Nicoletas v Wallara Australia Pty Ltd

(c) Aggravation of pre-existing cervical disc degeneration;

(g) Consequential psychological condition.[1]

1. The proceeding resolved on 20 November 2023. It was listed before me for hearing, and after being called on and appearances taken, I was advised by the plaintiff's senior counsel, Ms Pilipasidis, that the plaintiff had abandoned her claim for economic loss and she had accepted a serious injury certificate for pain and suffering only. Counsel said that the common law damages claim was also resolved between the parties as part of an all in settlement of the dispute.
2. Ms Pilipasidis sought certification of senior and junior counsels fees. The defendant objected to the certification of the plaintiff's counsels fees. It had good reason to. Let me explain why.
3. The defendant served a pain and suffering only notice ("the Notice") on the plaintiff on 9 June 2022, pursuant to the WorkCover (Litigated Claims) Legal Costs Order 2016 ("the Costs Order") that contained an offer to compromise the proceeding by granting a pain and suffering certificate only. The offer was open for acceptance for 28 days. It was not accepted by the plaintiff's solicitor within the 28 days. Despite not accepting the offer, the plaintiff submitted that it was reasonable to reject the offer of a pain and suffering only certificate during the period that the offer as made was open to be accepted. To understand why I am unable to accept the plaintiff's submission, it is necessary that I set out some relevant history.

1. The plaintiff is 59 years of age. She commenced with the defendant, Wallara Australia Pty Ltd in April 2004 as a disability support coach. She worked in community, high support and house high support looking after about five clients. Her duties included assisting clients with personal care such as showering, toileting and feeding. She also assisted clients with computer work and administration. She took them on outings and communicated with their families.

1. On 7 January 2013 the plaintiff was assaulted by a client and sustained injury.

1. Post-incident the plaintiff attended her general practitioner and had some physiotherapy. Her symptoms persisted and further investigations were conducted. The plaintiff was referred to neurosurgeon Mr Girish Nair, and on 17 August 2013, he performed a two-level cervical spine fusion.

1. The plaintiff deposed that prior to injury she had been working at least 40 hours per week, five days a week. However, at the time of the injury she was working part time in what was described as two "active night shifts" per week on Friday nights from 11:00 pm to 8:00 am on Saturday mornings, and Saturday night from 11:00 pm to 8:00 am on Sunday morning.
2. The plaintiff said that prior to injury, she was ready, willing and able to work overtime, as requested by her employer. She said she anticipated that her work hours would have increased in the future from just the two night shifts she was doing prior to her injury in 2013.
3. The plaintiff continued working with the defendant employer after the injury.
4. The plaintiff's GP certified her fit for light work for 19.5 hours per week. She worked three, six and a half hour shifts per week over a 39 hour fortnight. She said that she struggled to stay at work and believed that she was working at her maximum capacity. She deposed that increasingly, she struggled to cope at work due to neck pain and referred pain in her right shoulder and arm.

Work conduct issues, standing down investigation, resignation

1. In about October 2020, the employer commenced a disciplinary investigation against the plaintiff. In January 2021, she was stood down from her employment for disciplinary reasons. In February 2021, the suspension was lifted and the plaintiff returned to work.
2. In February 2022, the plaintiff resigned from her employment. She deposed that her resignation was because of her injury, but also because she was being bullied at work, and which she attributed to her injury.
3. Around this time the plaintiff attended her GP, who certified her unfit for work. The plaintiff deposed that her situation had changed and she considered that she had no capacity to work.
4. In April 2022, the plaintiff moved to Queensland because she had stopped working with the defendant and she wanted to be closer to her family.
5. The plaintiff has not worked since April 2022.

1. The plaintiff filed an Originating Motion on 15 February 2022, seeking leave of the Court to pursue a common law claim for damages for her injury to the cervical spine sustained on 7 January 2013 for both pain and suffering and pecuniary loss damages.
2. By order of his Honour Judge Pillay made on 23 February 2022, the plaintiff's Originating Motion was listed for hearing on 18 August 2022.
3. On 9 June 2022, the solicitors for the defendant served on the solicitors for the plaintiff the Notice pursuant to section 4, part A of the Costs Order. The Notice advised the plaintiff that the defendant would grant her a serious injury certificate for pain and suffering only, but maintained that the plaintiff was not entitled to a serious injury certificate for pecuniary loss. The Notice was open for acceptance for 28 days from the date of its receipt.
4. On 18 August 2022, the parties appeared before her Honour Judge Tran. The plaintiff had briefed both senior counsel and junior counsel for the Hearing. The hearing was vacated by her Honour on the basis that the plaintiff was seeking further treatment. Costs were ordered against the plaintiff's solicitors and the matter was re-listed for 7 March 2023.
5. Prior to 7 March 2023 the hearing was again adjourned because the plaintiff's condition was said to not be stable.
6. An administrative appearance occurred on 10 May 2023, and his Honour Judge Pillay listed the plaintiff's Originating Motion for hearing on 20 November 2023.
7. On 20 November 2023, prior to the commencement of the hearing, the parties resolved the plaintiff's application on the basis that the plaintiff would be granted a serious injury certificate for pain and suffering only and abandon her claim in respect of pecuniary loss. As I said earlier, the common law claim was resolved as well.

1. The Costs Order specifies the professional costs that may be paid by the Victorian WorkCover Authority or self-insurer to a legal practitioner acting on behalf of the worker, and the disbursements that may be paid to a worker or legal practitioner acting on behalf of a worker in respect of any claim or proceeding pursuant to section 352(2)(d) of the Act.
2. The Costs Order replaces any other entitlement of a worker or a legal practitioner to be awarded legal practitioners' professional costs and disbursements payable by the Authority or a self-insurer incidental for, and incidental to a proceeding under section 335(2) of the Act, and has full force and effect, notwithstanding anything to the contrary in the Legal Profession Uniform Law Application Act 2014, the Supreme Court Act 1986 or the County Court Act 1958, or in any regulations, rules or other documents made under any of those Acts.
3. The Costs Order is divided into Parts. Part A specifically regulates the professional costs of solicitors. Relevantly, Part A2 of the Costs Order provides:

(i) the Authority or a self-insurer gives Notice (the Notice) in writing to the worker's legal practitioner that the Authority or the self-insurer is satisfied that a worker's injury satisfies requirements of section 134AB(38)(b)(i) of the AC Act or section 325(2)(b)(i) of the WIRC Act but not the requirements of section 134AB(38)(b)(ii) of the AC Act or section 325(2)(b)(ii) of the WIRC Act, and that subject to the worker abandoning that part of the application seeking the leave of the Court to bring damages proceedings for pecuniary loss damages, the Authority or self-insurer will issue a certificate ('the offer'); and

(ii) within 28 days of receiving the Notice the worker or the worker's legal practitioner does not advise the Authority or the self-insurer that the worker accepts the offer; and

(iii) at the time of resolution, whether as a result of a certificate provided by the Authority or the self-insurer or as a result of leave being given by the Court, the worker is entitled to bring a damages proceeding for the recovery of pain and suffering damages but not for the recovery of pecuniary loss damages,

the costs payable is the sum in Table A1, payable at the time the Authority or the self-insurer made the offer in writing to the worker or the worker's legal practitioner

1. Parts B and C of the Costs Order deal with disbursements. They treats the costs of counsels' fees as a disbursement, not a professional cost. Subparagraph 5 of Part B, and Part C, provide:

5. the cost of counsel's fees (including brief fee) incurred not more than 28 days prior to day 1 of the hearing. The counsel fees payable will be calculated in accordance with the Scale of Costs or any other sum which is agreed or ordered by the Court;

In respect of an item in Part B, if a dispute arises in relation to the allowance of an item claimed or the reasonable cost of the item, the County Court Rules of Civil Procedure will apply to the dispute resolution process.

1. The defendant disputes the certification of counsels' fees. Part C requires the application of the County Court Civil Procedure Rules 2018 to the dispute resolution process. I have a discretion with respect to the certification of counsels' fees.
2. I was provided with a series of rulings of this Court,[2] regarding the certification of counsels' fees when the plaintiff did not accept a pain and suffering only offer made by the defendant via the Notice and pressed on with its pecuniary loss claim to hearing.
3. In Barman v Victorian WorkCover Authority (Ruling as to Costs), his Honour Judge Lauritsen said "in civil litigation, the purpose of offers of compromise or settlement is to bring litigation to an end sooner than would be the case if a trial occurred. They are meant to save costs, for the litigants and for the public."[3] His Honour Judge Coish has characterised the policy underlying the Costs Order and Notice as being to manage legal costs and encourage resolution of disputes.[4]
4. In Barman in order to arrive at his decision to certify counsels' fees, his Honour Judge Lauritsen undertook an analysis of the plaintiff's prospects of success when the Notice was given, "assessed within the period of 28 days afterwards on the basis of the material possessed by her."[5]
5. In the rulings to which I was referred, the relevant test is whether the plaintiff's rejection, or non-acceptance of the offer was reasonable in the circumstances.[6] Reasonableness is assessed within the period of time allowed at the giving of the notice.
6. In Dowling his Honour Judge Coish exercised his discretion not to certify plaintiff's counsels' fees. In coming to that decision, he considered when the offer was made whether "the requisite information in respect of the claim for loss of earning capacity was within the knowledge of the plaintiff or capable of being discovered by the plaintiff or her lawyers."[7] As in Dowling, I am satisfied that the requisite information in respect of the plaintiff's claim for loss of earnings was within the knowledge of the plaintiff's solicitors and capable of being discovered and the state of that information and the knowledge derived from it, leads to a conclusion that the non-acceptance of the offer contained in the notice was not reasonable in all the circumstances. So as to appreciate the reasons for my conclusion and the exercise of my discretion to not certify, it is important that I address the parties respective oral submissions.

1. Ms Pilipasidis submitted that the plaintiff was not in a position to accept the grant of a pain and suffering certificate only in June 2022 when the defendant made the offer.
2. Ms Pilipasidis relied on a chronology addressing the plaintiff's employment pre and post injury.

1. In April 2004, the plaintiff, was working 56.5 hours a fortnight as a disability support coach.
2. In August 2008, the plaintiff resigned from the defendant, before returning to work with the defendant on a casual basis in December 2008.
3. The plaintiff continued working with the defendant on a casual basis until May 2010, when she commenced working part time 60 hours a fortnight, which she did until July 2011. Then she commenced working part time at a base 36 hours a fortnight.
4. From 2012 the plaintiff commenced working "two active night shifts." This was the case at the date of injury.
5. The plaintiff's gross-income prior to the injury varied. In 2010 the plaintiff's gross income was $39,000. In 2011 it was $53,657. In 2012, it dropped to $39,661 and in 2013, the year the injury occurred, it was $30,510, of which around five months included WorkCover payments.
6. The injury occurred in January 2013. In June 2014 the plaintiff returned to work in alternative duties of 18 hours per week. By May of 2020 the plaintiff had increased her hours and was working 36.5 hours a fortnight.
7. In October of 2020, an issue arose at work and a disciplinary investigation was commenced. In January 2021, the plaintiff was suspended from the defendant employer with full pay whilst the disciplinary investigation was conducted. At this time the plaintiff was working and certified fit for modified duties.
8. In February 2021 the suspension was lifted and the plaintiff returned to work with the defendant in similar duties. In March 2021 the disciplinary investigation was concluded and, according to Ms Pilipasidis, the plaintiff's bullying allegations were largely substantiated.
9. The plaintiff's Originating Motion was filed on 15 February 2022. Immediately prior, the plaintiff was working 39 hours per fortnight, but undergoing physiotherapy, taking Endone, and Panadeine Extra and Voltaran.
10. On 23 February 2022, the plaintiff resigned from her employment and was certified unfit for work.
11. In April 2022, the plaintiff moved to Queensland.
12. The serious injury application was fixed for hearing in August 2022.
13. On 9 June 2022, the defendant served the pain and suffering only offer.
14. The plaintiff did not accept that offer, as at this stage:

(a) She had only relocated to Queensland;

(b) Neurosurgeon Professor D'Urso had prepared a report dated 26 May 2022 which recommended that the plaintiff undergo further investigations by way of a CT scan and an MRI Scan to determine the current status of her cervical spine. Prof. D'Urso reported that based on those investigations "If there was evidence of a pseudo arthrosis or complication related to surgery there may be indication for further surgical intervention."[8]

1. From this time onwards the further chronology becomes irrelevant to an assessment of the reasonableness of the plaintiff's lawyers to not accept the offer withing the period of 28 days. It is relevant however, to note that when the hearing of the application came before Judge Tran on 18 August 2022, it was adjourned because the plaintiff wanted to undertake the further investigations that had been recommended by Prof. D'Urso in his report of 26 May 2022, that is, his report provided prior to the notice of offer and prior to the date of its expiration.
2. Furthermore, the plaintiff had the x-ray and MRI of her cervical spine and in December 2022 consulted with neurosurgeon Mr Nair, who recommended that she have a further bone scan and CT guided right C6 nerve root injection, which occurred in January 2023.
3. In February 2023, the plaintiff returned to Mr Nair who discussed the prospect of the further surgery; however, the plaintiff was reticent to pursue anything but conservative treatment.
4. In July 2023, the plaintiff consulted with pain specialist Dr Sivakumar who recommended that she undergo a cervical pulse radiofrequency and right C5/6 transforaminal epidural injection. The plaintiff returned to Dr Sivakumar in August 2023 but decided not to pursue further treatment. The plaintiff continued to attend a physiotherapist weekly, and a psychologist monthly, and takes Panadeine extra.

1. The crux of the plaintiff's submissions was that in June 2022, when the Notice was served and the pain and suffering only offer was open for acceptance, the plaintiff's condition was not stable. Thus, so the argument ran, the plaintiff was akin to the plaintiff in Condron v Victorian WorkCover Authority (Ruling as to Costs),[9] where his Honour Judge Misso found that in the face of a reasonable offer of a pain and suffering certificate, the plaintiff had not "simply blithely" pressed on with their claim for pecuniary loss.[10]
2. Ms Pilipasidis referred to the plaintiff's circumstances that included a cervical spine fusion and having continued working with a sympathetic employer, however, her neck continued to be symptomatic and her symptoms persisted with treatment, such that as of May 2022 further investigations were required. In all the circumstances, the plaintiff was simply not in a position to accept the defendant's notice of offer made in June 2022, given the referral for scans and further investigations that had been made.
3. I asked Ms Pilipasidis when it was that she contended that it was clear that the application for pecuniary loss was no longer maintainable. Ms Pilipasidis said it was the Friday prior to the hearing, when all the evidence had been obtained and she conferred with the plaintiff. In answer to when it ought to have become clear to a reasonably prudent solicitor that the application for pecuniary loss was not maintainable, Ms Pilipasidis pressed for a date in about August 2023 after the plaintiff had consulted with Dr Sivakumar and decided not to undertake further treatment.
4. I asked Ms Pilipasidis if the plaintiff would likely have satisfied the statutory pecuniary loss test of a 40% loss of her earnings in June 2022 when the notice was served, given that prior to the plaintiff moving to Queensland the plaintiff was working 19.5 hours per week. Ms Pilipasidis contended that at that time there was a real question about the plaintiff's appropriate pre-injury earnings, on the basis that in 2011 she had earned $50,000. However, the year prior to the incident, in 2012 the plaintiff's work reduced to two "active" night shifts and she earned around $10,000 less, and she remained working two active night shifts in 2013 and this was so when the incident occurred. Ms Pilipasidis submitted that whilst the plaintiff was working less at the time of injury than in 2011, she had the ability to work full time. I pointed out the plaintiff had never sought to work a greater suite of hours then she had at 2011.
5. Ms Pilipasidis conceded that if a loss of earnings was to be determined based on the hours that the plaintiff was working in 2013, then the plaintiff would not have been able to satisfy the pecuniary loss threshold.
6. Ms Pilipasidis submitted that it was a relevant consideration in the thinking of a reasonably prudent solicitor that the plaintiff's ability to work had been qualified by occupational physician, Dr Slesenger who in his report of 12 October 2021 expressed the opinion that:

I am of the opinion that taking into consideration Ms Nicoletas' current symptoms and functional limitations, her age (56), her qualifications, her residential location (Cranbourne) and her driving capacity, she retains capacity for work with the restrictions outlined above.

