Aziz v Prestige Property Services P/L and Anor

[1] LYONS J: There are two defendants to the plaintiff's personal injuries claim, arising out of injuries sustained in an accident on 13 June 2000. The first defendant was the plaintiff's employer and the second defendant had control over the land upon which the plaintiff was injured. The plaintiff commenced proceedings against the second defendant in accordance with the Personal Injuries Proceedings Act 2002 in the District Court of Queensland on 1 June 2003. Separate proceedings were commenced against the first defendant on 2 July 2004 pursuant to the WorkCover Queensland Act 1996 in the Supreme Court. The proceedings against the second defendant were transferred to the Supreme Court and the two sets of proceedings were then consolidated pursuant to an order dated 23 December 2004.

[2] A mediation was held on 3 February 2006 and during the mediation an offer of settlement was made. The solicitors acting for the plaintiff however had concerns about his capacity at that time and advised the solicitors acting for the defendants that the plaintiff's acceptance of the offer was subject to confirmation by a psychiatrist that the plaintiff had capacity to provide instructions. The plaintiff's treating psychiatrist subsequently gave an opinion that the plaintiff's psychiatric condition was significantly influencing his decision making and was effectively preventing him from making decisions about his claim.

[3] On 7 June 2006, the plaintiff brought an application for leave to proceed in accordance with r 72 Uniform Civil Procedure Rules 1999. The application was opposed by both defendants who submitted that the action had been compromised in February 2006. On 27 March 2007, the Chief Justice directed that a number of preliminary issues needed to be determined and set the matter down for hearing. The preliminary issues essentially related to whether or not the proceedings had been compromised and, if not, whether the plaintiff was lacking in capacity so that he required a Litigation Guardian.

[4] The matter proceeded to a hearing on 1 June 2007 and reasons for judgment were delivered on 12 September 2007. The reasons for judgment indicated that the action had not been compromised and that the plaintiff required a Litigation Guardian. The plaintiff was granted leave to proceed under r 72. Final orders on costs were not made pending written submissions.

[5] The normal rule, of course, is that costs should follow the event.[1] The plaintiff submits that the Court would follow that rule in the instant case, especially for the following reasons:

1. The defendants strenuously resisted the relief sought by the plaintiff, by cross-examining witnesses, calling their own expert and making written submissions;

2. The defendants' position was misplaced as they called expert evidence which did not address the critical issue of the plaintiff's capacity in February 2006; and

3. The defendants do not identify any reason to depart from the normal rule

[6] The defendants submit that the question of costs in this matter is determined by s 325 of the WorkCover Queensland Act 1996, as it appeared prior to Act no 67 of 2001, and that therefore the Court cannot make any costs orders in relation to the first defendant as this is an interlocutory proceeding.

(1) No order about costs, other than an order allowed under this section, is to be made by the court in the claimant's proceeding.

(2) If a party to the proceeding makes a written final offer of settlement that is refused and the court later awards damages to the worker, the court must, in the following circumstances, make the order about costs provided for -

(a) if the amount of damages awarded is equal to or more than the worker's final offer - an order that WorkCover pay the worker's party and party costs from the day of the final offer;

(b) if the amount of damages awarded is equal to or less than the WorkCover's written final offer - an order that the worker pay WorkCover's party and party costs from the day of the final offer.

(3) If the award of damages is less than the claimant's written final offer but more than WorkCover's final offer, each party bears the party's own costs.

(4) An order about costs for an interlocutory application may be made only if the court is satisfied that the application has been brought because of unreasonable delay by 1 of the parties.

(5) If an entity other than the worker's employer or WorkCover is joined as a defendant in the proceeding, the court may make an order about costs in favour of, or against, the entity according to the proportion of liability of the defendants and the justice of the case.

(6) The court may make an order for costs against the worker's employer or WorkCover under subsection (5) only if -

(b) the worker's employer or WorkCover joined the entity as a defendant."

[8] Section 325(4) therefore clearly states that an order about costs for an interlocutory application may be made only if the court is satisfied that the application has been brought because of unreasonable delay by one of the parties.

[9] The plaintiff concedes that the application before the court is properly characterised as an interlocutory one and that a costs order cannot therefore be made for or against the worker or the employer. In Sheridan v Warrina Community Co-operative Ltd[2] it was held that s 325 is in effect a code with respect to the orders for costs that may be made in proceedings to which it applies.

As against the first defendant, it is clear that s 325(4) applies. The application currently before the Court is clearly interlocutory[3] and a costs order cannot be made for or against the worker or the employer.[4]

[11] However the defendants also seek to rely on s 325(4) to preclude the Court from making a costs order against the second defendant. The defendants argue that whilst s 325(5) empowers the Court to make orders for costs against defendants who are not the employer, such as the second defendant, the reference to the consideration of "proportion of liability" means it is concerned with orders for costs considered after a trial of the principal action.

[12] The defendants therefore submit that on its face s 325(4) is of general application and encompasses interlocutory applications against all defendants and there must therefore be no order as to costs

[13] The plaintiff submits that s 325(4) cannot apply in relation to the second defendant as s 325(1) to (4) are wholly concerned with the claim between the worker and the employer (which is the subject of the Act generally), and s 325(5) and (6) are the only provisions that deal with costs against non-employer defendants. That is, s 325(5) "stands alone" in addressing costs against non-employer defendants.

[14] The plaintiff submits that s 325(5) applies and the court has power to award costs against the second defendant as "... an entity other than the worker's employer or WorkCover [who] is joined as a defendant in the proceedings ..."

[15] The plaintiff further submits that the s 325(4) specifically does not apply in relation to a costs order against the second defendant for the following reasons:

(a) The normal rule is that personal injuries claims against non-employer defendants proceed under the Motor Accidents Insurance Act 1994, or the Personal Injuries Proceedings Act 2002, or at common law, and, in those cases, there is no fetter on the award of interlocutory costs, and there is no express declaration that Parliament sought to take away that right in s 325.

(b) The effect of the interpretation for which the second defendant contends is that, if the second defendant was sued separately, costs might be awarded against it, but if the proceedings were consolidated, no costs could be ordered against it. That is precisely the predicament here. Two sets of proceedings were consolidated (rather than being heard together) and the second defendant seeks to rely on that administrative step to remove any power in relation to costs.

[16] I agree with the submission of counsel for the plaintiff that any interpretation is awkward. On balance however I consider that the better interpretation is that s 325(1) to (4) are concerned with the worker's claim against his employer, and that is the sense in which the words "the claimant's proceeding" is used. It describes the claim, and the resultant proceeding, with which the Act is concerned.

[17] The only time that the Act makes any stipulation about non-employer defendants is in s 325(5) where it says that the Court can make such order that is warranted by the proportion of liability and the justice of the case. I consider that the Court retains a right to award costs against non employer defendants on interlocutory applications however this may not be able to be determined until the conclusion of the matter given the reference to "proportion of liability".

[18] In the circumstances of the current case I consider s 325(5) applies to the second defendant. However, it is clear that considering the interlocutory nature of the proceedings and the fact that there is another defendant, it is not appropriate to determine the issue of proportionality at this time. In the circumstances, the costs order against the second defendant should be reserved until the conclusion of the trial.

[19] As previously indicated there can be no order as to costs in relation to the first defendant given the provisions in the WorkCover Queensland Act 1996.

1. [1] Rule 689 Uniform Civil Procedure Rules 1999.
2. [2] [2004] QCA 308.
3. [3] Edmonds v Dunn Industries and WorkCover Queensland [2006] QSC 230.
4. [4] Sheridan v Warrina Community Co-operative Ltd & Anor [2004] QCA 308.