Synergy Scaffolding Services Pty Ltd v Alelaimat

Court of Appeal (NSW)|2024-02-07|Before: Meagher JA, Kirk JA, Campbell J

Solicitors: McCulloch & Buggy Lawyers (Appellant) Garling & Co Lawyers (1st Respondent) Moray & Agnew Lawyers (2nd Respondent) File Number(s): 2022/144781 Decision under appeal Court or tribunal: Supreme Court of NSW Jurisdiction: Civil Citation: [2022] NSWSC 536 Date of Decision: 05 May 2022 Before: Campbell J File Number(s): 2017/208752

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

MEAGHER JA: I agree with Simpson AJA.
KIRK JA: I agree with Simpson AJA.
SIMPSON AJA: On 7 September 2023 this Court made findings of fact, stated its preliminary conclusions and gave reasons with respect to: (i) proceedings brought by the plaintiff, Mr Alelaimat (now the first respondent) against two defendants, Synergy Scaffolding Services Pty Ltd ("Synergy Scaffolding", now the appellant) and the Workers Compensation Nominal Insurer ("WCNI", now the second respondent); (ii) a cross-claim brought by Synergy Scaffolding against WCNI; and (iii) a cross-claim brought by WCNI against Synergy Scaffolding: Synergy Scaffolding Services Pty Ltd v Alelaimat [2023] NSWCA 213 ("the Principal Judgment").
Having regard to certain complexities, to which I will come, the Court did not then proceed to make final orders (although it indicated, on a tentative basis, contemplated orders that might be seen to flow from its findings of fact and conclusions of law - see [194]). Instead, the Court gave an opportunity to the parties to make further submissions with respect to the orders to be made, once they were in possession of the relevant findings and conclusions. That was for two reasons: first, although the parties had had the usual opportunity to make submissions on the hearing of the appeal, they did so in ignorance of the actual findings and conclusions, meaning that their submissions were, in some respects, hypothetical and not directly on point; second, because the legal issues involved the construction and application of complex and difficult statutory provisions.
Because the issues involved questions of statutory construction having implications more generally than as applicable in the present case, the Court directed Synergy Scaffolding and WCNI to notify the State Insurance Regulatory Authority ("SIRA"), the statutory organisation that has general responsibility for the administration of the relevant statute (the Workers Compensation Act 1987 (NSW)), of the reasons and contemplated orders with a view to its providing assistance on the construction questions. All parties to the proceedings have now provided submissions. SIRA declined to become involved.

Relevant facts

The relevant facts and circumstances are fully set out in the Principal Judgment. The following is a synopsis (as brief as reasonably possible) of the facts necessary for an understanding of the present issues. It should not be taken as a substitute for the Principal Judgment.
On 10 October 2012 Mr Alelaimat was injured while working on a building site under the control of Synergy Scaffolding. He was employed by DJ's Scaffolding Services Pty Ltd ("DJSS"), which held a policy of workers compensation insurance with WCNI. Mr Alelaimat received from DJSS (or WCNI) payments of workers compensation, being weekly payments, medical expenses, and lump sum compensation for permanent impairment pursuant to s 66 of the Workers Compensation Act. Mr Alelaimat then brought proceedings in the Supreme Court for damages against both Synergy Scaffolding and WCNI (as insurer for DJSS, which is now in liquidation) as joint tortfeasors. Synergy Scaffolding and WCNI brought cross-claims against each other. Synergy Scaffolding claimed against WCNI contribution or indemnity pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("the 1946 Miscellaneous Provisions Act"), which provides for the apportionment of liability between joint tortfeasors. WCNI claimed against Synergy Scaffolding contribution or indemnity under that provision, and indemnity under s 151Z(1)(d) of the Workers Compensation Act for payments of compensation it had made to Mr Alelaimat under that Act.
In the Supreme Court Mr Alelaimat succeeded in his claim against Synergy Scaffolding, but failed in his claim against WCNI: Alelaimat v Synergy Scaffolding (No 3) [2022] NSWSC 536. The primary judge found that Synergy Scaffolding was negligently responsible for Mr Alelaimat's injuries, and that DJSS was not shown to be liable. That made determination of Synergy Scaffolding's cross-claim unnecessary, since DJSS was not shown to have been a joint tortfeasor. Damages against Synergy Scaffolding were quantified at $1,356,533.39. The primary judge determined WCNI's cross-claim by ordering, pursuant to s 151Z(1)(d) of the Workers Compensation Act, Synergy Scaffolding to indemnify WCNI for compensation paid to Mr Alelaimat (in the sum of $246,202.54) with interest of $68,234.19. His Honour did not determine WCNI's claim against Synergy Scaffolding under the 1946 Miscellaneous Provisions Act, again because, as DJSS was not held to be a joint tortfeasor, there was no basis for a contribution. The quantum of damages included amounts referable to Mr Alelaimat's loss of income, medical expenses, and non-economic loss.
The primary judge thus:

