Harvey v Frontline Australasia Pty Ltd [2001] VSC 77

9. The appellant claimed lump sum compensation from the respondent pursuant to s.98 of the Accident Compensation Act 1985 (the Act) in respect of permanent partial impairment of the left and right arms and for pain and suffering pursuant to s.98A of the Act. He also sought a determination of the liability of the respondent to pay weekly payments for the period from 19 April 1999 to the present and continuing and an increase in the percentage of weekly payments from 70% to 90%.

12. The respondent's insurer made a statutory offer of $15,000 in full settlement of the claims under ss.98 and 98A of the Act. The appellant by notice of counter statutory offer offered to accept the sum of $25,000 in full settlement of his ss.98 and 98A claims. The respondent rejected the counter offer and the appellant's claims duly went to trial before the Magistrates' Court at Ballarat.

15. On 19 July 2000 the learned Magistrate ordered that the respondent pay to the appellant the sum of $7,940.25 compensation in respect of his s.98 claim, found against the appellant in respect of his s.98A claim, found against him in respect of his serious injury claim but found that the appellant was partially incapacitated at the time the respondent terminated his weekly payments of compensation in October 1999 and ordered that he should receive a weekly payment at the rate of 70% from that date.

18. After later hearing submissions from counsel as to the orders for costs he should make in respect of the proceeding, on 4 September 2000 the learned Magistrate made the orders the subject of this appeal.

21. Determination of this appeal requires a consideration of the provisions of s.50 of the Act which reads:

"50. Costs (1) Subject to this Act, in proceedings before the County Court under this Act or the Workers Compensation Act 1958 being proceedings brought by a person other than the Authority, employer, or a self-insurer, the Court - (a) must award costs against the party against whom a judgement or decision is made; and (b) may, if it considers it appropriate, include in an order under paragraph (a) an award of costs to the representative of a worker in whose favour a judgement or decision is made; and (c) must not otherwise make an award of costs. (2) Nothing in sub-section (1) applies to proceedings brought by the Authority, employer or a self-insurer. (2A) In proceedings before the County Court under this Act which relate to a claim under section 98 or 98A, if a judgment or order is made by the County Court for the payment of an amount of compensation to the claimant - (a) which is not less than 90 per cent of the claimant's counter statutory offer but is greater than the statutory offer made by the Authority, employer or self-insurer - the Authority, employer or self-insurer must pay the claimant's party and party costs and must bear their own costs; or (b) which is equal to or less than the statutory offer made by the Authority, employer or self-insurer - the claimant must pay the party and party costs of the Authority, employer or self-insurer and bear his or her own costs; or (c) which is greater than the statutory offer made by the Authority, employer or self-insurer but less than 90 per cent of the counter statutory offer made by the claimant - each party must bear their own costs - and the County Court must not otherwise make an award of costs."

25. By virtue of the provisions of s.43 of the Act, s.50 applies to the Magistrates' Court where, as in the present case, it was hearing the appellant's claims for compensation.

28. In the reasons for his ruling on costs the learned Magistrate said:

"In my opinion where proceedings involve a mixed claim that involves a weekly payments claim, together with Sections 98 and 98A claims, as is often the case in practice, sub-section (2A) covers both the ss.98 and 98A claims determined in those proceedings. Likewise if the proceedings involve only Sections 98 and 98A claims, sub-section (2A) is the operative provision. On the other hand, if other proceedings involving weekly payments or serious injury claims are brought independently then the operative provision in awarding costs would be by Section 50(1). This would involve in some proceedings, such as these, the making of two separate orders for costs, one in favour of the Plaintiff, and another in favour of the Defendant. The various costs orders would then be setoff against each other. To construe subs.(2A) in any other way would be to limit the effect of the subsection."

32. In the first instance it was said that s.50(2A) of the Act only has application where the claim before the Court is a claim under s.98 or 98A. It has no application to a case where the claimant is not only seeking compensation pursuant to those sections of the Act but is also seeking compensation pursuant to other sections of the Act as in the present case.

35. Counsel for the appellant also challenged the validity of the views expressed by the Court of Appeal in Civic Workers Plus Pty. Ltd. v. Hill[1] that s.50(2A) lays down a code for the payment of costs in relation to all claims under ss.98 and 98A.

