Vrankic v Fidax Foundry Pty Ltd [1995] NSWCC 39; (1995) 13 NSWCCR 33 (14 December 1995)

[1995] NSWCC 39; (1995) 13 NSWCCR 33

VRANKIC v. FIDAX FOUNDRY PTY LTD

Compensation Court of New South Wales: Davidson J

14 December 1995

ALTERNATIVE RIGHTS AND ELECTION BETWEEN DIFFERENT REMEDIES - EFFECT OF CLAIM OR PROCEEDING FOR OR RECEIPT OF COMPENSATION ON RIGHT TO DAMAGES - APPLICATION FOR DETERMINATION SETTLED - AWARD BY CONSENT ENTERED - ELECTION - STATEMENT OF CLAIM FOR DAMAGES THEN FILED IN SUPREME COURT - AWARD SUM RETURNED - MOTION FOR AWARD TO BE SET ASIDE AND COSTS AWARDED AGAINST WORKER FOR INSTIGATING UNNECESSARY LITIGATION - WHETHER COURT HAD JURISDICTION TO CONSIDER MOTION - WORKERS COMPENSATION ACT 1987, PART 5 - COMPENSATION COURT ACT 1984, SECTION 17(4)

J.L. Sharpe, for the employer (applicant in the motion)

R.I. Goodridge, for the worker (respondent in the motion)

Ex tempore

DAVIDSON J: This is a notice of motion brought by the employer in respect of proceedings between the parties which came on for hearing before me at Parramatta on 29 June 1995.

The matter, on that occasion, was settled without any hearing or a final determination after the tender of evidence by me and terms of settlement, signed by the parties, were filed.

Consequently the formal court order issued, dated 29 June 1995, which set out the agreement the parties had, by consent, come to in respect of payment of the sum of $33,761 for 40 per cent loss of the applicant's left hand under section 66 of the Workers Compensation Act 1987 (the Act) and the sum of $10,000 in respect of pain and suffering under section 67 of the Act.

The claim for interest was dismissed. There was an order by consent that the respondent pay the applicant's section 60 expenses and the respondent pay the applicant's costs as agreed including qualifying fees and fee for counsel for advice on evidence. The final order by consent was that liberty be granted to apply in default of agreement as to the costs.

Following the entering of the award the applicant, as plaintiff in the Supreme Court, filed a statement of claim on 17 July 1995. By its notice of motion, the respondent employer today seeks to set that award aside. It further seeks that the application for determination in this matter be struck out, that the applicant pay the respondent's costs and such other orders as the Court may deem necessary.

In support of the motion there has been filed an affidavit of Christopher Ronald Michael. Annexed to the affidavit is correspondence between the solicitors for the parties.

That of 18 July 1995 from the applicant's solicitor advised that the applicant has elected to take common law proceedings and enclosed a cheque for the sum of $43,761 by way of return, which the respondent, no doubt through its insurer, had sent to the applicant's solicitors in satisfaction of the award.

Mr Sharpe appears for the applicant employer in this motion, and Mr Goodridge for the respondent worker.

The submission of the employer is that whatever the legislative provisions might permit, the conduct of the worker and his legal representatives in the particular circumstances of this case, as a matter of justice, require the order sought by it in the notice of motion. That is particularly so when the question of the payment by the applicant worker of the respondent's costs of the proceedings before me is considered.

Generally speaking, the employer says that the worker's course of conduct should not be countenanced as it amounts to unnecessary litigation having been instigated by the injured worker in this Court. It says that the immediate issue of the statement of claim in the Supreme Court establishes that, at the time of the bringing of the Compensation Court proceedings, the applicant and his solicitors had formed the intention to also institute the common law action.

I was referred by Mr Sharpe to two decisions. Firstly, of Williams J in MCDONALD V. CLAUDE FAY CELLARS [1979] 53 WCR (NSW) 121. In short, as I understand that authority, the parties had entered into a redemption agreement which had been approved under section 15 of the 1926 Act. At a later date, despite the fact that it had been noted at the time of the approval by Williams J that the sum to be paid by the respondent was to include the applicant's rights to medical and hospital expenses pursuant to section 10, the applicant sought further orders in respect of section 10 expenses.

I was also referred to the general practice of this Court and to an instance in a case, which Mr Sharpe could not immediately bring to mind in which he appeared before Campbell J, as he then was, who had held, as I believe has been a common attitude amongst the members of this Court, that an applicant can ask for the Court to exercise its jurisdiction and make a determination, although the applicant is, at the time, currently being paid his entitlements. That is not an uncommon occurrence.

However, the relevance of it from the employer's point of view is that in those circumstances the costs of the worker is another thing and should not ordinarily be allowed or, if allowed at all, they would be not on the normal scale.

I was further referred to the decision of Truss J of this Court, in HODSON V. SCOTT TRANSPORT INDUSTRIES PTY LTD [1994] NSWCC 3; (1994) 10 NSWCCR 19. That case became part heard in this Court and before it concluded the injured worker finalised common law proceedings arising out of the same injury. In those circumstances, Truss J exercised her discretion and refused to award costs to the injured worker in the Compensation Court proceeding.

I have taken those authorities into account in determining this matter.

As to the question of costs, Mr Sharpe submits on behalf of the employer, that the legislative intention in section 18 of the Compensation Court Act, public policy, and the need to guard against abuse of court process provide good reason, in this instance in any event, for an alteration of the costs order.

Mr Sharpe referred me to authority on that matter from appellate courts and in particular the judgment of Sheller JA in a recent case of STATE RAIL AUTHORITY V. CHALKER (1995) 11 NSWCCR 462 where it is made clear that one should look at the whole intention of the Act in this type of question.

