By summons filed on 19 March 2021, the plaintiff seeks an order pursuant to s 140(1) of the Civil Procedure Act 2005 (NSW) that the proceedings between the parties in the District Court of New South Wales be transferred to this Court. The application is made because the plaintiff contends that the amount of the claim, if successful, would exceed $750,000, being the jurisdictional limit of the District Court.
The first defendant opposes the application on the basis that the plaintiff has not advanced any change in circumstances or other explanation as to why the proceedings were not commenced in the Supreme Court in the first place. The second and third defendants neither consented to nor opposed the transfer whereas the fourth defendant consented to it. The only active contradictor on the motion was the first defendant.
The background to the plaintiff's claim is as follows, taken from the amended statement of claim filed on 17 December 2020. The plaintiff was 55 years old at the time of the accident and is now 59 years old. He commenced employment with the fourth defendant in or around September 2013. In or around mid-2016, the fourth defendant contracted the plaintiff's services to the first defendant. The plaintiff was required to perform work for the first defendant at premises in Bomaderry. The premises were owned by the second defendant and operated by the third defendant for the purpose of producing industrial food products. The third defendant is a company owned by the second defendant.
On 23 November 2016, the plaintiff attended work and was directed to perform particular tasks with two other workers in the plant switch room. In order to undertake that work they were directed to erect and use scaffolding. They were not told how to do so and erected the scaffolding by "trial and error" to a height of approximately six metres.
The following day the plaintiff and his co-workers were again directed to work in the plant switch room using the scaffolding. They were required to attach an air conditioning mounting bracket to the ceiling. The plaintiff and his co-workers re-erected the scaffolding but to a lower height of 3 metres as otherwise the scaffolding was too high to fit underneath the concrete beam which ran down the middle of the room and upon which the air conditioning bracket had to be installed. The plaintiff remained atop the scaffolding whereas his co-workers remained on the floor. It was necessary for the scaffolding to be rolled approximately 2 to 3 metres across the concrete surface. As the co-workers were moving the scaffolding it collapsed and the plaintiff fell in excess of 3 metres from atop the scaffolding on to a concrete floor. As a result of the fall, the plaintiff sustained fractures of the L1 and L4 vertebral body and disc injuries to L3/4 and L4/5 and has ongoing disabilities and symptoms.
The plaintiff relied upon the affidavit of his solicitor; Ms Aimee Louise Lanyon dated 18 March 2021. A number of medical reports are annexed to her affidavit including from Dr James Bodel dated 24 June 2019 and 10 July 2020, Dr Peter Bentivoglio dated 25 September 2019, and an occupational therapy assessment of Ms Marie Lucas dated 20 February 2020. Ms Lanyon deposed the following at [34] of her affidavit:
"It is my belief that should the plaintiff succeed on the issue of l[i]ability, he is likely to be awarded damages in excess of $750,000.00. The workers compensation insurer, as at 19 February 2021, had paid treatment expenses and weekly payments of $461,178.17 (gross)."
The defendant relied upon an affidavit of Gerry Tzortzatos sworn 11 May 2021 and the exhibits thereto. Exhibited to his affidavit were various medical reports.
Reliance was placed on the procedural history of the matter thus far as a basis for opposing the summons. The plaintiff commenced these proceedings in the Wollongong District Court on 4 November 2019. An amended statement of claim was filed on 12 May 2020. Mr Tzortzatos deposes that in or around June 2020 his firm was informed by the first defendant's liability insurer that they were investigating indemnity. The matter was not progressed from that time.
In July 2020, his firm was notified by the first defendant's liability insurer that it had denied indemnity under the policy. It was not until 1 October 2020 that the question of indemnity was resolved, and the matter could proceed further on behalf of the first defendant.
At a status conference on 2 December 2020, the plaintiff advised that they were intending to pursue work injury damages and the matter was adjourned until 4 November 2020.
On 17 December 2020, the plaintiff filed a second amended statement of claim joining the fourth defendant to the proceedings. The first defendant filed its defence to the second amended statement of claim on 19 January 2021.
[2]
The plaintiff's submissions
Mr Ryan of counsel submitted that the word "likely" in s 140(3)(b)(i) of the Civil Procedure Act, does not mean more probably than not but requires the Court in a summary way to make an assessment as to whether there is a real chance of the plaintiff obtaining a verdict of more than $750,000 if successful: Tauri v Janlin Circuses Pty Ltd (trading as Stardust Circus) [2017] NSWSC 1337 at [7].
It was submitted that the evidence set out in the affidavit of Ms Lanyon certified that test and that the first defendant in his written submissions did not appear to submit otherwise.