38. In support of that argument counsel for the appellant instanced a case in which a worker had made a claim for compensation pursuant to s.98 but had failed to establish his claim thereby resulting in it being dismissed.

41. If the views expressed by the Court of Appeal are correct it would follow that no order for costs could be made against the worker pursuant to s.50(2A) as no order would have been made by the Court for the payment of an amount of compensation as required by the sub-section.

44. It was argued by counsel that that cannot have been the intention of the legislature and that the proper view to take of the matter is that in such a situation the Court would exercise the power given it by s.50(1) and make the appropriate order for costs against the worker.

47. Counsel for the respondent contended that to adopt the argument of counsel for the appellant would be to read into s.50(2A) the word "only" in circumstances where there is simply no warrant for doing so.

50. Indeed he argued that if the mere inclusion in a claim for compensation under s.98 or 98A of a claim for a different sort of compensation would take the claim under s.98 or 98A outside the operation of s.50(2A), s.50(2A) would be rendered practically useless.

53. In my opinion there is no warrant for reading into s.50(2A) the word "only".

56. Sub-section (2A) provides that the sub-section applies to proceedings "which relate to a claim under s.98 or 98A". The proceeding before the Magistrates' Court clearly related to such a claim. It is not a requirement that the proceedings relate to such a claim and no other.

59. In Hill's case the claimant had made a claim for compensation under s.98 of the Act.

62. In determining that s.50(2A) was exclusive for claims under s.98 and s.98A Ormiston, J.A. said at para. 1:

"... In my opinion the concluding words of subs.(2A) substituted for the former subs.(2A) of s.50 when amended in 1997 is intended to provide a costs code for all County Court proceedings relating to claims under s.98 or s.98A of the Accident Compensation Act. The requirement to make the orders for costs prescribed by each of the paragraphs (a), (b) and (c) is imposed by the use of the imperative 'must' in each paragraph. It is my firm impression that the words added at the end of the sub-section, namely, 'and the County Court must not otherwise make an award of costs', is directed not so much to each of those paragraphs but to laying down a code for the payment of costs in relation to all claims under ss.98 and 98A. So it would seem that those responsible for drafting the sub-section, having regard to what they proposed by it and by the amendments of s.104 passed at the same time, had in mind a scheme which would cover the field for all such claims. They intended that the three paragraphs ought, in all foreseeable circumstances, to provide a regime for the payment and receipt of costs and that otherwise no party would pay or receive any costs. I do not think it was intended that subs.(1) should provide a 'backstop' for cases which happen to fall outside the provisions of subs.(2A)."

"... Ultimately we must have regard to the clear intention of Parliament that s.50(2A) should provide for the costs of all proceedings in which a claim is made for compensation under s.98 or s.98A on the assumption that in every case there will be a statutory offer and a counter statutory offer. Section 104 sets out to ensure that that assumption is made good, if necessary by deeming such offers to have been made, and the difficulties and uncertainties to which we were referred in argument are not separately or in combination sufficient in my opinion to gainsay the intended result."

"For the reasons which his Honour (Phillips, J.A.) has stated I think that s.50(2A) of the Accident Compensation Act 1985 ('the Act') was intended to provide a comprehensive regime dealing with the costs of all actions brought to recover compensation under ss.98 and 98A of the Act."

74. With respect I agree with their Honours' conclusion in the matter.

77. As to the argument that it would follow that in that situation a claimant who made a claim under s.98 or s.98A and who failed to establish his claim, could not be ordered to pay the costs of the respondent is concerned, I simply say that that may well have been the intention of the legislature.

80. It is to be remembered that prior to 1992 when s.50(1) was first introduced into the legislation it was common for costs not to be awarded against unsuccessful applicants for compensation. It may well have been the intention of the legislature to ensure that that practice continue in respect of claimants who make claims under s.98 or 98A and whose claims are unsuccessful.

83. The answer to the questions of law posed by the Master is No.

86. The appeal will be dismissed with costs to be taxed and paid by the appellant.

[1] [2000] VSCA 61 (28 April 2000)