Munro v State of Queensland (No. 2)
[2014] QDC 98
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- Unreported Judgment
- Munro v State of Queensland (No. 2)[2014] QDC 98
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Munro v State of Queensland (No. 2)[2014] QDC 98
Munro v State of Queensland (No. 2)[2014] QDC 98
DISTRICT COURT OF QUEENSLAND
CITATION: | Munro v State of Queensland (No.2) [2014] QDC 98 |
PARTIES: | JOAN MUNRO (plaintiff) v STATE OF QUEENSLAND (defendant) |
FILE NO/S: | BD 2326/2011 |
DIVISION: |
|
PROCEEDING: | Trial – costs issue |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 17 April 2014. |
DELIVERED AT: | Brisbane |
HEARING DATE: | Submissions in writing |
JUDGE: | McGill SC DCJ |
ORDER: | Judgment of 10 January 2014 varied by deleting the existing paragraph 2, and substituting: “Question of costs of the proceeding adjourned.” Order that the defendant pay the plaintiff’s costs of the action from 3 June 2013 on the Magistrates Court scale applicable where the amount recovered is more than $50,000.00. |
CATCHWORDS: | EMPLOYMENT LAW – Injury to employee – liability of employer – statutory restrictions on costs of proceeding – interpretation COSTS – Offers to settle – statutory restrictions on costs of proceeding – interpretation – some costs payable. Workers Compensation and Rehabilitation Act 2003 s 316, s 318, s 318B. Mio Art Pty Ltd v Macequest Pty Ltd (No 2) [2013] QSC 271 – cited. |
COUNSEL: | G J Cross for the plaintiff A S Mellick for the defendant |
SOLICITORS: | Colin Patino Lawyers for the plaintiff BT Lawyers for the defendant |
- [1]This matter went to trial before me in November 2013, on the basis that quantum had been agreed between the parties at $60,000 clear of the WorkCover refund. For reasons which I delivered on 10 January 2014, I gave judgment that the defendant pay the plaintiff that sum. The parties at that stage sought the opportunity to make written submissions as to costs, and accordingly I adjourned the question of costs.[1]Written submissions on behalf of each party were subsequently provided.
Legislation
- [2]The plaintiff’s claims were governed by the Workers Compensation and Rehabilitation Act2003 (“the Act”). The following sections of the Act are relevant:
“316 (1)No order about costs, other than an order allowed under this section, is to be made by the court in the claimant’s proceeding.
- (2)If a claimant or an insurer makes a written final offer of settlement that is refused, the court must, in the following circumstances, make the order about cost provided for –
- (a)if the court later awards an amount of damages to the worker that is equal to or more than the worker’s written final offer – an order that the insurer pay the worker’s costs on the standard basis from the day of the written final offer;
- (b)if the court later dismisses the worker’s claim, makes no award of damages or awards in amount of damages that is equal to or less than the insurer’s written final offer – an order that the worker pay the insurer’s costs on the standard basis from the day of the final offer.
- (3)If an award of damages is less than the claimant’s written final offer but more than the insurer’s written final offer, each party bears the party’s own costs.
318 (1):If the amount of damages a court awards could have been awarded in a lower court, the court must order any costs in favour of the claimant under the scale of costs applying in the lower court.
- (2)This section applied to all claimants.
318A (1)A court may make no order about costs to which division 1, 2 or 2A applies except the orders for costs provided for in the division.
- (2)Subsection (1) applies subject to this division.
318B (1)Subsection (2) applies to an order for costs a court is required to make under the following sections (a prescribed order) –
- (a)section 312(2);
- (b)313(2);
- (c)316A(3) or (4).
- (2)The court may make an order for costs other than the prescribed order if the party ordered to pay costs shows the other order is appropriate in the circumstances.
- (3)Subsection (4) applies if an award of damages is affected by factors that were not reasonably foreseeable by a party at the time of making or failing to accept a written final offer.
