Gina Koh v Ja Kil Ku

CATCHWORDS: Costs - s 338(1)(a) Legal Profession Act 2004 - Personal injury damages - Liability for intentional act - s 3B & Part 2 Civil Liability Act 2002

Civil Liability Act 2002 LEGISLATION CITED: Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) Legal Profession Act 2004

CASES CITED: Houda v State of New South Wales (2005) NSWSC 1053 King v Greater Murray Area Health Service (2007) NSWSC 914

PARTIES: Gina Koh (Plaintiff) Ja Kil Ku (Defendant)

COUNSEL: Mr M Maxwell (Plaintiff) Ms G Mahony (Defendant)

SOLICITORS: Adams & Co Lawyers Pty Ltd (Plaintiff) Dahan Lawyers (Defendant)

The issue 1 An issue requiring determination which has arisen in relation to costs is whether the limitation or cap on the maximum costs recoverable for legal services provided for by s 338(1)(a) of the Legal Profession Act 2004 (LP Act) applies to a claim for damages for personal injury in respect of an intentional tort where the damages awarded were less than $100,000.

2 The plaintiff alleged that whilst living in the same house as the defendant, on four occasions between May 2002 and early 2003, he subjected her to sexual assault and/or false imprisonment as a consequence of which she sustained psychological injury, namely depression and a post traumatic stress disorder.

3 Following an eight day hearing, on 22 December 2008 the court gave judgment for the plaintiff for $63,870 of which $60,000 was for general and aggravated damages and the balance for past and future out-of-pocket expenses. The court also ordered the defendant to pay the plaintiff's costs and granted liberty to apply in relation to any additional costs orders.

4 The parties are in agreement that: (a) the plaintiff's claim was in respect of personal injury, as opposed to matters such as injury to reputation, humiliation, disgrace and the like which do not involve a recognised psychological condition (as was the case, for example, in Houda v State of New South Wales (2005) NSWSC 1053. (b) the provisions of the Civil Liability Act 2002 (CL Act) as to assessment of damage did not apply because of the operation of s 3B.

5 The defendant's position is that as the plaintiff was awarded less than $100,000 the costs to which she is entitled are limited by s 338(1)(a) of the LP Act to $12,774 being 20% of the amount recovered, because she received personal injury damages as defined in s 337(1). The plaintiff's position is that section 338(1)(a) does not apply because the reference to personal injury damages in s 337(1) only applies to damages awarded in accordance with the CL Act as opposed to common law principles.

6 Counsel for both parties provided comprehensive and helpful written submissions.

(a) The Legal Profession Act 2004 7 Section 338 relevantly provides: 338 Maximum costs fixed for claims up to $100,000 (1) If the amount recovered on a claim for personal injury damages does not exceed $100,000, the maximum costs for legal services provided to a party in connection with the claim are fixed as follows: (a) in the case of legal services provided to a plaintiff-maximum costs are fixed at 20% of the amount recovered or $10,000, whichever is greater. Section 337 Interpretation and application (1) In this Division: "personal injury damages" has the same meaning as in Part 2 of the Civil Liability Act 2002.

(b) The Civil Liability Act 2002 8 The purpose of the Act is explained in the Long Title as being: An Act to make provision in relation to the recovery of damages for death or personal injury caused by the fault of a person; to amend the Legal Profession Act 1987 in relation to costs in civil claims; and for other purposes.

9 Section 3B Civil liability excluded from Act relevantly provides: ( 1) The provisions of this Act do not apply to or in respect of civil liability (and awards of damages in those proceedings) as follows: (a) civil liability of a person in respect of an intentional act that is done by the person with intent to cause injury or death or that is sexual assault or other sexual misconduct committed by the person-the whole Act……

10 Part 2 Personal Injury Damages of the CL Act includes sections 11 and 11A which relevantly provide: 11 Definitions In this Part: "injury" means personal injury and includes the following: (a) pre-natal injury, (b) impairment of a person's physical or mental condition, (c) disease. "personal injury damages" means damages that relate to the death of or injury to a person. 11A Application of Part (1) This Part applies to and in respect of any award of personal injury damages, except an award that is excluded from the operation of this Part by section 3B. …….. (3) A court cannot award damages, or interest on damages, contrary to this Part.

