HIS HONOUR: The current argument concerns costs following my decision in Fields v Berrigan & Anor (No. 1) [2022] NSWDC 567. This is the 28th year in which I have had cause to observe that nothing excites the zeal, the ardour, and the passion of members of the legal profession more than an argument about costs. I made a number of orders in this matter on 16 September this year. In matter 2016/00085305, I ordered the Plaintiff to pay the First Defendant's costs insofar as they made a claim for damages under the Civil Liability Act 2002. On the application of the Plaintiff, I reserved costs of the Plaintiff's claim against the First Defendant in those proceedings insofar as they are a claim for work injury damages.
The course of the pleadings needs to be considered. The initiating process was filed on 18 March 2016. According to that Statement of Claim, the relief claimed was this:
"1. Work injury damages.
2. Interests pursuant to Section 151M of the Workers Compensation Act 1987.
3. Costs."
The Court's file contains an Amended Statement of Claim, which has written on its coversheet the date 29 November 2016. However, the document has not passed under the seal of the Court. What did pass under the seal of the Court is a copy of the same document, the seal having been affixed on 6 April 2017. According to that Amended Statement of Claim, the relief claimed was this:
"1. Damages pursuant to the Civil Liability Act in the alternate work injury damages.
2. Interest in accordance with the Civil Procedure Act 2005 in the alternate interest pursuant to section 151M of the Workers Compensation Act 1987.
3. Costs."
A further Amended Statement of Claim was filed on 10 May 2021. According to that version of the Statement of Claim, the relief claimed was this:
"1. Work injury damages.
2. Interest pursuant to Section 151M of the Workers Compensation Act 1987.
3. Costs."
I have been referred by learned Counsel for the Plaintiff to the provisions concerning costs contained in the Workers Compensation Regulation 2016 (NSW), in particular Part 17, Division 3. The relevant provisions are these:
"Subdivision 1 Maximum costs recoverable by law practices in work injury damages matters
91 Application of Division
This Division is made under section 337 of the 1998 Act and applies to the following costs payable on a party and party basis, on a law practice and client basis or on any other basis -
(a) costs for legal services or agent services provided in or in relation to a claim for work injury damages,
(b) costs for matters that are not legal or agent services but are related to a claim for work injury damages.
Note -
Section 337(3) of the 1998 Act provides that a law practice is not entitled to be paid or recover for a legal service or other matter an amount that exceeds any maximum costs fixed for the service or matter by regulations under section 337.
92 Fixing of maximum costs recoverable by law practices
(1) The maximum costs for -
(a) legal services provided in or in relation to a claim for work injury damages, and
(b) matters that are not legal services but are related to a claim for work injury damages,
are the costs set out in Schedule 7, except as otherwise provided by this Part.
Note -
The effect of this clause is that a law practice or agent cannot recover any costs in relation to a claim for work injury damages unless those costs are set out in Schedule 7, except as otherwise provided in this Part.
(2) If there is a change in the law practice retained by a party in or in relation to a claim for work injury damages, the relevant costs are to be apportioned between the law practices concerned.
(3) If there is a dispute as to such an apportionment, either law practice concerned (or the client concerned) may refer the dispute to the President for determination.
(4) A law practice has the same right of appeal against a determination made under subclause (3) as the law practice would have under clause 125 if the determination were a determination made by the President in relation to a bill of costs.
Note -
Division 3 of Part 4.3 of the Legal Profession Uniform Law (NSW) requires a law practice to provide a client with information disclosing the basis on which legal costs will be calculated, and an estimate of the total legal costs, as soon as practicable after instructions are given in relation to any matter.
93 Contracting out - law practice/client costs
(1) This clause applies in respect of costs in or in relation to a claim for work injury damages if a law practice -
(a) makes a disclosure under Division 3 of Part 4.3 of the Legal Profession Uniform Law (NSW) (sections 174(4) and 178 excepted) to a party to the matter with respect to the costs, and
(b) enters into a costs agreement (other than a conditional costs agreement, under section 181 or 182 of that Law, that provides for the payment of a premium of more than 10% of the costs otherwise payable under the agreement on the successful outcome of the matter concerned) with that party as to those costs in accordance with Division 4 of that Part, and
(c) before entering into the costs agreement, advises the party (in a separate written document) that, even if costs are awarded in favour of the party, the party will be liable to pay such amount of the costs provided for in the costs agreement as exceeds the amount that would be payable under the 1998 Act in the absence of a costs agreement.
(2) Schedule 7 does not apply to the costs concerned to the extent that they are payable on a law practice and client basis.
Subdivision 2 Restriction on awarding of costs
Note -
This Subdivision is made under section 346 of the 1998 Act, which provides that a party is not entitled to an award of costs to which that section applies (being costs payable by a party in or in relation to a claim for work injury damages, including court proceedings for work injury damages) except as prescribed by the regulations or by the rules of the court concerned.
In the event of any inconsistency between the provisions of this Regulation and rules of court, the provisions of this Regulation prevail to the extent of the inconsistency: section 346(4) of the 1998 Act.