Mr Ryan acknowledged that he had been briefed in the matter from the outset but relied upon the fact that minds may differ as to the value of a claim such as this. The evidence that the matter had gone to mediation on 5 March 2021 was relied upon to draw the inference that it was that event which led to the application being made, consistent with the plaintiff's lawyers' duty to their client.
It was submitted that the fact that the proceedings could have been commenced in the Supreme Court, but were not, is not a bar to the success of the present motion. It was noted that the procedural history shows the first defendant has not been as assiduous in progressing the matter through the District Court as it alleged. The first defendant's defence was only filed on 19 January 2021. No medical reports have been filed as yet although, on 13 April 2021, the first defendant gave notice of pending medical examinations for the first time.
It was submitted that it was very unlikely that a hearing would be fixed in the District Court in December 2021. It was noted that there had not as yet been any consideration of the joint expert report.
Finally, it was submitted that there would be no further significant delay should the order for transfer be made.
[3]
The first defendant's submissions
The preliminary basis upon which the transfer was proposed was on discretionary grounds. Mr Weinberger submitted there had been no change in circumstances in this matter such as a deterioration in the plaintiff's condition, and no explanation provided for this late application to transfer proceedings.
Reliance was placed upon the decision in Kadic v Theiss Brothers Pty Ltd [1967] 2 NSWR 257 at 258 as authority for the proposition that a transfer would ordinarily only be made where there has been a change in some way after filing. It was submitted that the plaintiff ought to have known at the time the proceedings were commenced in the District Court that the quantum of the claim may exceed the monetary jurisdiction of that Court. Awareness on the part of the plaintiff was said to arise from a number of factors including the following:
1. The Workers Compensation Insurer had already made payments in respect of treatment in the amount of $133,124.33 prior to the commencement of the proceedings.
2. The plaintiff had received approximately $166,979.19 in weekly compensation payments by that time.
3. Dr James Bodel, the orthopaedic surgeon, had opined that the plaintiff had no prospects of returning to work as a boilermaker and only limited prospects of returning to any form of paid employment.
4. Dr Peter Bentivoglio, neurosurgeon, had opined that the plaintiff would never be able to return to his pre-injury employment.
5. If the Court accepted that the plaintiff had no residual earning capacity, his future economic loss could equate between approximately $323,000 and $436,000.
As part of the submission that the transfer should be dismissed on discretionary grounds, reliance was also placed on the fact that it was anticipated the matter will be ready for hearing in the District Court sittings at Wollongong in the week commencing 6 December 2021. The proceedings would not be heard in this Court until late next year or possibly even early 2023.
The alternate basis upon which objection to the transfer was made was that the Court could not be satisfied that the plaintiff's damages are likely to exceed $750,000. Reliance was placed on the fact that the plaintiff had a long history of chronic ill-health including hypothyroidism, obesity, insulin dependent diabetes mellitus, renal colic and two heart attacks. One of the defendant's reports from Dr Jordan Brooks dated 5 April 2021 assessed his life expectancy to be reduced to 71 years due to these other medical conditions.
In addition, the plaintiff has a long history of chronic lower back pain relating to a work fall in 1991 and none of the medicolegal experts suggests that the plaintiff requires further surgery in the future.
It was submitted that the plaintiff's non-economic loss could reasonably be assessed in the range of 25-27% of the most extreme case.
Reliance was placed on the plaintiff's tax returns for 2014 which disclosed earnings of $30,980 net for that year. It was submitted that previous earnings must be taken into account in assessing past and future economic loss. Reliance was also placed on the fact that the plaintiff returned to part-time light duties in December 2016 until his surgery in December 2017 and resumed further light duty work in January 2018. He ceased work altogether after the deterioration of his condition in March 2018.
Reliance was also placed on the fact that the plaintiff commenced a volunteer position at Vinnies North Wollongong. Even though that work was unpaid, it was said to demonstrate that he had a residual earning capacity that he could exercise in the future.
In relation upon these matters an estimate of $453,401 was advanced as the likely maximum damages. It was also submitted that any verdict, if successful, would be further reduced on account of the plaintiff's contributory negligence in erecting the scaffolding.
The first defendant relied on the decision of in Younes v QIC Ltd (trading as Westpoint Blacktown) [2012] NSWSC 451 as authority for the principle that if the likely judgment amount is contentious, the Court must be affirmatively satisfied that an award of damages is likely to exceed the relevant limit before the transfer could be ordered.
It was submitted that the amount over the threshold that the likely damages would be is another relevant factor in the discretion; that is, there is a difference between a case where the estimate is significantly over the threshold as opposed to only slightly over it.
