Osei v P K Simpson Pty Ltd

1. [1]

   WHITE JA: This is an application for leave to appeal from orders of the District Court (Osei v PK Simpson & Co Pty Ltd and Carney [2021] NSWDC 74 (Scotting DCJ)).

2. [2]

   The applicant, Mr Osei, was the plaintiff in the court below. He sued his former solicitor (PK Simpson & Co) and barrister (Mr Carney) in respect of allegedly negligent advice given to him to compromise proceedings he had brought in the Workers Compensation Commission.

3. [3]

   Mr Osei’s claim in the Workers Compensation Commission arose from his working as a taxi driver. On 7 March 2010 when working as a contractor for Sunrise Cabs Pty Ltd, Mr Osei was assaulted and sustained physical and psychological injury. His claim for workers’ compensation was provisionally accepted. On 22 April 2010 CGU Workers Compensation (NSW) Ltd (“CGU”) acting as agent for “the NSW WorkCover Scheme” advised Sunrise Cabs that CGU had approved payment of weekly benefits and assessed Mr Osei’s current weekly wage rate at $960.18 per week (subject to change).

4. [4]

   The primary judge recorded that on or about 8 November 2011 the insurer ceased paying weekly compensation to Mr Osei (at [20]).

5. [5]

   Between 12 December 2011 and 10 July 2012 Mr Osei filed three applications in the Workers Compensation Commission for reinstatement of weekly benefits. The first two applications were discontinued. The third was settled on 29 January 2013. Orders were made by consent following a conciliation hearing before an arbitrator of the Commission, Ms Nicholl. Pursuant to the parties’ agreement, the Commission determined the matter as follows:

6. [6]

   On 28 January 2019 the applicant sued the respondents in the District Court claiming damages for negligent provision of legal services in connection with the settlement of 31 January 2013 in the Commission.

7. [7]

   The primary judge found that Mr Carney, the applicant’s barrister, was in breach of his duty of care owed to the applicant by giving inadequate advice to the applicant which induced the applicant to accept the compromise (J [122]). The primary judge found that PK Simpson & Co was in breach of its duty by failing to correct the barrister’s advice, and encouraging the applicant to bring a work injury damages claim that PK Simpson & Co knew was hopeless and was an irrelevant consideration to his decision to settle the proceedings before the Commission. In addition, both the barrister and solicitor were in breach of their duty of care by failing to ensure that the legal advice given was interpreted to the applicant in his first language (J [122] and [123]).

8. [8]

   There is no application for leave to cross-appeal from these findings.

9. [9]

   The claim for damages was a claim for pure economic loss of the chance of recovering a greater award of workers’ compensation benefits than was achieved by the compromise (Johnson v Perez (1988) 166 CLR 351 at 366, 371-372, 389-390; Nikolaou v Papasavas Phillips & Co (1989) 166 CLR 394 at 400, 402-404).

10. [10]

    The assessment of the value of the loss of the chance of recovering compensation required the primary judge to assess the applicant’s prospects of success on his application before the Commission. Where it was not clear that the applicant would certainly have succeeded, nor that he would certainly have failed, his chance of success was to be estimated as a percentage of an assessment of the amount of compensation to which he would have been entitled had he wholly succeeded (Johnson v Perez at 372; Firth v Sutton [2010] NSWCA 90).

11. [11]

    This was how the primary judge approached the question (J [147]). His Honour said:

12. [12]

    The applicant did not dispute these conclusions.

13. [13]

    It would have been necessary for the Commission to calculate the applicant’s current weekly wage. As explained below, the applicant did not have any records to establish his weekly earnings at the date of his injury.

14. [14]

    In 2020 the applicant filed an application in the Workers Compensation Commission seeking payments of weekly compensation for the period from 1 February 2013 to 14 June 2013 and unpaid s 60 expenses (J [86]). The primary judge recorded:

15. [15]

    The primary judge found (J [152]) that the arbitrator’s determination of 26 November 2020 formed the basis for a reasonable estimation of the plaintiff’s pre-injury average weekly earnings. His Honour concluded:

16. [16]

    After further deductions (that are not in dispute) for the amount of the settlement, the amount of a disability support pension and taxation, the primary judge determined $21,683.26 as the amount for which the applicant was out of pocket by having compromised the claim, instead of pursuing it to a successful conclusion.

17. [17]

    The primary judge then applied a discount for the chance of his not succeeding before the Commission of 40%, thus arriving at an assessment of $13,009.96 as the value of his loss of a chance to have had his claim determined by the Commission (J [156]-[159]).

18. [18]

    With the addition of interest, the applicant was entitled to a judgment of $19,086.65.

19. [19]

    It was common ground that the applicant’s claim was an apportionable claim within the meaning of s 34 of the Civil Liability Act 2002 (NSW). The primary judge apportioned the loss 70% to be borne by the solicitor and 30% by the barrister (J [170], [175]). As a result a verdict was given against PK Simpson & Co in the sum of $13,360.65 and against Mr Carney in the sum of $5,726.

