On 16 October 2015 in the matter of Abdul-Rahman v WorkCover Authority of NSW [2015] NSWSC 1483 ("the principal judgment") I made the following orders:
(1) Leave to appeal under s 53 Crimes (Appeal and Review) Act 2001 (NSW) is granted to the plaintiff.
(2) Leave to file and rely on a Notice of Contention under Part 50.11 Uniform Civil Procedure Rules 2005 (NSW) is granted to the Defendant.
(3) The appeal is allowed.
(4) The decision of the Local Court is set aside and in lieu thereof there will be a judgment for the plaintiff (that is, judgment for the defendant in the Local Court).
(5) Subject to any further submissions on the issue of costs, the defendant is to pay the costs of the plaintiff in both this Court and the Local Court.
Abdul-Rahman v WorkCover Authority of NSW [2015] NSWSC 1900 | Case summary | Zoe
The judgment indicated at [60] that if either party sought to be heard further as to costs they should approach my Associate within 72 hours. On 19 October 2015 my Associate received an email from the plaintiff's solicitor requesting that the matter be relisted for submissions as to costs. There was email correspondence between the parties and my Associate. Both parties sought to make submissions on the issue of costs and it was agreed that the costs applications would proceed by way of written submissions. I did not set a timetable, an omission that I regret and one that has caused significant delay in resolving the matter to finality. The case was heard on 6 October 2015 and judgment was published ten days later. It took 2 months for the parties to provide all of the submissions on the questions of costs. This was done in a disjointed and haphazard way. I understood that the last of that material was provided on 9 December 2015. I was wrong. On 14 December 2015 the matter was listed for judgment to be delivered today (17 December 2015). The plaintiff then sought to file further submissions and evidence. I will now recount a more detailed chronology of the filing of submissions and the evidence relating to the question of costs.
On 28 October 2015 my Associate received an email stating that the plaintiff applied under s 101(4) and (5) of the Civil Procedure Act 2005 (NSW) for interest to be paid on the costs in both the Local Court and Supreme Court and that the plaintiff would apply for indemnity costs in respect of the appeal to the Supreme Court.
On 2 November 2015 counsel for the plaintiff filed submissions seeking an order for interest on costs to be made to compensate the plaintiff "for being out of pocket in respect of relevant costs which he has paid." The submissions consist almost entirely of an excerpt of Grace v Grace (No 9) [2004] NSWSC 1239 from [57]-[65]. It will be necessary to refer to those submissions again. On the basis of the passage from Grace v Grace, it was submitted that it was not necessary to adduce evidence of the date or dates upon which the relevant costs were paid. There was no suggestion in the submissions that any application for indemnity costs was pressed.
On 18 November 2015 my Associate sent an email to the defendant's solicitors asking whether the defendant proposed to file submissions. On 27 November the defendant filed submissions. The defendant submitted that the costs should be limited "to an amount between 25% and 50% of the plaintiff's costs." This was based on the manner in which the plaintiff conducted the appeal in this Court. Further, it was submitted at [15] that "the plaintiff's application for interest on costs should be refused" on the basis that there was, in the terms employed in Grace v Grace, "a countervailing discretionary factor", namely the plaintiff's conduct of the Supreme Court proceedings.
On 1 December 2015 the plaintiff filed further submissions. Apart from replying to the defendant's submissions, the plaintiff sought to rely on additional evidence in the form of an affidavit of the plaintiff, two letters said to constitute "Calderbank Offers" and a series of tax invoices from the plaintiff's counsel and solicitors. On the basis of that additional evidence, the plaintiff argued that he should receive an order for indemnity costs and/or an order for specified gross sum costs. On 3 December 2015 the plaintiff's solicitors advised my Associate "We confirm that we have now submitted all relevant material."
Finally, or so I believed, the defendant filed some evidence in reply and submissions dated 8 December 2015. The submissions complained that "it was understood from the plaintiff's submissions dated 2 November 2015 that the plaintiff's application regarding costs was limited to an application for interests on costs" and that the submissions and evidence provided in early December was filed "without prior grant of leave or any directions" and "went beyond responding to the defendant's application".
While the defendant's complaint is unsurprising and probably justified, in the interest of bringing the litigation to a conclusion, I resolved to deal with each of the applications on its merit and on the basis of the material that had been filed by the parties.
