Paskins v Hail Creek Coal Pty Ltd

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - where the plaintiff successfully sued for injuries sustained in the course of his employment with first defendant - where the liability of each defendant to the plaintiff was in dispute at trial - where the liability between the defendants was in dispute at trial - where the assessment of damages was in dispute at trial - where the second defendant was the employer of the person ultimately held responsible for the injuries the plaintiff sustained

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - MULTIPLE DEFENDANTS - where the plaintiff succeeded against both defendants - where the plaintiff cannot obtain an order for costs against the first defendant due to the effect of the Workers' Compensation and Rehabilitation Act 2003 (Qld) - where the plaintiff seeks an order that the second defendant pay not only the costs incurred in pursuing the second defendant but the costs incurred in pursuing the first defendant - whether the plaintiff can circumvent the effect of the Workers' Compensation and Rehabilitation Act 2003 (Qld) - whether the costs order against the second defendant in favour of the plaintiff should extend to those costs that the plaintiff incurred in pursuing the first defendant

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - where the plaintiff formerly brought an application seeking various orders - where all of the orders except two were consented to by the time of the hearing - where the plaintiff was successful on the remaining arguments - where the second defendant contends that the plaintiff should pay the second defendant's costs of the application - whether costs should be awarded for an application brought by the plaintiff

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TWO COUNSEL - where the plaintiff seeks an order that the fees of two counsel should be regarded as costs necessary and proper - where the defendants have made no submission to the contrary - where the plaintiff submits a number of relevant factors as to why the fees of two counsel should be regarded as necessary and proper - whether an order should be made concerning the costs of the two counsel engaged by the plaintiff

Civil Proceedings Act 2011 (Qld) s 15

Law Reform Act 1995 (Qld) s 6

Uniform Civil Procedure Rules 1999 (Qld) r 681, r 698

Workers' Compensation and Rehabilitation Act 2003 (Qld) s 5, s 318C

Bullock v London General Omnibus Co [1907] 1 KB 264, cited

Bonser v Melnacis [2002] 1 Qd R 1, cited

Gould v Vaggelas (1984) 157 CLR 215, followed

Kerle v BM Alliance Coal Operations Pty Ltd & Ors (No 2) [2017] QSC 7, followed

Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, considered

Paskins v Hail Creek Coal Pty Ltd & Anor [2017] QSC 190, cited

Sanderson v Blyth Theatre Co [1903] 2 KB 533, cited

Stanley v Phillips [1966] HCA 24; (1966) 115 CLR 470, followed

Steppke v National Capital Development Commission (1978) 21 ACTR 23, cited

[1] McMEEKIN J: I delivered reasons in this matter on 1 September 2017.[1] I directed that the parties confer in an endeavour to agree on the orders that should be made to give effect to my reasons. There is a dispute as to the appropriate orders.

[2] Mr Paskins sued for damages for injuries sustained in the course of his employment with the first defendant. The issues at trial included the liability of each defendant to Mr Paskins, and as between themselves, and the assessment of damages. The second defendant was the employer of one Phillips, the person I held responsible for the injuries that Mr Paskins sustained.

[3] Each defendant denied liability. I held them both liable. Each defendant contended that the other was responsible for Phillips' negligence. Effectively I held the second defendant liable for Phillips' negligence. Each defendant contended that Mr Paskins should bear some responsibility for his injuries. I found against the defendants on that latter contention.

[4] It is not in dispute that I should give judgment for Mr Paskins as follows:

(a) Judgment against the first defendant in the sum of $709,408.26 clear of the refund due to WorkCover Queensland of $180,527.01;

(b) Judgment against the second defendant in the sum of $966,991.38.

[5] The rights that Mr Paskins has to a costs order against his employer, the first defendant, are governed by the provisions of the Workers' Compensation and Rehabilitation Act 2003 (Qld) (WCRA). It is common ground that Mr Paskins has no entitlement to a costs order against the first defendant given the mandatory final offers made, nor does the first defendant have any entitlement to an order against Mr Paskins. Thus each party should bear their own costs of the proceedings between them.

[6] It is common ground that the second defendant should be ordered to pay Mr Paskins costs of the proceeding against the second defendant on the standard basis.

[7] I held that the second defendant was required to indemnify the first defendant in respect of the plaintiff's claim. The defendants have resolved between them that the indemnity should extend to the costs incurred by the first defendant in defending the plaintiff's claim and in seeking contribution from the second defendant.

(a) Whether the costs order against the second defendant in favour of the plaintiff should extend to those costs that the plaintiff incurred in pursuing the first defendant;

(b) The costs of an application brought by the plaintiff on 15 May 2017; and

(c) Whether I should make an order concerning costs of the two counsel engaged by the plaintiff;

Should the costs order made in favour of the plaintiff against the second defendant extend to include the costs of pursuing the first defendant?

[9] Here the plaintiff succeeded against both defendants. He cannot obtain an order for costs against the first defendant because the WCRA prohibits that order being made as his mandatory final offer was less than the eventual award. He seeks an order that the second defendant pay not only the costs incurred by him in pursuing the second defendant but the costs incurred by him in pursuing the first defendant. The question is whether he can circumvent the effect of the WCRA by these means?

[10] The plaintiff's submission is that costs are in the discretion of the Court (see s 15 Civil Proceedings Act 2011 (Qld), r 681 Uniform Civil Procedure Rules 1999 (Qld) (UCPR)) and that it was reasonable that the plaintiff take the course of pursuing both defendants. There can be no doubting the reasonableness of the course taken by the plaintiff. The defendants each contended that the other was liable for the negligence of Mr Phillips. The plaintiff could not take the risk of suing one and not the other, particularly given that the evidence determining that issue was largely, if not exclusively, in the possession of the defendants.

[11] The plaintiff makes the further point that if he had sued the second defendant alone, that defendant could not have pursued the first defendant for contribution under the Law Reform Act 1995 (Qld) provisions[2] save and unless the plaintiff had first satisfied the pre-litigation procedures under the WCRA: Bonser v Melnacis [2002] 1 Qd R 1. So it is argued that the second defendant took advantage of the joinder for its own purposes. While true, I cannot see how that affects matters greatly. It does tend to reinforce the view that the second defendant cannot be heard to say that the plaintiff acted unreasonably.

[12] If the plaintiff had pursued both defendants and failed against one and so incurred an adverse costs order there is well accepted authority[3] for the view that the unsuccessful defendant can be ordered to pay those costs directly to the successful defendant - thus the risk of the order not being met falls onto the successful defendant, not the plaintiff: Sanderson v Blyth Theatre Co [1903] 2 KB 533 at 539. As well the trial judge has a discretion to order that the plaintiff pay the costs of the successful defendant but recover them from the unsuccessful defendant: Bullock v London General Omnibus Co [1907] 1 KB 264. In Gould v Vaggelas[4] Gibbs CJ said:

"In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission (1978) 21 ACTR 23 at 30-31, when he said that "there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant".

[13] There is nothing in the reasoning of the other members of the Court to suggest that the foregoing is not a correct exposition of the relevant principle.

[14] Here the plaintiff did not fail against one defendant but rather succeeded against both. He seeks an order that one defendant's costs burden be increased by reason of the involvement of the other defendant. It is the above principle as explained by Gibbs CJ, albeit in a different context, that the plaintiff calls in aid. Here the second defendant denied the basis of the claim made against it, namely that it was responsible for Phillips' negligence. This effectively mandated that the plaintiff sue both defendants. I do not think it can be doubted that the conduct of the second defendant has been such as to make it fair to impose some liability on it for the costs of the first defendant.

[15] The problem with that approach however is that the legislature has seen fit to deny a plaintiff the protection of a costs order if he or she does not put in place a mandatory final offer less than the eventual award. Should that operate to protect the second defendant?

[16] I have no authority to guide me. I think that the answer is to be found in the objects of the WCRA which for present purposes are found in s 5(2), (4) and (5) of that Act. It is there said in relation to the workers' compensation scheme set up under the Act:

(2) The main provisions of the scheme provide the following for injuries sustained by workers in their employment -

(aa) implementation of the national injury insurance scheme for serious personal injuries resulting from workplace incidents connected with Queensland;

(d) employers' obligation to be covered against liability for compensation and damages either under a WorkCover insurance policy or under a licence as a self-insurer;

(i) providing fair and appropriate benefits for injured workers or dependants and persons other than workers; and

(ii) ensuring reasonable cost levels for employers; and

(b) ensure that injured workers or dependants are treated fairly by insurers; and

(c) provide for the protection of employers' interests in relation to claims for damages for workers' injuries; and

(d) provide for employers and injured workers to participate in effective return to work programs; and

(da) provide for workers or prospective workers not to be prejudiced in employment because they have sustained injury to which this Act or a former Act applies; and

(e) provide for flexible insurance arrangements suited to the particular needs of industry.

(5) Because it is in the State's interests that industry remain locally, nationally and internationally competitive, it is intended that compulsory insurance against injury in employment should not impose too heavy a burden on employers and the community.

[17] None of the objects of the Act are offended by making the order that the plaintiff seeks.

[18] In Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543 Mason CJ said of the general principle regarding the awarding of costs:

"If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings."

[19] The question then is whether it is just, that the plaintiff, who was successful against both defendants, obtain an indemnity, to the extent that an order for costs on the standard basis can do so, against the expense to which he has been put by reason of the second defendant's unsuccessful stance, that led to the plaintiff incurring this increased costs burden? I cannot see why, in fairness, the second defendant not be required to bear that burden itself.

[20] In the application the plaintiff sought various orders. All but two were consented to by the time of the hearing. Those in contention related to a change of venue and the setting of trial dates. The plaintiff was successful on those arguments.

[21] The costs of the application were reserved. Absent any order the second defendant will be required to pay those costs - see r 698 UCPR. There can be no order against the first defendant given the strictures of the WCRA. That is the result the plaintiff contends for.

[22] The second defendant contends that the plaintiff should pay the second defendant's costs of the application on the following grounds:

(a) the majority of the orders sought in the application was unnecessary and could have been dealt with by way of a consent;

(b) the application was served at short notice and could have been made earlier;

(c) the effect of the orders was to impose an extra costs burden on the second defendant as the Counsel retained in the matter was unavailable on the proposed dates, and the preparation time for trial was short.

[23] The plaintiff sought that the venue be moved from Rockhampton to Mackay and that the matter be heard in the next sittings in Mackay on 6 June. The Plaintiff gave notice of his intention to bring the application on 3 May 2017. On 15 May the defendants argued that the matter not be moved and that it be heard at the next sittings in Rockhampton in July.

[24] Given that matters remained in dispute it was necessary for the application to be heard. It is a material factor in the exercise of the discretion that the plaintiff succeeded on the matters in contest.

[25] The fundamental point that the submissions of the second defendant overlook is why the orders were made. The second defendant assumes in its submissions that this matter could have proceeded in the July sittings in Rockhampton. In fact in early April another matter was listed for those sittings and it was expected that the trial of that matter would take up the whole of those sittings (which, as it happens, it did). Sittings in which matters on the civil list can be heard in the provincial centres occur only from time to time. What motivated the plaintiff's application was the unavailability of dates in Rockhampton for many months (at least until the end of August) and the availability of dates in Mackay in the then relatively near future.

[26] The second defendant contends that it had no option but to oppose the orders sought because, if granted, they would result in significantly increased costs to it. Assuming that it is appropriate that such decisions are justified by having regard to financial interests, then the plaintiff's position must also be brought into account. He was a badly injured man and out of work. The judgment shows (as does the pre-trial joint offer from the defendants) that he was entitled to a very large sum of money from the defendants. Delay kept him out of his monies. His financial interests deserved to be considered too.

[27] In any case I am not at all sure that it is relevant to assert that a party who succeeds on an application should be denied their costs because the opposing party is inconvenienced by the orders made or because they are more out of pocket than they would otherwise like to be.

[28] As well the submission assumes that the second defendant would not have to retain different counsel if the matter proceeded at a sittings in Rockhampton later than the July sittings. That is not even asserted let alone proved. It also assumes that if the application had been brought earlier, that costs would have been avoided. That is not shown by any cogent evidence to be so.

