On 5 July 2023 I provided my reasons in this matter subject to final orders being made after the parties had the opportunity to make further submissions on certain matters (De Vries v JNC Group Australia Pty Limited [2023] NSWSC 777).
The court reconvened today to consider the further submissions. There was a good deal of agreement, but also some argument on the following matters:
1. The plaintiff's ability, in particular in respect of timing, to not accept satisfaction of judgment against the second defendant as envisaged by s 151Z(2)(e) of the Workers Compensation Act 1987 (NSW).
2. An order requested by the first defendant that the second defendant pay 20% of the plaintiff's costs.
3. The plaintiff's application for indemnity costs against the first defendant, arising from an offer of compromise made by the plaintiff on 16 July 2021.
4. Section 151Z(2)(e)
Section 151Z(1) of the Workers Compensation Act 1987 (NSW) states:
(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect -
(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,
(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation,
(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,
(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),
(e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,
(e1) if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment,
(f) all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission.
Section 151Z(2) states:
If, in respect of an injury to a worker for which compensation is payable under this Act -
(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and
(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer,
the following provisions have effect -
(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable,
(d) the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 as to the award of damages,
(e) if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that -
(i) if the compensation paid by that employer exceeds the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise - the indemnity referred to in subsection (1) (d) is for the amount of the excess only, and
(ii) if the compensation paid by that employer does not exceed the amount of that contribution - subsection (1) (d) does not apply and the employer has, to the extent of the compensation so paid, a defence to an action for such a contribution.
The operative subsections for present purposes are ss 151Z(1)(d) and 151Z(2)(e), the point at issue being at what stage the plaintiff is entitled to not accept satisfaction of the judgment.
Following my publishing of reasons on 5 July 2023, the plaintiff immediately stated that he did not accept satisfaction of the judgment against the second defendant (his employer). That position was repeated in argument today.
The first defendant submitted that the decision to not accept satisfaction of the judgment could only be made after final orders had been entered. Neither party was able to cite authority for their position one way or the other. I was told that there is a matter currently before the NSW Court of Appeal which may resolve the issue, which apparently arises from an earlier decision of that Court in Southwest Helicopters Pty Ltd v Stephenson [2017] NSWCA 312; (2017) 98 NSWLR 1.
I cannot see, in the legislation, any basis to restrict the timing of the declaration by the plaintiff that he will not accept satisfaction of a judgment. As soon as I published my reasons, it became evident that he was entitled to the judgment and was able to make an assessment as to whether or not to accept the judgment.
The first defendant accepted that if I came to this conclusion then, as relevant, the orders proposed by the plaintiff should be made but subject to a notation as to the first defendant's position. I will include that notation in the final orders.
[2]
Payment of 20% of the plaintiff's costs by the second defendant
This submission was made by the first defendant in order to reflect my finding that the second defendant was liable, to the extent of 20%, for the injury suffered by the plaintiff. The order was said to fall within my general discretion as to costs.
The second defendant responded that such an order was simply not possible because of the combined effect of s 346 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and regs 96 and 97 of the Workers Compensation Regulation 2016 (NSW).
The first defendant accepted the restrictions imposed by the above statutory provisions but nevertheless urged me to make another finding that would reflect the overall justice emanating from my reasons. The first defendant suggested that I might deny the plaintiff any costs associated with obtaining reports from his expert, Mr Dubos.
The difficulty with the first defendant's proposal, concerning Mr Dubos' reports, is that they really have nothing to do with my findings on liability. I prefer the suggestion made by the plaintiff that the plaintiff not be able to recover any costs exclusively limited to the case against the second defendant.
[3]
Indemnity costs
The plaintiff's application for indemnity costs was supported by an affidavit of his solicitor, Mr Michael Barnes, dated 6 July 2023. The affidavit annexes an offer of compromise served under r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW).
The offer was to accept judgment in the sum of $550,000 clear of workers compensation payments. The workers compensation payments at that time were $346,878.06. The addition of these two figures results in a total well below the sum I have assessed in damages.
The first defendant did not challenge the form of the offer but submitted that it was reasonable for the offer not to have been accepted. The basis for the submission was that, as at July 2021, the plaintiff was relying on a different factual scenario which included the expert reports of Mr Dubos. Reliance on these reports was abandoned on the first day of the hearing.
The plaintiff initially countered this submission by referring to the position papers that had been submitted by the parties for a mediation on 16 July 2021. The reliance on the position papers was later withdrawn, in recognition of the confidential 'bubble' surrounding the mediation.
The plaintiff also submitted that the "presumptive entitlement" arising under the rules (in particular r 42.14) had not been displaced by the first defendant. It was said that the matters relied upon by the first defendant were simply representations from the bar table and not based on any evidence. I agree that the representations were from the bar table, but they accord with events during the hearing, such as the abandonment of the plaintiff's expert evidence on the first day.
There is no evidence before me of any notification by the plaintiff to the first defendant of a change in its position as to reliance on expert evidence and as to the circumstances of the injury. The first defendant was entitled to expect that the plaintiff would rely on expert evidence and would advance the case as originally suggested.
The first defendant had expert evidence directly contradicting that of Mr Dubos. It was entitled to rely on that evidence and assume it would be a central feature in the hearing. If the case had been run on the assumptions posed to the experts, a different result may have been ensued. I think it was reasonable for the first defendant to reject the offer of compromise.
Accordingly, I reject the application for indemnity costs.
[4]
Final orders
I will first of all record the following two notations respectively sought by the plaintiff and the first defendant, in the terms requested by these parties:
1. Note that if the plaintiff is able to recover against the first defendant, the plaintiff will not accept satisfaction of the judgment against the second defendant (s 151Z(2)(e) Workers Compensation Act 1987 (NSW)). Consequently, s 151Z(1) applies as if the plaintiff had not been entitled to recover damages against the second defendant.
2. Note that the first defendant formally objects to the orders sought by the plaintiff concerning s 151Z and would prefer the following order:
Pursuant to s 151Z(2)(c) of the Workers Compensation Act 1987 (NSW), the damages ($1,537,808.42) other than for economic loss ($708,955.92), are to be reduced by 20% to a figure of $567,164.73. Adding the damages for economic loss ($828,852.50) results in a judgment for the plaintiff against the first defendant in the sum of $1,396,017.23.
I make the following orders:
1. Pursuant to s 151Z(2)(c) of the Workers Compensation Act, the damages, other than for economic loss ($853,538.92), are to be reduced by 20%; to a figure of $682,831.14. Adding the damages for economic loss ($828,852.50) results in judgment for the plaintiff against the first defendant in the sum of $1,511,683.60. (Noted in such event, the plaintiff is to repay the second defendant the compensation received, $373,302.90).
2. Judgment for the plaintiff against the second defendant in the sum of $828,852.50.
3. Pursuant to s 151Z(2)(d) of the Workers Compensation Act, Judgment for the first defendant against the second defendant on the cross-claim, for 20% of the economic loss damages, being $165,770.50.
4. The first defendant is to pay the plaintiff's costs of the proceedings on an ordinary basis, except that those costs are not to include any costs exclusively limited to the case against the second defendant.
5. No order as to costs as between the plaintiff and the second defendant.
6. The first and second defendants are to bear their own costs of the cross-claims.
7. Judgment against the first defendant is stayed on condition that any appeal from the judgment is filed within 42 days of the date of these orders.
[5]
Amendments
01 August 2023 - [22]-[23] - Paragraph numbering corrected.
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: 01 August 2023