- (4)The court may, if satisfied that it is just to do so, make an order for costs under divisions 1, 2 or 2A as if the reference to a written final offer or a failure to accept a written final offer were a reference to a later offer made, or a failure to accept a later offer made, in the light of the factors that became apparent after the parties completed the exchange of written final offers.”[2]
- [3]In this matter the compulsory conference was held on 7 June 2011 when the written final offers were exchanged. They were, by the plaintiff, to accept an amount of $115,000 clear of the WorkCover refund, while the defendant’s offer was nil. Counsel for the plaintiff in written submissions accepted that, subject to the operation of s 318B, s 316(3) applied, given that the amount of the judgment fell between the written final offer of the plaintiff and the written final offer of the defendant. Counsel for the plaintiff however relied on s 318B(4), and a further written offer which she made on 3 June 2013, to accept that which was ultimately agreed. I was not referred to any relevant authorities on these provisions, and have found none.
Section 318B(3)
- [4]The first question in determining whether s 318B(4) applies is whether s 318B(3) is satisfied, that is to say, if the award of damages was affected by factors that were not reasonably foreseeable by a party at the time of making or failing to accept a written final offer. In the present case the award of damages was in the most immediate sense affected by the factor that the parties had agreed on quantum. I was not told when the question of quantum was settled between the parties, though evidently it was after 21 October 2013, when the defendant offered to settle for a much lower amount. The trial began on 25 November 2013. The only issue then was whether there was negligence on the part of the defendant, or breach of statutory duty; there was no plea of contributory negligence, so that the amount of the judgment followed automatically from the finding that the defendant was liable to the plaintiff.
- [5]It has occurred to me that, in circumstances where quantum is settled between the parties, the factor that affects the award of damages is the fact of the settlement agreement between the parties. If that is the factor that is relevant for the purposes of subsection (3), I would readily conclude that settlement in those terms was not reasonably foreseeable at the time of the compulsory conference, given that the matter had not only failed to settle at that conference but that the written final offers then exchanged were so far apart. I suppose it is possible to say that in principle any matter can be settled no matter how far apart the parties may appear to be, but in practical terms I do not think that that means that subsection (3) can never be satisfied where the parties agree on the quantum of damages after an unsuccessful compulsory conference. It looks to me as though the defendant’s position at the date of the compulsory conference was one of complete rejection of the claim, and that suggests that it was not reasonably foreseeable that there would be an agreement reached about quantum.
- [6]The parties however argued the point as though what mattered was whether the quantification of the damages by the party’s agreement was affected by factors not reasonably foreseeable at the time of the written final offers. At the time of the compulsory conference, and for over seven months thereafter, the plaintiff remained in the employment she had been in at the time of the injury, as a registered mental health nurse. She left that employment on 15 January 2012, and on 19 March 2012 took up employment in South Australia as a nurse in an ordinary ward with the Port Pirie hospital board, until a position in a community nursing role became available; she moved to such a role in May 2012. That role does not require physical interaction with patients who are aggressive, but involves visiting patients who are in the community for the purpose of insuring that they are continuing to cope mentally. She is generally able to cope with that work, though it is less remunerative than work either as a nurse in the general ward at the hospital in Port Pirie, or the work that the plaintiff had been doing in Brisbane.
- [7]The plaintiff’s argument is that it was this change in her employment which was the relevant factor which had affected the amount of her damages. At the time the further offer to settle was made on 3 June 2013, the covering letter pointed out that the plaintiff had been able to obtain and maintain this less physically demanding role, and asserted that the opportunity to do this became apparent after the parties had completed the exchange of written final offers.
- [8]It was however submitted for the defendant that there was no evidentiary basis upon which I could find that this was not reasonably foreseeable as at 7 June 2011. It was submitted that it could not be assumed that matters raised in the statement of loss and damage filed on 17 October 2011,[3]or in the updated statement of loss and damage served on 25 July 2013[4]after the change of employment, were correct, on the basis apparently that it could not be assumed that allegations made therein would have been accepted by the court, bearing in mind that adverse findings on credibility were made in respect of at least one issue in relation to the plaintiff’s evidence on the liability. The latter point is true, but it does not follow that if the matter had gone to trial adverse findings on credibility in relation to quantum would have been made.