[29] Finally, even if the argument be accepted that there was some increase in costs due to the need to change counsel late or otherwise get ready for trial on short notice, and that might have been otherwise avoided, what is not shown is the difference in the costs to the second defendant. If it is proper to weigh those considerations in the balance I have no idea what they might be and so what force they might have.

[30] Costs generally follow the event. The plaintiff was successful and should have his costs of the application.

[31] A further argument is put by the second defendant that the plaintiff should be ordered to pay the first defendant's costs of the application. It is pointed out that under s 318C of the WCRA costs may only be awarded on such an application if the offending party has been guilty of "unreasonable delay". To establish the point the second defendant would need to show when it was that the plaintiff should first have appreciated that it was in his interests to apply for the orders that were in contention. I do not know when that was. It could only have been a matter of a few weeks before notice was first given, at the most. I would not hold such a delay to be "unreasonable". I decline to so order.

[32] The plaintiff seeks that the order be in accordance with the order made by me in Kerle v BM Alliance Coal Operations Pty Ltd & Ors (No 2) [2017] QSC 7 which was in these terms:

"...the costs be assessed on the basis that, except insofar as they are of an unreasonable amount, the fees of two counsel should be regarded as costs necessary and proper but limited to fees for trial, otherwise to be in the discretion of the assessor."[5]

[33] The defendants have made no submission to the contrary.

[34] The plaintiff cites the following as relevant factors:

(a) The importance of the issues and the lack of authority guiding the parties - the significant issues concerned the respective responsibility of an employer and a labour hire company at a mine site where their employees interact at the workplace with injury resulting to another worker;

(b) There was a dearth of authority on a potentially relevant point namely whether there could be dual vicarious liability;

(c) The quantum of the claim - approaching $1,000,000;

(d) The volume of relevant material - in excess of three substantial volumes;

(e) The potential number of witnesses - 13 to 14 being anticipated.

(f) The need to confer with witnesses during the taking of evidence.

[35] The question I think is whether it was "necessary and proper for the attainment of justice or for defending the rights" of the plaintiff to brief senior counsel: Stanley v Phillips [1966] HCA 24; (1966) 115 CLR 470 at 486 per Taylor and Owen JJ. In the same case Barwick CJ at 479 - 480 said:

"The question for the taxing master is whether the case by reason of any of its features, the volume of material to be handled, the number or character of the witnesses to be examined, the nature or extent of the cross-examination required, the anticipated length of the case, the complexity of its issues of fact or of law, the extent of the preparatory research of fact or of law to be undertaken, the involvement of charges of fraud, or other serious imputations of personal reputation or integrity, the complexity of the required presentation and so on, make it reasonably necessary or proper that the services of two counsel be engaged in order that the court may do justice between the parties."

[36] While that case concerned a particular rule the principles seem generally to be applicable.

[37] I am satisfied that the combination of factors here justified the employment of two counsel, limited as is proposed.

(a) Judgment for the Plaintiff against the First Defendant in the sum of $709,408.26 (clear of the workers' compensation refunds of $180,527.01);

(b) Judgment for the Plaintiff against the Second Defendant in the sum of $966,991.38;

(c) The Second Defendant indemnify the First Defendant against the First Defendant's liability in respect of the Plaintiff's claim;

(d) That the Second Defendant pay the Plaintiff's costs of and incidental to the proceedings on a standard basis to be agreed or assessed;

(e) That the Plaintiff's costs be assessed on the basis that, except insofar as they are of an unreasonable amount, the fees of two counsel should be regarded as costs necessary and proper but limited to fees for trial, otherwise to be in the discretion of the assessor;

(f) There be no order as to costs as between the Plaintiff and the First Defendant;

(g) The Second Defendant indemnify the First Defendant against the costs incurred by the First Defendant:

(ii) in respect of the claims for contribution and indemnity between the First Defendant and the Second Defendant.

[1] Paskins v Hail Creek Coal Pty Ltd & Anor [2017] QSC 190.

[2] See s 6.

[3] See Gould v Vaggelas (1984) 157 CLR 215.

[4] (1984) 157 CLR 215 at 230.