Taking into consideration her overall presentation, I recommend that she remains at work 4 hours a day, 4 days per week (I am of the opinion she is currently working outside her capacity limits).[11]

1. Ms Pilipasidis referred to a similarly expressed statement of opinion by Dr Slesenger dated 26 May 2022 addressing the plaintiff's ability to work. He said that the plaintiff had said she was struggling with her job demands, had severe pain towards the end of the day and was exhausted.[12] He added that the plaintiff had resigned in March 2022 in the context of workplace harassment.
2. Ms Pilipasidis observed that the plaintiff was only provided with comparable earnings figures by the defendant (in response to a Notice to Produce) the Friday prior to the hearing. Therefore, the plaintiff's solicitor also was unclear on the hours that the plaintiff was working which had made the comparison required of pre and post injury earnings, and as to whether the plaintiff met the statutory threshold difficult.
3. For all these reasons, Ms Pilipasidis said that the decision not to accept the pain and suffering certificate in June 2022, was reasonable in circumstances where the plaintiff has just moved to Queensland, and her cervical spine condition required further investigation and treatment. In those circumstances, it was appropriate for a prudent solicitor to have recommended that the certificate just for pain and suffering not be accepted.

1. Mr McKenzie's principal submission was that when the offer was made in June 2022, on the plaintiff's own material, the question of pecuniary loss was straightforward, and the non-acceptance of the offer at the date it was made and during the period of its currency for acceptance, therefore, was unreasonable.
2. Mr McKenzie submitted that the plaintiff's appropriate pre-injury earnings should have been known to be that sum which the plaintiff was earning when the injury occurred in 2013 and she was working two active night shifts. Mr McKenzie submitted that when the injury occurred the plaintiff had reported to CoWork that she had slowed down to working three days per week.[13] However, Mr McKenzie submitted that post-incident and from 2021 the plaintiff was working 36 hours a fortnight. He contended that the plaintiff's affidavit material did not suggest that when the injury occurred she was working part time for a particular reason, but was intending to increase her hours to full time in the future.
3. Mr McKenzie submitted that whatever might have been argued as to the precise calculation of hours that the plaintiff might have been working from time to time, even taking the matters at its highest, the taxation records "tell the story."[14] He said that assuming the plaintiff was working 18 hours per week, which is what she had been working when the incident occurred, her application for pecuniary loss was destined to fail.
4. Mr McKenzie submitted that the plaintiff's earnings of around $55,000 in the 2011 financial year, was an outlier and could not sensibly be treated as representative of career progression. However, if even 60% of that figure, namely, $33,318 was the appropriate threshold figure, then it was exceeded by her subsequent earnings from 2016 to 2021. Hence, Mr Mc Kenzie submitted it should have been glaringly apparent that the plaintiff's pecuniary loss claim would fail the statutory test.
5. Mr McKenzie further contended that although Prof. D'Urso had recommended further investigation, in that same report, and on which the plaintiff places reliance for not accepting the offer, and which opinion was in the plaintiff's possession prior to the notice served on 9 June 2022, he wrote that the plaintiff "would have capacity to perform employment activities within the restrictions mentioned... above on a full-time basis."[15]
6. Mr McKenzie also submitted that the report of treating psychologist Marie Reilly dated 23 May 2022 was that the plaintiff felt unable to return to work in March 2022, being when her period of leave following the investigation of conduct related matters was scheduled to conclude, because the plaintiff was feeling an escalation of stress at the thought of returning to work and went on sick leave, with the intention to give notice of her resignation.
7. By letter dated 23 February 2022, the plaintiff gave notice to the employer.[16] Mr McKenzie said that the resignation letter, in part focused on the plaintiff's injuries that are the subject of this proceeding, but that there was considerable attention placed on the "false allegations" that had been made by another staff member against the plaintiff, and that she was "bullied by managers, disciplinary meetings etc, etc."[17] Mr McKenzie submitted that it was open on the evidence that the plaintiff had resigned due to the disciplinary process for alleged inappropriate workplace behaviour that commenced in October 2020.
8. Mr McKenzie referred to the opinion of the plaintiff's treating general practitioner Dr Albir, dated 6 June 2022 and so prepared before the plaintiff received the notice and whose report referred to:

Chronic right side neck pain & chronic right upper limb pain & recurrent headache. This pain of mild degree & some time on occasions can be moderate degree. She is using Panadeine tablet for it & also voltaren tab.