- [9]In circumstances where the matter did not go to trial on quantum it seems to me that it is pure speculation to consider what findings might have been made in relation to quantum had the matter gone to trial. In the event, quantum did not depend on anything either side said at the trial, but on the parties agreement as to quantum. Unless the relevant factor is the making of the agreement itself, which I have already dealt with, the relevant factors are the factors which induced the parties to enter into that agreement. There is no direct evidence of this in respect of either party, but one would expect that a change of employment, particularly a change to less remunerative employment,[5]would be a factor having a significant effect on the quantification of economic loss, and in that way to be a significant factor in the parties’ approach to the issue of quantum.
- [10]The position would I think have been clearer if there had been evidence from the plaintiff as to the circumstances of her decision to move[6]and the time when the job became available, and indeed when she began looking for it. The timing however suggests it was not the case that she gave up the Queensland position and moved to South Australia having already ascertained that the position was available for her, particularly bearing in mind that she took a temporary position in another area for a couple of months before the position that she was really interested in became available. The timing suggests to me that she left employment with the defendant, and then began to look for something in South Australia, but in any case given that the compulsory conference was held about 9 months before she obtained any employment in South Australia, it seems to me that the appropriate inference to draw is that this was not something which she was planning or even contemplating as at June 2011. Accordingly I find that it was not reasonably foreseeable then that she would obtain employment in the clinical mental health nurse position in South Australia in May 2012.
- [11]It is I think not difficult to infer that that is the sort of change which would be likely to affect the question of assessment of economic loss, and therefore be a factor relevant to the settlement of quantum in a matter of this nature. At the time of the compulsory conference the plaintiff’s case was that she was hanging on at a job that she was not really coping with, because of her physical difficulties in the form of continuing symptoms in her hand, and psychiatric difficulties, which led her to consult medical practitioners and to take medication.
- [12]Counsel for the defendant did not object to the admissibility of the affidavit sworn by the plaintiff’s solicitor, nor to the admissibility of the statements of loss and damage relied on by the plaintiff and quoted in or exhibited to the affidavit. The position rather was that counsel for the defendant submitted that I should be doubtful about the reliability of the facts alleged in those statements, and should not treat them as “facts set in concrete”. But in circumstances where the defendant’s counsel did not object to the admissibility of this material, I do not think that I should treat it as having no evidentiary value.[7]Bearing in mind that the evidences is un-contradicted, and that there is no particular reason to doubt the accuracy of factors such as the timing of various employment, it is I think reasonable enough for me to act on this evidence. In any event, I am not persuaded not to do so.
- [13]A statement of loss and damage is a document signed by the plaintiff. It is thus a document which is admissible in evidence, if not objected to, as evidence of the truth of its contents, under s 92 of the Evidence Act. This would not of course overcome an objection to the affidavit on the ground of hearsay, but no such objection has been advanced. Rather I am being asked to disbelieve the facts asserted in this material, not on the ground that this is inadmissible, but on the ground that it is not credible. If counsel for the defendant wanted me to disbelieve the plaintiff’s evidence, he should have objected to the receipt of the evidence in this form, and, if an affidavit by the plaintiff personally were then filed in response, have sought to cross-examine the plaintiff on that affidavit. He did not do so, and is not entitled to be put in the same position as if he had done so, and successfully.
- [14]The claim and statements of loss and damage had claimed amounts which were greatly in excess of the settlement amount. On this basis it was submitted that the claim and statements of loss and damage had been exaggerated, and that accordingly that I should be sceptical about the plaintiff’s allegations. The fact that the matter was resolved for an amount considerably less than the amount sought in the statements of loss and damage of the plaintiff is however unsurprising; I do not think I have ever seen the statement of loss and damage which was not in the nature of an “ambit claim”, and it is commonplace that claims for damages for personal injuries are settled for amounts much less than the amount so claimed, or indeed have quantum resolved at trial at less than such an amount. Given that defendants complain bitterly if ever a plaintiff seeks to go beyond anything said in a statement of loss and damage, it is unsurprising that they are cast as broadly as possible.
- [15]In any case, for all I know, if the plaintiff had gone to trial on quantum my assessment may well have been well in excess of the settlement figure, or indeed of the plaintiff’s written final offer. A plaintiff in personal injury litigation is under enormous pressure to compromise the claim, particularly under the Act, and it is no doubt common for such claims to be settled for amounts which are much less than the plaintiff would be awarded by a judge. The proposition that the fact that the plaintiff agreed to settle quantum at $60,000 proves that that was all her injuries were really worth is nonsense.