In opposition to the motion, Mr Goodridge, on behalf of the worker, referred me to the relevant provisions of the Act and more particularly section 151 and its various related sections. They include sections 151A(2), 151B, 151B(4), 151H(2A) and 151N(2).

He also referred me to KEMPSEY DISTRICT HOSPITAL V. THACKHAM, Court of Appeal, No. 40373/94, 7 June 1995, unreported.

Mr Goodridge said that the motion should fail for two reasons: one was because of the lack of substance on the facts and the law. Secondly, he submitted that I had no jurisdiction to entertain the notice of motion nor to make the orders sought in it.

The basis of the jurisdictional point was that I was functus as the parties had come to an agreement and the respondent could not go behind it. In effect he submitted that the respondent employer, the applicant in this motion, was saying that the worker had rescinded the agreement. Mr Goodridge submitted that that was not so and in fact that the applicant relied upon it.

I am satisfied that I have jurisdiction to entertain this application. It seems to me that the broad power given under section 17 of the Compensation Court Act permits it.

It might be thought also that the fact that in the award under consideration there was reserved, in paragraph 6, liberty to apply in default of agreement as to costs permits it. Mr Goodridge submitted that that was purely as to quantum; I agree. In any event, it does not effect my conclusion that I have jurisdiction by virtue of section 17.

It would appear that this may be the first occasion on which this question has been raised in this Court and there is no direct authority to assist me.

Having weighed the respective arguments and the authorities to which I have been referred, I have come to the conclusion that the statute does allow the course taken by the applicant. I have come to that view somewhat reluctantly, as it was my initial reaction, having heard Mr Sharpe and considered the conduct of the worker, that prima facie there was a doubling of litigation and consequent costs.

At this very moment, the legislature is formulating emergency legislation, the effect of which, in part, is to rein in what is said to be the ballooning cost of compensation and, in particular, legal costs.

It is the submission of the employer that this is an instance falling within that category. On one view of it it may be. However, I accept the submissions that Mr Goodridge has put, more particularly, those relating to those parts of Part 5 of the Act to which he referred me.

I sought from Mr Goodridge some guidance as to the effect which this course by the worker would have in respect of costs overall. That is to say, both in the proceedings in this Court and in the impending Supreme Court action.

I understand from him and have, to a great extent, acted upon this, that the fact that the section 66 and 67 matter has been dealt with firstly in this Court, will reduce the time and costs in any subsequent common law action. It seems to me that some support is to be gained, in what he says from the Bar table as to that, from Thackham's case.

Whilst that case dealt with other legislative problems of a fairly consequential nature, the President provided some insight into what I believe is the thinking of at least the three members of the Court of Appeal who deliberated in Thackham's case.

Handley JA, at the conclusion of his judgment indicates that the course taken by the worker in this instance probably should be condoned. Handley JA said that:

"The practical difficulties adverted to by Mr Deakin which have been recognised by this Court can be overcome in most but not all cases if a plaintiff crystallises his or her compensation rights prior to the trial of common law proceedings by obtaining awards for any weekly or lump sum compensation. Legal advisers for a plaintiff faced with a situation such as the present should be alert to the problems, and to the solution which is readily available if the appropriate steps are taken in time."

Whilst I am hesitant to adopt that 100 per cent and apply it in all circumstances, it does provide the support for the proposition advanced by the worker in this instance.

As I understand Thackham's case, the real problem there was an assessment of future compensation rights. Nevertheless, Handley JA speaks of crystallising rights prior to the trial by obtaining awards not only for weekly but also for lump sum compensation.

Kirby P in Thackham's case appears to consider that the course adopted here would probably be reasonable. At least that is the way I read between the lines, as one sometimes has to do when the case is not exactly in point.

He refers to Meagher JA's observation that:

"... the conduct of a trial within a trial 'is hardly a unique feature of the law'. "

with which he agreed.

He goes on to say:

"But given that in some cases, at least, such a trial will be conducted before a jury upon which a judge is expected to give clear instructions it is hardly an inviting prospect for the legal resolution of the case which this Court can accept with easy equanimity."

He referred then to Handley JA's suggestion that:

" ... the problems presented could 'largely be overcome by crystallising a plaintiff's compensation rights prior to the trial of common law proceedings'. But, with respect, that solution involves a number of assumptions about the willingness of parties to pursue workers compensation rights at a given time in the wisdom of a worker's forsaking such rights in a case where recovery of common law may be dubious."

As I say, at the risk of reading too much into that, I believe it does support the course adopted by the worker in this instance. Certainly it would seem to me that Meagher JA sees nothing improper in it when he talks about the trial within a trial.

If it can be shown, as I accept is the case, that there is a saving of costs, I believe that the course adopted should not be brought into question.

Mr Goodridge also drew an analogy with the position, generally speaking, as it was under the 1926 Act. There proceedings were frequently taken before the Workers' Compensation Commission, brought to conclusion and then the worker proceeded, if it was warranted, to a common law hearing.

I believe to the limited extent that that analogy is applicable, it supports the conduct in this instance.

I, therefore, with some hesitation, dismiss the notice of motion and refuse to set aside the earlier award or to strike out the application for determination.

So far as the question of the payment of the costs is concerned, I have had even more difficulty. On the face of it, it would appear that unnecessary costs have been incurred. However, having weighed the whole of the matter, I have concluded that is not the case for some of the reasons that I have given in respect of the refusal of the substantive motion.

I dismiss the whole of the motion and order the applicant employer to pay the respondent worker's costs of this motion.

Orders accordingly

Solicitors for the applicant/employer: Neville & Edwards

Solicitor for the respondent/worker: Firths