Kelly v Thorn; Monteleone v Thorn

Judgment (5 paragraphs)

[1]

REVISED EX TEMPORE Judgment

This matter comes before me today for the purposes of: 1. finalising the judgment in matter number 2015/326714 which I handed down on 19 February 2021; 2. stay applications by the defendants in respect of both the claims by the plaintiff (Mr Monteleone) and the Kellys ("the employers") as plaintiffs; 3. costs issues; and 4. an application without notice under the slip rule, that I amend the judgment to include a sum for interest on past economic loss.
Mr Reynolds SC appears on behalf of the plaintiff, with Mr Renshaw of Counsel, Mr Robison of Counsel appears for the employers and Mr Darren Kelly of Counsel appears on behalf of the defendants in respect of both matters.
I will deal with each of the issues.

[2]

Finalisation of the judgment in proceedings no. 2015/326714

As I indicated in my judgment, I found in favour of the employers as plaintiffs in terms of the right to indemnity in respect of workers compensation payments made by the Workers Compensation Nominal Insurer, for which the employers had an obligation to repay the Workers Compensation Nominal Insurer.
I asked the parties to agree on the final figure. The parties have now agreed on the final figure, although there is a dispute as to interest. Mr Kelly submits that I have a discretion whether to allow interest in favour of the employers in respect of amounts which they have paid to the Workers Compensation Nominal Insurer, albeit he does not challenge either the amount that the employers have reimbursed or the amount that the Workers Compensation Nominal Insurer has paid.

Stay Applications

The defendants seek a stay of the judgment entered in favour of the plaintiff and the judgment entered in favour of the employers.
The defendants have filed a notice of appeal in the plaintiff's matter, limited to damages issues. Mr Kelly submits that the potential result of the appeal is that the amount awarded on account of damages may be reduced to a figure around $200,000.
In general terms, the basis of that submission is that the Court of Appeal may accept the approach of the defendant, being the submissions they made on the hearing of the matter that: 1. the surveillance material is compelling; 2. the other objective material is compelling; and 3. the defendant had significant medical evidence to support the proposition that there is little wrong with the plaintiff which would prevent him from working or suggest that he required any care.
That was certainly the defendant's argument on the hearing. I accept that the propositions advanced are arguable although, of course, I did not accept them for the purposes of the judgment.
Thus the threshold which a party seeking a stay must overcome, being that there is a reasonable argument as to error which is the subject of the appeal is established. [1]
I am not suggesting that I necessarily accept the reasonableness of the proposition that the damages might be reduced to $200,000, but there are certainly arguments to be pursued on damages issues, as will be apparent from my judgment.
The defendants seek a stay pursuant to s 135 of the Civil Procedure Act 2005 (NSW). There is no dispute that I have a power to make orders in favour of the defendants. However, in circumstances in which there is no liability appeal, the real question is what the amount of the stay should be. That question is complicated in this matter, because the employers have also obtained a judgment for a sum, being $238,026, representing the amount of workers compensation payments paid by the Workers Compensation Nominal Insurer and some interest.
As submitted on behalf of the defendants, the plaintiff has a primary obligation under s 151Z of the Workers Compensation Act 1987 (NSW) ("WCA") to repay workers compensation and the employers have a right to indemnity in respect of those same amounts pursuant to s 151Z(1)(d) of the WCA.
Mr Kelly submits that, depending on the outcome of the appeal, if a stay is not granted in respect of the judgment in favour of the plaintiff and in respect of the judgment in favour of the employers, there is a risk that the defendants will end up having to pay a certain sum twice and may not be able to recover that amount.
That may depend upon a particular interpretation of s 151Z(e) and in particular s 151Z(e1). It is not my function today to determine that argument. However, there is merit in Mr Kelly's submissions about the possible complications, should his client largely succeed on the appeal against the plaintiff.
In terms of the application for a stay against the employers, Mr Kelly submits again that the appeal point that the defendants will pursue is based on the same construction arguments which were raised before me.
Mr Robison points out that at least ground 1 of the appeal could not really be arguable, bearing in mind that this merely involves an application of terms defined in the legislation. Be that as it may, it seems to me that the argument is more nuanced. Whilst plainly I did not accept it, I accept for the purpose of this application that there is an argument to the contrary and the threshold for a stay is satisfied.
In reality, only a relatively small portion of the amount of workers compensation payments made by the Workers Compensation Nominal Insurer has been repaid by the employers, although, as I observed in my judgment, the employers are liable to repay the full sum and the principal employer, William Kelly, said in evidence that he would be doing so.
The defendants also seek a stay in respect of the costs orders.
On 19 February 2021 I made orders that the defendants pay the costs of the plaintiff and that the defendants pay the costs of the employers. These were separate proceedings which were run together. Mr Kelly submits that his client will be making an application for a special costs orders in due course, depending upon the outcome of the appeal. He refers to an Offer of Compromise which was made by the defendants but he also says that he will be seeking some form of special costs order in respect of the fact that both plaintiffs were jointly represented until two weeks before the hearing and that there should be no overlap in respect of costs.
I am not sure whether that is a matter of assessment or requires some special costs order but there is no application before me for any special costs order at this time. However, for the purposes of considering the stay, it is a factor to which I will have regard.
Finally, Mr Robison submits that the defendants have not established any incapacity or inability of the employers to repay any such sum. The evidence on the hearing tended to establish that the employers own rural properties, such that the ordinary principle that a party is entitled to the fruits of the judgment, should apply.
Just as these matters were heard together and the issues were determined together, it is difficult to isolate the questions of whether stays should be granted. The issues tend to overlap.
Mr Kelly, on behalf of the defendants, submits that if I do not grant a stay in respect of costs, I should make an order in accordance with TCN Channel Nine v Antoniadis (No 2) [2] , in effect requiring that the solicitors for the plaintiff and the employers give personal undertakings as to repayment of the costs. I am not persuaded that is appropriate in the circumstances of this matter.
Rather, I accept that the defendants are entitled to a partial stay in respect of the judgment in favour of the plaintiff. Further, I accept that there may be some complicated costs issues arising.
However, despite Mr Kelly's persuasive submissions, I consider it highly unlikely that the Court of Appeal might reduce the judgment down to a figure of $200,000.
In my view, the defendant should pay approximately 50% of the judgment in favour of the plaintiff. I will round that up to a sum of $750,000.
Further, I consider that there is merit in Mr Kelly's submissions in respect of costs, so I propose to grant a stay in respect of the order in favour of the plaintiff for costs.
In respect of the employers' case, it is notable that only a portion of the amount has yet been paid to the Workers Compensation Nominal Insurer. Whilst it may be that the employers have the capacity to repay any judgment, (if the defendants succeed and if the defendants are able to execute against the property), bearing in mind the complications on workers compensation and the issues as to costs, I stay the complete judgment in favour of the employers and I stay the order for costs.
I order: 1. In matter number 2015/326714: 1. I enter judgment for the plaintiffs, William Andrew Kelly, William Richard Kelly and Margaret Jane Kelly, in the sum of $238,026; 2. I grant a stay in respect of that judgment; and 3. I grant a stay in respect of order 6, made on 19 February 2021 being the costs order. 1. In respect of matter number 2016/74936: 1. I direct that the plaintiff provide the defendants with a submission less than two pages as to: 1. why the plaintiff is now entitled to interest on the claim for past economic loss; and 2. the amount of the sum sought. 1. I grant a stay of execution in the sum of $670,971; and 2. I grant a stay in respect of orders 4 and 5 made on 19 February 2021, being the order in favour of the plaintiff in respect of costs.

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Judgment (5 paragraphs)

Legislation Cited (2)

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