It was further submitted that the first defendant would suffer prejudice if the likely hearing date in December 2021 was postponed until later next year or even the following year.
It was submitted that this Court should not just "rubber stamp" an application like this in the absence of an explanation from the plaintiff for the change in approach. It was conceded that the only prejudice to the first defendant would be costs thrown away from the transfer. Accordingly, it was submitted that a condition should be imposed, in the event that the plaintiff is successful, that the plaintiff pay the costs thrown away by the transfer. When I inquired what these costs would be it was accepted they are difficult to predict but, in any event, that is a matter for a cost assessor and if no costs are thrown away, then the order would be otiose.
Finally, the first defendant submitted that although it would be unfair if a claim worth more than $750,000 was to remain in the District Court, that unfairness was comparable to a party being denied the opportunity to amend a pleading shortly before a hearing.
[4]
Consideration
Section 4 of the District Court Act 1973 (NSW) provides that the jurisdictional limit of the District Court is $750,000. Section 140 of the Civil Procedure Act provides as follows:
140 Transfer of proceedings to higher court
(1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court or the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court.
(2) The District Court may, of its own motion or on application by a party to proceedings before the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the District Court.
(3) Proceedings in the District Court on a claim for damages arising from personal injury or death are not to be transferred to the Supreme Court under this section unless the Supreme Court is satisfied -
(a) in the case of a motor accident claim or a workplace injury damages claim -
(i) that the amount to be awarded to the plaintiff, if successful, is likely to be more than $1,000,000, and
(ii) that the case involves complex legal issues or issues of general public importance, or
(b) in any other case -
(i) that the amount to be awarded to the plaintiff, if successful, is likely to exceed the jurisdictional limit of the District Court, or
(ii) that there is other sufficient reason for hearing the proceedings in the Supreme Court.
(4) Proceedings in the Local Court are not to be transferred to a higher court under this section unless the higher court is satisfied that there is sufficient reason for hearing the proceedings in the higher court.
(5) This section extends to proceedings that have been transferred to the District Court or the Local Court pursuant to a previous transfer order under this Division or under Division 2.
The power to transfer District Court proceedings to this court is discretionary. Although the first defendant's primary opposition was based on discretionary grounds, I propose to address the second basis for opposing the transfer first. Pursuant to s 140(3)(b) of the Civil Procedure Act proceedings are not to be transferred unless either the amount to be awarded to the plaintiff, if successful, is likely to exceed the jurisdictional limit of the District Court, or there is other sufficient reason for hearing the proceedings in the Supreme Court.
In Johnstone v State of New South Wales [2006] NSWCA 105, Giles JA, with whom Santow and McColl JJ agreed, considered the role of the judge asked to consider whether the Court would be satisfied that an amount awarded to the plaintiff, if successful, is likely to exceed $750,000. Complaint was made in that matter that the judge considering the transfer application had not engaged in a complete assessment in that regard. Giles JA observed, at [22]:
"Plainly he was not to engage in an exercise of complete assessment but was to arrive at likelihood and, of necessity, he had to do so to an extent as a matter of impression albeit founded on the evidence before him."
His Honour went on to observe at [23]:
"It was submitted that the judge should have gone to each of the items in the assessment and stated his own assessment in substitution for that proposed on behalf of the claimant so that it was demonstrated quasi mathematically that the threshold of $750,000 was not achieved. I do not think that is correct. The question for the judge was not an assessment of the individual components of a damages claim, but rather the broader question of whether it appeared likely to him that if the claimant was successful, his damages would exceed $750,000."
That principle was followed by Davies J in Every v Osborne [2012] NSWSC 1437 where his Honour observed at [16]:
"The appropriate way for a judge to approach an application such as the present was set out in Johnstone v State of NSW [2006] NSWCA 105 at [22] and [23]. Giles JA said, with the agreement of Santow and McColl JJA, that the question for the judge was not an assessment of the individual components of a damages claim but rather the broader question of whether it appeared likely to him or her that if the claimant was successful the damages would exceed $750,000."
I have had regard to these principles and applied them to the evidence before me. That evidence discloses that at the time of the accident, the plaintiff was 55 years of age. He alleges that he sustained significant injuries primarily to his lumbar spine as a result of the accident. On his case, he has been unfit for work since the accident and will remain unfit on an ongoing basis.
The orthopaedic surgeon retained by the plaintiff, Dr Bodel, opines in his report of 24 June 2019, that the symptomatology of pain, stiffness and restriction of movement in his back and referred pain and weakness in his leg will persist indefinitely. The plaintiff has already undergone two surgical procedures which have not resulted in any real recovery. According to Dr Bodel the plaintiff has no prospects of returning to his pre-injury work as a boilermaker.