20. [20]

    The claim was heard in the District Court over four days in August 2020 and on four further days between 2 October 2020 and 15 March 2021.

21. [21]

    In a second judgment given on 17 June 2021 (Osei v PK Simpson & Co Pty Ltd and Carney [2021] NSWDC 254) the primary judge determined the issues of costs. His Honour ordered that the respondents pay the applicant’s costs of the proceedings in the sum of $10,000 apportioned 70% to PK Simpson & Co and 30% to Mr Carney.

22. [22]

    The primary judge held that the applicant’s costs were capped at $10,000 by cl 2 of Sch 1 of the Legal Profession Uniform Law Application Act 2014. Clause 2 provides:

23. [23]

    Clause 1 of Sch 1 includes a definition of “personal injury damages”. Clause 1 provides:

24. [24]

    In Pt 2 of the Civil Liability Act “personal injury damages” is defined in s 11 as follows:

25. [25]

    “Injury” is defined in s 11 as follows:

26. [26]

    The primary judge considered the High Court’s decision in Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378; [2012] HCA 56, and Harrison AsJ’s decision in Hammond v Stern [2013] NSWSC 70. He concluded that the damages awarded to the applicant were “personal injury damages” as defined in s 11 of the Civil Liability Act and therefore that his costs were capped at $10,000.

27. [27]

    The applicant initially filed a notice of appeal asserting an entitlement to appeal as of right. There were seven grounds of appeal. Later, the applicant filed a summons seeking leave to appeal. Ultimately he acknowledged that leave to appeal was required and relied upon a revised notice of appeal that raised only two grounds. The grounds on which leave to appeal is sought are as follows:

28. [28]

    The raising and abandonment of the other grounds upon which the applicant originally relied, and to which the respondent filed responsive written submissions, has costs consequences to be considered later.

29. [29]

    The application for leave to appeal and the appeal, if leave be given, were heard concurrently.

Ground 3

1. [30]

   I would not give leave to the applicant to appeal on ground 3. The ground raises no issue of principle nor potential injustice that is more than merely arguable (Be Financial Services Pty Ltd v Das [2012] NSWCA 164 at [32]-[39]; The Age Company Ltd & Ors v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]).

2. [31]

   Although not an employee of Sunrise Cabs, the applicant was a deemed employee of that company pursuant to cl 10 of Sch 1 to the Workplace Management and Workers Compensation Act 1998. He had no records to substantiate his claimed weekly loss of earnings.

3. [32]

   The primary judge found that the applicant, who had migrated to Australia in 1989, established an export business in about 1997 whereby he bought second hand clothing and exported it to Ghana (J [10] and [11]). His Honour also found that from about late 2009 the applicant worked 12 hour shifts as a taxi driver where he hired taxis from their owners on a shift-by-shift basis. He paid a hire fee and paid for fuel and kept the takings (J [12]).

4. [33]

   The applicant had no records to substantiate his earnings as a taxi driver. His tax returns for the years ended 30 June 2009 and 2010 recorded his main salary or wage occupation as being that of an “importer”. His tax returns disclosed an income from his salary or wage as an importer and “other business income” against which were set off expenses which exceeded his income. The expenses comprised “purchases and other costs”, depreciation, motor vehicle expenses and other expenses. They contain no corroboration of his earning income as an independent contractor driving taxis. Nor were they inconsistent with his contention that he had derived such income.

5. [34]

   The first two applications before the Workers Compensation Commission were discontinued in order that the applicant could seek corroborative evidence of his working as a taxi driver and his claim to have earned $1,000 per week as a taxi driver (J [27]). According to his solicitor before the Workers Compensation Commission, Mr Eggins of PK Simpson & Co, the applicant’s accountant, Mack Partners, provided a letter dated 3 April 2012 in which they advised that they were the tax agents for the applicant, that he had two businesses, an importing business which was his core business and a taxi driving business for which he earned $1,000 per week. They advised that the amount had not been audited. Mr Eggins deposed that he received a copy of a statutory declaration prepared by the plaintiff dated 4 April 2012, which was handwritten and difficult to read. That document was not reproduced in the appeal papers. Mr Eggins deposed that, on his reading of the document, the applicant declared that he had no information to provide as he always recorded his time and hours on a worksheet and any enquiries regarding such information should be directed to Sunrise Cabs.

6. [35]

   The primary judge recorded that the evidence filed with the third application in the Commission included a statement from the applicant and correspondence from his accountant explaining the inability to produce financial records. The primary judge said that the applicant’s business activity statements and income tax returns had been prepared on the basis of primary records provided to him by the applicant which had been returned to him. The applicant said that those records were lost when he was evicted from his residence.