11 The balance of Part 2 (sections 12 to 26) makes provision for: · fixing damages for economic loss (division 2); · fixing damages for non-economic loss (division 3); · interest on damages (division 4) · third party contributions (division 5); · exemplary and similar damages (division 6); · structured settlements (division 7).

12 I consider it useful to refer to the relevant legislative history by way of background to the present application and also because it is relevant to a decision of Harrison AJ in King v Greater Murray Area Health Service (2007) NSWSC 914 which was the only authority touching upon the issue to which the court was referred.

13 Schedule 2.2[2] of the Civil Liability Act 2002 (NSW) inserted Division 5B Maximum costs in personal injuries damages matters into Part 11 of the Legal Profession Act 1987 (NSW). This Division relevantly included sections 198C and 198D.

14 Section 198D(1)(a) provided: 198D Maximum costs fixed for claims up to $100,000 (1) If the amount recovered on a claim for personal injury damages does not exceed $100,000, the maximum costs for legal services provided to a party in connection with the claim are fixed as follows: (a) in the case of legal services provided to a plaintiff maximum costs are fixed at 20% of the amount recovered or $10,000, whichever is greater.

15 Section 198C contained the following definition: "personal injury damages" has the same meaning as in the Civil Liability Act 2002.

16 At that time, s 3 Definitions, which was in Part 1 of the Civil Liability Act, provided: personal injury damages means damages that relate to the death of or injury to a person caused by the fault of another person.

17 On 6 December 2002, the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) came into force. This Act made a number of amendments to the Civil Liability Act including: (a) the definition of personal injury damages was omitted from s 3, (Schedule 2[2]). Section 11 was omitted and replaced with a new section (Definitions) . This included a definition of personal injury damages which was a modified form of the earlier definition in that the words caused by the fault of another person, were removed (Schedule 2[5]). (b) s ection 11A was inserted by the same clause and became part of Part 2.

(c) section 9 (which had excluded from the operation of Part 2 damages where the fault concerned was an intentional act) was omitted (Schedule 2[5]) and s 3B was inserted (Schedule 2[3]). (d) as a consequential amendment the definition of personal injury damages in s 198C(1) of The Legal Profession Act 1987 was omitted and replaced with a definition in identical terms to that which now appears in s 337(1) of the 2004 Act (Schedule 4.5).

18 On 1 October 2005, the Legal Profession Act 1987 was repealed in its entirety and replaced by the Legal Profession Act 2004 (NSW). Sections 198C and 198D of the 1987 Act were replicated in Sections 337 and 338 of the 2004 Act.

King v Greater Murray Area Health Service 19 The defendant submitted that the approach urged on the court by the plaintiff is analogous to an argument which failed in King. It was submitted that King supports the defendant's case because s 11A of the CL Act is comparable with s 9 (now repealed) which was considered in King as both sections exclude intentional torts from the operation of Part 2 for the purposes of assessing damages.

20 In my view a significant distinction between the relevant provisions of the CL Act in the two cases is that in this present case the definition of personal injury damages is contained in Part 2, whereas in King it appeared in the definition section in Part 1.

21 Because the statement of claim in King had been filed before 6 December 2002 the amendments made by the Civil Liability Amendment (Personal Responsibility) Act to which I have referred did not apply. Her Honour was therefore concerned with s 198C of the LP Act as originally enacted and the original definition of personal injury damages in s 3 of the CL Act.

22 Her Honour, in determining that legal costs in relation to awards for intentional torts were limited by s 198C, said, in the course of her judgment:

30 Section 3B lists a number of intentional torts. The plaintiff submitted that removing intentional torts from application of a Part entitled "Personal Injury Damages", defined by later amendments to the Act removes intentional torts from the definition of personal injury damages, and accordingly, ss 198C and 198D have no application in a cause of action of this nature. Section 198C of the LPA 1987 defines "personal injury damages" as having the same meaning as in the CLA . It does not define personal injury damages as having the same meaning as that contained in Part 2 of the CLA . 31 It is my view that the reasoning of the Costs Review Panel is correct. Section 9(2) does not remove intentional torts from the definition of "personal injury damages" but excludes intentional torts "from the operation of this Part". This Part is the part that applies to and in respect of an award of personal injury damages. The definition of "personal injury damages" that had application is the general definition contained in s 3 of the CLA . That is, personal injury damages are those damages that relate to the death or injury to a person caused by the fault of another person. It is that definition that applied to ss 198C and D of the LPA 1987 .