Whilst it will be a matter for the trial judge as to acceptance or otherwise of his level of complaint and pain, it is perhaps unsurprising that a person with that alleged level of disability could not perform work of a hard and physical nature such as being a boilermaker.
On the plaintiff's claim he was earning a gross salary of $1,600 per week. Even assuming a net weekly salary of $1,000, his claim for past economic loss would be approaching $250,000 and his claim for future loss might be in a similar or higher range. If he succeeds against the non-employer defendants, he will be entitled to non-economic loss and perhaps some allowance for care. His medical expenses are already significant.
I have had particular regard to the fact that the Workers Compensation Insurer has already made payments in excess of $450,000. Although, as I have already stated, it would be a matter for the hearing and any competing evidence as to whether all of the plaintiff's claims are accepted, having regard to the nature of his injury, the nature of his pre-accident work and the medical and expert evidence relied upon by the plaintiff, I am satisfied as a matter of impression that the plaintiff has established on the balance of probabilities that it is likely that, if successful, he will be awarded an amount that exceeds the jurisdictional limit of the District Court.
Given this finding the question then becomes whether, even after making a positive finding that the statutory pre-requisites to a transfer have been met, the Court would nonetheless decline the transfer on discretionary grounds given the absence of any explanation as to why the transfer application was brought at this time.
I accept that there has been no fulsome explanation as to why the motion to transfer has been made at this late stage. I am prepared to draw the inference that it follows the recent mediation which occurred on 5 March 2021 although there was no direct evidence of that before the Court.
Although it is unfortunate that the plaintiff's lawyers have only recently formed the view that the plaintiff's claim might exceed the jurisdictional limit of the District Court, I am unaware of any authority for the proposition that such a finding is fatal to an application of this nature. Moreover, there is a fundamental difficulty with the first defendant's position. On the one hand it is contended that the summons should be dismissed because, in effect, it should have been obvious to the plaintiff that his claim was potentially worth more than $750,000. On the other hand, the first defendant disputes that the evidence in the claim would exceed $750,000.
The first defendant relies upon the prejudice to it should an order for transfer be made. I am satisfied that there would be real prejudice to the plaintiff should this claim be assessed as being more than $750,000 in the District Court. But there was no real articulation of the prejudice to the first defendant should I make the orders sought today. The highest that prejudice rose to was the right of the first defendant to have the hearing dealt with expeditiously.
Contrary to the submission of the first defendant, I am not persuaded that it has acted expeditiously in the proceedings in the District Court although there has certainly been no unreasonable delay. Nor am I satisfied that an order for transfer would cause any real unfairness should the proceedings be delayed by the act of transferring them to this Court.
Although Mr Weinberger pressed for a costs order as to the costs thrown away by the transfer, he was unable to articulate precisely how those costs might arise.
The overriding purpose of civil litigation in New South Wales is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56, Civil Procedure Act. Section 58 of the Civil Procedure Act requires the Court to seek to act in accordance with the interests of justice. It is inevitable that in achieving the overriding purpose of the Civil Procedure Act, orders may be made from time to time that will lead to the potential for a decision to result in some degree of apparent injustice.
As I have already stated, I am not persuaded that any apparent injustice would be visited upon the first defendant should I make the orders sought today given I am otherwise satisfied s 140(3)(b)(i) has been satisfied.
As for the question of costs of the summons, the plaintiff submitted that they should not be in the cause or reserved but should follow the event. It was submitted that none of the other three defendants opposed the transfer and the first defendant elected to be the only contradictor on this motion. The first defendant, on the other hand, as I have already stated, submitted that a costs order granting costs thrown away to the first defendant should be made in the event that the plaintiff is successful.
I have had regard to these submissions. Although the manner in which the first defendant opposed this transfer was inherently inconsistent I am not satisfied that the usual order for costs on a motion to transfer should be departed from. I do not propose to make any order that the plaintiff pay the first defendant's costs thrown away. It is difficult to see what they might be and, in any event, I am not persuaded that the proceedings will be unnecessarily protracted as a result of the transfer.
[5]
ORDERS
Accordingly, I make the following orders:
1. Pursuant to s 140(1) of the Civil Procedure Act, District Court proceedings number 2019/00346074 including any cross-claims in the proceedings, be transferred to the Supreme Court of New South Wales.
2. Costs of this summons are to be the costs in the cause of the primary proceedings.
3. This matter is listed for directions before the Registrar on 30 August 2021.
[6]
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Decision last updated: 10 June 2021