Skene v Coles Supermarket Pty Ltd [2000] NSWCC 59; (2000) 21 NSWCCR 54 (26 October 2000)

Last Updated: 23 July 2001

[2000] NSWCC 59; (2001) 21 NSWCCR 54

SKENE v COLES SUPERMARKET PTY LTD

[2000] NSWCC 59

Compensation Court of New South Wales: Campbell CJ

26 October 2000

Workers compensation - Costs - Order against applicant - If claim made without proper justification - Relevant time to decide - When proceedings actually commenced - Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 112

Workers compensation - Costs - Order against insurer, party in proceedings, to pay costs of other successful insurers - Generally not given - May be given if insurer acted intransigently

C.T. Pinkerton, for the applicant

A. Parker, for the respondent in the interests of Allianz

W.S. Strathdee, for the respondent in the interests of NEM

C. Zucker (solicitor), for the respondent in the interests of American Home Assurance

M.J. Jenkins, for the respondent in the interests of Royal & Sun Alliance

Ex tempore

1 CAMPBELL CJ: I did say that I would reserve my decision on the issue of costs because it had seemed to me that it would be necessary to consider quite a number of matters including some of the evidence given by the applicant. However, upon reflection and analysis I think that that is not necessary. I have reached a conclusion on the matter and it is therefore appropriate I give judgment. The parties have been informed by my associate of the proposed giving of the judgment. In the circumstances, being here at Tamworth, I have conveyed a message that I would excuse the representatives of the parties, unless they wished to attend. In the circumstances I will arrange that when the judgment is transcribed and duly put in proper form copies of it will be provided to the solicitors for the parties by my chambers.

2 The matter came on for hearing yesterday. For present purposes it is sufficient to refer to the relevant insurers involved as follows: Allianz, for whom Mr Parker of counsel appeared, were the insurers from 1 January 1974 to 30 June 1976, from 31 July 1986 to 30 June 1987 and from 30 June 1987 to 21 January 1999. NEM, for whom Ms Strathdee of counsel appeared, was the insurer from 30 June 1976 to 30 June 1981. American Home Assurance for whom Mr Zucker, solicitor, appeared was the insurer from 30 June 1981 to 31 July 1985 and Royal & Sun Alliance, for whom Mr Jenkins of counsel appeared, was the insurer from 31 July 1985 to 31 July 1986. Mr Parker sought and was granted leave to withdraw from the courtroom after counsel for the other insurers had confirmed that no order was sought against Allianz.

3 Ms Pinkerton of counsel appeared for the applicant.

4 The hearing of the principal matter commenced, it being a claim for continuing weekly payments. The applicant had been paid weekly benefits for some considerable time and also medical expenses including the expenses of an operation. During the course of Mr Parker's cross-examination of the applicant and following the showing of a video, the applicant in effect destroyed her credibility. It is unnecessary to take that aspect further.

5 Following an adjournment, a consent award was made for the respondent, Allianz agreeing to pay the $6,000 applicant's costs, which, amongst other things, covered costs relating to an earlier listing of the matter. All other counsel simply consented to the award.

6 Then Ms Strathdee made an application that the applicant should pay the costs of NEM. She was supported by Mr Zucker and Mr Jenkins in respect of the costs of their respective insurers. The matter was put by Ms Strathdee, who led the argument, under the provisions of s 112 of the Workplace Injury Management and Workers Compensation Act 1998 and specifically in reliance upon the provision that a costs order may be made against an applicant if the Court is satisfied that the application was made without proper justification. Ms Strathdee took me to a case decided by O'Meally J on 24 November 1998 of Duffy v John Fairfax & Sons Pty Ltd, NSWCC, No. 11861/96, unreported, in which his Honour had ordered that the applicant pay the costs of an earlier insurer.

7 Ms Strathdee then led some evidence, to which I will refer later, including, in particular, correspondence between solicitors and made reference to the lack of certain evidence in the evidence given by the applicant in chief.

8 It would seem, with respect, that Ms Strathdee had overlooked the matter raised expressly by O'Meally J in Duffy's case, namely that the relevant time at which one considers whether the claim had or had not been made without proper justification was at the time the proceedings were actually commenced. His Honour pointed out, when it was suggested that the order that the applicant should pay the costs should commence at some later point:

I doubt that it would be a proper exercise of my discretion. I have to determine that the proceedings were brought without proper justification. That is to say that at the time the application was filed there was no evidence, at least none communicated to me--despite my invitation--which would have justified proceedings against NEM.

