Taboas v Abigroup Contractors Pty Ltd

Background 5The proceedings were originally commenced against VSL by amended statement of claim filed in the District Court in February 2012. VSL declined a request by Mr Taboas for unlimited jurisdiction in that Court. VSL did not, however, oppose the transfer of the proceedings to this Court in July 2012. Damages assessed in favour of Mr Taboas against VSL prior to the application of the calculation in accordance with s 151Z(2) of the Workers Compensation Act 1987 amounted to $609,853.

VSL's submissions 6Section 98(1) of the Civil Procedure Act 2005 confers power on the Court to make orders in relation to costs. It is in the following terms: "(1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis." 7In support of its application, VSL referred me to a series of authorities that it contended provided guidance upon the proper application of UCPR 42.34. These included Milich v The Council of the Municipality of Canterbury (No 3) [2012] NSWSC 1280, Ji v Firth t/as Firths the Compensation Lawyers [2013] NSWSC 186, Shield Mercantile Pty Ltd v Citigroup Pty Ltd [2013] NSWSC 287 and State of New South Wales v Quirk [2012] NSWCA 216. 8According to VSL, these cases and others suggested that the following factors were to be taken into account when dealing with the applicability of the rule:

1. The nature of the claim.
2. Its factual complexity.
3. The potential judgment amount.
4. The ratio between the costs of the proceedings and the amount in issue in the proceedings.
5. Whether the proceedings had been commenced in, or transferred to, the Supreme Court. 9By reference to these matters VSL contended that Mr Taboas could not satisfy me that he was entitled to the costs of the proceedings on an ordinary basis. He transferred his proceedings to this Court when he at least knew that he was not as disabled as he was claiming in the proceedings or revealing to his lawyers. That is said to flow from the evidence in the trial upon which I placed some reliance that showed Mr Taboas performing physical work with his father, secretly recorded on video, that was inconsistent with his claimed and asserted level of incapacity. VSL referred to paragraphs [137] to [139] of my reasons for judgment that referred to this as follows: "[137] Taken at face value there is a direct and distinct disconformity between Mr Taboas' own descriptions of what he can and cannot do due to the pain that limits his activities in various ways on the one hand, and the activities that he is shown performing in the film on the other hand. Doing the best I can, having regard to the clarity of the images, Mr Taboas did not appear to me to exhibit any apparent limitations or restrictions at all during the whole of the time that he is shown working there. That work involved standing, stooping, bending, lying down and kneeling throughout the whole of the film. He did not stop working at any time in a way that suggested pain was limiting his performance. He appeared to me to be wholly unrestricted in everything he is shown to be doing. [138] That presentation has to be contrasted with his performance in court before me. Throughout the hearing, whether in the witness box giving evidence or seated elsewhere in the courtroom, Mr Taboas adopted the habit of standing and stretching his back from time to time. That was an activity that was entirely consistent with the type of back problems he claims to have. No such interludes punctuated his video activities. It was suggested to me that his apparently free and unrestricted performance shown on the film might have been possible due to analgesic pain relief. However, it is difficult to understand why he would not have been similarly assisted in court if his pain were so extreme as to require constant postural adjustment. This contrast was not taken up by anybody in cross-examination but appears to be a matter of which I can take notice. This is all the more so in my view having regard to the fact that Mr Taboas described and listed the considerable amount of pain killers that he is in the daily habit of ingesting. I put to one side the lurking contradiction that arises from the fact that no documented claim is made for out of pocket expenses for the cost of any such medication throughout the whole of the period between late 2006 and now. [139] Part of Mr Taboas' claims relates to his inability to perform domestic tasks, or at least that he has experienced some difficulties in doing so. The evidence about this was scant and largely untested. It was unfortunately not corroborated either. It is remarkable that Mr Taboas' did not choose to call either his wife, to whom he referred in various contexts throughout his evidence, or his father. The former would have been particularly helpful given the nature and extent of Mr Taboas' claimed restrictions. The latter would have been of equal assistance in light of the controversy attending what can be made of the activities shown on film. Mr Taboas' father was there at the time and appears to have driven to and from Sydney with him to carry out the work. It is difficult to think of a better witness to these events, whose evidence may have helped to dispel any doubt or uncertainty about what to make of it." 10VSL also directed attention to paragraphs [167] to [173] of my reasons for judgment in support of the same contentions. 11Mr Taboas' claim as originally particularised came to approximately $2.3M, excluding non-economic loss and out of pocket expenses. I assessed his claim for future economic loss, particularised at just under $1M, at just over $220,000. According to VSL, this was an unjustified overstatement of the value of his claim that could only have been based upon a knowing exaggeration or misstatement by Mr Taboas about the true level of his injury and disability. But for that overstatement, the proceedings should have remained in the District Court where they were commenced, in which case the rule upon which VSL relies would have had no application. VSL even went as far as to contend in written submissions that, based upon a comparison between what was claimed and what was recovered, Mr Taboas "essentially substantially failed in his particularised claim" because apart from non-economic loss, "he obtained an award of damages against [VSL] that was only about 18 percent of that claimed (after allowing for the s 151Z deduction)". VSL also made this submission: "But for [Mr Taboas'] attempts to exaggerate and mislead medical examiners and ultimately the court, he was well aware his case was much more modest than he tried to make out. He should not be rewarded for doing so by having his costs paid without any sanction." 12VSL submitted in the alternative that it should only be liable for 50 percent of the costs that it would otherwise be ordered to pay.

