Toll Pty Ltd v Harradine (No 2)

THE COURT: On 21 December 2016, this Court made the following orders: [1]

The purpose of inviting the parties to reach agreement on short minutes of order was to enable the calculations required to give effect to the Court’s reasons. In particular, it was necessary to determine the adjustments required by reason of the finding in the Principal Judgment that the primary Judge erred in concluding that the respondent (Worker) would have earned $1,661.00 net per week at the date of the trial but for his injuries. [2] The Principal Judgment concluded that the primary Judge’s calculations should be modified by substituting $1,350.00 as the Worker’s net weekly earnings at the date of the trial instead of $1,661.00. [3]

The parties each filed written submissions, although not in conformity with the original timetable. The last submissions were filed on 28 March 2017.

The parties are agreed that the damages for loss of future earning capacity should be $470,408.00, inclusive of $46,592.00 for loss of future superannuation entitlements. [4] (The primary Judge appears to have awarded $614,801.25 under this head, inclusive of loss of future superannuation entitlements. [5] )

The parties are also agreed that the appellant (Toll) is entitled to a credit of $71,631.00 for workers compensation payments already made.

The parties disagree as to the calculation of damages for past loss of earning capacity. The Worker says that the primary Judge’s assessment (apparently $183,018.00 before allowances for superannuation and the Fox v Wood [6] component [7] ) should not be disturbed. Toll says that the assessment should be reduced to take account of the substitution of $1,350.00 as the Worker’s net weekly earnings but for the accident instead of $1,661.00.

Although the Principal Judgment referred to an adjustment to the Worker’s net weekly earnings (but for the accident) at the date of the trial, an adjustment must also be made to the assessment of damages for past loss of earning capacity. On this basis, the Worker does not dispute Toll’s calculations which are as follows:

It follows that judgment should be entered for the Worker in the sum of $660,898.00 (that is, $470,408.00 plus $190,490.00). A notation should be made that Toll is entitled to a credit of $71,631.00 for workers compensation payments that have already been made.

The Worker submitted that the costs of the District Court proceedings fall to be determined in accordance with the Workers Compensation Regulation 2016 (NSW) (WC Regulation) reg 94, which provides as follows:

It is common ground that the Worker’s final offer at a mediation held on 13 July 2015 was:

The outcome of the appeal is that judgment is to be entered for the Worker in the sum of $660,898.00 and Toll is entitled to a credit for $71,631.00 for workers compensation payments. Neither party has informed the Court as to the amount of workers compensation paid as at the date of mediation. Nor have the parties explained how the sum of $71,631.00 has been calculated, bearing in mind that the judgment entered by the primary Judge noted that $309,667.00 was to be credited to the amount of the judgment “owing to workers compensation payments that have already been made”.

In the absence of the necessary information, it is not clear whether the Worker has obtained judgment no less favourable than the terms of his final offer of settlement. In these circumstances, the appropriate order is that each party pay his or its own costs of the District Court proceedings.

The Worker submits that, although Toll succeeded on the appeal, no order should be made in its favour for the costs of the appeal because of s 346 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIM Act) and WC Regulation reg 96. Section 346 of the WIM Act provides as follows:

In Smith v Sydney West Area Health Service (No 2) [9] (Smith), this Court held that s 346 of the WIM Act and reg 91 of the Workers Compensation Regulation 2003 (NSW) (a predecessor to reg 96 of the WC Regulation) displaced s 98 of the Civil Procedure Act 2005 (NSW) (CP Act) in a case involving a claim for work injury damages. Section 98(1) provides that costs are in the discretion of the Court, subject to the rules of the Court, the CP Act itself or any other Act. However, that discretion is displaced in cases to which s 346(1) of the WIM Act applies. [10]

The Court in Smith also said that the expression “in relation to” in s 346(1) of the WIM Act is of “particularly wide import” and “is designed to catch matters that have a sufficient nexus to the subject matter of the provision”. [11] Accordingly, the Court held that the language of s 346(1) is wide enough to apply to proceedings in the Court of Appeal if they are in relation to a claim for work injury damages.

Toll submitted that Smith is distinguishable from the present case because the proceedings in this Court, although ultimately resulting in an award for “work injury damages”, cannot properly be regarded as “in or in relation to a claim for work injury damages”. This submission rests on the proposition that what was in dispute on the appeal was the Worker’s claim to damages assessed pursuant to the provisions of the Motor Accidents Compensation Act 1999 (NSW) (MAC Act) and not any claim by the Worker to work injury damages.

The Worker’s Amended Statement of Claim in the District Court proceedings made a claim pursuant to the MAC Act or, in the alternative, pursuant to Part 5 of the Workers Compensation Act 1987(NSW) (WC Act) and Part 6 of the WIM Act. The point at issue at the trial and on appeal was whether the Worker’s claim for damages was to be dealt with under the MAC Act or as a claim for work injury damages. In the latter case, the Worker’s damages would be assessed in accordance with the “more restrictive regime” established by the WC Act and the WIM Act. [12] The outcome of the appeal, as Toll’s initial submissions on costs specifically stated, is that the Worker’s damages are to be assessed on the basis that his claim is “limited to a work injury damages claim”.

In Chubs Constructions Pty Ltd v Chamma (No 2), [13] this Court held that an appeal in respect of costs ordered in proceedings for work injury damages had “a sufficient, indeed an obvious nexus to such proceedings, so as to fall within s 346(1)”. The very point of this appeal, from Toll’s perspective, was to limit the Worker to his claim for work injury damages. This has a sufficient, indeed obvious nexus with a claim for work injury damages such as to attract s 346(1) of the WIM Act.

In conformity with WC Regulation reg 96, each party to the appeal should bear his or its own costs.

The following orders additional to those in the Primary Judgment should be made: