Thorn v Kelly

Supreme Court of NSW|2016-12-06|Before: Campbell J

Solicitors: Gillis Delaney Lawyers, (Plaintiffs) A.R. Conolly & Company (Defendants) File Number(s): 2016/311601

By summons filed on 19 October 2016, the plaintiffs, whom I will refer to as the Thorn parties, seek an order that proceedings no. 2015/326714 in the District Court be transferred to this Court to be heard with proceedings no. 2016/74936 commenced in this court.
Both sets of proceedings are concerned with the consequences of injuries received by Mr Ross Monteleone in an industrial accident which occurred on 15 March 2014.
The proceedings in the District Court are a claim for statutory indemnity brought by the defendants to the summons, whom I will refer to as the Kelly parties, under s 151Z(1)(d) Workers' Compensation Act 1987 (NSW). The proceedings in this Court are Mr Monteleone's claim for damages for personal injury. The Thorn parties are the defendants in each set of proceedings.
For present purposes, it is sufficient to state that Mr Monteleone's case is that he was employed by the Kelly parties as a station and stock hand at their property, "Little Narrawa", at Rugby, between Boorowa and Crookwell, New South Wales. The Thorn parties were contracted to deliver a mob of 800 merino weaner wethers purchased by the Kelly parties to "Little Narrawa."
Mr Monteleone was asked to assist in unloading the sheep at "Little Narrawa." He was on the lower deck, assisting by shepherding the sheep toward the rear, so that they would move out the stock-trailer's tail-gate ramp and into the race and yards of the property. While engaged in this work, Mr Monteleone alleges that Mr Thorn, the stock carrier responsible for the unloading, released a ramp suspended from the deck above where Mr Monteleone was working, without warning. The ramp descended suddenly, striking Mr Monteleone and inflicting a very serious crush injury to his right arm. He suffered multiple orthopaedic injuries, neurological injuries and significant other injuries to the soft tissues of his right arm. He has undergone multiple operations and has been unable to return to his usual, or any, work. Monies paid to, for or on his behalf under the Workers' Compensation Act are in the vicinity of $178,000, including about $43,000 in medical expenses.

Evidence

The Thorn parties read the affidavit of their solicitor, Amanda Bond, sworn on 17 October 2016 and the Kelly parties relied upon two affidavits of their solicitor, Elizabeth Ramsay, sworn on 30 November and 1 December 2016 respectively.

Summary of argument

Mr D Kelly of Counsel argues that although the Kelly parties are not parties to the Supreme Court proceedings, the issues in each proceeding are substantially the same. Each concern the nature and extent of Mr Monteleone's injuries and disabilities; whether he was an employee or an independent contractor of the Kelly parties; whether each of the Thorn parties and the Kelly parties were negligent; whether Mr Monteleone was contributorily negligent; the apportionment of liability amongst them; and the quantum of damages Mr Monteleone is entitled to, including any reduction required by s 151Z(2) Workers' Compensation Act. Counsel argued that it was inevitable that the evidence in both proceedings would be the same and it was against the public interest to risk inconsistent verdicts if each case is decided separately in a different court. He acknowledged that this legally could occur in this area of legal discourse (see, for example, Government Insurance Office of New South Wales v C.E. Donald (1991) 25 NSWLR 493; and QBE Workers' Compensation (NSW) Ltd v Dolan [2004] NSWCA 458).
Counsel also argued by reference to RCR Resolve FM v Serco Australia [2014] NSWSC 1477 (per McDougall J) that inconsistent verdicts were "manifestly undesirable" (RCR Resolve at [20]). He argued that the overriding purpose of civil litigation expressed by s 56 Civil Procedure Act 2005 (NSW) favoured one hearing rather than two.
Mr T Brennan of Counsel, who appeared for the Kelly parties, argued that while s 140 Civil Procedure Act conferred a broad discretionary power on the Court, it is necessary for the applicant to show a sound ground or good reason why an order ought now to be made. Counsel accepted that the issues are substantially the same, but he argued that there was nothing in s 151Z that required the proceedings be heard together. By reference to WorkCover Queensland v Amaca Pty Ltd (2010) 241 CLR 420; [2010] HCA 34, Mr Brennan argued that the Kelly parties' statutory cause of action is entirely independent of Mr Monteleone's common law claim. He emphasised that inconsistent results are tolerated by the law in this area (see, for example, Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321 at 333).
Counsel also argued that the Kelly parties may suffer relevant prejudice if the hearing of the District Court proceedings is delayed. By reference to Ms Ramsay's affidavit, he sought to demonstrate that Mr Monteleone's injuries are not yet stabilised and it is unlikely that his claim for damages would be determined until they were. The Kelly parties were uninsured for workers' compensation purposes and had incurred a liability to reimburse the State Insurance Regulatory Authority for compensation paid to Mr Monteleone from the Uninsured Liability Scheme. They had already reimbursed some $72,000. Moreover, it was said that the Kelly parties were desirous of dissolving their pastoral partnership, but were hindered in doing so by the ongoing, unfunded liability for Mr Monteleone's compensation. Mr Brennan argued, by reference to these considerations, that the interests of justice were better served by leaving the proceedings to take their course where they lay.
In reply, Mr Kelly argued that the Thorn parties would resist the allocation of a hearing date in the District Court until Mr Monteleone's injuries had stabilised and an accurate assessment of the damages he was likely to recover could be made. The Thorn parties' liability to indemnify the Kelly parties, if any, was capped by the amount of damages payable by it to Mr Monteleone.