- [16]In the circumstances it is, I think, not difficult to draw the inference, on the material available, that the award of damages was affected by the settlement which in turn was affected by a factor, namely the plaintiff’s change of employment, and her obtaining suitable employment with which she could cope in South Australia, and that this was not reasonably foreseeable by her (or for that matter by the defendant) at the time of her making her written final offer, and failing to accept the defendant’s written final offer. It follows that subsection (4) is available.
Section 318B(4)
- [17]When subsection (4) applies, it gives the court a discretion to treat a “later offer made” as if it were the “written final offer” for the purpose of applying the provisions of Divisions 1, 2 or 2A. Subsection (4) requires that there be a later offer, and gives the court a discretion to treat that offer as if it were the written final offer, and to apply some other section of the Act on that basis. For practical purposes, that means that I could apply s 316(2) by reference to the later offer.
- [18]No doubt the intention of the legislature in inserting this provision was to provide protection to defendants, as shown by the example,[8]but there is nothing in the wording of the subsection which prevents it from being used in an even handed way, if it applies and if the court is satisfied that it is just to do so. The relevant consideration must be whether it is just in the circumstances to have regard to the later offer rather than the written final offer, and the court does not take into account the fact that the scheme in relation to costs provided by s 316 is itself fundamentally unjust, since for practical purposes a plaintiff is confronted with the necessity to be willing to accept less than she deserves in order to avoid having to bear her own costs of the trial.[9]Accordingly the question is whether, accepting that ordinarily s 316 is to be applied by reference to the parties’ written final offers, it is just in the particular circumstances of this case to have regard to later offers.
- [19]The defendant’s counsel submitted that I should have regard to a number of factors in determining whether to exercise the discretion to allow costs, namely that the plaintiff’s version of events was contentious and that adverse credibility findings were made with respect to her version, that the plaintiff made exaggerated claims in relation to quantum, that liability was always contentious, that as at the date of the compulsory conference the plaintiff had not obtained either of the expert liability reports, and that the report of one of the experts was not obtained until after the offer of settlement on 3 June 2013. This submission mistakes the discretion which the court has under s 318B(4). It is not a discretion as to whether to allow costs, but a discretion as to whether to apply the statutory regime in s 316 by reference to an offer other than the written final offer. Section 316 does not allow any discretion as to how to deal with costs: If a particular provision of that section applies, the court “must … make the order about costs provided for” (s 316(2)), and cannot make an order other than the order allowed under that section: s 316(1).
- [20]The relevant discretion is a discretion as to whether to apply s 316 by reference to a later offer rather than the written final offer. Most of the factors relied on do not appear to be relevant to that issue. It is unhelpful to say that liability was contentious; questions of costs after trial are always resolved with the benefit of hindsight. I have already dealt with the issue about whether the claims in the statements of loss and damage were exaggerated. It is unsurprising that reports from experts for use at the trial would not be obtained until after the compulsory conference, in circumstances where at best under s 316(2)(a) the plaintiff will recover costs on the standard basis from the day of the written final offer. Such a regime discourages detailed preparation prior to that date, so it was reasonable for expert reports to be obtained after then. It is also true that the report of Mr McDougall was obtained after the relevant offer of settlement, but there was nothing earth-shattering in that report, my use of the evidence of Mr McDougall was limited and the defendant did not lead evidence to contradict anything he said; and of course that report had nothing to do with quantum. Overall I find these submissions entirely unpersuasive.
- [21]Given that the subsection can only apply in circumstances where the award of damages is affected by factors that were not reasonably foreseeable at the time of the written final offers, this would seem to depend on whether the relevant additional factors are sufficiently significant to make it just to apply the section by reference to the later offers rather than the written final offers. That depends on my assessment of the significance of the new or changed factor, which I have already discussed, and, as I have in substance already indicated, it does seem to me that that factor was a significant factor in relation to the quantification of the plaintiff’s future economic loss, suggesting that it is in the circumstances of this case just to have regard to the later offer.
