Glad Retail Cleaning Pty Ltd v Alvarenga

Judgment 1EMMETT JA: Mrs Carolina Alvarenga sustained injury when she fell at the Chester Square Shopping Centre (the shopping centre) on 25 July 2008. She commenced proceedings in the District Court for recovery of damages in respect of her injury. She sued Mirvac Real Estate Pty Limited (Mirvac), which was the manager and the occupier of the shopping centre, and Glad Retail Cleaning Pty Limited (Glad), which performed cleaning services in and about the shopping centre. Mirvac was the first defendant and Glad was the second defendant. In the present appeal, 127719 of 2013, Glad is the appellant and Mirvac is the second respondent. 2The proceedings at first instance were heard in the District Court in March 2013 and on 28 March 2013 the District Court gave judgment for Mrs Alvarenga against Mirvac and Glad in the sum of $453,651.91, judgment for Mirvac against Glad on a cross-claim in the sum of $362,920.72 and judgment for Glad against Mirvac on a second cross-claim in the sum of $90,730.19. The orders made were based on findings that both Mirvac and Glad were liable to Mrs Alvarenga in negligence and that each was liable to contribute as a joint tortfeasor. The effect was that Glad would bear 80 per cent responsibility and Mirvac 20 per cent responsibility. 3On 23 April 2013, Mirvac paid the sum of $90,730.19 to Mrs Alvarenga's solicitors, in partial satisfaction of the judgment against it. In the letter enclosing the cheque, Mirvac's solicitors stated that "[w]e have provided you with our client's share of the judgment moneys pursuant to the 20% liability found by his Honour Judge Elkhaim [sic] in order to facilitate payment. The other defendant will pay the 80% share". In a letter Mirvac's solicitors sent to Glad's solicitors informing them of Mirvac's payment to Mrs Alvarenga, Mirvac's solicitors said that "[o]ur client had paid its 20% contribution in order to protect itself against any claim for interest". 4Clearly, Mirvac was content with what it understood the determination of the District Court to be, namely that it should bear 20 per cent of the damages awarded to Mrs Alvarenga. It apparently assumed that Glad would bear the other 80 per cent, despite the fact that Glad's appeal rights had not yet expired and that it was still possible for Glad to appeal against both the judgment against it in favour of Mrs Alvarenga and also the judgment against it on Mirvac's cross-claim. That assumption is apparent from the letter enclosing the cheque for $90,730.19. The payment was made unconditionally. 5Glad filed a notice of intention to appeal on 24 April 2013 and filed a notice of appeal on 27 June 2013. Mirvac, on the other hand, did not file either a notice of intention to appeal or notice of appeal within the time limited by the Rules. On 24 April 2013, Mirvac's solicitors received Glad's notice of intention to appeal. On 27 June 2013, Mirvac's solicitors received Glad's notice of appeal. Mirvac was joined as a respondent to Glad's appeal and a notice of appearance was filed on behalf of Mirvac on 17 July 2013. Even at that stage, Mirvac's solicitors did not appreciate that, if Glad succeeded in its appeal, Mirvac could be left to meet the entire judgment. 6Mirvac's notice of appeal did not seek to appeal from the judgment against it on Glad's cross-claim in the sum of $362,920.72. It stated that Glad "appeal[ed] from part of the decision below, being an appeal on primary liability and contributory negligence". Theoretically, that meant that, even if Glad were to succeed on its appeal and Mrs Alvarenga sought to enforce the joint liability of $453,651.91 solely against Mirvac, Mirvac would still have the benefit of judgment on its cross-claim against Glad, such that Glad would still have to contribute $362,920.72 to Mirvac, and Mrs Alvarenga would still end up with the benefit of the entire judgment at first instance, notwithstanding that Glad's appeal succeeds. However, notwithstanding the lack of a specific mention of appeal from the judgment on Mirvac's cross-claim, Glad sought an order that the judgment against it be set aside and that there be a "verdict and judgment" for it. As the judgment on Mirvac's cross-claim was founded on the assumption that both Glad and Mirvac were liable to Mrs Alvarenga, Glad was clearly impugning that order, even if not explicitly. Glad had joined Mirvac as a second respondent to its appeal. Mirvac filed its notice of appearance in Glad's appeal on 17 July 2013. 7On 30 July 2013, Mirvac's solicitors received a letter from Mrs Alvarenga's solicitors seeking payment of the balance of the judgment sum. On 31 July 2013, Mirvac's solicitors replied, saying that Glad, not Mirvac, was appealing against the judgment for the plaintiff and that it was their "understanding that [Glad] is insured and we expect them to pay their contribution towards the judgment sum inclusive of interest". On 31 July 2013, Mirvac's solicitors wrote to Glad's solicitors to inform them that Mrs Alvarenga's solicitors had written to Mirvac requesting Mirvac pay the balance of the judgment. The letter stated: We note it is your client [Glad] that has lodged an Appeal in these proceedings. As far as we are aware no stay has been obtained by your client in respect of the judgment sum. Could you please take steps to apply for a stay in respect of the proportion payable by your client of the judgment monies or alternately [sic] arrange for payment of the outstanding judgment monies inclusive of interest. 8On 5 August 2013, Mrs Alvarenga's solicitors wrote to Mirvac's solicitors again, saying that, as Glad had not paid anything, Mrs Alvarenga was "now seeking the balance of her judgment, plus interest thereon, from [Mirvac], as she is entitled to do". Mrs Alvarenga's solicitors pointed out to Mirvac's solicitors that "[y]our client can rely on the verdict entered in its favour against [Glad] on the cross claim". It is unclear whether Mrs Alvarenga's solicitors gave consideration to the fact that Glad's notice of appeal did not explicitly impugn Mirvac's successful cross-claim against it. 9On 5 August 2013, Mrs Alvarenga's solicitors also wrote to Glad's solicitors. Glad had previously sought Mrs Alvarenga's consent to Glad's motion for a stay of the judgment until the resolution of the appeal. Mrs Alvarenga's solicitors responded to that request for consent by saying that "[t]he question of an order for a stay being required as against [Glad] is irrelevant ... [as the plaintiff] is seeking payment of the balance of the judgment, plus interest, from [Mirvac]". That is to say, Mrs Alvarenga's solicitors were apparently seeking to enforce the whole judgment debt against Mirvac so as to defeat any stay that Glad may succeed in obtaining pending the resolution of Glad's appeal and on the basis that Mirvac, which had paid its contribution already, was entitled to rely on its successful cross-claim against Glad. 10On 22 August 2013, it became apparent to Mirvac's solicitors that, even if Glad obtained a stay of the judgment pending its appeal, Mrs Alvarenga intended to seek to enforce the balance of the judgment against Mirvac. Mirvac's solicitors obtained instructions to seek a stay of the judgment against Mirvac. It was only then that Ms Belinda Mason, the solicitor who was acting for Mirvac, appreciated that if Glad succeeded in its appeal Mirvac could be left to meet the entire judgment. Ms Mason says that she was also "aware that Glad, through its Notice of Appeal, did not seek to challenge the orders made on the cross claims". 11On 26 August 2013, in discussions between the parties' representatives, it became apparent to Ms Mason that Glad proposed to amend its notice of appeal to include an order that the judgment of the District Court in respect of the cross-claims between Mirvac and Glad, which dealt with apportionment and contribution, be set aside. On 26 August 2013 counsel advised Mirvac that if it did not file a notice of appeal and Glad succeeded in its appeal, Mirvac would be liable for the entire judgment. Accordingly, in order to protect its position, Mirvac gave instructions on 26 August 2013 to seek an extension of time within which to file a notice of appeal raising grounds similar to those raised in the notice of appeal already filed by Glad. On the same day, Mrs Alvarenga's solicitors were informed of Mirvac's intention to seek an extension of time for filing a notice of appeal. 12Both Glad and Mirvac made an application for stay of the judgment in this Court on 26 August 2013. The applications were dealt with by McColl JA. Her Honour granted Glad's stay up until the resolution of the appeal and granted Mirvac's stay until the time that Mirvac's motion for an extension of time to file a notice of appeal were made returnable. The question of stay is not presently before me, except to the extent that it may be necessary to extend the stay granted to Mirvac if an extension of time were to be granted to Mirvac to file a notice of appeal. 13It is against that background that I now have before me two notices of motion. One is a motion filed on 28 August 2013 by Mirvac, seeking an extension of the time for it to file a notice of appeal. The other is a notice of motion by Glad seeking leave to file an amended notice of appeal, to ask for orders that the judgment in favour of Mirvac on Mirvac's cross-claim be set aside and that verdict and judgment be entered for Glad on that cross-claim. 14That is to say, Glad now seeks to make explicit what was almost certainly implicit in its original notice of appeal, namely, that if it were to succeed in its appeal against the verdict in favour of Mrs Alvarenga, so that it were no longer liable to her at all, it should also succeed in having set aside the judgment against it in favour of Mirvac on Mirvac's cross-claim. 15That amendment emphasises the consequences for Mirvac if Glad's appeal succeeds and Mirvac is shut out from filing a notice of appeal against the verdict against it in favour of Mrs Alvarenga. In one sense, Mirvac's present application for an extension of time is responsive to Glad's application to make explicit that it seeks to set aside the judgment against it in favour of Mirvac. Mirvac's concern is that the consequence of Glad succeeding in its appeal will be that Mirvac will be left to bear the entire judgment. 