Briggs v State of New South Wales (No 2)

[2015] NSWDC 299

District Court

New South Wales

Medium Neutral Citation:	Briggs v State of New South Wales (No 2) [2015] NSWDC 299
Hearing dates:	11 December 2015
Date of orders:	16 December 2015
Decision date:	16 December 2015
Jurisdiction:	Civil
Before:	Levy SC DCJ
Decision:	See paragraph [36] for orders
Catchwords:	INTEREST – pursuant to s 151M of the Workers’ Compensation Act 1987 in workplace injury damages claim – SLIP RULE – amendment to previous costs orders – STAY– order for stay pending appeal
Legislation Cited:	Civil Procedure Act 2005, s 101 Workers Compensation Act 1987, s 151M. s 151D Workplace Injury Management and Workers Compensation Act 1998, s 318
Cases Cited:	Briggs v State of New South Wales [2015] NSWDC 235
Category:	Consequential orders (other than Costs)
Parties:	Ryan Briggs (Plaintiff) State of New South Wales (Defendant)
Representation:	Counsel: Mr T Ower (Plaintiff) Mr L Morgan (Defendant)   Solicitors: Harris Wheeler Lawyers (Plaintiff) HWL Ebsworth (Defendant)
File Number(s):	2015/84738
Publication restriction:	None

Judgment

Background

1. On 23 October 2015, in these workplace injury damages proceedings the principal judgment was given in favour of the plaintiff in the sum of $969,136 plus costs: Briggs v State of New South Wales [2015] NSWDC 235.

Applications for further orders

2. On 11 December 2015, at the request of the parties, the matter was relisted for further argument on consequential matters. These comprised first, an application by the plaintiff pursuant to s 151M of the Workers' Compensation Act 1987 ("the Act") for interest on the assessed damages, secondly, slip rule amendments to the previous cost orders to properly reflect the orders that were intended, and thirdly, an application by the defendant for a stay of the judgment pending an appeal to the Court of Appeal as the defendant has filed a Notice of Intention to Appeal.

Evidence tendered on the applications

3. On the applications, the plaintiff read the affidavits of his solicitor, Stuart Gray sworn on 18 November and 1 December 2015, and the affidavit of Amanda Joy Bell, a solicitor in the employ of Mr Harris, sworn on 5 November 2015. The Plaintiff also tendered 2 folders of voluminous materials comprising the Exhibit SG-1 which was exhibited to Mr Gray’s affidavits. For reference purposes, the plaintiff's outline of submissions is marked as MFI "1" on the application.

Facts relevant to interest claim

4. The parties attended a mediation of the proceedings on 25 February 2015, at which time the plaintiff's lowest offer of settlement was $650,000 clear of past weekly compensation payments made by the defendant, plus costs. The defendant's highest offer of settlement on that day was $200,000, expressed to be on the same basis.

5. On 27 August 2015, the defendant made a further written offer of settlement to the plaintiff in the sum of $260,000 which was expressed to be inclusive of costs: Exhibit SG-1, page 833.

6. The parties have agreed that the verdict in favour of the plaintiff in the sum of $969,136 will ultimately reduce to an amount of $727,515.42 plus costs, after the deduction of payments made by the defendant comprising weekly workers' compensation in the total amount of $241,620.58.

7. For the purpose of the assessment of the plaintiff’s consequential claim to interest entitlements, when analysing the defendant’s offer of $260,000 inclusive of costs, the plaintiff submitted that the costs of the proceedings should be conservatively assumed to be $50,000. That assumption seemed to be a reasonable premise. The defendant did not contest that assumption.

8. On behalf of the plaintiff it was argued that, conservatively, once party / party costs are taken into account, the defendant's last offer of settlement represents no more than a $50,000 increase on the defendant's previous offer at mediation. That seems to be a reasonable premise.

9. In my view, as at 27 August 2015, the defendant had ample evidence of the plaintiff's incapacity for work, and had ample evidence of the plaintiff’s pre-injury earnings, to be in a position to make a proper assessment of the plaintiff's damages in order to consider making a reasonable offer of settlement.

10. At that time, the defendant knew that a claim was made by the plaintiff for loss of earnings and loss of earning capacity. The plaintiff was a 38 year old former sergeant of police and the claim was being made at the comparable rates. At that time, all of the plaintiff’s claimable heads of damage were identifiable and quantifiable.