On 9 December 2015 the plaintiff's solicitors sent an email to my Associate attaching submissions dated 2 November 2015, that is, over one month earlier. These submissions sought indemnity costs and relied on the contents of a "Calderbank Offer" sent on 21 July 2015 and the defendant's failure to respond to that offer. The solicitors explained that the submissions had not been provided earlier as a result of inadvertence and apologised for the oversight. Needless to say, the modest outrage expressed by counsel for the defendants in his submissions of 8 December 2015 was caused by the failure to serve the submissions seeking indemnity costs earlier and the appearance that the application for indemnity costs was raised for the first time in the plaintiff's reply submissions. In any event, the plaintiff's solicitors confirmed that "this now completes the evidence for the plaintiff".
At 2:51pm on 14 December 2015, my Associate notified the parties by email that judgment would be delivered on 17 December 2015 (that is, today). In spite of this, at 3:22pm on 14 December 2015, the plaintiff sought to file yet further submissions by counsel (dated 10 December 2015) as well as further evidence in the form of an affidavit of his solicitor (sworn 10 December 2015). On this occasion - no doubt conscious of the complaint made by the defendant as to the filing of documents and evidence without leave on 1 December 2015 - the plaintiff sought leave. My Associate notified the plaintiff's solicitors that I would receive submissions by 12:00pm on 15 December 2015 as to why leave should be granted to rely on further evidence and submissions after the matter was listed for judgment and after the plaintiff had twice indicated that there would be no further material filed.
I received those submissions. [1] The submissions explained the reasons it was necessary to file the material at such a late stage. In particular, the plaintiff understood (on the basis of correspondence from my Associate) that it was unlikely that judgment would be delivered this year. I accept those explanations although it is with some reluctance, and without in any way endorsing the conduct of the plaintiff's lawyers, that I have decided to grant leave and to receive and consider that further material. I do so in the interests of justice and finality and on the basis that the plaintiff himself should not be disadvantaged by the conduct of those representing him.
This morning, before delivering judgment, I had the various emails, submissions, affidavits and correspondence marked as exhibits.
There is no doubt that the Court has power to make the various orders sought by each side. The parties have made reference to the relevant provisions and case law. It is unnecessary to set out the legislation, rules and authorities here. The objective of any costs order is to achieve justice between the parties. This involves balancing a variety of considerations. The discretion is a wide ranging one. Section 98(1) of the Civil Procedure Act 2005 (NSW) provides that costs are to be awarded at the discretion of the Court and that the Court has full power to determine by whom, to whom and to what extent costs are to be paid.
To understand what follows, it is necessary to read these reasons in conjunction with the principal judgment.
[2]
Costs in the Local Court
The plaintiff's primary argument in the Local Court (or at least the first limitation argument raised in his Further Amended Defence) was the argument upon which he ultimately prevailed in this Court. While both parties raised submissions in the Local Court that might be thought to lack merit and were inconsistent with submissions made before me, there is no reason that the usual costs order should not follow.
The plaintiff shall have his costs for the Local Court proceedings.
[3]
Costs in the Supreme Court
The plaintiff prevailed in his appeal to this Court and he should receive an order for costs. However, I accept the defendant's submission that the conduct of the appeal by and on behalf of the plaintiff was such that the plaintiff's costs should be limited in accordance with an evaluative judgment based around considerations of fairness and justice.
Counsel for the plaintiff attempted to take forensic advantage of the remarks of the Magistrate to suggest that this Court was bound to proceed on the basis that the relevant limitation period was that created by s 247 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW). Section 247 applies to "proceedings for an offence". There is no sensible approach to the facts of this case that would permit a finding that the defendant brought "proceedings for an offence" against the plaintiff. Even when this became clear in oral argument, counsel maintained that this Court was bound to act on that basis because the Magistrate had made that finding [I interpolate here: he hadn't] and the defendant had not challenged the finding. This approach involved a misreading of the Magistrate's reasons and an attempt to have this Court proceed on the basis of a fanciful and erroneous approach to the law. I accept the defendant's categorisation of this as "an extraordinarily unmeritorious position to take."
On the other hand, the defendant also changed its position on the construction point having submitted at one stage in the Local Court that there may be no limitation period and finally submitting that s 18 of the Limitation Act 1969 (NSW) provided the limitation period. The defendant also withdrew one of its primary written submissions (that there was no practical distinction between the limitation period under s 18 and the provision under s 247) when the case came on for hearing and belatedly filed a notice of contention.