9 I accept the view expressed by his Honour--the language of the section would appear clearly to support it--the relevant time is when the proceedings were commenced.

10 In my view, the applicant's solicitors did have at that time material to support the bringing of the claim against the respondent in respect of the entire period for which the applicant had worked for the respondent. It was not for the applicant, certainly at that point of time, to seek to sort out what the respondent's internal insurance arrangements were. The application for determination was filed on 26 July 1999. The applicant was, as her solicitors clearly would have known, a night filler for a time, worked in a dairy section for a time and subsequently worked as a point-of-sales operative for the respondent. The applicant's solicitors would not have had to inquire what that involved but I have no doubt they would have been aware that such work involved the type of duties referred to by Dr Endrey-Walder in a report of 30 March 1999 which was received by the applicant's solicitors on 7 April, that is well before the proceedings commenced, in which the doctor said:

I believe that it would be reasonable to suggest that one-half of her degenerative changes of the right knee would be reasonably attributable to the nature and conditions of her work at Coles over the previous 25 years and one-half to natural age-related wear and tear changes.

11 It is not to the point that the applicant in a claim form following the frank injury, which she relied upon from 2 March 1998, said "going from back of store to front of store in a hurry and knee gave way". It is clear, despite some very strange evidence that the applicant happened in fact to give, that those advising the applicant were aware at the time the proceedings were issued that she had degenerative changes in the knee. Dr Endrey-Walder had expressed the view that they might be reasonably attributed, or half of them, to the nature and conditions of her work over that time and that is ample justification for the applicant's solicitors to issue the proceedings that were issued and therefore for her to issue them. That in fact disposes of the matter.

12 I should deal with one or two points raised by Ms Strathdee. She submitted that the applicant had given no evidence of engaging, as Dr Endrey-Walder had put in his report, in the following activities:

... she had to walk around the store or stand by the check out counter, she had shelf filling duties to perform as well as other forms of merchandising, she had to squat or kneel down to attend to stock or stretch on the top of her toes to reach high shelves...

13 I have no doubt that this Court, being a specialised Court, dealing amongst other things in industrial type injuries, is entitled to know the sort of work a night filler does for a supermarket. In any event it would be not improbable that Dr Endrey-Walder's report would find its way into evidence. Unless proper objection was taken and an appropriate order made, it may well be that under the Evidence Act 1995 the account given by Dr Endrey-Walder would be in evidence. However, I do not need to get involved in that complication.

14 In Duffy reliance was placed upon a later report of a doctor not dissimilar in some respects to that of Dr Endrey-Walder, but, as O'Meally J pointed out, that report was obtained long after the proceedings had been commenced which is quite different to the present situation.

15 The requirements of s 112 are not satisfied and the application therefore fails. Even if I were entitled to consider the position as it later unfolded, I would be of the same view.

16 There was discussion between the solicitors, Connery & Partners for American Home Assurance and Royal & Sun Alliance and Hunt & Hunt for NEM, with the applicant's solicitors, pointing out that against the background of the entire matter it seemed that liability would devolve upon Allianz. The applicant's solicitors in correspondence agreed that that appeared to be the most likely outcome and consulted Hickson Wisewoulds, the solicitors for the Allianz Group. From the correspondence it is quite clear that over the course of the matter the last mentioned solicitors had been maintaining, one trusts on instructions, the position that it would not be accepted that the case was a disease matter and that it would not be accepted that Allianz was bound to indemnify the respondent in respect of such liability as might be established.

17 The last letter from the applicant's solicitors to Hickson Wisewoulds sought, as I understand it, although the letter is not before me, that Allianz agree to the other insurers being, to put it broadly, released. Regrettably, Hickson Wisewoulds chose to write back a letter, which was both impertinent and showed a lack of comprehension on the part of the author of the letter of the actual position. The letter acknowledged receipt of the applicant's letter and the enclosed letter of Hunt & Hunt indicating that that firm considered that NEM should be released and that, if it were not, costs would be sought and said:

We presume you are not asking for direction as to how you should run your claim.

18 A very impertinent comment when solicitors are trying sensibly and properly to reduce the costs of an overall piece of litigation. Hickson Wisewoulds's letter went on:

However, we have some sympathy with Hunt & Hunt's position and we are inclined to echo them in relation to pleadings against Allianz Australia Ltd in the old Act period. Please advise us what you intend to do about further conduct of the proceedings.

19 Obviously the solicitor was being intransigent, or simply failed to understand that what was being called for at that time was an agreement that Allianz would indemnify the respondent against such liability as might be established.

20 It is a strange feature of this case, although, perhaps, common enough, that all the insurers have bayed after the blood of the applicant--or in a sense the applicant's solicitors since what took place were really legal decisions--but none seem to have pursued the real "nigger in the wood pile", namely Allianz and perhaps those advising Allianz. I was expressly told that no insurer was seeking that its costs be paid by Allianz. I therefore have not heard what Allianz would have to say about it. Subject to that, it would seem to me that it is highly likely that, had I been asked to make such an order, I would have done so.

21 It is not for the applicant's solicitors, faced with this sort of situation, to make difficult decisions from the aspect of the applicant. Ms Strathdee did refer to a decision of Burke J in Perry v Tanine Pty Ltd [1998] NSWCC 14; (1998) 16 NSWCCR 253 in which his Honour held that a carpal tunnel syndrome resulting from repeated stress amounted to a disease and suggested that that is what the applicant's solicitors should have had in mind. The problem with that is that many decisions have proceeded on the basis that allegations of "nature and conditions of employment" found in appropriate cases findings of repeated micro-trauma which are injuries simpliciter.

22 In Australian Conveyor Engineering Pty Ltd v Mecha Engineering Pty Ltd (1998) 45 NSWLR 606, Powell JA, with whom Sheller JA agreed, said it was open to the trial Judge to hold that the worker's impairments were due to two discrete injuries. Powell JA said at 619:

... it was open to the trial Judge to hold that the worker's impairments were due to two discrete "injuries"-- a simple "injury" in 1992 and an injury brought about by the nature and conditions of his employment with the first respondent--and that he did not err in doing so. This being so, it seems to me the case did not call for the application of the provisions of s 16 of the Act.

23 In the case of Colliar v Bulley (2000) 19 NSWCCR 302, Davies A-JA, with whom Meagher JA agreed, took the view that an injury being the aggravation or exacerbation of a disease to which employment had contributed fell within s 16 and was not excluded simply because the claim for compensation was or could have been framed in terms of par (a) of definition of "injury" in s 4 of the Workers Compensation Act 1987 (the Act), that is as injury simpliciter. On the other hand in a powerfully argued dissent in the same case Priestley JA took the view that the majority opinion of the High Court in Zickar v MGH Plastic Industries Pty Ltd [1996] HCA 31; (1996) 187 CLR 310 led to the conclusion that if there is an injury which can be a par 4(a) injury or a par 4(b) injury and the Court finds a s 4(a) injury, then s 16 has no application. One cannot expect applicants' solicitors to make fine decisions based upon what would follow from an allegation of nature and conditions, nor to make fine distinctions as to the liability to indemnify for particular periods of insurance, which are primarily a matter between the respondent and its insurers.

24 I am aware that it has been for a long time the practice in the Compensation Court, and in the Commission before it, that insurers who succeed do not generally seek orders for costs against other insurers. That is a very salutary practice. It avoids unnecessary litigation and argument and probably generally works out fairly evenly in the long run. However, where, as here, an insurer has, on what appears before me, either because of express instructions or by reason of some failure of comprehension on the part of those advising it, acted with a measure of intransigence, it would not be inappropriate to make orders that that insurer, who was a party in the proceedings, pay the costs of the other insurers.

25 I emphasise, of course, that I have not heard what could have been put on behalf of Allianz. I should also say that Mr Parker, properly discharging the duty of counsel, whilst not resiling from the instructions that he had been given, did indicate at the outset of the matter that he anticipated that the issues in the end would fall to be resolved between the applicant and Allianz.

26 For those reasons I decline to make the orders sought by the three insurers that their costs be paid by the applicant.

Application declined

Solicitors for the applicant: Long Howlland Houston

Solicitors for the respondent in the interests of Allianz: Hickson Wisewoulds

Solicitors for the respondent in the interests of NEM: Hunt & Hunt

Solicitors for the respondent in the interests of American Home Assurance: Connery & Partners

Solicitors for the respondent in the interests of Royal & Sun Alliance: Connery & Partners