gave judgment for Mr Alelaimat against Synergy Scaffolding in the sum of $1,356,533.39 (order 1);
gave judgment for WCNI against Mr Alelaimat (order 2);
ordered Synergy Scaffolding to pay Mr Alelaimat's costs of the proceedings (order 3);
ordered Synergy Scaffolding, pursuant to s 151Z(1)(d) of the Workers Compensation Act, to indemnify WCNI for compensation paid to Mr Alelaimat in the sum of $246,202.54 and to pay WCNI interest in the sum of $68,234.19 (orders 4 and 5);
ordered Synergy Scaffolding to pay WCNI's costs of the cross-claims (order 6).

On appeal, Synergy Scaffolding did not contest the findings of negligence against it, but challenged the finding that WCNI was not liable to Mr Alelaimat (ground 2), and contended that the primary judge should have found that WCNI was liable to Mr Alelaimat as a joint tortfeasor with Synergy Scaffolding and was therefore liable to Synergy Scaffolding as cross-claimant (ground 3), and that the primary judge should have dismissed WCNI's cross-claim (ground 4). Finally, Synergy Scaffolding contended that the amount of damages payable to Mr Alelaimat should not have included an amount referable to medical expenses paid by WCNI (on the basis that they were not repayable by Mr Alelaimat and therefore did not represent a loss incurred by him as a result of Synergy Scaffolding's negligence) (ground 5).
WCNI did not, by cross-appeal or notice of contention, seek to agitate its claim for contribution or indemnity under s 5(1)(c) of the 1946 Miscellaneous Provisions Act.
This Court:

accepted the (uncontested) finding that Synergy Scaffolding was liable to Mr Alelaimat for damages (Principal Judgment at [88]);
found (contrary to the finding of the primary judge) that DJSS (and, accordingly, WCNI) was liable to Mr Alelaimat for damages (in the sum of $917,686.00) (Principal Judgment at [129]);
found that Synergy Scaffolding failed to discharge its onus of proving its claim against WCNI for contribution or indemnity under s 5(1)(c) of the 1946 Miscellaneous Provisions Act (which would result in an order that Synergy Scaffolding's cross-claim against WCNI be dismissed) (Principal Judgment at [162]); and
found that WCNI had not established a basis for an order under s 151Z(1)(d) of the Workers Compensation Act that Synergy Scaffolding indemnify it for the compensation it had paid Mr Alelaimat (which would result in an order that WCNI's cross-claim again Synergy Scaffolding be dismissed) (Principal Judgment at [185]). The orders the Court then contemplated making are to be found at [194] of the Principal Judgment.

The first three findings mentioned above are not now controversial. It is the last finding that caused the Court to offer the parties an opportunity to make further submissions. That finding must be explained. (A more complete explanation is to be found at [165]-[189] of the Principal Judgment).
That finding, and the issues that remain for determination, are to be understood in the context of the relevant legislation.