- [22]In my opinion that consideration is reinforced by the fact that it is clear from the amounts of the various offers that the ultimate agreement between the parties on quantum involved a good deal more movement on the part of the defendant than on the part of the plaintiff. Although the plaintiff did come down quite a bit from her written final offer, at the stage of the conference the defendant was offering nothing, a position which with the benefit of hindsight was clearly unjustified, and even after the plaintiff offered to accept the figure which was ultimately agreed, the defendant made an offer of a much lower figure, $15,000.00 net of the refund, on 21 October 2013. It was really only quite close to trial that it appears to have been recognised by the defendant that its position in relation to quantum was quite unrealistic, and the defendant agreed to compromise quantum in terms of the plaintiff’s offer of 3 June 2013. To the extent that s 316 reflects a legislative policy that parties should be encouraged to make realistic offers of settlement, that policy would be better supported in the present case by a finding that it is just to apply s 316(2)(a).
- [23]It follows that the plaintiff’s offer of 3 June 2013 should under s 318B(4) be treated as the written final offer for the purpose of applying s 316. Hence s 316(2)(a) applies, and accordingly the insurer must pay the plaintiff’s costs on the standard basis from the day of that offer. Presumably this is achieved by making an order for costs against the defendant.[10]The defendant also relied on s 318, which provides that if the amount of damages awarded could have been awarded in a lower court, the court must order any costs in favour of the claimant on the scale applying in the lower court. No submissions were advanced on behalf of the plaintiff as to why that section does not apply, and it seems to me that it does. At the time this proceeding commenced the Magistrates Court had jurisdiction to award damages of $60,000.00, and accordingly the costs must be on the scale of costs applying in the Magistrates Court where the amount recovered is in excess of $50,000.00.[11]
Reserved costs
- [24]Under UCPR r 698, reserved costs follow the event unless a court orders otherwise.[12]Costs were reserved on two occasions, on 17 August 2012 when an order was made by consent and on 29 July 2013 when another Judge adjourned the trial. Given that the order for costs is only in respect of costs from 3 June 2013, it is unnecessary to consider the earlier occasion.
- [25]This matter was originally listed for trial before another Judge on 19 July 2013. On that occasion his Honour ordered that the trial be adjourned to the callover list and reserved costs.[13]It was submitted for the defendant that the trial was adjourned because of the late disclosure by the plaintiff of two expert reports. I note that the associate’s endorsement on the court file records that the order was made by consent. I have read the transcript of proceedings on that day.[14]Initially there was no application by either party to adjourn the trial. Counsel for the plaintiff began by opening the plaintiff’s case, and noted in the process that three reports on which the plaintiff sought to rely, the reports of Mr Turner and Mr McDougall (the same reports that were ultimately relied on before me) and a report of an occupational therapist, Mr Hoey, were objected to by the defendant. The defendant objected to the admissibility of these reports, in the case of Mr Turner’s report, on the grounds of expertise and relevance, and in respect of the reports of Mr McDougall and Mr Hoey, on the ground of late disclosure and of relevance.
- [26]It appears from the transcript that at the point when the objection was raised the response of that Judge was that the matter was not ready for trial.[15]The Judge enquired about what witnesses might be called by defence counsel and was given a list of five or six, and responded by saying that the matter was not going to finish in three days, that a very complex technical matter had arisen, and that the trial should be adjourned.[16]At that point his Honour was invited to read the reports in question, each counsel also handed up written submissions on the objections, and the court adjourned for the Judge to read the material.
- [27]After the adjournment counsel for the plaintiff announced that both parties were seeking an order adjourning the matter back to the callover list on the basis that it would be set down for five days on the next occasion, and reserving the costs. Counsel for the plaintiff said that the order, including that costs be reserved, was by consent and counsel for the defendant agreed.[17]His Honour said at p 1-26 that the orders were made by consent, and then obtained the express agreement to that proposition from both counsel. Accordingly the associate’s endorsement was correct, and insofar as the formal order on file fails to reflect that the order was made by consent, it is defective.
- [28]In these circumstances it is simply not true that the trial was adjourned because of late disclosure on the part of the plaintiff; the trial was adjourned because both parties agreed that it be adjourned. It is true that counsel for the defendant was objecting to the receipt in evidence of two reports on the ground that they had been disclosed late, but counsel for the plaintiff did not ask that Judge to rule on that question so that he could seek instructions as to whether to ask for an adjournment; his approach was to open the case for the plaintiff. Whether he would have sought an adjournment had that Judge upheld all or part of defence counsel’s submissions, I do not know; in fact after it became apparent that the Judge was unwilling to rule on the objections raised by defence counsel and considered that the trial ought to be adjourned, the parties entered into an agreement. There was no decision made at that time by that Judge on those objections.
