Lucas v Tubrule Pty Ltd

CATCHWORDS: FINAL ORDERS - Extended jurisdiction of the Court - Interest - Indemnity Costs

Civil Liability Act 2002 LEGISLATION CITED: Civil Procedure Act 2005 District Court Act 1973

CASES CITED: Richards v Cornford [2009] NSWDC 60 Richards v Cornford [2010] NSWCA 99

Emanuel Lucas (Plaintiff) PARTIES: Tubrule Pty Limited (First Defendant) Baulderstone Hornibrook Pty Limited (Second Defendant)

FILE NUMBER(S): 2005/00298961 (Previously: 5635 of 2005)

D Campbell SC and A Foel (For the Plaintiff) COUNSEL: R Sheldon (For the First Defendant) J Guihot (For the Second Defendant)

Keddies Litigation Lawyers (For the Plaintiff) SOLICITORS: Kennedys (For the First Defendant) Moray & Agnew Solicitors (For the Second Defendant)

1 In this matter reasons for judgment were handed down on 5 March 2010 and the matter adjourned to deal with a number of outstanding issues. They have been adjourned on two further occasions to today's date. The parties have provided me with a schedule of figures marked Exhibit P in which they record as best they can, given the recalcitrance of the workers compensation insurer, the figures that are the result of the reasons published, although they are not necessarily accepted by either defendant. This left outstanding a number of matters that were the subject of argument on 30 March 2010. Those matters related to the Court's jurisdiction having regard to the fact that the judgment sum exceeds this Court's monetary jurisdiction, the plaintiff's claim for indemnity costs, the defendants' claim for their costs of an adjournment granted on 31 March 2008, the question of interest on past economic loss, and the orders to be made.

2 After calculation of the heads of damages and deduction of 20% to take account of the liability apportioned to the plaintiff's employer, the judgment figure arrived at is $796,202 inclusive of the claim for interest. Under s 44(1) of the District Court Act 1973 the limit of the Court's jurisdiction is $750,000. Section 51 of the District Court Act provides for the Court to exercise consent jurisdiction to a maximum of an additional $375,000 if a memorandum of consent is filed or if no objection to the Court's jurisdiction has been raised by any of the parties prior to three months before the trial of the action commenced.

3 These provisions apply when, as provided in s 51(1), the Court would not have jurisdiction to hear and dispose of the action by reason only of the fact that the amount claimed exceeded the jurisdictional limit of the Court at the time the action was commenced.

4 The statement of claim in this matter was filed on 21 December 2005 and, in keeping with the practice that was prescribed following enactment of the Civil Procedure Act 2005, it did not specify the amount claimed. It simply claimed that the plaintiff suffered injury, loss and damage.

5 A statement of particulars filed with the ordinary statement of claim particularised substantial injuries and disabilities including those affecting three of the plaintiff's limbs, that is, the right arm and the right and left knees. The particulars claimed non-economic loss and income loss specifying the plaintiff's income at the time to be $1,050 per week nett. A claim was also made for superannuation and for domestic care on a voluntary and commercial basis.

6 The statement of particulars was updated on two occasions. The last was filed on 15 April 2009. The hearing commenced on 27 April 2009.

7 The plaintiff argued that perusal of the statement of particulars, both in its original and in its updated form, would have made it apparent that the amount claimed exceeded $750,000. At no stage did the plaintiff seek the consent of either defendant to the exercise the Court's of extended jurisdiction. At no stage did the defendants object to the Court's exercise of jurisdiction.

8 In reviewing this problem I noted that the words at the time the action was commenced apply to the jurisdictional limit of the Court at that time. It therefore does not apply to the amount claimed at the time the proceedings were commenced. At the time the action was commenced the jurisdictional limit of the Court in respect of the plaintiff's claim was $750,000.

9 The defendants relied upon the decision of Judge Murrell in Richards v Cornford [2009] NSWDC 60 to argue that in the absence of a claim for a specific sum in the statement of claim the provisions of s 51(1) did not apply. Their proposition was that in those circumstances the Court was limited to awarding the plaintiff the sum of $750,000. The decision in Richards v Cornford has subsequently been dealt with by the Court of Appeal in Richards v Cornford [2010] NSWCA 99.

10 It was suggested to me on behalf of the first defendant that the Court of Appeal's decision in Richards v Cornford indicated that it was necessary that the plaintiff provide some form of specific statement to the effect that the claim exceeded the Court's jurisdictional limit. I did not accept that argument.

11 I did not accept that was the conclusion that Judge Murrell came to or that it was a conclusion that the Court of Appeal came to. It was clear from her reasons that Judge Murrell's decision was based upon her assessment of the amount of the plaintiff's claim as set out in the statement of particulars and that it fell well short of the jurisdictional limit. The Court of Appeal set aside her decision on the basis that having regard to the documents filed in support of the plaintiff's claim it did not fall short of the jurisdictional limit. Indeed the Court of Appeal noted, as I have done, that it is no longer permitted in the statement of claim to state the amount claimed but that the amount claimed can be ascertained by the defendant by reference to the documents filed in support of the claim, including the statement of particulars.

12 I have already noted that the initial statement of particulars filed in this case claimed income loss on the basis of $1,050 nett per week plus superannuation. The claim was made for substantially the whole of the period from the date of the plaintiff's injury until he attained the age of 65, a period in excess of 36 years. This part of the claim alone exceeded $750,000.

13 In addition there was the non-economic loss claim and the other ancillary claims. Even allowing for the application of a discount for vicissitudes, perusal of this document would have made it apparent from the outset that the amount claimed exceeded the Court's jurisdictional limit.

14 Amendments to the particulars were filed in March 2007 and April 2009 and, although those particulars dealt with a period when the plaintiff secured some employment at approximately one-half of his pre-injury income, they also detailed his deteriorating physical condition and his increased claims in respect of medical expenses and care both on a voluntary and commercial basis.

15 I raised with the parties today the proposition that in the absence of a memorandum of consent or objection by the defendants it was possible that the Court, if one read s 51(1) literally, never had the power to hear and dispose of the action with the result that work done to date would have to be aborted and the proceedings transferred to be heard and disposed of in the Supreme Court. That was not a proposition that was argued before me and on the basis of my decision I do not need to take it further.

16 The defendants argued that they did not appreciate the quantum of the claim, notwithstanding the three sets of particulars, until they received shortly before the hearing commenced a schedule of damages in a form similar to that which was marked Exhibit M in the proceedings. They claim that they did not have the opportunity to object three months prior to the commencement of the hearing. Information has been put before me today to suggest that this was not precisely the position, although the defendants' counsel may not have been aware of it.

17 On my reading of the decision of the Court of Appeal in Richards v Cornford and upon my perusal of the statements of particulars, it was readily apparent to me that it should have been clear to the defendants that the claim from the outset exceeded the jurisdictional limit of this Court and that they had the opportunity, if they wished, to make the objection provided for in s 51(2)(b) of the District Court Act 1973. In those circumstances, I concluded that in the absence of objection the Court was in a position to exercise jurisdiction up to the maximum amount provided for in s 51(4) of the Act.

18 The plaintiff claimed interest on the element of damages relating to past economic loss. Section 44(2) of the District Court Act provides that interest that could be awarded under s 100(1) of the Civil Procedure Act 2005 is to be disregarded in deciding whether the jurisdictional limit of the Court has been exceeded and in deciding whether the Court has jurisdiction to hear and dispose of the action.

19 The defendants argued that the claim for interest on past economic loss in this case was made under s 18 of the Civil Liability Act. On that basis it was argued that interest was not awarded under s 100 of the Civil Procedure Act and that thus it may not be disregarded.

20 I rejected this argument. I did not regard s 18 of the Civil Liability Act as conferring a right to interest. Rather it restricted the extent to which interest may be ordered by the Court to be paid. Under ss 2(b), when the Court is satisfied that interest payable, the amount is to be calculated in accordance with the principles ordinarily applied by the Court. The way in which interest is ordinarily applied has regard to s 100(1) of the Civil Procedure Act. Thus I concluded that the interest was to be disregarded in deciding whether the jurisdictional limit of the Court was exceeded. I also decided that it was to be calculated by reference to the relevant interest rate as provided in s 18(4) of the Civil Liability Act. I accepted that on ordinary principles the amount to be paid would be one-half of the relevant interest rate.

21 I note that the plaintiff served four offers of compromise dated 31 October 2006, 26 September 2007, 5 March 2008 and 13 October 2008. The amount awarded substantially exceeded them all.

22 The defendants resisted the plaintiff's claim for indemnity costs from the date of the initial offer. They claimed that they were not in a position to assess the offer of October 2006 because at that time they had only recently received reports of the plaintiff's medical and other experts. They claimed that further reports were served after the dates of subsequent offers including a forensic accounting report served after the last offer that was made in October 2008.

23 The plaintiff pointed out that by October 2006 both defendants had arranged medical examination of the plaintiff and had issued a substantial number of subpoenas in their investigation into the circumstances of the plaintiff's injury and his medical background. Thus it was contended that the defendants had ample opportunity to assess what was a relatively straightforward claim and, in the absence of exceptional circumstances, the plaintiff was entitled to indemnity costs.

24 I decided that costs on an indemnity basis should be paid from 26 September 2007, the date of the second offer. I accepted that the defendants' capacity to assess the initial offer was limited by only recently served medical material that supported the plaintiff's claim.

25 Both defendants sought the costs of an adjournment granted in March 2008 when the plaintiff proceeded with surgery to his right knee. I accepted that injury to the left knee might have placed greater pressure on the right knee and aggravated the pre-existing arthritic condition of the right knee. I did not accept that the injury to the right knee for which the surgery was required was causally related to the injury to the left knee or any other injury suffered by the plaintiff in the accident that was the subject of the claim. In those circumstances, I concluded that the plaintiff should pay the defendants' costs of the March 2008 adjournment.

26 I was satisfied that an appropriate form of order will be to enter verdict and judgment against both defendants for the full amount without apportionment.

27 The orders that I make in this matter therefore are as follows.

(1) Verdict and judgment for the plaintiff in the sum of $796,202 calculated as set out in scenario 1 of Exhibit P. (2) Tubrule will be liable to Baulderstone Hornibrook in respect of its proportion of the judgment sum to the extent of $447,863. Baulderstone Hornibrook will be liable to Tubrule in respect of its portion of the judgment sum in the amount of $348,337.

(3) The defendants are to pay the plaintiff's costs of the proceedings on an ordinary basis up to and including 26 September 2007 and on an indemnity basis thereafter.

(4) Verdict for Tubrule on the cross-claim brought against Baulderstone Hornibrook in the sum of $348,337. The cross-claimant and the cross-defendant are to pay their own costs of the cross-claim.

(6) The orders made are stayed for a period of six weeks on condition that within that period a notice of appeal is filed and on condition that thereafter the appeal is prosecuted with diligence and efficiency.

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