The Workers Compensation Act

The Workers Compensation Act distinguishes between, on the one hand, compensation, which includes weekly payments representing loss of income (Pt 3 Div 2), medical expenses (Pt 3, Div 3) and, in some cases, lump sum compensation for permanent impairment (Pt 3, Div 4), payable by (or on behalf of) an employer, to which an injured worker is entitled without the need to establish fault on the part of the employer, and, on the other hand, damages which the injured worker may recover from either the employer or a third party and which depend on proof of fault.
Significant limitations are placed on the quantum of damages that may be awarded against an employer. The quantum of damages that may be awarded against a third party tortfeasor is not governed by the limiting provisions of the Workers Compensation Act (although they may be limited by other legislation, for example the Civil Liability Act 2002 (NSW)).
Section 151Z of the Workers Compensation Act is directed to cases where an injured worker is entitled to compensation under the Workers Compensation Act and is or may be entitled to damages against either or both the employer and a third party. Two classes or categories of case are contemplated by s 151Z: (i) cases in which the injured worker is entitled to compensation under the Workers Compensation Act from the employer, and to damages from the third party (but not the employer) (s 151Z(1)); and (ii) cases in which the injured worker is entitled to compensation under the Workers Compensation Act and is or may be entitled to receive damages from the employer and from the third party (s 151Z(2)).
Section 151Z appears to have two principal purposes: (i) to ensure that an injured worker who is entitled to compensation from his or her employer and to damages from the third party is not able to retain both to the extent of any overlap (that is, to prevent "double recovery"): s 151Z(1); and (ii) to modify the quantum of damages recoverable by an injured worker who is entitled to take proceedings for damages against both the employer and the third party: s 151Z(2).
Section 151Z relevantly provides: 151Z Recovery against both employer and stranger (1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect - (a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation, (b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation, … (c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act, (d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages), (e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages, (e1) if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment, (f) all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission. … (2) If, in respect of an injury to a worker for which compensation is payable under this Act - (a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and (b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer, the following provisions have effect - (c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable, (d) the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 as to the award of damages, (e) if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that - (i) if the compensation paid by that employer exceeds the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise - the indemnity referred to in subsection (1) (d) is for the amount of the excess only, and (ii) if the compensation paid by that employer does not exceed the amount of that contribution - subsection (1) (d) does not apply and the employer has, to the extent of the compensation so paid, a defence to an action for such a contribution. …
Section 151Z(2) applies where the injured worker takes, or is entitled to take, proceedings for damages against both the employer and the third party. That is this case. Mr Alelaimat in fact took proceedings against both Synergy Scaffolding and WCNI, and (on appeal) was found entitled to damages (differently quantified) against each.
Section 151Z(1) applies only where the third party, as distinct from the employer, is the tortfeasor. It does not apply in circumstances where the employer (who is liable to pay compensation under the Workers Compensation Act) is also a tortfeasor and liable to pay damages (see Principal Judgment at [91]). That is not this case: as noted above, this Court held that WCNI, as well as Synergy Scaffolding, is liable to Mr Alelaimat for damages. The double recovery provisions of s 151Z(1) (pars (a), (b) and (c)), on their face, do not apply. Nor does par (d), which entitles the employer who has paid compensation to the injured employee to indemnity for those payments from the third-party tortfeasor. It is that circumstance that gave rise to the Court's invitation to the parties to provide further submissions on this Court's conclusions. Mr Alelaimat's damages against Synergy Scaffolding will include components referable to income loss, for which he has (at least in part) been compensated by WCNI, and medical expenses (the greater proportion of which have been paid by WCNI), with no liability to repay them.
Further, notwithstanding that par (d) of s 151Z(1) clearly contemplates that an employer who has paid compensation will be entitled to indemnity from a third party tortfeasor for those payments, unless s 151Z(1) is applicable (which, on its face, it is not), WCNI will be without recourse for that indemnity.
One further avenue for the application of s 151Z(1) is possible.
Notwithstanding that subs (1) of s 151Z excludes the application of the remaining provisions of that subsection in cases when both the employer and the third party are liable for damages, par (e) of s 151Z(2) provides that, in stated circumstances, s 151Z(1) will apply. The stated circumstances are alternative negative preconditions, which are expressed in the present tense. Thus, s 151Z(1) will apply to preclude double recovery by Mr Alelaimat, and to entitle WCNI to indemnity from Synergy Scaffolding, if either: 1. Mr Alelaimat "does not take proceedings" against DJSS; or 2. Mr Alelaimat "does not accept satisfaction of the judgment" against WCNI.
The first of these preconditions is not, and cannot be, satisfied. Mr Alelaimat did take proceedings against WCNI (ultimately successfully). The second precondition is opaque but is taken to mean that the worker does not enforce judgment against the employer (see Principal Judgment at [171]).
That pre-condition has not been satisfied but may be satisfied at a point in the future. Indeed, it is likely that it will be satisfied. That is because Mr Alelaimat's putative judgment against WCNI is significantly less than his putative judgment against Synergy Scaffolding. The likelihood is that he will elect to enforce the judgment against Synergy Scaffolding in preference to the lesser judgment against WCNI - subject to the financial viability of Synergy Scaffolding or its insurer. But a likelihood does not establish the fact. The legislation does not contemplate a predictive finding that, on the probabilities, Mr Alelaimat will not enforce the putative judgment against WCNI. (There is, as yet, no judgment to be enforced).
Unless it can be shown that Mr Alelaimat "does not [enforce] judgment against" WCNI, the double recovery provisions of s 151Z(1) do not apply. Neither do the indemnity provisions as between defendants - specifically par (d) of s 151Z(1). Unless and until it can be established that Mr Alelaimat "does not [enforce] judgment against" WCNI, WCNI has no recourse, pursuant to s 151Z(1)(d), against Synergy Scaffolding.
Before proceeding, one other provision of the Workers Compensation Act should be noted: s 151A, subs (1) of which relevantly provides: "(1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3), (4) or (5) covers the case) - (a) the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and (b) the amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and (c) …" (None of the exceptions mentioned in subss (2), (3), (4) or (5) is applicable).
As things presently stand, s 151A(1) does not apply. That is because Mr Alelaimat has not recovered damages from WCNI (see [188] of the Principal Judgment).