Abigroup's submissions 13Abigroup argued that its liability for costs should be only 50 percent of the Schedule 7 costs. It did so by reference to the decisions in Sam Chamma v Solima & Sons Pty Ltd [2008] NSWSC 165 and Chubs Constructions Pty Ltd v Sam Chamma [2009] NSWCA 98.

Consideration 14One of the matters that might be expected reliably to inform the current debate is the rationale behind a rule that can on one view operate effectively to penalise a plaintiff for choosing the "wrong" court in which to litigate his or her claim. The only basis upon which the chosen court can be assessed as wrong in this context is by reference to the amount recovered. The only sanction for failing to choose the "correct" court is the one impliedly indicated or covered by the rule. Despite my concern to understand the historical or principled reasons for the sanction, no satisfactory or unambiguous rationale has emerged. 15The old system of differing scales of costs for legal practitioners has long gone. Recovery of costs upon an assessment no longer involves the application of rates for legal work that vary according to the court in which the work was performed. In that sense, therefore, there is no incentive for a legal practitioner to choose a jurisdiction that attracted a more generous scale of costs because the assessment process is effectively directed to the calculation of what is a reasonable recompense for the work that is performed, regardless of the venue. 16The rule in question has seen equivalent expression over the years in various iterations in the rules of Court. The wisdom that informs the existence of the rule seems to be no more and no less than an indirect check or brake upon the assignment of business to the court considered most appropriate to hear it, measured somewhat bluntly by reference only to the amount of the verdict. 17It is important immediately to observe that the rule does not in terms say that a plaintiff is not entitled to an order for costs, or even that an order for costs will not ordinarily be made, if the plaintiff recovers an amount of less than $500,000. Nor does the rule say in terms that the commencement or continuation of proceedings by a plaintiff in the Supreme Court rather than in the District Court will not have been warranted unless he or she recovers an amount of not less than that sum. I note that the rule referred to, in the expression "[t]he rule applies if", in the opening line of UCPR 42.34(1), is in practical terms, UCPR 42.34(2). The implication is that the commencement or continuation of proceedings in the Supreme Court, where the plaintiff recovers less than $500,000, will not or at least may not have been "warranted". 18Nor does that implication limit the Court to a consideration only of the amount recovered. For example, the rule does not foreclose the possibility that there may be other reasons why the Court might come to the view that the commencement or continuation of proceedings in this Court was not warranted. Accepting the limited use that can be made of it, the introductory heading to the rule arguably captures the generality of its application in the words "costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court". Whatever other factors may theoretically be considered in making a decision about whether or not this Court is appropriate, VSL only relies in the circumstances of this case upon Mr Taboas' failure to recover in excess of $500,000 and the anterior matters concerning his truthfulness about his condition, which VSL says led to that result. 19In the present case it is uncontroversial that Mr Taboas, through his legal advisers, sought VSL's consent to unlimited jurisdiction in the District Court. It will immediately be apparent that that approach was based upon what VSL would contend was an equally unfounded view of Mr Taboas' case, that he at least should have understood was proceeding in accordance with his less than forthcoming instructions concerning the full and precise nature and extent of his injuries and disabilities. In other words, even the application for unlimited jurisdiction in order safely to maintain the proceedings in the District Court was unnecessary having regard to what Mr Taboas knew, or ought to have known, and revealed to his legal representatives at the time. In that sense, VSL undoubtedly contends that Mr Taboas can derive no support from its refusal to consent to the application for unlimited jurisdiction because it was in effect a faux application in any event. 