McGoldrick v Dendrobium Coal Pty Ltd

Interest

1. The plaintiff claims interest on the components of the damages award which represent his non-economic loss ($174,758) and the allowance for his past domestic assistance ($15,000). The plaintiff calculates his claim at an average interest rate for the period of 9.25 years which sufficiently allows for the period between the date when his injury occurred and the date of the first judgment.
2. The parties agree that before the Court can order interest on an award of damages of the kind made in the first judgment, the provisions of s 151M of the Workers Compensation Act 1987 ("the Act") must be satisfied.
3. It is unnecessary to set out the entirety of that section. Section 151M(4) has the substantive effect that interest is not payable, and a Court cannot award a sum for interest on damages, unless there has been either an exchange of reasonable offers of settlement, or else there has been a reasonable opportunity for the parties to make offers of settlement, and in addition that the plaintiff is awarded damages in a sum which is 20% more than the highest sum offered by the defendant.
4. In its written submissions, the defendant conceded that the amount of damages set out at [182] of the first judgment (which has only been increased by the agreed additional amounts referred to above) is more than 20% higher than the only offer which it made.
5. Accordingly, I proceed to determine the question of interest on the basis that the relevant threshold in s 151M of the Act has been met, and that the Court is entitled to consider whether or not to include, in any assessment of damages up to judgment, a sum by way of interest on damages.
6. It is appropriate to note a couple of matters which are addressed by s 151M of the Act. First, the appropriate rate for the payment of interest is that fixed by s 151M(6) of the Act, namely, three quarters of the rate prescribed for the purposes of s 101 of the Civil Procedure Act 2005 ("the CPA"). The rate provided for in s 101 of the CPA is prescribed by r 36.7 of the Uniform Civil Procedure Rules 2005 ("the UCPR") as being 6% above the cash rate last published by the Reserve Bank of Australia.
7. Secondly, the dual effect of s 151M(5) of the Act is that where interest is to be awarded, the amount is to be calculated for the period from the date of injury until the date on which the Court determines the damages, and further, that the amount of interest is to be calculated in accordance with the principles ordinarily applied by the Court for that purpose.
8. In response to the plaintiff's claim for interest on non-economic loss, the defendant submits that it is not open to the Court to make that award because the provisions of s 151M(3) of the Act provide that no interest is payable on damages awarded for non-economic loss. Insofar as the plaintiff's claim is for interest on past domestic assistance, the defendant relies on s 151M(2) of the Act which is to the same effect.
9. As the plaintiff had not referred to these provisions, it has been necessary for me to be satisfied as to whether the defendant's submission is legally correct.
10. Section 151M of the Act was originally introduced in 1989. The section was in a quite different form at that time and did not include the provisions now relied upon by the defendant.
11. Section 151M in the form relied upon by the defendant in its submissions was inserted into the Act by the WorkCover Legislation Amendment Act 1995. That amending legislation took effect from 1 January 1996.
12. The two relevant sub-sections were later repealed by the provisions of cl 11 of Sch 1 of the Workers Compensation Legislation Further Amendment Act 2001 which took effect from 27 November 2001.
13. However, the transitional provisions are of critical importance. Clause 2 of Sch 4 of the 2001 amending legislation was in these terms, referring to amending the Act (i.e., the 1987 Workers Compensation Act), in this way: "Schedule 6 Part 18 Special provision relating to coal miners Omit clause 3 (1). Insert instead: (1) Subject to this clause, the 2001 amendments do not apply to or in respect of coal miners and this Act and the 1998 Act (and the regulations under those Acts) apply to and in respect of coal miners as if the 2001 amendments had not been enacted."
14. But for this transitional provision, and having regard to the fact that the plaintiff's accident occurred in 2013 and that the award of damages was made in a judgment delivered in 2022, the provisions of s 151M(2) and (3) which were formerly in existence (and which are relied upon by the defendant to oppose any order for interest) would not be applicable to deny the plaintiff's entitlement to interest.
15. However, because the transitional provision has the effect that coal miners ( a term which apples to the plaintiff in respect to this claim) are not bound by the 2001 amendments (which repealed the provisions preventing a court awarding interest on non-economic loss and past domestic assistance), then it seems to me that subss (2) and (3) remain applicable to the plaintiff's claim.
16. Those sub-sections are in the following form: "151M Payment of interest (1) Limited statutory entitlement A plaintiff has only such right to interest on damages as is conferred by this section. (2) Domestic services, nursing and attendance No interest is payable on damages comprising compensation under section 151K. A court cannot order the payment of interest on such damages. (3) Non-economic loss No interest is payable on damages awarded under section 151G. A court cannot order the payment of interest on such damages."
17. Section 151K refers to awards of damages for past domestic assistance. Section 151G refers to damages for non-economic loss.
18. In those circumstances the Act, interpreted as I have set out above, has the effect that this plaintiff, because he is a coal miner within the definitions in the Act, is not entitled to any award of interest on these heads of damages as he claims.
19. I accept the submissions of the defendant and decline to include in the verdict any interest from the date of the accident until the date of the judgment, on the claimed heads of damage.