7. [36]

   Sunrise Cabs was deregistered on 2 January 2011. The primary judge said that the correspondence and subpoenas addressed to Sunrise Cabs was sent at a time when it was in the process of being deregistered and was unlikely to be answered (J [38]).

8. [37]

   There may have been a number of reasons why no documents to substantiate the applicant’s claimed earnings were obtainable on subpoena from Sunrise Cabs. One may have been that the documents were destroyed after Sunrise Cabs was deregistered. Another may have been that Sunrise Cabs was not itself the owner of the vehicles that were the subject of a contract of bailment between the owner of the vehicle and the applicant, but rather managed the arrangements for such bailments between the driver and the owner of the vehicle. If that were the position, there would be a real question as to whether Sunrise Cabs, as distinct from the owner of the vehicle which the applicant was driving on the night he was assaulted, would be taken to be his employer. A third possibility was that there were no records to produce because the applicant had only hired a taxi from Sunrise Cabs on the day on which he was assaulted. Although the document was not reproduced in the appeal papers, the primary judge recorded that a statement prepared by the insurer had been taken from a Krishna Narula, the proprietor of Sunrise Cabs, who stated that the applicant had only hired a taxi from Sunrise Cabs on the one occasion, being the date on which he was assaulted and had had no prior relationship with the company. The applicant disputed the truth of the statement (J [38]).

9. [38]

   Mr Narula’s statement tendered in the proceedings in the District Court would not have been evidence of the facts asserted. But it was evidence that would have been before the Commission had the proceedings not been settled at the conciliation hearing before the Commission but proceeded to arbitration. Whether Mr Narula or the plaintiff would have given oral evidence before the arbitrator, or whether the matter would have been decided on the papers, is not known. The primary judge recorded that in the conciliation hearing the arbitrator queried whether the applicant could prove wage loss from his inability to work as a taxi driver (J [30]).

10. [39]

    The primary judge’s discount of 40% of the maximum amount, which the applicant could have achieved before the Commission had the matter proceeded to a contested hearing, was open to him. The case raises no question of principle. I would refuse leave to appeal on ground 3.

Ground 4

1. [40]

   Ground 4 raises an important issue concerning the application of cl 2 of Sch 1 to the Legal Profession Uniform Law Application Act. The issue has not been decided in this Court and, for the reasons that follow, is not determined by the judgment of the High Court in Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378 which the primary judge applied.

2. [41]

   The primary judge followed the decision of Harrison AsJ in Hammond v Stern [2013] NSWSC 70 in which the same issue arose. Harrison AsJ’s decision was affirmed on appeal by Button J (Hammond v Stern (2014) 86 NSWLR 612; [2014] NSWSC 864). It appears that the primary judge was not referred to Button J’s decision. Nonetheless it supports the primary judge’s conclusion. Both the judgments of Harrison AsJ and Button J are carefully reasoned. Nonetheless, for the reasons which follow, I do not think that they are consistent with the conclusion of the majority of the High Court in New South Wales v Williamson (2012) 248 CLR 417; [2012] HCA 57. Accordingly, I would give leave to the plaintiff to appeal on ground 4.

3. [42]

   Ground 4 turns upon the proper interpretation to be given to cl 2 of Sch 1 to the Legal Profession Uniform Law Application Act when read with the definition of “personal injury damages” in cl 1(1) of the Schedule and the definition of that term in s 11 of the Civil Liability Act. When the definition of “personal injury damages” is read into cl 2 of Sch 1 it relevantly provides:

4. [43]

   The applicant’s claim for damages was for economic loss of his chance to receive payments of weekly workers’ compensation payments following his injuries when assaulted in the course of his work as a taxi driver. The genesis of his claim was his suffering injury. If he had not been injured he would have had no claim to workers’ compensation payments and no chance of receiving an award. Hence the respondents submitted that his claim for damages related to his injury even though his claim was not a claim for damages for personal injury. The respondent submitted that the words “relate to” denote any connection between the death or injury to a person and the claim for damages. They submitted that it was sufficient that the claim for damages for loss of the chance of receiving workers’ compensation payments arose from the applicant’s having suffered injury and it therefore followed that the claim for such damages related to injury to the applicant within the meaning of cl 2(1) of the Schedule. They relied on the decision of the High Court in Certain Lloyd’s Underwriters v Cross and of Button J in Hammond v Stern.

5. [44]

   In the course of oral submissions it was pointed out from the Bench that judgment had been given against each respondent for its and his apportionable responsibility for the claim. Section 34(1) of the Civil Liability Act relevantly provides:

6. [45]

   The judgments given against each respondent were thus given on the conceded basis that the applicant’s claim was one for economic loss that was not a “…claim arising out of personal injury”.

7. [46]

   When this was pointed out, Ms Steele SC, who appeared with Mr Beran for the respondents, submitted that whether or not the matter was caught within Pt 4 of the Civil Liability Act, and how it was dealt with in that Part, was not relevant to whether it fell within the definition of personal injury damages under cl 2 of Sch 1 to the Legal Profession Uniform Law Application Act. She submitted that in Certain Lloyd’s Underwriters v Cross the High Court held that the scheme under Sch 1 of the Legal Profession Uniform Law Application Act operated independently of the Civil Liability Act.