20At large in this discussion is also the difficulty of assessing what a particular claim is worth, or more particularly, doing so within anything other than fairly broad and correspondingly vague tolerances. In the present case, Mr Taboas managed to secure a base verdict of almost $500,000. But for the view I took of his non-economic loss, as a percentage of a most extreme case, he might have recovered much less of somewhat more than that amount. Put another way, even if Mr Taboas had provided his lawyers with the same information concerning his condition as that which emerged during the trial, and with the benefit of which I decided the case, there is no guarantee that they would not have still sought to litigate the proceedings in this Court. 21There may be cases where a plaintiff fails conspicuously to approach the sum of $500,000. Counsel for VSL referred me to a number of them. This is not such a case. 22I am also unable to agree with the submissions of either VSL or Abigroup that they should, in slightly different ways, be liable only for 50 percent of the costs that would otherwise be payable by them as losing defendants. On the one hand, VSL will only be liable for that proportion of Mr Taboas' total costs as are attributable to, or which Mr Taboas incurred in, the proceedings against VSL. Correspondingly, Abigroup will only be liable for that proportion of Mr Taboas' total costs as are attributable to, or which Mr Taboas incurred in, the proceedings against Abigroup. The fact that each defendant was found by me to be equally liable to Mr Taboas on the liability issue does not logically or even fairly lead to the result that they are less liable for the whole of the costs referrable to establishing Mr Taboas' respective cases for damages against each of them. Neither of the cases to which Abigroup directed my attention supports any proposition or statement of principle to the contrary. Indeed, the fact that both defendants were sued in the one set of proceedings must necessarily, or at least presumably, have produced economies of scale and corresponding costs savings that reduce the amount of costs for which each would otherwise have been potentially liable if sued separately. 23In my opinion, there is no basis for making any order for costs other than what might be described as the usual order. I am satisfied that the continuation of these proceedings in this Court in all of the circumstances was warranted. I decline to make any other order apportioning the liability of either VSL or Abigroup for costs in accordance with my findings concerning their responsibility for his loss and damage as between themselves.

Orders 24I make the following orders:

1. Judgment for Mr Taboas against Abigroup Contractors Pty Ltd (Abigroup) for $366,324.
2. Judgment for Mr Taboas against VSL Australia Pty Ltd (VSL) for $488,088.
3. Note that the amounts referred to in orders 1 and 2 are not cumulative and any satisfaction of either will to that extent satisfy the other.
4. Order Abigroup to pay Mr Taboas' costs of the proceedings against it pursuant to Schedule 7 of the Workers Compensation Regulation 2010.
5. Note the agreement between Mr Taboas and Abigroup that the costs referred to in order 4 shall include fees for senior and junior counsel.
6. Judgment for Abigroup on its claim for contribution against VSL for $189,117, with no order as to the costs of the cross-claim.
7. Judgment for VSL on its claim for contribution against Abigroup for $183,162 with no order as to the costs of the cross-claim.
8. Order VSL to pay Mr Taboas' costs of the proceedings against it.
9. Note that the sum of $63,247 has been paid to Mr Taboas by or on behalf of Abigroup pursuant to the Workers Compensation Act 1987.

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: 24 April 2014