16The grant of an extension of time is not automatic. The object of rules limiting the time for filing appeals is to ensure that parties to litigation are certain of their rights. A party to litigation is entitled to assume that it is secure in the result, after the time limited by the Rules for filing a notice of appeal has expired. That result may be described as an accrued right. On the other hand, one object of rules for extensions of time is that they do not themselves become instruments of injustice. The discretion to extend time is to enable the Court to do justice between the parties. That requires the applicant to establish that strict compliance with the Rules will work an injustice upon it. In order to determine whether the Rules will work such an injustice, it is necessary to have regard to various considerations, such as the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for an extension of time. 17In an application for an extension of time in which to file an appeal, it is necessary to consider the prospects of the applicant succeeding in the appeal. It is also necessary to bear in mind the vested right to retain the judgment that has accrued to the successful party. In general terms, the relevant factors are the length of the delay, the reason for the delay, whether the applicant has a fairly arguable case and the extent of any prejudice suffered by the respondents to the application. 18The length of the delay in the present case is in effect two months. In ordinary circumstances, an unexplained delay of some two months could well be fatal. However, in the present circumstances, it is relevant to bear in mind that Glad's appeal was filed within the time fixed by the Rules. So far as Mrs Alvarenga is concerned, there has always been the prospect of further litigation, in the form of Glad's appeal. In circumstances where it was clear to Mrs Alvarenga that there was to be an appeal by Glad in any event, the length of the delay in the present case is not inordinate. The application for an extension of time was made promptly, once the necessity for doing so was appreciated by Mirvac's solicitor, Ms Mason. 19That brings me to the reason for the delay. The evidence of Ms Mason was given by affidavit, in terms that are not entirely satisfactory. Counsel for Mrs Alvarenga indicated that he wished to cross-examine Ms Mason but, for personal reasons, Ms Mason would have found it inconvenient to attend. In the circumstances, counsel for Mrs Alvarenga waived the requirement that she be available for cross-examination. No criticism can therefore be levelled at Mrs Alvarenga for not seeking to test the reasons advanced by Ms Mason for her apparent lack of understanding of the consequences of the judgments entered in the District Court. 20I have already summarised the relevant effect of Ms Mason's evidence. Thus, on the assumption that she should be believed about her state of mind, and it has not been suggested that she should not, it appears that she simply did not think through the consequences of Glad's appeal. Advice was apparently given to Mirvac that if it were prepared to accept a judgment against it in the sum of $90,730, it could discharge its liability by paying that share of the judgment to Mrs Alvarenga. It was only when Mrs Alvarenga intimated that she wished to enforce recovery of the full amount from Mirvac, apparently in order to render nugatory Glad's proposed stay and, in effect, Glad's entire appeal, that it became apparent to Ms Mason that the consequences of Glad's appeal may be that Mirvac could be liable for the full amount of the judgment. 21Ms Mason's reasons are unsatisfactory, in the sense that, had careful consideration been given to the matter, Mirvac would have been advised to file at least a notice of intention to appeal in order to preserve its position, in case Glad filed a notice of appeal. At the time when Mirvac paid the sum of $90,730.19 to Mrs Alvarenga, Mirvac's solicitors could not have known that Glad's future notice of appeal, which it still had time to file within the Rules, would not explicitly seek to impugn the judgment on Mirvac's cross-claim. Indeed, it would have been reasonable to expect that any appeal by Glad would do so. Even when Glad filed its notice of appeal, Mirvac took no further step. It was only when the threat of enforcing the full amount of the judgment against it was made that it was prompted to seek an extension of time. Nevertheless, I accept the explanation for the delay, namely, Ms Mason's failure to appreciate the consequences of Glad's appeal and Mirvac's failure to appeal. Mirvac would be prejudiced by the mistake of its solicitors, if an extension were tobe refused. 