8. [47]

   The applicant submitted that his claim for damages for professional negligence for economic loss of the chance to recover workers’ compensation payments had a different character from his earlier claim in the Commission. He submitted that his claim did not “relate to” the “death of or injury to a person” but rather “related to” the breach by legal practitioners of their common law duty of care. The applicant submitted that cll 2(1) and (4)(b) of Sch 1 to the Legal Profession Uniform Law Application Act apply only to cases in which a direct claim for personal injury damages is brought.

9. [48]

   The applicant also submitted that it would be incongruous if a lawyer who is negligent in the conduct of his or her client’s claim for personal injury damages, or workers’ compensation arising from personal injury, could take the benefit of the cap provided in cl 2 of Sch 1 to the Legal Profession Uniform Law Application Act. The applicant submitted that it was clear that that was not the purpose for which the provision was passed.

10. [49]

    Section 33 of the Interpretation Act 1987 (NSW) requires that in the interpretation of cl 2 of Sch 1 of the Uniform Law Application Act a construction be adopted that would promote the purpose or object underlying the provision, in preference to one that would not promote that purpose or object. The extrinsic materials whose use is permitted by s 34 of the Interpretation Act may be considered either to confirm that the legal meaning of the Act is the ordinary meaning conveyed by the text, or to determine the meaning of the provision if it is ambiguous or obscure or if the ordinary meaning would lead to a result that is manifestly absurd or unreasonable.

11. [50]

    The predecessor to Sch 1 to the Uniform Law Application Act was introduced by an amendment to the Legal Profession Act 1987 made by the Civil Liability Act 2002 No 22. Section 198D introduced to the Legal Profession Act 1987 in 2002 was in substantially the same terms as the current cl 2 of Sch 1 to the Uniform Law Application Act. That section was substantially replicated in the Legal Profession Act 2004 and re-enacted in the Uniform Law Application Act.

12. [51]

    In the Second Reading Speech for the Civil Liability Bill that introduced s 198D of the Legal Profession Act 1987, the then Premier stated that the object of the proposed Act was to reduce public liability premiums. This object informed the amendments made to the Legal Profession Act. The Premier also said that the cap on fees would promote efficiency on the part of the legal profession and help to contain costs (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 28 May 2002 at 2085-2086). In Certain Lloyd’s Underwriters v Cross Kiefel J said (at [95]):

13. [52]

    It may be accepted that the interpretation of cl 2 of Sch 1 to the Uniform Law Application Act for which the respondents contend, would not promote the purpose or object of the legislation of reducing premiums for policies of public liability insurance. It does not follow from s 33 of the Interpretation Act that the contrary construction should, on that account, be preferred. Neither the construction contended for by the applicant, nor that contended for by the respondent, would promote the purpose or object underlying the amendments made in 2002 of seeking to reduce public liability insurance premiums. The fact that the 2002 amendments, that have been brought forward to the current Act, were not enacted for the purpose of promoting the interests of professional indemnity insurers, or their policy holders or shareholders, is a neutral consideration.

14. [53]

    The words “relate to” on their face denote a wide connection between the claim for damages and a person’s death or injury. In Hammond v Stern (2014) 86 NSWLR 612; [2014] NSWSC 864, Button J rightly observed:

15. [54]

    In Certain Lloyd’s Underwriters v Cross the plaintiffs sued for damages for personal injury suffered as a result of an assault by hotel security staff. They sued the defendants as insurers of the company that employed the staff. They alleged that personal injuries were inflicted on them intentionally and with an intention to injure (at [2]). The claim was settled for less than $100,000 on the basis that the defendant would pay the plaintiffs’ costs. The issue was whether the costs were capped at $10,000 pursuant to s 198D(1) of the Legal Profession Act 1987, that was in materially the same terms as what is now cl 2 of Sch 1 to the Uniform Law Application Act. Costs payable to an applicant for compensation under Pt 2 of the Victim Support and Rehabilitation Act 1996 (NSW), for legal services provided in respect of a claim under the Motor Accidents Compensation Act 1999 or a claim for work injury damages as defined in the Workplace Injury Management and Workers Compensation Act 1998, or for damages for dust diseases brought under the Dust Diseases Tribunal Act 1989 were excluded from the operation of s 198D by s 198C(2) (at [5]). The same exclusions are now found in cl 1(2) of Sch 1 to the Uniform Law Application Act.