The questions for present determination

The questions that remain for determination are what orders ought to be made in response to grounds 4 and 5 of the appeal. By ground 4 Synergy Scaffolding contended that WCNI's cross-claim ought to have been dismissed. By ground 5 Synergy Scaffolding contended that the award of damages in favour of Mr Alelaimat ought not to have included any component for medical expenses, on the basis that Mr Alelaimat was not obliged, under s 151Z(1)(b), to repay those expenses to WCNI.
The answer to the questions hinges on the answer to a further question: does s 151Z(1) apply? If s 151Z(1) applies, WCNI will be entitled to the indemnity it seeks under par (d), and Mr Alelaimat will be required to repay (out of the damages he recovers) the compensation he has received. If s 151Z(1) does not apply, it may be appropriate to deduct from the judgment sum amounts referable to the compensation paid. That would be to provide Synergy Scaffolding a benefit (by reduction in the damages payable) at the expense of WCNI.
The answer to that further question depends upon whether Mr Alelaimat "does not [enforce] judgment" against WCNI. That is a question that cannot presently be answered.

The submissions of the parties

Synergy Scaffolding, WCNI and Mr Alelaimat all responded to the Court's invitation to provide submissions with respect to the orders that should be made consequential on the findings and conclusions published. Those submissions are outlined below.

