5On the face of it the First Defendant made an offer of $320,000 to the Plaintiff and the Plaintiff will obtain a judgment for $232,315.80. On the face of the offer and the judgment the Plaintiff obtained a judgment that was less favourable than the terms of the offer.
6The Plaintiff submitted, however, that consideration did not rest at that point. If the Plaintiff had accepted the offer of 12 January 2011 he would have received $320,000 from the First Defendant but, by reason of the indemnity in favour of the Second Defendant in the sum of $241,012, the judgment for the Plaintiff against the First Defendant would have been $78,988. The figure of $241,012 represented the Workers Compensation payments received to that time.
7In my first judgment I determined that the lower back injury from which the Plaintiff now suffers was not caused in the course of his employment with the Second Defendant nor whilst working for the First Defendant. That had the effect, as a result of findings I made in my second judgment, that although the Plaintiff obtains a judgment against the First Defendant for $232,315.80 (a sum lower than the offer) he is bound to repay a much smaller sum ($89,744.26) to the Second Defendant in repayment of Worker's Compensation payments received in respect of the injuries that I found were work related.
8By reason of my judgment the Plaintiff will receive, after the operation of the indemnity reduces the amount payable to the Plaintiff by the First Defendant, the sum of $142,571.54. Accordingly, the Plaintiff has achieved a better result as a result of the judgment than by accepting the offer in January 2011.
9The question is whether one looks simply to the figures of $320,000 and $232,315.80 or whether one takes account of the net result by reason of the different Worker's Compensation paybacks.
10In my opinion, two reasons suggest that it is the net position which is the appropriate consideration for the purposes of r 42.15(1). First, if the Rule had only been concerned with the bare figures of the offer and the judgment it could have read:
...the Plaintiff obtains an order or judgment on the claim concerned equal to or less than the terms of the offer.
The inclusion of the word "favourable" at two places in the rule suggests that other considerations may be operative and that it is the result to the Plaintiff to which one looks rather than making a bare comparison of the figures. In Hancock v Arnold (No. 2) [2009] NSWCA 19 the Court of Appeal said at [23]:
Whether there is an offer of compromise must be capable of objective determination by reference to the circumstances at the time the offer was made.
One of those circumstances must have been the issue of any Worker's Compensation payback.
11The second, and not unrelated, reason is that the issue of the Worker's Compensation refund was inextricably linked with the outcome of the case for the Plaintiff. He had brought proceedings against his employer as well as the Council. The employer had sought the indemnity under s 151Z(1)(d). The inevitable result was that any verdict the Plaintiff would obtain from the First Defendant would be a figure net of the employer's indemnity.
12Mr Sheldon of Senior Counsel who appeared for the First Defendant submitted that it was inappropriate to consider the Worker's Compensation payback because to do so would open the matter for consideration of other deductions that might have to be made by a Plaintiff. These would include any payback to the Health Insurance Commission for medical costs and, perhaps, solicitor client costs over and above party/party costs received from the Defendants.
13In my opinion, those matters are extraneous to a consideration of whether the judgment obtained was not less favourable to the Plaintiff than the offer. That is because amounts other than the Worker's Compensation payback do not reflect themselves in any way in the judgments between the parties to the litigation. By virtue of the statutory indemnity, the sum the Plaintiff obtains against the First Defendant is reduced by the indemnity. Further, a determination of the amount of that indemnity forms part of the litigation in respect of which the Offer of Compromise has been made because of the cross-claim brought by the employer against the Council.
14It would be entirely artificial, in my opinion, to ignore the Worker's Compensation payback with the result that the Plaintiff's final position after the judgment would not be the appropriate comparison with the offer made taking into account that payback.
15In my opinion, the judgment obtained by the Plaintiff was not less favourable than the offer made by the First Defendant on 12 January 2011. In those circumstances the ordinary costs order applies that the First Defendant should pay the Plaintiff's costs.