23 It was submitted by the plaintiff that, unlike the legislative framework as applied in King, as the definition of personal injury damages has now been included in Part 2, it is no longer possible to consider such definition in isolation from s 11A and for that reason the decision in King has no application to this case. This distinction was referred to by Her Honour in the last sentence of paragraph 30.

Determination 24 The defendant submitted that: (a) Section 11 of the CL Act does not: · define personal injury damages by reference to any categories of claims excluded from the operation of the Act; and

· exclude any categories of claims from the definition. (b) The combination of ss 11A and 3B demonstrate a clear legislative intent that claims to which s 3B applies were intended to fall within the meaning of personal injury damages. To that end, a claim for personal injury damages founded on an intentional tort is a personal injury damages claim albeit one not limited by the CL Act provisions which apply to the assessment of damages. (c) Section 11A of the CL Act does not operate to remove claims excluded by s 3B from the definition of personal injury damages. Nor does it remove intentional torts from the definition of personal injuries damages . Its role is limited to excluding such torts from the operation of the Part for the purposes of assessing damages. (d) Similarly s 3B does not operate to remove the excluded claims from the definition of personal injury damages. By way of contrast it is clear that had the plaintiff sought damages for what could be regarded as an infringement of her civil rights (for example as in Houda) , her case would have not fallen within the definition in s 11 and s 338 of the LP Act would therefore not apply. (e) Section 337(1) of the LP Act brings in the broad definition found in Part 2 of the CL Act for the purpose of determining the amount of costs payable on personal injury claims not excluded by s 337(2) where the damages awarded is less than $100,000.

25 The defendant further submitted that for the plaintiff to succeed on her argument, the court would need to be persuaded that s 338(1), which is drafted in broad terms, does not apply to awards of personal injury damages arising from intentional torts, despite the fact that such awards do not fall within s 337(2) which sets out the types of claims excluded from the operation of the provision.

26 Section 337(2) of the LP Act provides that Division 9 of Part 3.2 Maximum costs in personal injury damages matters does not apply to costs payable in respect of claims under the following Acts: (a) Victims Support and Rehabilitation Act 1996; (b) Motor Accidents Act 1988 or Motor Accidents Compensation Act 1999; (c) Workplace Injury Management and Workers Compensation Act 1998; (d) Dust Diseases Tribunal Act 1989.

27 It was therefore submitted s 337(2) does not exclude costs payable in respect of a claim for damages for personal injuries arising from an intentional tort and that if it had been Parliament's intention that Division 9 of the LP Act be limited to claims for personal injury damages assessed pursuant to the CL Act it can be assumed the Act would have been drafted in such a manner to reflect this.

28 In response to this argument the plaintiff submitted that the explanation for intentional torts not being included in the list of exceptions in s 337(2) is because the purpose of that list is to avoid any confusion or overlap otherwise created by reason of the fact that all of the Acts referred to contain their own independent cost-capping provisions.

29 In my view the critical matter is that s 337(1) of the LP Act defines personal injury damages by reference to the same meaning as in Part 2 of the CL Act. Significantly, it does not define personal injury damages simply by reference to the CL Act (as was the case with the original version of s 198C). For this reason I consider that the meaning of personal injury damages in s 337(1) ought not be determined by reference to s 11 only and that regard must also be had to the entirety of Part 2, which includes s 11A(1). It follows that the reference to personal injury damages in Part 2 of the CL Act encompasses only personal injury damages awarded under that Part and not damages for personal injury which have been specifically excluded therefrom.

30 For these reasons the court concludes that the costs recoverable on a claim for personal injury damages which are fixed by section 338(1)(a) of the Legal Profession Act 2004 do not include costs recoverable in respect of damages for personal injury awarded outside the operation of the Civil Liability Act 2002. Accordingly, the costs recoverable by the plaintiff in this case are not limited to those allowed by s 338(1)(a) of the Legal Profession Act 2004.

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