22It is not the function of the Court when considering an application for an extension of time to decide what the likely outcome of the appeal will be. It is common ground that the question is whether Mirvac would have a fairly arguable case on its appeal. In dealing with the applications for a stay, McColl JA considered that Mirvac had a fairly arguable case. I have considered the reasons given by the District Court and Mirvac's proposed notice of appeal. I am satisfied that Mirvac has a fairly arguable case. That, of course, says nothing about the likely ultimate outcome of any appeal. 23That brings me to the final factor in considering the application for extension of time, namely, the extent of any prejudice suffered by Glad or, more importantly, Mrs Alvarenga. I do not understand Glad to have said that it would suffer any prejudice by the extension of time. However, Mrs Alvarenga has opposed the application on the basis that she will be deprived of the accrued right that vested upon the expiration of time for Mirvac to appeal. Of course, that, of itself, cannot be sufficient. If it were, there would never be a grant of an extension of time. A balancing exercise is involved in determining where justice lies. 24I have already referred to the fact that Mrs Alvarenga has had the prospect of continuing litigation hanging over her from the time whenGlad filed its notice of intention to appeal. It is certainly not apparent that Mrs Alvarenga took the view that she did not need to be concerned with Glad's appeal, simply because she had her verdict against Mirvac and was secure in that verdict. Rather, once Mrs Alvarenga and her solicitors were concerned about Glad's appeal and its proposed stay, Mrs Alvarenga's solicitors sought to circumvent Glad's proposed stay, and in effect Glad's appeal, by enforcing the entire judgment against Mirvac, apparently in the belief that Mirvac would be entitled to its its judgment on its cross-claim, regardless of Glad's appeal, perhaps either because Glad's notice of appeal did not explicitly impugn Mirvac's judgment on its cross-claim or simply because, like Mirvac's solicitors, it did not occur to them that, if they enforced the entire judgment against Mirvac and Glad succeeded on its appeal, Mirvac might have to pay the entire judgment debt while Glad might pay nothing. 25In an affidavit filed in relation to the stay applications, Mrs Alvarenga said that she had been paid $90,730 on 28 March 2013 and that, since Mirvac had not appealed from the orders of the District Court, she had given instructions to her solicitors to enforce the balance of the judgment against Mirvac. Mrs Alvarenga has also filed evidence indicating the considerable hardship that she will suffer if she were to be deprived of the judgment that she has obtained. However, as I have said, she does not appear to have adopted the stance that she did not ever need to oppose or be concerned about Glad's appeal because there was no notice of appeal from Mirvac, such that she enjoyed a vested right from the moment Mirvac's time within which to appeal expired. In her second affidavit filed on 16 September 2013, Mrs Alvarenga stated that she had "come to the conclusion that if both Glad and Mirvac successfully appeal the decision of the District Court we will have to sell our home at Holsworthy". That also suggests that Mrs Alvarenga did not believe that she had a vested right to the entirety of the judgment at the time at which Mirvac's time to file a notice of appeal expired. It tends to suggest that she was already concerned by Glad's appeal and is now even more concerned by Mirvac's appeal because it might mean she loses the benefit of the judgment below altogether. 26It is clear enough that Mirvac has had a change of mind. It now seeks, if an extension of time were to be granted, to have the whole of the judgment against it set aside, in circumstances where it had previously taken the position that it would not appeal against an order by which it was required to pay no more than one-fifth of the judgment. That is a factor that should be taken into account in considering the grant of an extension of time. 27I consider that justice would be done between the parties by granting an extension of time to Mirvac to file its notice of appeal, but on terms that it undertake not to seek to recover, or to enforce any right to recover, from Mrs Alvarenga the amount that it has already paid to her, even if it be ultimately successful in its appeal. However, in the course of argument, it became apparent that there may be further significant complications from Mrs Alvarenga's point of view in relation to such a term. The complications arise out of s 151Z(1)(b) of the Workers Compensation Act 1987 (the Act). 28Section 151Z relevantly provides that if a worker's injury, for which compensation is payable under the 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, and the worker first recovers compensation and secondly recovers damages against any person liable, then the worker is liable to repay out of those damages the amount of any compensation that the person has paid under the Act in respect of the worker's injury, and the worker is not entitled to any further compensation. Under 149(1) of the Act, damages includes any form of monetary compensation, as well as any amount paid under a compromise or settlement of a claim for damages, whether or not legal proceedings have been instituted. 