While the plaintiff succeeded in his appeal, he did so on a different legal basis to the primary submission that he advanced at the hearing. His counsel maintained at the hearing that s 247 created the appropriate limitation period and that, even if that was wrong, I was required to proceed on that erroneous legal basis because the defendant had not filed a cross-summons.
Taking all of those matters into account, my evaluative judgment is that the defendant should pay 75% of the plaintiff's costs in this Court.
[4]
Interest on costs
I accept the plaintiff's submission as to the discretionary power to award interest on costs. It is just that the plaintiff should have interest on the costs in the Local Court.
However, I accept the defendant's submission that the plaintiff's conduct of the proceedings in this Court constitutes a countervailing discretionary factor militating against making an order that interest be paid on the award of costs in this Court.
Accordingly, I will make an order for interest on the Local Court costs but decline to make such an order in respect of the costs of these proceedings.
[5]
The plaintiff's application for specified lump sum costs and indemnity costs
In seeking an order for costs on an indemnity basis, the plaintiff relies on an offer of settlement made after the Local Court hearing (and after he had filed submissions in this Court) in which he offered to forego seeking interest on costs if the defendant agreed to withdraw the proceedings, consent to judgment in his favour, pay costs in both the Local and Supreme Court and to sign a release which covered both him and his wife.
The matters to which I have made reference above concerning the conduct of the proceedings in this Court militate against an award for either indemnity costs or lump sum costs. While the plaintiff's conduct of the proceedings in this Court (or that of his counsel) does not disentitle him to such orders, it is a factor militating against making them.
In any event, I accept the defendant's submission that the material filed by the plaintiff does not enable me to make an informed assessment of the reasonableness of the costs claimed by the plaintiff and evidenced by the various tax invoices of his barrister and solicitors.
[6]
The legal costs and counsel's fees charged by the plaintiff's lawyers
Without forming any final opinion on the matter and noting that it may be a matter for agreement or (more likely, given the history of this case) a costs assessor, the costs claimed appear to be generous to a fault.
To take but one example provided by the defendant, [2] counsel for the plaintiff charged for 7 hours on 1 November 2013 to prepare written submissions seeking interest on the costs order. [3] Those submissions were just slightly longer than four pages. Half of the first page was taken up with the formal title of the proceedings. The first paragraph was a reference to s 101 of the Civil Procedure Act 2005 (NSW) and the following three pages of the submissions was a lengthy quote from one authority (Grace v Grace). There was one additional sentence of just over two lines at the end (33 words including prepositions, indefinite articles and the plaintiff's name).
In the submissions filed after the parties had been notified that judgment would be delivered, counsel for the plaintiff wrote:
"9. In reference to paragraph [25] of the Authority's submissions. Simplicity in the presentation of submissions belies the hard work in researching those submissions, the case law, the legal controversy on the timing of such applications, the UCPR and ascertaining the correct interest rates to be applied."
The difficulty with this submission is that the written submission for which the 7 hours was claimed said nothing about any legal controversy, made no reference to the UCPR or the correct interest rates and referred to one case. [4] Submissions as to the correct interest rates were provided on 1 December 2015 as part of a longer submission comprising a response to the defendant's submissions and seeking indemnity costs and gross sum costs order. [5] In addition to the fees charged on 1 November 2015, counsel charged a further 5 hours on 2 November 2015 for "preparation of submissions for orders seeking indemnity costs pursuant to Calderbank offer". [6] It seems that this relates to the submissions dated 2 November 2015 but "inadvertently not served" until 9 December 2015. It was submitted correctly that the delay in filing is "regrettable" and I accept that it was an "oversight" on the part of the plaintiff's solicitors. [7] Mr Abdul-Rahman was charged a further $3,500 (plus GST) by separate bill dated 1 December 2015 for:
"Review Costs Submissions by the Authority and authorities cited therein. Prepare Costs Submissions. Multiple telephone attendances upon Brydens. Settle Affidavit." [8]
While the number of hours is not stated, I assume based on other material that this bill is based on a total of 10 hours at $350 per hour.
I have also perused other tax invoices provided by counsel for the plaintiff and her instructing solicitors. On the material before me, and to put the matter as neutrally as I can, I am unable to come to a view that the costs claimed are reasonable. A costs assessor would be in a far better position to make a determination on that issue.