16. [55]

    Section 9(2) of the Civil Liability Act (subsequently repealed by cl 5 of Sch 2 of the Civil Liability Amendment (Personal Responsibility) Act 2002 and substantially replaced by s 3B) provided that

17. [56]

    Section 3B(1)(a) now relevantly provides:

18. [57]

    The issue in Certain Lloyd’s Underwriters v Cross was whether as the damages recovered were in respect of alleged intentional acts committed with the intention of causing injury such that Pt 2 of the Civil Liability Act did not apply to the cause of action alleged, s 198D(1) of the Legal Profession Act fixing the amount of costs for legal services provided in connection with a claim for “personal injury damages” also did not apply. “Personal injury damages” was defined as having the same meaning as in Pt 2 of the Civil Liability Act 2002.

19. [58]

    The Court of Appeal (Cross v Certain Lloyd’s Underwriters; Thelander v Certain Lloyd’s Underwriters [2011] NSWCA 136) held that the phrase “personal injury damages” did not merely pick up the words of the definition in the Civil Liability Act, but took account of the meaning of that term by reference to the application section of the Civil Liability Act. As the Civil Liability Act did not apply to the particular claim for personal injury damages, it was held that the cost capping provision in the Legal Profession Act 1987 did not apply (at [49], [59]).

20. [59]

    A majority of the High Court (French CJ, Hayne and Kiefel JJ) disagreed. French CJ and Hayne J said:

21. [60]

    An additional reason for rejecting the decision of the Court of Appeal was that the exclusions to the operation of the Civil Liability Act and the exclusions to the costs limiting provisions in the Legal Profession Act did not have a coextensive operation (at [36]).

22. [61]

    Kiefel J also held that the two statutes operated independently of each other and that there was no warrant for reading the Legal Profession Act by reference to the application of the Civil Liability Act (at [102]-[103]). Her Honour said:

23. [62]

    Crennan and Bell JJ dissented. They held that the extrinsic materials indicated that the Civil Liability Act was enacted to deal with a perceived problem involving the high cost of negligence claims and that the costs limitations provisions in the Legal Profession Act were enacted to remedy the same problem. As the Civil Liability Act did not apply to the intentional infliction of personal injury, s 198C and 198D of the Legal Profession Act 1987 ought not be construed as if the definition of “personal injury damages” had the same meaning as in s 11 of the Civil Liability Act but rather the reference to that phrase having the same meaning as in Pt 2 of the Civil Liability Act meant that the costs capping provision in the Legal Profession Act applied only to those claims for personal injury damages that fell within the operation of Pt 2 of the Civil Liability Act (at [58]-[60]).

24. [63]

    Certain Lloyd’s Underwriters v Cross did not address the issues raised in the present appeal. There was no issue in that case as to the width of the words “damages that relate to the death of or injury to a person” in the definition of personal injury damages as applied in the Legal Profession Act. That issue did arise in New South Wales v Williamson. Again, the plaintiff’s claim was compromised for less than $100,000 on the basis that the defendant would pay the plaintiff’s costs. The question was whether the costs were capped. Section 338(1)(a) of the Legal Profession Act 2004 (NSW) imposed the cap where the amount recovered on a “claim for personal injury damages” did not exceed $100,000. Section 337(1) provided that “personal injury damages” had the same meaning as in Pt 2 of the Civil Liability Act 2002. Section 11 of the Civil Liability Act is in the same terms as quoted earlier in these reasons, as meaning “damages that relate to the death of or injury to a person”.

25. [64]

    In New South Wales v Williamson the plaintiff alleged that he had been unlawfully arrested and assaulted by police officers and then dragged to his feet and lifted into the back of a police wagon and further assaulted. The pleaded facts, if established, would give rise to causes of action in assault and battery, and false imprisonment. He claimed exemplary damages. His particulars of injury and disability included psychological injury as well as feelings of humiliation, indignity, anger and frustration (State of New South Wales v Williamson [2011] NSWCA 183 at [13]-[14]).

26. [65]

    The claim was settled for a sum of less than $100,000 plus costs and the issue was whether costs were capped by s 338 of the Legal Profession Act 2004.

27. [66]

    In the Court of Appeal, Campbell JA who gave the leading judgment said:

28. [67]

    Hodgson JA said (at [2]):

29. [68]

    Macfarlan JA also agreed with Campbell JA’s reasons on this issue ([117]).

30. [69]

    In the High Court the State of New South Wales submitted:

31. [70]

    In the opening oral submissions of counsel for the State the argument was put thus:

32. [71]

    That submission was rejected.