29Mrs Alvarenga has been receiving workers compensation from her employer since the accident. Mirvac paid the sum of $90,730.19 to Mrs Alvarenga's solicitors on 23 April 2013. Clearly enough, that sum was paid as damages. The payment was made unconditionally, by way of part satisfaction of the judgment entered against Mirvac by the District Court. It was not paid on the basis that, if any appeal were to succeed, it would be repayable. That payment may well have triggered, as at 23 April 2013, a liability under s 151Z and may have then terminated Mrs Alvarenga's entitlement to further compensation. It is possible that had Mirvac commenced an appeal within time and succeeded, it might have been entitled to recover the amount paid to Mrs Alvarenga. That is by no means certain. 30Mrs Alvarenga's concern with the term foreshadowed above is as follows. If Mirvac were to succeed in its proposed appeal, assuming an extension were granted, and then does not seek to recover the amount paid, even if it be entitled to do so, then Mrs Alvarenga would be taken, under s 151Z of the Act, to have recovered that sum as damages. The consequence would be that not only would she be liable to repay the amount of any compensation she had received, she would also no longer be entitled to any further compensation to which she might otherwise be entitled if the payment had not been received, even if she were to lose on both Glad's and Mirvac's appeals. 31Even if, after losing both appeals, Mrs Alvarenga were to choose to repay the amount that she had already been awarded as damages, it may not alter the fact that she has already received that amount as damages, such that her compensation rights ceased at the time of payment. Of course, Mirvac may not even be entitled to recover the amount it unconditionally paid as damages, even if it were successful in its appeal. If that be the case, it may be that Mrs Alvarenga has already suffered significant detriment by losing her entitlement to past and future compensation, in circumstances where there is an appeal or possibly two appeals against the award of damages that would replace her compensation rights and where that appeal or those appeals might leave her with no damages at all, the obligation to repay past compensation, no entitlement to future compensation and significant costs. 32Even if Mirvac had only made the payment to Mrs Alvarenga conditionally, such as by indicating that despite the payment it intended to appeal the verdict against it, it is not clear that that would avoided Mrs Alvarenga losing her rights to compensation under the Act due to the reception of an award of damages. However, it is certainly possible that a significant detriment may have been suffered by Mrs Alvarenga simply by reason of Mirvac's failure to file a notice of appeal before making the payment in part satisfaction of the judgment against it. Mirvac elected to make the payment unconditionally, thereby possibly waiving any entitlement to recover it if it succeeded in an appeal. On the other hand, the consequence of making the payment, without indicating to Mrs Alvarenga that it may seek to appeal from the verdict, is that Mrs Alvarenga has acted to her detriment by accepting the payment and, thereby, possibly activating s 151Z. That may be a basis for refusing any extension of time to Mirvac in the particular circumstances of this case. 33In her affidavit of 16 September 2013, Mrs Alvarenga stated that her employer had advised her that the weekly compensation payments would "soon cease" and that her employer "was entitled to do so once judgment was entered and Mirvac paid up". Mrs Alvarenga expressed strong concern that the weekly compensation payments might be terminated. 34After further submissions in relation to the question, it became apparent that it would be undesirable to attempt to resolve the somewhat complex issues that arise under s 151Z in the present case. The parties therefore agreed that the appropriate course was to reserve until the hearing of Glad's appeal the question of whether Mirvac should have an extension of time. Accordingly, the parties agreed that the Court should give directions for the preparation of an appeal by Mirvac as though an extension had been granted, but on the basis that the question of an extension and the substance of the appeal, assuming an extension were to be granted, would be heard concurrently with Glad's appeal. On that basis, there was no opposition to the proposed amendment to Glad's notice of appeal. I will give directions accordingly. 35In the circumstances, I consider that the parties' costs of Mirvac's motion should be borne by Mirvac in any event. The appropriate order in relation to Glad's motion for leave to amend its notice of appeal is that there be no order as to costs of that motion.

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