11. I accept the plaintiff's mathematical submissions (at paragraphs 10 and 11 of MFI "1") to the effect that on analysis, the defendant knew or ought to have known that the plaintiff's range of likely damages, as particularised at that time, would be in the range $740,710 to $833,983 less workers' compensation payments, which yielded a net range of damages of between $538,495 and $631,768 clear of workers' compensation payments.

12. When analysed, those calculations are all obviously significantly in excess of 20 per cent more than the defendant's higher written offer of settlement.

Interest claim

13. The plaintiff's entitlement to interest on workplace injury damages is discretionary, and is governed by s 151M of the Act, which provides a limited statutory right to interest that only arises if the specified conditions are satisfied.

14. Relevant to these proceedings, those specified conditions are satisfied if first, the plaintiff can show that the damages awarded, before the addition of interest, is more than 20 per cent higher than the highest amount offered by the defendant, and secondly, the offer made by the defendant was unreasonable, having regard to the information available to the defendant when the offer was made: s 151M(4)(a)(iv) of the Act.

15. The plaintiff is not entitled to an award of interest if, at the time the offer was made, the defendant was not able to make a reasonable assessment of the plaintiff's full entitlement to damages of any kind: s 151M(4)(b) of the Act.

16. In this case, the defendant's offer was in writing, thus also satisfying the requirements of s 151M(4)(c) of the Act.

17. In my view, at the time the defendant made its offer, it was able to make a reasonable assessment of the plaintiff's full entitlement to damages of any kind. That conclusion arises from the particularised claim and the content of the materials provided to the defendant in the form of the pre-filing statement the plaintiff was required to serve on the defendant pursuant to s 318 of the Workplace Injury Management and Workers Compensation Act 1998. The verdict in favour of the plaintiff was within the claim that had been particularised.

18. In those circumstances, I consider that the plaintiff has satisfied the requirements of s 151M(4)(b) of the Act. This then leads to an evaluation of the effect of the defendant’s offer.

19. The defendant's offer of settlement of $260,000 inclusive of costs was obviously a compromise position based upon the commercial considerations of risk assessed by the defendant. It did not purport to be based upon a reasoned analysis of the likely monetary outcome of the case if fully contested and if the plaintiff was successful.

20. The first trigger for an award of interest in this case is that the plaintiff's verdict exceeded the defendant's last written offer by more than 20 per cent. There is no dispute that the plaintiff has achieved that result. The second consideration is whether the offer made was reasonable having regard to the information then available to the defendant: s 151M(4)(a)(iv) of the Act.

21. The detail which based the monetary assessment of the plaintiff's claim appears in the principal judgment. It is therefore unnecessary to further review those details here, other than to record that, as at the date of the defendant’s highest offer, the defendant knew that the plaintiff had not worked since 16 November 2011, except for brief periods of attempted mitigatory employment and attempted rehabilitation, under medical advice, and that his claim was essentially for economic loss.

22. The defendant also knew that the plaintiff's further attempts at employment had proved fruitless through no fault or lack of effort on his part. The preponderance of the rationally expressed medical opinions was that the plaintiff was unlikely to be able to resume his work as a police officer. That position indicated the plaintiff was likely to receive substantial damages for both past and future economic loss.

23. At the time the defendant made its offer, it appears that the defendant had already determined the case would be fought on the basis of an attack upon the credibility of the plaintiff's evidence. On the evidence available to the defendant, that was a high risk strategy that, as made, was based on flimsy evidence that was on the margins of admissibility or reliability. At the trial, that strategy failed: Briggs v State of New South Wales [2015] NSWDC 235 at [21] - [26], and related paragraphs.

24. The defendant was aware that as a former sergeant of police, the plaintiff had retired on medical grounds after 14 years of solid service with an unblemished record, and therefore, if there was to be an attack on the plaintiff's credit, and upon the case sought to be made by the plaintiff, it needed to be sound, compelling, and persuasive. It was none of those things. The defendant nevertheless took the litigation risks involved in putting the plaintiff to proof in his case.

25. All of this occurred in the context of a scheme which has the underlying policy encouragement to a defendant to offer a reasonable offer of settlement in order to avoid a liability for interest. The scheme also has a policy encouragement directed at the plaintiff to settle for a reasonable sum if available because of the restricted scope for the assessment of damages and costs, including the limited basis for an award of interest.