[7]
The Calderbank offers
In relation to the offers of settlement said to enliven the principles in Calderbank v Calderbank [1975] 3 All ER 33, I accept the defendant's submission that the defendant did not act unreasonably in declining to accept the plaintiff's offers.
What became clear when the original Calderbank submissions were served on 9 December 2015 is that the plaintiff was basing the claim for indemnity costs on the offer made 21 July 2015 and only seeking indemnity costs from that 22 July 2015. This was not clear in the submissions of 1 December 2015 which asserted "the Authority on two occasions unreasonably rejected two attempts to settle this litigation" [9] (emphasis in the original).
The plaintiff's first Calderbank offer was made on 12 December 2014. This involved the defendant withdrawing the proceedings and paying $20,000 in costs at a time when not very much had happened beyond the commencement of the proceedings, the filing of the defence (which was subsequently amended), [10] some conferences, correspondence and drafting of subpoenas. [11] According to the tax invoices annexed to the plaintiff's affidavit of 1 December 2015, to that point the plaintiff had been billed at total of approximately $11,500 [12] and had deposited a total of $13,000 into the solicitor's trust account. The disparity between the costs sought in the Calderbank offer and the amount in the tax invoices was raised by counsel for the defendant in his submissions dated 8 December 2015 where the offer was described as "disingenuous". [13] The plaintiff then (after being advised that judgment was to be delivered three days later) filed a further affidavit in which this apparent conundrum was explained as follows:
"4. The mater of Abdul-Rahman -ats- WorkCover was a matter that Ms [REDACTED] had carriage of.
5. Ms [REDACTED] [14] was summarily dismissed by this firm on 11 September 2014.
6. This left many files in a state of flux and many billings were not properly issued and identified.
7. As a result of her dismissal, I had to take on her practice as well as continue to operate with my practice.
8. Upon perusal of the file of Abdul-Rahman -ats- WorkCover, it came to my attention quite quickly that all items were not billed.
9. These items included such items as the initial interview, the 2nd interview where an interpreter was required, perusal of pleadings, perusal of various letters forwarded by Turks Legal concerning provision of documents under subpoena, perusal of subpoenas, preparation of brief to appear and advice to counsel, and other like items.
10. Apart from the item referred to in the Affidavit of Mohyeddine Abdul-Rahman at paragraph 9, I had estimated that there would be in excess of $11,500 in items that were not invoiced.
11. These matters are currently being invoiced,
12. This is why the figure of $20,000 was used in the Calderbank Offer because costs were in excess of that amount."
In the circumstances, the defendant has neither sought, nor had the opportunity, to cross-examine on this material. While I feel bound to accept the material in Mr Pserras' affidavit, the manner in which the material has been adduced is unsatisfactory. It does not relieve me of the anxiety that I feel as to the legal fees that Mr Abdul-Rahman has been, and will be, charged. [15] It does not convince me that the first Calderbank offer was one that the defendant, acting reasonably, was obliged to accept in order to avoid an order for indemnity costs.
The second "Calderbank" offer came after the defendant had succeeded in the Local Court. Along with dismissal of the proceedings and costs, it also sought to impose a condition that the plaintiff's wife (not a party to the proceedings) be immunised from suit. The defendant was entitled to consider this offer in the context of the first Calderbank offer. While the plaintiff offered to forego interest on his legal costs, and while this was not an insignificant concession in view of the evidence of his impecuniosity, [16] the defendant was entitled to be somewhat wary in reaching an agreement to pay his legal costs on the basis that they would be "agreed or assessed". The prospect of a lengthy dispute about the quantum of costs was real. This is acknowledged, in a different context, by counsel for the plaintiff. [17]
I accept that the principles are correctly stated in the plaintiff's submissions of 2 November 2015 [18] by reference to the decision in Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721. However, I accept the submissions of counsel for the defendant that "there was nothing unreasonable in refusing the offers made on behalf of [the plaintiff]."
[8]
The identity of the parties
In respect of each of the discretionary judgments that I have made above, I have taken into account the matters raised by counsel for the plaintiff concerning the identity of the parties. It is true that the defendant is a public authority, as it is put by Ms Beck, "a substantial commercial corporation". I also accept - while noting that the affidavits upon which this finding is based have not been subject to cross-examination - that the plaintiff is an individual who has faced a heavy burden emotionally and financially in defending the proceedings.