- [29]As it happens, the objections as to expertise in the case of Mr Turner, and relevance in the case of both liability expert witnesses, were repeated before me, and rejected. There was no occasion for the plaintiff to rely on Mr Hoey’s second report before me, since quantum had been resolved. My clear impression from the transcript is that the real reason why the trial was adjourned in July was that counsel for the defendant took an objection (which, largely, I ultimately overruled), and that Judge was unwilling to deal with it then without having had the opportunity to consider the relevant material in advance.[18]For all I know, if the objection had been limited to the ground of late disclosure of the two reports said to have been disclosed late, that Judge would have decided that question, and the trial would have proceeded.
- [30]A short answer to the defendant’s submission in relation to these reserved costs is that the costs were reserved because on 29 July last year both parties agreed that they be reserved. In those circumstances there is no reason to depart from the consequence provided by the rule.
Conclusion
- [31]I therefore order that the defendant pay the plaintiff’s costs of the action from 3 June 2013 on the Magistrates Court scale applicable where the amount recovered is more than $50,000.00. Apart from its being unnecessary to refer expressly to reserved costs, which are included unless a special order is made under r 698, it is also unnecessary to refer to the assessment being on the standard basis, since costs are assessed on the standard basis unless there is a specific order to the contrary: UCPR r 702(1). It is also unnecessary to order expressly that the costs be assessed, r 686(a), r 687(1), and unnecessary and inappropriate to order that the costs include costs incidental to the proceeding.[19]
Footnotes
[1]This aspect of the judgment was not correctly reflected in the formal judgment. I will therefore order that that judgment be varied under UCPR r 667(2)(d).
[2]An example is then given, concerning a sudden unexpected deterioration of the claimant’s medical condition.
[3]Quoted in part in the affidavit of Patino filed 31 January 2014 para 5; the document is on the court file, as document 7.
[4]Affidavit of Patino Exhibit CJP-2; this is signed by the plaintiff.
[5]It appears in material in the statement of loss and damage that the employment in South Australia was less remunerative than the plaintiff’s position with the defendant. In the 2012-2013 financial year gross earnings were about $52,000 in South Australia, whereas in the 2010-2011 financial year (the last full year before the accident) the plaintiff’s gross earnings in Queensland were over $59,000.
[6]Or return – the plaintiff had worked in South Australia at least from 1 July 2006 to 18 December 2009, as a nurse, according to the updated statement of loss and damage.
[7]No doubt if objection had been taken an affidavit by the plaintiff personally, swearing to facts within her own knowledge, would have been forth coming. At least, it might have been.
[8]And because that seems to have been the intention behind all of the 2010 amendments, which introduced this section: See Workers Compensation and Rehabilitation and Other Legislation Amendment Bill 2010 Explanatory Note p 1, “Reasons for the Bill”.. Cf Klein v Minister for Education (2007) 81 ALJR 582 at [7].
[9]Fortunately a lifetime’s interest in science fiction literature has given me the necessary capacity for suspension of disbelief to permit the mental gymnastics required.
[10]The wording of this section does not reflect the fact that it applies only in respect of proceedings that have been commenced in court, so that its terminology is inapt.
[11]The practical effect of these limitations of date and scale are, I suspect, that the plaintiff will recover about 25% of her actual legal costs, a tribute to the meanness of these statutory provisions.
[12]A point which appears to have been overlooked by both parties in their submissions.
[13]Court file, Document 61.
[14]Helpfully provided by counsel for the defendant.
[15]P 1-15: “It’s not ready – this trial is not ready; I get the feel of it already. It’s not really ready for trial”.
[16]P 1-17.
[17]P 1-25
[18]I know that some Judges like to be given notice of contentious matters, and the opportunity to read relevant documents, in advance of hearings. I do not mean to criticise that approach merely because it is not the way I operate.
[19]Mio Art Pty Ltd v Macequest Pty Ltd (No 2) [2013] QSC 271 at [17].