26. In the described circumstances, I consider the defendant's offer was unreasonable in the relevant sense. This was because the amount offered to the plaintiff was significantly below the amount of the claim for past loss of earnings and future loss of earning capacity in a case where those claims were compelling and not contradicted by persuasive evidence. Furthermore, the offer was unreasonable because the offer was not accompanied by a rational analysis which related the offer to a reasoned damages position that was justifiable on the evidence. The offer therefore lacked that element of reasonableness.

27. The material relied upon by the defendant to seek to defeat the plaintiff's claim, both on liability and on quantum, was insubstantial, and the defendant was therefore not in a reasonable position to undermine the plaintiff’s case by contradictory evidence, expert or otherwise.

28. In those circumstances, I find that the plaintiff has satisfied all of the requirements of s 151M(4)(a)(iv) of the Act with the result that he is entitled to an assessment of his claim for interest on the damages that had been awarded to him.

Interest calculation

29. The calculation of interest in this case requires the identification of a starting date to represent the relevant date of the plaintiff’s injury. In this case that injury was described as being progressive or incremental. Therefore, the plaintiff relies on the date he left work, namely 16 November 2011, as the notional date of injury for the purpose of calculating interest. I consider that to be a reasonable and conservative approach on the evidence in this case. This identifies the period for which interest should be calculated as being 3.9 years.

30. The rate of claimable interest is prescribed pursuant to s 101 of the Civil Procedure Act 2005. The plaintiff's submissions have tabulated the applicable rates from 1 July 2011 until 31 December 2015. After making due allowance for potential unrepresentative skewing of rates for the first of the 8 periods in that tabulation, the plaintiff identifies an average rate for interest of 6.875 per cent, of which three quarters is claimable as the rate to be used in these calculations, namely 5.16 per cent. I consider that approach to be reasonable.

31. Applying that rate, interest on the identified sum of $727,515, at 5.16 per cent over 3.9 years, yields an amount for interest in the sum of $146,405. I therefore assess the plaintiff’s entitlement to interest in that sum, which is to be added to the amount of the plaintiff’s verdict to identify the final judgment sum to be entered in favour of the plaintiff. That total is $1,115,541.

32. The parties have previously indicated their intentions to make their own adjustments for payments made for weekly payments of workers' compensation without the need for orders to that effect.

Slip Rule amendments to previous costs orders

33. At the time the principal judgment was delivered, it was ordered that the defendant pay the plaintiff's costs of the s 151D motion on the applicable scale, and the costs of the proceedings on the ordinary basis unless otherwise ordered. Those orders became incorrectly transposed in an unintended way. They will be corrected in the orders I will shortly make with regard to another aspect of costs. I have already certified the justification for the plaintiff being represented by both senior and junior counsel at the trial, and that order will remain unaltered.

Stay application

34. The defendant has filed a holding appeal. In those circumstances, especially given the evidence of the plaintiff's past financial difficulties which may give rise to an apprehension he may not be in a position to repay the judgment monies in the event of a successful appeal, a conditional stay seems reasonable.

35. The parties have agreed on a stay conditional upon the plaintiff being paid 50 per cent of his award including interest as a part payment. I consider that to be a reasonably agreed position, and my orders will give effect to that agreement.

Orders

36. I make the following orders:

1. Pursuant to s 151M of the Workers' Compensation Act 1987, the plaintiff's entitlement to interest is assessed in the amount of $146,405;

2. Verdict and judgment for the plaintiff in the revised amount of $1,115,541, including the assessed interest;

3. In lieu of order (2) made on 23 October 2015, I order that the defendant pay the plaintiff's costs of the motion pursuant to s 151D of the Workers' Compensation Act 1987, on the ordinary basis, unless otherwise ordered;

4. In lieu of order (3) made on 23 October 2015, I order that the defendant pay the plaintiff's costs of the proceedings on the applicable scale;

5. The judgment entered in favour of the plaintiff in the sum of $1,115,541 is stayed conditional upon the defendant forthwith paying to the plaintiff's solicitor a sum equal to 50 per cent of that judgment amount, pending any further orders of the Court of Appeal;

6. In the event that the defendant does not file a Notice of Appeal, the stay the subject of order (5) is discharged, so that any balance of the judgment monies then owing to the plaintiff becomes payable on the expiry of the time for filing a Notice of Appeal and the non-filing of an appeal;

7. The defendant is to pay the costs of the applications for interest and for a stay;

8. Liberty to apply on 7 days notice if further or other orders are required.

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Decision last updated: 16 December 2015