(i) Synergy Scaffolding

Synergy Scaffolding placed considerable reliance on (i) the conclusion (at [185] of the Principal Judgment) that, on the orders contemplated, s 151Z(1) does not apply to require Mr Alelaimat to repay the compensation he has received; and (ii) the conclusion (at [188]) that s 151A(1) does not operate to require the amount of payments of weekly compensation to be deducted from Mr Alelaimat's damages. The consequences of those circumstances (independently or in combination), on Synergy Scaffolding's argument, is that those amounts should be deducted from the damages that would otherwise be awarded to Mr Alelaimat. That is because the quantification of damages included income loss and medical expenses (on the assumption that those amounts would be repayable to WCNI). Were they not now to be deducted (and not required to be repaid), Mr Alelaimat would be compensated for losses he has not incurred. That would be in contravention of the principle that damages are awarded for the purpose of putting a plaintiff in the position he or she would have been in but for the tortfeasor's wrongdoing: Skelton v Collins (1966) 115 CLR 94 at 128; [1966] HCA 14.
If, therefore, it could be clearly established that Mr Alelaimat will not be required to repay any or all of the compensation he has received, it would be appropriate, as Synergy Scaffolding proposes, to deduct from the award of damages an amount representing those payments. Mr Alelaimat does not contend to the contrary. The difficulty for Synergy Scaffolding is that it is not clearly established that Mr Alelaimat will not be obliged to repay those amounts. If, at a time in the future, Mr Alelaimat enforces judgment against Synergy Scaffolding (and not against WCNI) it will be open to WCNI to demand from Mr Alelaimat, pursuant to s 151Z(1)(b), repayment of the amounts of compensation paid. As I read s 151Z(1), WCNI's entitlement to take that course is independent of and will survive the finalisation of these proceedings: note the observations of Barrett JA in Gallagher Bassett Services NSW Pty Ltd v Murdock (2013) 86 NSWLR 13; [2013] NSWCA 386 at [47]-[48]. It would not be right to reduce Mr Alelaimat's damages award against Synergy Scaffolding against the mere possibility that he may not be required to repay the compensation to WCNI.
With that in mind, WCNI opposed the course proposed by Synergy Scaffolding.

(ii) WCNI

WCNI accepted that, as a consequence of this Court's conclusions with respect to its liability to Mr Alelaimat, orders 4 and 5 made by the primary judge (that, pursuant to s 151Z(1)(d), Synergy Scaffolding indemnify WCNI for amounts of compensation paid to Mr Alelaimat, and for payment of interest thereon) must be set aside.
WCNI proposed, however, a course that could, it contended, preserve the (intended) operation of s151Z(2)(e) and s 151A of the Workers Compensation Act. First, WCNI contended that its cross-claim against Synergy Scaffolding should not be finally disposed of; instead, it proposed, if and when Mr Alelaimat enforces judgment against Synergy Scaffolding but not against WCNI, WCNI should be granted liberty to apply to the primary judge for orders under s 151Z(1)(d). Second, WCNI contended that the judgment against it should be expressed to be "less any deduction required by s 151A(1)", again with liberty to apply to the primary judge in the event of any dispute as to the deduction. WCNI did not identify any statutory or other power in this Court that would authorise either of the courses it proposes. The submission also failed to identify what order (besides granting liberty to apply to the primary judge) should be made with respect to ground 4 of the appeal.
In support of its first contention, WCNI argued that analogy is to be found in, for example, cases where a plaintiff sues two defendants, each of which cross-claims against its insurer. WCNI asserted that, in such a case, the insurers have no liability to their insured unless and until judgment is enforced against one or both of the defendants and that the liability of the insurer is contingent on that event. (While that proposition is not uncontroversial, and the insurer's liability will depend on the terms of the policy, it is not in this case necessary to engage with the correctness of the proposition.) Against the contingency of the liability arising, a declaration, which may give rise to an entitlement in the defendant to seek order against the insurer, may be made, leaving it open to the parties to seek orders, consistent with the declaration, enforcing the rights declared.
For my part, I do not find the analogy useful, at least at this stage of these proceedings. The procedure on which reliance is placed may be effective in first instance proceedings. It is difficult to see its practicality in proceedings in this Court. Whether the analogy is potentially useful in future cases (at first instance) does not arise for present consideration.
By its Notice of Appeal, Synergy Scaffolding has invoked the jurisdiction of this Court. The course proposed by WCNI is not a proposal that this Court defer its determination of the issues raised on appeal, it is a proposal that this Court decline to exercise its jurisdiction to resolve the matters remaining in dispute. I am aware of no basis upon which this can be done, and none has been identified. Moreover, the Supreme Court has fully discharged its functions under the Further Amended Statement of Claim, and, while there are (limited and defined) circumstances in which it may reopen proceedings, this is not one of them.
I am unpersuaded that declining to conclude this appeal is a practical solution to the undoubted difficulties that arise. Acceptance of either of WCNI's proposals would not result in determination of the appeal. If the course I have proposed above in relation to the award of damages against Synergy Scaffolding is adopted, and if, as expected, Mr Alelaimat enforces the judgment against Synergy Scaffolding (and not against WCNI), then (subject to any issues that may arise under the principles stated in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45), WCNI will retain its rights under s 151Z(1)(d) to seek repayment of the compensation it has paid to Mr Alelaimat.
For similar reasons, and an additional reason, I would also reject the proposal that the judgment against WCNI should be expressed to be subject to any deduction required by s 151A(1)(b). The additional reason is that the expression proposed is unnecessary. Section 151A(1)(b) operates of its own force. If - and when - Mr Alelaimat recovers damages against WCNI, WCNI will be entitled (and required) by s 151A(1)(b) to make the appropriate deduction. WCNI recognised this by seeking that liberty to apply be given in respect of any dispute as to the deduction.
It is necessary that this Court proceed to finalisation of the issues raised in the appeal. It is necessary that that be done on the evidence of the situation as it presently exists - that is, that neither of the preconditions in s 151Z(2)(e) that would render s 151Z(1) applicable has been satisfied. Section 151Z(1), therefore, does not apply, to the (present) benefit of Mr Alelaimat and Synergy Scaffolding. The orders I propose will recognise that fact.