Determination

In Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 at [4], Bryson J (as his Honour then was) said: "No limits or restrictions on the discretion [to transfer] are established by authority. When asked to exercise this power, the Court should, in my opinion, appraise the facts and circumstances of the case before it and consider whether the applicant has shown something which, within the framework of the purposes for which the power exists, is a sound ground or a good reason why an order ought now to be made. The subject does not admit of more particular exposition." This was said in relation to the former s 145 District Court Act 1973 (NSW), but was approved and applied by Campbell J (as he then was) concerning s 140 in Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631.
It should be pointed out that the Thorn parties claim for statutory indemnity is not a workplace injury damages claim and accordingly the limitations upon the wide discretion imposed by s 140 (3)(a) do not apply. There is no suggestion that the amount to be awarded to the Thorn parties, if successful, is likely to exceed the jurisdictional limit of the District Court (s 143(b)(i)), and accordingly, it is sufficient that the Thorn parties demonstrate "that there is other sufficient reason for hearing the proceedings in the Supreme Court" (s 143(b)(ii)).
I am satisfied that the Thorn parties have demonstrated sufficient reason for hearing the proceedings in the Supreme Court, applying the approach suggested by Bryson J to this determination.
In RCR Resolve at [20] McDougall J said: "It is manifestly undesirable that the same issue (of fact or law or both) between the same parties should be considered by different judges in different courts. It leads to the risk of inconsistent verdicts. It raises the potential for estoppels to complicate one or other sets of proceedings. And it has the consequences, in terms of costs and other complexities and waste of resources, to which I have referred already." The parties here are different. The Thorn parties are parties in each court, but his Honour's comments remain apposite given, as Mr Brennan acknowledged, the very substantial similarly of issue arising in both sets of proceedings. Either there is a risk of inconsistent verdicts in relation to substantially the same matter likely to be determined on much the same evidence, or there is a potential for estoppels arising out of the District Court proceedings to complicate proceedings in this Court, although the parties are not the same.
As counsel demonstrated in argument, there are cases of inconsistent outcomes between the worker's damages claim, and the employer's statutory indemnity claim, against the same third party, it is not clear that the law will always permit or tolerate this, at least where rather than a consent judgment, the first proceedings heard are decided by the actual exercise of judicial power after a contest: see Manners v Transfield Pty Ltd (1992) 110 ALR 70 (discussed by Beazley JA (as she then was)) in Dolan at [54] - [57]; Turner v Manier [1958] VR 350; and Starkey v Pike (unreported; District Court of New South Wales, 10 June 2005; 67/02 and 18/03; by his Honour Judge Walmsley SC).
In Starkey v Pike the worker sued the third party tortfeasor and after a contested hearing, judgment was entered for the defendant. Judge Walmsley SC decided, by reference to the extended abuse of process principles, that the employer was precluded from proceeding with his claim for the statutory indemnity: see Starkey at [28]. It's unnecessary for me to decide the correctness or otherwise of these decisions. But they provide a basis for finding the potential for complications in the proceedings in this Court if the proceedings in the District Court are decided adversely to the Kelly parties before-hand. Even assuming that the Kelly parties succeed in the District Court, as Mr Monteleone is not a party, there is a real risk of inconsistent outcomes.
I accept there may be a degree of hardship suffered by the Kelly parties for the reasons given in Ms Ramsay's affidavit. However, I am not satisfied that those considerations undermine the Thorn parties' sound argument for having the District Court proceedings transferred to this Court. It seems to me that there is a prospect that, when the matter is next before the Registrar on 10 February 2017, both sets of proceedings may be ready to take a hearing date.

Orders

My orders are: 1. Under s 140 Civil Procedure Act 2005, transfer proceedings no. 2015/ 326714 from the District Court to the Supreme Court; 2. Direct that the proceedings be case managed in this Court concurrently with proceedings no. 2016/74936, between Ross Monteleone and Andrew Thorn and Thorn Transport Pty Ltd; 3. List both matters for directions before the Common Law Case Management Registrar at 9:00 a.m. on 10 February 2017; 4. The Thorn parties' costs of the summons are costs in the cause.

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: 09 December 2016

Workers' Compensation Act 1987(NSW)s 151Z

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