33. [72]

    All of the Justices of the High Court dismissed the appeal. Crennan and Bell JJ, who dissented in Certain Lloyd’s Underwriters v Cross, did so on the basis that a claim for “personal injury damages” did not include a claim for damages for personal injury occasioned by an act done with the intention of causing injury (at [39]). Kiefel J agreed with the reasons of French CJ and Hayne J that a claim for personal injury damages did not include a claim for damages for false imprisonment (at [45]). French CJ and Hayne J noted (at [32]) that the plaintiff alleged that the batteries he had suffered had caused him personal injury. Their Honours observed that it was far from clear that he alleged that the wrongful deprivation of his liberty had itself impaired his physical or mental condition (at [32]) but assumed that he alleged his false imprisonment had caused him some personal injury (at [34]). Their Honours held that even on that assumption, because the claim for false imprisonment necessarily included a claim for damages on account of the deprivation of liberty with accompanying loss of dignity and harm to reputation (which is not itself physical injury as defined), the claim for false imprisonment, to the extent it sought damages for deprivation of liberty, was not a “claim for personal injury damages” (at [34]). Their Honours said:

34. [73]

    The majority of the High Court must be taken to have rejected the appellant’s submission that to satisfy the requirement that the claim for damages for loss of dignity as a result of false imprisonment “related to” the plaintiff’s injury, it was enough that the same false imprisonment had caused him psychological injury, so that each head of damage claimed “related to” injury to the plaintiff.

35. [74]

    Rather, it was held both in the Court of Appeal and in the High Court that because some part of the damages claimed for false imprisonment was not damages “for” personal injury and because the settlement was for an indivisible sum, it was not possible to say that the amount received was an amount recovered “on a claim for personal injury damages”.

36. [75]

    It follows that the majority of the High Court in New South Wales v Williamson did not read the words in s 11 of the Civil Liability Act “damages that relate to the death of or injury to a person” as having a wider sense than as meaning damages for personal injury or death to a person.

37. [76]

    In this appeal the respondent submitted that:

38. [77]

    I do not agree.

39. [78]

    In Certain Lloyd Underwriters v Cross the majority of the High Court adopted a literal interpretation of the legislation in rejecting the purposive construction adopted by this Court that the expression “personal injury damages” in s 198C(1) of the Legal Profession Act 1987 applied only to such damages (as defined) to which Pt 2 of the Civil Liability Act applied. The Court did not otherwise address the scope of the expression “relate to” in the definition of “personal injury damages” in s 11 of the Civil Liability Act.

40. [79]

    That issue was addressed by the High Court in New South Wales v Williamson. There, the ambiguous but potentially wide expression “relate to” was construed in the narrow sense of meaning “for”.

41. [80]

    In Hammond v Stern [2013] NSWSC 70 (Harrison AsJ) and Hammond v Stern (2014) 86 NSWLR 612; [2014] NSWSC 864 (Button J) the plaintiff sued his former lawyers for professional negligence for loss of lump sum workers’ compensation and for common law damages for personal injury as a result of his lawyers not having brought such claims in earlier litigation. The claim against his former lawyers was settled for $60,000. The issue was whether his costs were capped pursuant to s 338(1)(a) at 20% of the amount recovered. At first instance, Harrison AsJ, and on appeal Button J, held that the costs were so capped.

42. [81]

    Harrison AsJ held that the claims “related to” the personal injury suffered by the plaintiff. Her Honour quoted that part of para 41 of the reasons of French CJ and Hayne J in Cross where their Honours said:

43. [82]

    Her Honour rejected the plaintiff’s submission that the claim that a possible claim for personal injury damages was squandered or allowed to cease to exist was not itself a claim for personal injury damages (at [37] and [45]).

44. [83]

    On appeal (Hammond v Stern (2014) 86 NSWLR 612; [2014] NSWSC 864), Button J focused on the width of the expression “relate to” in the definition of personal injury damages in s 11 of the Civil Liability Act. Button J correctly observed that the expression is potentially one of broad import and can denote a connection or relationship, direct or indirect, between one subject matter and another, but that its meaning must depend upon context (at [45]-[47] quoted above).

45. [84]

    Button J said:

46. [85]

    Evidently Button J was not assisted with submissions directed to the necessary point upon which Williamson was decided as to the scope of the phrase “relate to”.

47. [86]

    In the absence of appropriate submissions as to the reasoning of the majority of the High Court in New South Wales v Williamson, Button J concluded as follows:

48. [87]

    If the matter were free from authority and the question were only one of literal construction, there would be much to be said for this construction. But the matter is not free from authority. The decision of this Court in State of New South Wales v Williamson and of the High Court in New South Wales v Williamson does not permit a construction of the phrase “that relates to” as connoting a merely indirect connection between the claim for damages and the personal injury to which the claim for damages relates. New South Wales v Williamson requires that the claim for damages be a claim for the personal injury suffered.

49. [88]

    That construction is consistent with the purpose of the original amendments to the Legal Profession Act that was the progenitor of the current legislation, that had the purpose of reducing the cost of public liability insurance and was concerned with legal costs associated with claims for personal injury damages where the sum recovered was no more than $100,000 (Certain Lloyd’s Underwriters v Cross per Kiefel J at [99] and [103]).