Costs

1. The proceedings were initially commenced in the District Court of NSW and transferred to this Court on 3 June 2016.
2. The plaintiff seeks an order in the following terms: "(a) Defendant to pay the plaintiff's costs on the ordinary basis up to and including 25 May 2017; (b) Defendant to pay the plaintiff's costs on the indemnity basis from 26 May 2017, save for the costs ordered by Davies J on 8 November 2019, which are to be paid by the plaintiff on the ordinary basis."
3. There is also a disputed issue between the parties as to what order this Court ought make with respect to an order for costs which was reserved by Wright J on 24 February 2021, when he vacated the initial fixture for trial of the matter ("the reserved costs issue"). It will be necessary to return to that issue in due course, but it is appropriate to first address the costs of the proceedings more generally.

Costs of the Proceedings Generally

1. Leaving aside the reserved costs issue, the defendant accepts that the Court should make an order that it pay the plaintiff's costs on the usual basis. Accordingly, the first disputed issue to be determined is whether there is any basis for an award of indemnity costs as claimed by the plaintiff.
2. The award for indemnity costs is claimed to arise with effect from 25 May 2017. The evidence filed in support of this Motion shows that on that date the solicitors for the plaintiff served an Offer of Compromise on the solicitors for the defendant. It was noted to be open for the period of 28 days. The covering letter indicated that it, and the Offer of Compromise, were also intended to operate according to the principles set out in Calderbank v Calderbank [1976] Fam 93.
3. The Offer of Compromise was as follows: "Verdict and judgment for the plaintiff in the sum of $425,000 clear of workers compensation benefits paid to, for or on behalf of the plaintiff to date."
4. The plaintiff notes that at the time that offer was served, even though the proceedings were in the District Court of NSW, the plaintiff's claim had been particularised and the primary reports of Dr Bodell of 2 May 2016 and Dr Marsh dated 17 November 2016, had been served.
5. The plaintiff submits that he has obtained judgment on the claim which is significantly more favourable to him that the terms of the offer which he made. Accordingly, in reliance on r 42.14 of the UCPR, he claims entitlement to an order for indemnity costs from the date of the Offer.
6. The defendant does not submit that the plaintiff has not been appropriately successful, nor that he has not received judgment which is more favourable to him. Rather, the defendant submits that there were significant changes in the plaintiff's case after 25 May 2017, and that given all that occurred after that date, the Court should, within the meaning of r 42.14 "otherwise order" because of those matters.
7. The defendant draws attention to the following changes after that time, namely:

• proceedings were, after 25 May 2017, transferred to the Supreme Court from the District Court. The defendant submits that the Court would infer that that was because the plaintiff's solicitors thought that the claim might exceed the jurisdictional limit of the District Court (which was then $750,000);
• a Second Amended Statement of Particulars was filed on 22 January 2018;
• in November 2019, the plaintiff successfully applied to the Court to rely on medical reports in addition to those of Dr Bodell and Dr Marsh;
• the plaintiff served further evidentiary statements addressing the issue of future economic loss, followed by a Third Amended Statement of Particulars on 29 March 2021.

1. Those submissions do not refer to, but it is necessary to take into account, the fact that the defendant adopted the view at all times, until shortly before the final hearing of the proceedings in 2021, that the plaintiff had no entitlement to any sum by way of damages for future economic loss because of the provisions of s 151I of the Act. By the conclusion of the hearing, as recorded in the first judgment, senior counsel for the defendant expressly accepted that the Workers Compensation legislation did not preclude the Court from awarding damages for future economic loss by way of a buffer.
2. The plaintiff also draws attention to the fact that the only offer ever made by the defendant by way of an Offer of Compromise, was one dated 29 March 2021, namely a time after all amendments had been made by the plaintiff to his claim. He draws attention to the fact that that offer was the sum of $300,000 exclusive of costs and workers compensation payments which had been made to that time.
3. The plaintiff notes that the defendant at no time made any rational assessment of the likely sum of damages which the plaintiff would recover and, accordingly, even if the plaintiff's case had changed in the way now complained of by the defendant, that change made no difference to the defendant's assessment of the value of the claim.
4. In my view, the plaintiff's submission is to be preferred. The UCPR provides for a standard mechanism whereby a plaintiff is entitled to costs on an indemnity basis in the event that certain things have occurred. The defendant seeks the exercise of the discretion by the Court, based upon, essentially, the fact that the value of the plaintiff's claim significantly increased after the 25 May 2017 Offer was made such that the Offer ought not be regarded as being a reasonable or sensible one.
5. I do not accept this. The fact of the matter is that the defendant assessed the plaintiff's claim on a particular view that it took of the law, namely, that amongst other things, the plaintiff was not entitled to any sum of money for future economic loss. This was a considered forensic decision which was ultimately conceded by senior counsel for the defendant to be wrong.
6. In addition, even allowing for that miscalculation, which may cause an adjustment of the judgment sum of the plaintiff by almost $400,000, the Offer made by the defendant seems not to have sufficiently assessed the balance of the claim.
7. However, it is unnecessary to form any conclusion about that because, in my view, the defendant chose to maintain an untenable view of the entitlement of the plaintiff to damages and for that reason, any of the changes upon which it now relies are irrelevant. I am not persuaded to exercise my discretion as the defendant seeks.
8. It is now necessary to consider the question of the appropriate order to be made with respect to the reserved costs order made by Wright J.

Reserved Costs Issue

1. The hearing was originally fixed to take place on 24 February 2020. That hearing was vacated by Wright J who, at the time, made an order that the costs of and occasioned by the adjournment be reserved.
2. Rule 42.7 of the UCPR provides as follows: "(1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including - (a) costs that are reserved, and (b) costs in respect of any such application or step in respect of which no order as to costs is made, are to be paid and otherwise dealt with in the same way as the general costs of the proceedings."
3. The defendant submits that the Court would "otherwise order" within the meaning of that rule, because the adjournment of the hearing was occasioned by the service of the plaintiff's further evidentiary statement which, included a reference to the prospect that he might lose his job as a Control Room Operator at the Appin Coal Mines if the mines at which he was then working reduced their operations from two long wall operations to one. The defendant submitted that it was not clear from the content of the plaintiff's further evidentiary statement that his belief that his job was at risk arose for the first time at the meetings held in February 2020.
4. The defendant submits that in the absence of a proper explanation of the circumstances that led to the plaintiff seeking to rely on a further evidentiary statement served on 21 February 2020, it would not be appropriate to order costs in favour of the plaintiff. Rather, the defendant submits, the appropriate order is that it should have its costs paid by the plaintiff for the costs thrown away by reason of the adjournment.
5. The issue raised by the additional evidentiary statement was discussed in the first judgment under the heading "Current Employment Security". I concluded in the judgment (at [135]) that I was not satisfied on the probabilities that the Appin Mine would continue to operate past the end of the existing lease in 2034, and that it may well cease operations before then because it was not economically viable. I took into account those possibilities in the assessment of damages.
6. Putting it differently, the additional evidentiary statement which the plaintiff first produced in February 2020 contained evidence which was relevant to the assessment of his future prospects and his future economic loss in the proceedings.
7. An examination of that statement demonstrates that the fears which he was raising were sourced from meetings at the mine site held in 13 and 14 February 2020.
8. The defendant at trial called Mr Manz who was at that time, in February 2020, General Manager of the Appin Mine. It is clear from his evidence that the first time various groups of staff, including the plaintiff, were told about the plans for the Appin Mine was at those meetings.
9. In those circumstances, it seems to me that the plaintiff promptly raised the new matters which had arisen in February 2020 for the first time. It was the defendant, or its parent company - South 32, which was raising those matters with the employees, and it was South 32 which had control over when it raised the matter with them. The plaintiff could not have known of the matters any earlier from any official source. In those circumstances his conduct in raising those matters was not unreasonable. Whether, and if so to what extent, the defendant actually needed an adjournment, given that it was the original source of the information, is not a matter which is necessary to be considered.
10. However, in my view, the adjournment of the hearing fixed at that time was simply an ordinary incident of the litigation which was at that time unresolved. The new information raised an important matter to the plaintiff's case. In those circumstances, I see no reason to vary the usual order for costs, set out in r 42.7 of the UCPR.
11. Accordingly, the costs reserved by Wright J will be part of, and be included in, the order for costs which I have proposed.

Total Award of Damages

1. In light of my conclusion that interest on damages is not available, it is now appropriate to reproduce the table from the first judgment adjusted for the changes earlier referred to. Item $ Buffer on future earning capacity $350,000.00 Lost superannuation on future earning capacity $42,000.00 Non-economic loss $174,758.00 Future surgery $7,500.00 Fox v Wood damages $4,896.16 Past medical expenses $57,306.84 Additional medical expenses (paid by plaintiff) $12,230.86 Future out-of-pocket expenses $30,000.00 Past domestic assistance $15,000.00 Future domestic assistance $200,000.00 Home modifications $5,000.00 Verdict Total $898,691.86 Credit to defendant $86,683.79 Judgment Total $812,008.07

Orders

1. I make the following orders: 1. Verdict for the plaintiff in the sum of $898,691.86. 2. Judgment for the plaintiff, after allowance for monies paid by the defendant, in the sum of $812,008.07. 3. Order the defendant to pay the plaintiff's costs of the proceedings on the usual basis up to and including 25 May 2017. 4. Thereafter, order the defendant to pay the plaintiff's costs of the proceedings on an indemnity basis. 5. I order that the judgment take effect from 18 October 2022. 6. For the purposes of Rules 51.8 and 51.16 of the Uniform Civil Procedure Rules 2005, I stay the effect of this judgment up to and including 20 January 2023.

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