94 Costs where claimant no less successful than claimant's final offer
If a claimant obtains an order or judgment on a claim that is no less favourable to the claimant than the terms of the claimant's final offer of settlement in mediation under the 1998 Act as certified by the mediator under section 318B of the 1998 Act, the court is to order the insurer to pay the claimant's costs on the claim assessed on a party and party basis.
95 Costs where claimant less successful than insurer's final offer or insurer found not liable
(1) If a claimant obtains an order or judgment on a claim that is less favourable to the claimant than the terms of the insurer's final offer of settlement in mediation under the 1998 Act as certified by the mediator under section 318B of the 1998 Act, the court is to order the claimant to pay the insurer's costs on the claim assessed on a party and party basis.
(2) If a claimant does not obtain an order or judgment on a claim (that is, if the court finds the insurer has no liability for the claim), the court is to order the claimant to pay the insurer's costs on the claim assessed on a party and party basis.
96 Costs in other cases
Except as provided by this Subdivision, the parties to court proceedings for work injury damages are to bear their own costs.
97 Deemed offer where insurer denies liability and no mediation occurs or mediation fails
(1) If -
(a) the insurer wholly denies liability, and
(b) no mediation occurs, and
(c) the claimant obtains an order or judgment on the claim,
costs are to be awarded in accordance with this Subdivision as if -
(d) the insurer had made a final offer of settlement at mediation of $0, and
(e) the claimant had made a final offer of settlement at mediation of -
(i) in the case where the President issued a certificate verifying the matters referred to in paragraphs (a) and (b) and the claimant, within one month of the issue of that certificate, made a subsequent offer of settlement to the insurer - the amount of damages specified in that subsequent offer of settlement, or
(ii) in any other case - the amount of damages specified in the pre-filing statement served under section 315 of the 1998 Act.
(2) If -
(a) the insurer wholly denies liability, and
(b) the matter is referred to mediation, but the matter is not resolved by settlement at the mediation, and
(c) the claimant obtains an order or judgment on the claim,
costs are to be awarded in accordance with this Subdivision as if -
(d) the insurer had made a final offer of settlement at mediation of $0, and
(e) the claimant had made a final offer of settlement at mediation of -
(i) in the case where the claimant, within one month of the conclusion of that mediation, made a subsequent offer of settlement to the insurer - the amount of damages specified in that subsequent offer of settlement, or
(ii) in any other case - the amount of the claimant's final offer of settlement in mediation under the 1998 Act as certified by the mediator under section 318B of the 1998 Act.
Note -
Persons claiming work injury damages who wish to be awarded costs on a party and party basis should apply to the Commission for the mediation of the dispute before the matter goes to court. The availability of costs on a party and party basis is subject to the provisions of clause 94 and this clause."
The general provision is, of course, Clause 96. The commentary in C P Mills, Workers Compensation New South Wales (2nd ed 1979, Butterworths) refers me to the decision of the Court of Appeal in Grima v RFI (Aust) Pty Ltd [2014] NSWCA 345.
I have also been referred by Mr Best, learned counsel for the Plaintiff, to Smith v Sydney West Area Health Service (No 2) [2009] NSWCA 62 and to Chubs Constructions Pty Ltd v Chamma [2009] NSWCA 98. I have also had regard to the decision of Taylor SC DCJ in Ortlipp v Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer (No 3) [2014] NSWDC 161, and I have been referred by the solicitor for the first defendant to Tavener v St Vincent's Hospital Sydney Limited [2018] NSWDC 378.
According to learned counsel for the Plaintiff, Mr Best, the Court's ability to order costs is governed by clause 96 of the Workers Compensation Regulation 2016. According to the Defendant, this was not a claim for work injury damages because the Plaintiff had failed to comply with the procedural requirements of the Workplace Injury Management and Workers Compensation Act 1998 contained in Chapter 7, Part 6, Divisions 3 and 4.
Division 3 contains s 315 to 318. Section 315 requires a Claimant to serve upon a proposed Defendant a pre-filing statement prior to the commencement of Court proceedings. Section 316 requires a Defendant to respond to a pre-filing statement by serving a pre-filing defence upon the proposed Plaintiff within 28 days of service of the pre-filing statement. Section 317 describes what must occur if it be thought that the pre-filing statement were defective. Section 318 provides that the parties are limited to the allegations contained in the pre-filing statement, and in the pre-filing defence, and to the evidence served in connection with those documents. Division 4 concerns mediation, and s 318A requires a proposed Plaintiff to refer a claim for work injury damages for mediation before the Plaintiff can commence Court proceedings. The rest of the division deals with the mediation procedures.
The argument by the Defendant is that because the Plaintiff did not observe those procedures prior to commencing Court proceedings, the Court proceedings should not be seen as a claim for work injury damages. I am unpersuaded as of the correctness of that submission. True it is that the relevant provisions to which I have just referred amount to procedural hurdles which must be overcome, but it is clear from the Statement of Claim as filed by the Plaintiff that he was claiming work injury damages, albeit that he had not complied with the statutory requirements.
Furthermore, there is no suggestion that at any time the Defendant made any offer of compromise to the Plaintiff such as to enliven the provisions of clause 97.
I, accordingly, order that each of the Plaintiff and the First Defendant is to pay his own costs of the proceedings insofar as they were a claim for work injury damages.
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Decision last updated: 18 November 2022