50. [89]

    The fourth of Button J’s reasons (Hammond v Stern at [63]) referred to the decision of Allsop P, with whom Macfarlan and Young JJA agreed in Firth v Sutton [2010] NSWCA 90. There a solicitor was found liable in negligence for failing properly to pursue his client’s claim for personal injuries. No complaint was made in relation to the prosecution of the client’s workers’ compensation claim (at [17]). Button J said that in Firth v Sutton Allsop P “…affirmed the application of s 18 of the Civil Liability Act to the determination of interest on damages in a professional negligence suit founded on personal injury” (at [34]).

51. [90]

    I do not read Allsop P’s reasons in Firth v Sutton as having expressed any view upon the application of s 18 to the awarding of interest on the action for the lost opportunity to pursue a personal injury damages claim. As I read his Honour’s reasons, Allsop P considered that the primary judge was correct in characterising the claim as a loss of opportunity action but expressed no view on the primary judge’s determination that interest was controlled by s 18 of the Civil Liability Act. Rather, his Honour invited submissions from the parties on the question of interest, expressing no view as to whether the primary judge’s approach was correct (at [189]-[192]).

52. [91]

    When the matter returned for the entry of final orders the parties provided calculations of interest. Both parties’ calculations used the long term bond rate provided for by s 18 (Firth v Sutton (No 2) [2010] NSWCA 109 at [4]). The Court was not called on to decide the issue.

53. [92]

    I respectfully disagree with the observations of Hoeben J (as his Honour then was) in Pritchard v Trius Constructions Pty Ltd & Ors (No 2) [2011] NSWSC 1114, where his Honour considered that Allsop P had expressed a view in favour of the approach adopted by the primary judge in Firth v Sutton in regard to the interest payable, such that his Honour was bound by the authority of Firth v Sutton to find that interest on a claim for professional negligence in the conduct of a claim for personal injury damages was governed by s 18 ([22]).

54. [93]

    In any event, the question is to be determined not in the light of Firth v Sutton, but having regard to the High Court’s reasoning in New South Wales v Williamson. For the reasons above, New South Wales v Williamson requires a narrower construction of the words “relate to” than their connoting an indirect connection but requires them to be read in the narrower sense of “for”.

55. [94]

    For these reasons I would uphold ground 4 of the notice of appeal. Order 1 made by the primary judge on 17 June 2021 should be varied by deleting the cap of $10,000. The respondents did not dispute that it was appropriate that they pay the applicant’s costs of the proceedings in the District Court in the proportions 70% to the first respondent and 30% to the second respondent.

56. [95]

    Although the applicant is entitled to succeed on one of the grounds on which he sought leave to appeal, he has either abandoned or failed on the other grounds on which he sought leave to appeal. The ground on which he has succeeded raised a separable issue. The parties have had mixed success on the application.

57. [96]

    Prima facie costs will follow the event. But the applicant advanced two claims: one concerning the quantum of damages, the other costs. He failed on the first and succeeded on the second. The issues are separable. Where parties have had mixed success on separable issues such that it is not appropriate that a successful plaintiff or appellant (or defendant or respondent) receive the whole of his or her costs, the perspective of both parties is to be considered (Oikos Constructions Pty Ltd t/as Lars Fischer Constructions v Ostin & Anor (No 2) [2021] NSWCA 98 at [28]). The respondent succeeded on the applicant’s claim for leave to appeal on the quantum of damages claim and would be entitled to its costs of that claim and the grounds the applicant abandoned.

58. [97]

    Having regard not only to the two grounds that were the subject of the oral submissions, but the other grounds that were the subject of extensive written submissions but were abandoned, I cannot say that more costs would have been spent in this court on the ground that succeeded than on the grounds which were abandoned or failed.

59. [98]

    I would make no order as to the costs of the summons for leave to appeal and of the appeal.

60. [99]

    I therefore propose the following orders:

    1. (1)

       Grant the applicant leave to appeal on ground 4 of the proposed “revised draft notice of appeal” dated 18 October 2021.

    2. (2)

       Otherwise dismiss the applicant’s summons for leave to appeal.

    3. (3)

       Order that within seven days the applicant file a notice of appeal in accordance with the leave granted.

    4. (4)

       Allow the appeal against order 1 made in the District Court on 17 June 2021.

    5. (5)

       Vary the order made by the District Court on 17 June 2021 by deleting the words “in the sum of $10,000”.

    6. (6)

       No order as to costs of the summons for leave to appeal or the appeal, with the intent that the parties bear their own costs of the proceedings in this Court.

61. [100]

    McCALLUM JA: Save as to the issue of the costs of the summons for leave to appeal and of the appeal, I agree with White JA, for the reasons his Honour has stated. I also agree with Garling J’s additional reasons. As to the issue of the costs of the summons for leave to appeal and of the appeal, I agree with Garling J. Accordingly, I agree with orders 1 to 5 proposed by White JA and order 6 proposed by Garling J.

62. [101]

    GARLING J: I agree with White JA that leave ought to be granted to the applicant on Ground 4 of the proposed Notice of Appeal, and that his appeal ought to be allowed. I would not grant leave to appeal on the other proposed ground of appeal.