On the other hand, the defendant has a statutory duty to ensure that proper policies of insurance are maintained by those conducting businesses employing individuals who might be injured or suffer loss or damage in the course of their employment. It is also correct, as the defendant submits, that the question of construction upon which the plaintiff ultimately prevailed was a difficult one. However, costs are designed to compensate the successful party. The public interest that the defendant represents and the fact that it had an arguable case are not particularly significant matters in exercising the discretion as to costs.
[9]
Conclusion as to the plaintiff's applications
I am unable to conclude that the conduct of the defendant in connection with the proceedings was unreasonable or involved misconduct of any relevant kind. [19] I am unable to make an informed assessment as to the reasonableness of the legal costs that the plaintiff has been charged by his lawyers. A costs assessor is in a far better position to make such an assessment. [20]
For the foregoing reasons, this is not an appropriate case to make either an order that the defendant pay the plaintiff's costs on an indemnity basis or a lump sum costs order.
[10]
Costs on the applications for costs
Each of the parties has enjoyed some success on the application of costs. The parties should bear their own costs on this issue. For the sake of clarity, my order that the defendant pay 75% of the plaintiff's costs in the Supreme Court proceedings does not include the costs of and incidental to the various applications for variation of the original costs order.
[11]
ORDERS
I make the following orders:
1. Revoke the order as to costs made on 16 October 2015 and in lieu thereof order as follows:
2. The defendant to pay the plaintiff's costs of proceedings in the Local Court as agreed or assessed.
3. The defendant to pay interest on the costs of proceedings in the Local Court at the prescribed rate under s 101 Civil Procedure Act 2005 (NSW) and Rule 36.7(1) Uniform Civil Procedure Rules 2005 (NSW) from the date of judgment in the Local Court until the date of payment.
4. The defendant is to pay 75% of the plaintiff's costs of the proceedings in this Court as agreed or assessed.
5. The parties are to pay their own costs in relation to the applications to vary the cost order originally made in this Court.
6. Refuse the plaintiff's application for interest on the costs of proceedings in this Court.
7. Refuse the plaintiff's application for indemnity costs.
8. Refuse the plaintiff's application for a specified lump sum costs order.
[12]
Endnotes
Submissions dated 15 December 2015 under the hand of Jim Pserras of Bryden's lawyers.
Paragraph [25] of the submissions of Mr Rayment dated 8 December 2015.
See Tax Invoice Jennifer D Beck dated 4 November 2015.
See submissions on Ms Beck dated 2 November 2015.
See undated submissions of Ms Beck (7 pages) sent by email on 1 December 2015, p 2.
Tax Invoice, Jennifer Beck dated 4 November 2015.
Submissions of Ms Beck dated 10 December 2015.
Tax Invoice, Jennifer D Beck, dated 1 December 2015.
Ms Beck's undated submissions filed 1 December 2015 at p 5 [1.6] (the paragraph numbers are out of turn).
See Further Amended Defence dated 10 March 2015, annexure C to affidavit of Demetrios Pserras affirmed 12 May 2015.
See Tax Invoices of Jennifer D Beck dated 20 August 2014 and 1 December 2014, Tax invoice of Brydens dated 31 March 2015.
$2,951.66, $3,733.75 and $1,540 (including GST) by Ms Beck and $2,849.33 (including GST and disbursements) by Brydens.
Submissions of Mr Rayment dated 8 December 2015.
I have redacted the name of the solicitor as she is not represented here and is not in a position to respond to the allegations that her former employer makes against her.
As I understand pp 6-7 of Ms Beck's submissions served 1 December 2015, the total costs in the Local Court were $29,584 and in the Supreme Court $41,338.50. I assume (without certainty) that this includes the matters that the employed solicitor failed to bill when she left her files in the "state of flux" referred to in Mr Pserras's affidavit of 15 December 2015. [Just before delivering judgment I was advised that this assumption was incorrect and that the costs in the Local Court were greater than this.]
See Manly Council v Byrne and Anor (No 2) [2004] NSWCA 227 and Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721.
See Ms Beck's submissions dated 10 December 2015 (filed 14 December 2015) at [6].
Served 9 December 2015 after the defendant had filed its submission in reply.
See the cases collected in Ritchie's Uniform Civil Procedure NSW, LexisNexis, Sydney, 2005 to date (loose-leaf at September 2015) at [42.5.5]-[42.5.7].
Compare, for example, Herbert v Tamworth City Council (No 4) [2004] NSWSC 394; 60 NSWLR 476 at [32].
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Decision last updated: 17 December 2015