(iii) Mr Alelaimat

In his initial submissions, Mr Alelaimat accepted (subject to responding to contrary submissions from other parties) that the orders contemplated in [194] of the Principal Judgment are appropriate.
In response to the submissions of Synergy Scaffolding and WCNI, Mr Alelaimat accepted that, in the event that neither of the s 151Z(2)(e) preconditions is satisfied, and s 151Z(1) therefore has no operation, it would be appropriate that the award of damages be reduced as proposed by Synergy Scaffolding. Mr Alelaimat pointed out, however, that the s 151Z(2)(e) preconditions have not yet been satisfied, and that, in the event that they are, he will be required to repay the compensation he has received. He therefore supported WCNI's proposals, specifically that the award of damages should not be reduced by reference to those payments.

Conclusions

Section 151Z(1) does not currently apply, either to require Mr Alelaimat to repay, under par (b), to WCNI the compensation he has received, or to require Synergy Scaffolding, under par (d), to indemnify WCNI for the compensation paid. That is not to say that circumstances will not, in the future, arise so that s 151Z(1) becomes applicable, in which case Mr Alelaimat will become liable to repay the compensation, or Synergy Scaffolding will be obliged to indemnify WCNI for the compensation (pars (b) and (d) cannot both operate - if they did, it would be the employer who would "doubly recover").
Accordingly, I would not accede to Synergy Scaffolding's proposal that the damages it is liable to pay to Mr Alelaimat be reduced to take account of the compensation he has received. Nor would I accede to WCNI's proposal that the questions be delegated to the Supreme Court for determination if and when Mr Alelaimat makes his election as to enforcement.
The orders contemplated in [194] of the Principal Judgment included reduction in the award of damages to Mr Alelaimat by reference to the amount paid by WCNI in respect of medical expenses (see [190]-[193]). In the light of the further submissions, and these further reasons, I do not adhere to that proposed order. The amount paid on behalf of Mr Alelaimat as medical expenses falls to be considered together with the other payments made under the Workers Compensation Act, and should be included in the damages award - and be subject to any repayment required if one of the s 151Z(2)(e) preconditions is satisfied and s 151Z(1) comes into effect.

Costs

There remains for determination the question of costs, in respect of which each of the parties provided submissions.

Costs of the proceedings in the Supreme Court

It is now apparent that the results of the proceedings in the Supreme Court are as follows:
Mr Alelaimat has succeeded against Synergy Scaffolding and should have his costs of that proceeding.
Mr Alelaimat has succeeded against WCNI. However, by s 346 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW), costs of claims for work injury damages are governed by the Workers Compensation Regulation 2016, the effect of which (by cl 96 thereof) is that each party is to bear its or his own costs.
Synergy Scaffolding has failed in its cross-claim against WCNI; WCNI should have its costs of that cross-claim.
WCNI has failed in its cross-claim against Synergy Scaffolding; Synergy Scaffolding should have its costs of that cross-claim. The logical result of (3) and (4) is that Synergy Scaffolding and WCNI pay their own costs of the cross-claims.