Cap on Costs Issue

1. [102]

   I wish to add these reasons to the judgment of White JA. I will refer to the applicant as the appellant.

2. [103]

   Ground 4 raises a matter of the proper interpretation of Cll 1 and 2 of Sch 1 of the Legal Profession Uniform Law Application Act 2014 (“the LP Act”). The relevant provisions are set out at [22]-[25] above.

3. [104]

   Until the appellant’s lawyers acted negligently, he made no claim for damages of any kind against anyone. Whilst he claimed to have been physically injured at work as a taxi driver, the appellant’s claim was that he had a statutory entitlement from his deemed employer for weekly payments pursuant to the Workers Compensation Act 1987 (NSW).

4. [105]

   The factual circumstances in which the appellant’s injuries occurred did not give rise to, nor did the appellant ever claim to be entitled to, an award of damages for his injuries against anyone, much less his lawyers whom he retained only after his injuries had occurred.

5. [106]

   Clause 2 of Sch 1 of the LP Act limits the maximum costs for legal services provided to a “party”. The party to whom the legal services were provided here, and to whom the Court below applied Cl 2, was the appellant. Clause 2 operates only on a claim “for personal injury damages” (emphasis added). That is to say a claim for damages that, relevantly, relates to injury to a person.

6. [107]

   Even according to the much used phrase “relate to” an expansive definition, which for the reasons given persuasively by White JA would not be the correct approach, there is no part of the appellant’s claim for damages for breach of the retainer of the respondents which relates to personal injury.

7. [108]

   The retainer with the solicitors was described somewhat succinctly in these terms:

8. [109]

   Any written retainer with the barrister was not tendered in evidence, but in his Defence the barrister admits he was retained by the solicitors to appear for the appellant at a conciliation and/or arbitration hearing before the Workers Compensation Commission on 29 January 2013.

9. [110]

   Neither of the retainers agreed to provide any legal services which referred to or included the bringing of any claim for damages against the person at fault for the appellant’s injuries. No such proceedings were ever brought. The proceedings in the Workers Compensation Commission were not a claim for damages.

10. [111]

    The following propositions clearly emerge:

    1. (1)

       the circumstances in which the appellant was injured (i.e. assault by an unknown person) did not give rise to any claim for personal injury damages;

    2. (2)

       his deemed employer, Sunrise Cabs, was not said to be tortiously liable for the appellant’s injuries – hence, the appellant brought no claim for “work injury damages” under the Workplace Injury Management and Workers Compensation Act 1998 (NSW);

    3. (3)

       the appellant’s proceedings in the Workers Compensation Commission were not for damages but were for a statutory entitlement to a weekly benefit;

    4. (4)

       the retainers between the appellant and each of his solicitors and barrister did not seek the provision of legal services to make a claim for personal injury damages;

    5. (5)

       the legal services provided to the appellant which were the subject of the cap under Cl 2 of Sch 1 of the LP Act were all of the services appropriate to enable him to claim he had suffered pure economic loss, calculated by reference to the principle of a loss of chance of a more favourable outcome in his claim for weekly benefits, because of the negligence and breach of contract of this solicitors and barrister.

11. [112]

    As I see the matter, the Court below erred in concluding, by following the decision of Harrison AsJ in Hammond v Stern [2013] NSWSC 70, that the costs of the appellant at trial fell within the cap provided in Sch 1 of the LP Act because they related to personal injury. As the propositions above show, not even in the broadest interpretation of the phrase “relate to”, could it be said that here the appellant’s costs related to damages for personal injury.

Costs of the Appeal

1. [113]

   White JA would order that each party pay their own costs of the application for leave to appeal and the appeal.

2. [114]

   I have the misfortune to disagree. I would order that the respondents pay the appellant’s costs of the application for leave to appeal and the appeal itself.

3. [115]

   The respondents opposed the grant of leave to appeal with respect to all issues raised including the issue relating to the cap on the legal costs of the proceedings below. As the judgment of White JA shows, Ground 4 raises an important issue which has not previously been decided by this Court.

4. [116]

   The argument about the cap on costs issue occupied the substantial part of the oral and written argument in this Court. Given that the proceedings in the District Court were heard over eight days with written submissions on the questions of costs, the ground upon which the appellant is in my view entitled to succeed is the most substantial in monetary terms.

5. [117]

   Neither of the respondents made any submissions, nor provided any evidence to support a submission, that costs ought not “follow the event”, that is, costs ought not follow the result of the application for leave, or the appeal if leave is granted.

6. [118]

   In those circumstances when the appellant has succeeded on the most substantive issue, I see no reasons why his costs should not be ordered to be paid by the respondents.

Orders

1. [119]

   In addition to Orders 1 to 5 proposed by White JA, I propose, in lieu of Order 6, the following Order:

   1. (1)

      Order the respondents to pay the appellant’s costs of the application for leave to appeal and of the appeal.