She is very stable & I think she is unlikely to have further surgery unless another injury happened to the cervical spine at the neck.

She was advised that she can work physically in her pre-injury in modified duty & she should avoid further injury/risk. Or safer place/alternative job.[18]

1. Mr McKenzie pointed out that the plaintiff's GP was certifying the plaintiff fit for six to eight hours of work per day for a maximum of 40 hours a fortnight in light duties from 2016 up until April 2022.[19]
2. Mr McKenzie said that had the defendant's case proceeded then it would have been put on the basis that the plaintiff had retired to move to Queensland to be closer to her family, having had enough of her employer and the disciplinary investigation.
3. Mr McKenzie submitted that this was always a case where the plaintiff had worked part-time hours prior to her injury. He said that even on Dr Slesenger's analysis, as referred to by Ms Pilipasidis, the plaintiff would be working 16 hours per week as opposed to her pre-injury 18 hours per week, and hence could not have reached the statutory pecuniary loss threshold.
4. Accordingly, Mr McKenzie submitted that looking at the significant body of material, particularly from the treating general practitioner as well as the plaintiff's before and after injury earnings, this was an application where it was always clear that pecuniary loss should fail but that at least the conclusion should be reached that a solicitor exercising reasonable prudence and with knowledge of the plaintiff's before and after injury earnings, ought to have during the period of 28 days accepted the offer. The issue of stability falls away when regard is had to the opinion of Prof. D'Usro that the plaintiff had a full capacity for suitable employment.

1. I have discretion in respect of the certification of counsels' fees. I find in the circumstances of this case, it is not appropriate to exercise this discretion in favour of certification.
2. It is perhaps trite to say that a solicitor with the carriage of the conduct of a proceeding on behalf of a plaintiff client cannot decline a notice of offer of a pain and suffering certificate with a later disbursement impunity, only because she or he during the period it remains open, decides to press on with the claim for pecuniary loss with the hope it may succeed. If that was an acceptable methodology, the giving of a notice and its purpose in costs savings would be rendered otiose.
3. I can readily address the submission made by Ms Pilipasidis of the late provision of comparable earnings. To the reliance made on behalf of the plaintiff, I regard the language of his Honour Judge Coish apposite and meets the point when he said that:

The requisite information in respect of the claim for loss of earning capacity was within the knowledge of the plaintiff or capable of being discovered by the plaintiff or her lawyers.[20]

1. The information known to the plaintiff's solicitors made the prospect of the success of a pecuniary loss claim extremely unlikely. It was not reasonably prudent with the knowledge available to, or capable of being known to the plaintiff's solicitors at the time of the receipt of the notice, and during the period it was open to be accepted, to have not accepted the offer.
2. The application for certification is refused.

[1] Plaintiff's Particulars of Injury filed 25 March 2022.

[2] Barman v Victorian WorkCover Authority (Ruling as to Costs) [2020] VCC 380 ('Barman'); Condron v Victorian WorkCover Authority (Ruling as to Costs) [2021] VCC 183; Dowling v Myers Street Family Medical Practice Pty Ltd (Ruling as to Costs) [2018] VCC 2314 ('Dowling'); Gellard v Victorian WorkCover Authority [2017] VCC 1919; Madex v VWA [2023] VCC 1972; Matthews v Latrobe Regional Hospital (Ruling as to Costs) [2021] VCC 1161; Traumanis v State of Victoria (Unreported) 26 May 2017.

[3] [2020] VCC 380, [6].

[4] Dowling [2018] VCC 2314, [19].

[5] Barman [2020] VCC 380, [8].

[6] See also Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435, [23]. The test was stated in the context of a _Calderban_k offer. It should be noted the principles governing offers in general civil litigation may not be in all respects directly applicable to Legal Costs Orders but any differences have not affected the outcome of the current application.

[7] Dowling [2018] VCC 2314, [24].

[8] Report of Prof. D'Urso dated 26 May 2022, page 4, question 9.

[9] [2021] VCC 183.

[13] Defendant's Court Book ('DCB') 108.

[15] Report of Professor D'Urso dated 26 May 2022, page 4, question 6.

[18] Plaintiff's Court Book ('PCB') 40-42.

[20] Dowling [2018] VCC 2314, [24].