workers compensation payments that have already been made". 2. In the absence of the necessary information, it is not clear whether the Worker has obtained judgment no less favourable than the terms of his final offer of settlement. In these circumstances, the appropriate order is that each party pay his or its own costs of the District Court proceedings. 3. The Worker submits that, although Toll succeeded on the appeal, no order should be made in its favour for the costs of the appeal because of s 346 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIM Act) and WC Regulation reg 96. Section 346 of the WIM Act provides as follows: "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 any 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." Regulation 96 of the WC Regulation is as follows: "96 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." 1. In Smith v Sydney West Area Health Service (No 2) [9] (Smith), this Court held that s 346 of the WIM Act and reg 91 of the Workers Compensation Regulation 2003 (NSW) (a predecessor to reg 96 of the WC Regulation) displaced s 98 of the Civil Procedure Act 2005 (NSW) (CP Act) in a case involving a claim for work injury damages. Section 98(1) provides that costs are in the discretion of the Court, subject to the rules of the Court, the CP Act itself or any other Act. However, that discretion is displaced in cases to which s 346(1) of the WIM Act applies. [10] 2. The Court in Smith also said that the expression "in relation to" in s 346(1) of the WIM Act is of "particularly wide import" and "is designed to catch matters that have a sufficient nexus to the subject matter of the provision". [11] Accordingly, the Court held that the language of s 346(1) is wide enough to apply to proceedings in the Court of Appeal if they are in relation to a claim for work injury damages. 3. Toll submitted that Smith is distinguishable from the present case because the proceedings in this Court, although ultimately resulting in an award for "work injury damages", cannot properly be regarded as "in or in relation to a claim for work injury damages". This submission rests on the proposition that what was in dispute on the appeal was the Worker's claim to damages assessed pursuant to the provisions of the Motor Accidents Compensation Act 1999 (NSW) (MAC Act) and not any claim by the Worker to work injury damages. 4. The Worker's Amended Statement of Claim in the District Court proceedings made a claim pursuant to the MAC Act or, in the alternative, pursuant to Part 5 of the Workers Compensation Act 1987(NSW) (WC Act) and Part 6 of the WIM Act. The point at issue at the trial and on appeal was whether the Worker's claim for damages was to be dealt with under the MAC Act or as a claim for work injury damages. In the latter case, the Worker's damages would be assessed in accordance with the "more restrictive regime" established by the WC Act and the WIM Act. [12] The outcome of the appeal, as Toll's initial submissions on costs specifically stated, is that the Worker's damages are to be assessed on the basis that his claim is "limited to a work injury damages claim". 5. In Chubs Constructions Pty Ltd v Chamma (No 2), [13] this Court held that an appeal in respect of costs ordered in proceedings for work injury damages had "a sufficient, indeed an obvious nexus to such proceedings, so as to fall within s 346(1)". The very point of this appeal, from Toll's perspective, was to limit the Worker to his claim for work injury damages. This has a sufficient, indeed obvious nexus with a claim for work injury damages such as to attract s 346(1) of the WIM Act. 6. In conformity with WC Regulation reg 96, each party to the appeal should bear his or its own costs. 7. The following orders additional to those in the Primary Judgment should be made: 1. In lieu of Orders 1 and 2 made by the primary Judge on 3 March 2016 make the following orders: (1) Judgment for the plaintiff (Worker) in the sum of $660,898.00. (2) Note that the defendant (Toll) is entitled to a credit of $71,631.00 for workers compensation payments already made to the Worker. (3) Note that Toll is further entitled to a credit of $400,000.00 pursuant to an order made by McLoughlin DCJ on 4 April 2016. (4) No order as to the costs of the District Court proceedings, with the intent that each party should bear his or its own costs. 2. No order as to the costs of the appeal with the intent that each party should bear his or its own costs. ********** Endnotes 1. Toll Pty Ltd v Harradine [2016] NSWCA 374 (Principal Judgment). 2. Principal Judgment at [109]. 3. Primary Judgment at [110]. 4. There is a minor difference of $28.00 in the figures said to be agreed to by the parties. We have adopted the appellant's figures. 5. Principal Judgment at [22], [24]. 6. (1981) 148 CLR 438; [1981] HCA 41. 7. Principal Judgment at [23]. 8. It is not clear that reg 94 of the WC Regulation applies to the costs of the District Court proceedings rather than reg 104 of the Workers Compensation Regulation 2010 (NSW), which was in force at the time of the District Court proceedings: see Interpretation Act 1987 (NSW), s 30(1)(c), (e); compare WC Regulation Sch 8 cl 39(1). However reg 104 of the Workers Compensation Regulation 2010 (NSW) is identical to the current provision in reg 94 of the WC Regulation. 9. [2009] NSWCA 62. 10. WIM Act s 346(4). 11. Smith at [15]. 12. Principal Judgment at [5]. 13. (2010) 78 NSWLR 679; [2010] NSWCA 225 at [20] per curiam. 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: 10 April 2017