Costs of the appeal

In its Notice of Appeal Synergy Scaffolding initially identified nine grounds (four of which were not pressed, although it is not clear at what point they were abandoned). The abandoned grounds challenged orders in relation to contributory negligence, one aspect of the medical expenses claim, and damages for economic and non-economic loss. Ground 1 of the appeal challenged the rejection by the primary judge of Synergy Scaffolding's defence under the Limitation Act 1969 (NSW). That ground failed.
Notwithstanding that the orders contemplated in [194] of the Principal Judgment included a deduction from the damages of an amount referable to medical expenses, such a reduction is not now proposed. Synergy Scaffolding has failed in ground 5, by which it contended that the award of damages for Mr Alelaimat ought not to have included amounts referable to medical expenses. (No specific issue was taken by Synergy Scaffolding with respect to the other components of the compensation payments to Mr Alelaimat). The remaining grounds (grounds 2, 3 and 4) were almost entirely directed to the primary judge's orders concerning WCNI. Synergy Scaffolding accepts that it must pay Mr Alelaimat's costs of the appeal.
As between Synergy Scaffolding and WCNI, Synergy Scaffolding has succeeded in ground 2, by which it asserted error in the primary judge's finding that WCNI was not liable to Mr Alelaimat. Synergy Scaffolding has also succeeded in ground 4, by which it asserted that WCNI's cross-claim ought to have been dismissed. Synergy Scaffolding's success against WCNI has therefore been substantial. Synergy Scaffolding, however, accepts that some allowance ought to be made in recognition of the time taken on ground 1 (on which it failed), and proposes that, while it should have an order for costs against WCNI, the order should be for 75% of the costs.
WCNI accepted that it is liable for a proportion of Synergy Scaffolding's costs, but proposed that that should be 50%.
I would accept Synergy Scaffolding's proposal of 75%.

Orders

I propose that the following orders be made:

On the appeal

Appeal allowed in part;
Order 2 made in the Supreme Court on 18 May 2022 (being judgment for the second respondent (WCNI) against the first respondent (Mr Alelaimat)) set aside;
In lieu thereof, judgment for Mr Alelaimat against WCNI in the sum of $917,686.00;
Order 6 made in the Supreme Court on 18 May 2022 (that Synergy Scaffolding pay WCNI's costs of the cross-claims) set aside.

On the first cross-claim (Synergy Scaffolding v WCNI) 5. The first cross-claim (Synergy Scaffolding v WCNI) dismissed;

On the second cross-claim (WCNI v Synergy Scaffolding) 6. Orders 4 and 5 made in the Supreme Court on 18 May 2023 set aside. 7. The second cross-claim (WCNI v Synergy Scaffolding) dismissed.

Costs in the Supreme Court 8. Synergy Scaffolding to pay Mr Alelaimat's costs of the proceedings in the Supreme Court. 9. No order as to the costs of the cross-claims, with the intent that Synergy Scaffolding and WCNI pay their own costs thereof.

Costs of the appeal 10. Synergy Scaffolding to pay Mr Alelaimat's costs of the appeal. 11. WCNI to pay 75% of Synergy Scaffolding's costs of the appeal.

For avoidance of doubt the effect of the proposed orders is to confirm the judgment against Synergy Scaffolding in favour of Mr Alelaimat in the sum of $1,356,533.39 (recognising that the sum might need adjustment to allow for interest, and/or any amounts paid to Mr Alelaimat).
I would, however, in the hope that reason and common sense will prevail, defer pronouncing orders for 14 days in order to give the parties the opportunity to reach some sensible resolution. Whether that will happen will depend largely upon Mr Alelaimat, who should appreciate that, if he does not participate in an appropriate way, he will be at risk of a further claim by WCNI, and at risk of costs of that claim.
The orders identified at [57] will be made on 21 February 2024 unless orders consented to by all parties are provided to the Court before that date.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 February 2024

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