De Bono v Victorian WorkCover Authority (No 2) (Ruling)

[2018] VCC 1135

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not restricted
Suitable for Publication

SERIOUS INJURY LIST

Case No.  CI-18-00136

BRYAN PHILLIP DE BONO	Plaintiff
v
VICTORIAN WORKCOVER AUTHORITY	Defendant

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JUDGE:	HIS HONOUR JUDGE MISSO
WHERE HELD:	Melbourne
DATE OF HEARING:	16 July 2018
DATE OF RULING:	1 August 2018
CASE MAY BE CITED AS:	De Bono v Victorian WorkCover Authority (No 2) (Ruling)
MEDIUM NEUTRAL CITATION:	[2018] VCC 1135

RULING AS TO COSTS
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Subject:  ACCIDENT COMPENSATION

Catchwords:             Serious injury – pain and suffering conceded – plaintiff elected to proceed with loss of earning capacity – plaintiff failed to prove that loss of earning capacity consequences were “serious” – offer made pursuant to WorkCover (Litigated Claims) Legal Costs Order 2010 – offer made under the wrong costs order – cost implications of failing with loss of earning capacity consequences – knowledge by the plaintiff of an offer for pain and suffering – whether costs should be awarded proportionally pursuant to r63A.04(1) and (2) of the County Court Civil Procedure Rules 2008

Legislation Cited:     WorkCover (Litigated Claims) Legal Costs Order 2010; WorkCover (Litigated Claims) Legal Costs Order 2016; Accident Compensation Act 1985; Workplace Injury Rehabilitation and Compensation Act 2013; County Court Civil Procedure Rules 2008

Cases Cited:De Bono v Victorian WorkCover Authority [2018] VCC 997; Giankos v SPC Ardmona Operations Ltd (2011) 34 VR 120

Ruling:  The defendant pay the plaintiff’s costs pursuant to the relevant costs order.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C W R Harrison QC with Mr C A Sidebottom	Hounslow Lawyers
For the Defendant	Mr B R McKenzie	Minter Ellison

HIS HONOUR:

Introduction

1       The plaintiff filed an Originating Motion on 15 January 2018 seeking leave of the Court to bring a common law proceeding to recover damages for pain and suffering and loss of earning capacity.

2       The proceeding was listed for hearing before me.  The trial of the application occurred on 15 June 2018.  I subsequently delivered Reasons for Judgment on 29 June 2018.[1]

[1]De Bono v Victorian WorkCover Authority [2018] VCC 997

3       At the commencement of the hearing of the application, the defendant conceded pain and suffering.  What I was then asked to determine was the plaintiff’s application for loss of earning capacity.

4       I was not satisfied that the plaintiff’s loss of earning capacity consequences were “serious”. I dismissed his application in that respect, and otherwise pronounced an order in his favour relevant to pain and suffering.

5       When the issue of costs was debated by the plaintiff and the defendant, I was made aware of the fact that the defendant had made an offer conceding pain and suffering prior to the commencement of the trial of the application.  The defendant submitted that the effect of the offer was to disentitle the plaintiff to recovery of the full amount of the costs of the application applied for by the plaintiff.

The offer

6       The offer was served by the defendant’s solicitors on the plaintiff’s solicitors under cover of a letter dated 4 June 2018.  Omitting the formal parts of the letter, the relevant parts are as follows:

“We confirm our view that the worker will not satisfy the economic loss test pursuant to Section 134AB (38) of the Accident Compensation Act1985.

We enclose a Notice pursuant to Section 4 Part A of the WorkCover (Litigated Claims) Legal Costs Order 2010.

We are instructed that in the event your client agrees to withdraw their claim for leave to bring proceedings for damages for loss of earning capacity, WorkSafe will grant a certificate for serious injury for pain and suffering consequences.

Please obtain your client’s instructions and provide your response on or before 4pm on 8 June 2018.”

7       The offer is dated 4 June 2018.  It is drafted as a single page document.  It identifies the plaintiff, the defendant and the authorised insurance agent.  It bears the following heading at the top of the page:

“NOTICE PURSUANT TO SECTION 4 PART A OF

WORKCOVER (LITIGATED CLAIMS) LEGAL COSTS ORDER 2010.”

8       The notice then reads as follows:

“WorkSafe gives notice it is satisfied that the injury of Bryan De Bono incurred on 12 May 2011 to his back satisfies the requirements of section 134AB(38)(b)(i) of the Accident Compensation Act1985 but not the requirements of section134AB(38)(b)(ii).”

9       The plaintiff rejected the offer, preferring to have the Court determine the issue of whether his loss of earning capacity consequences were “serious”.

The costs orders

10      There are two costs orders in existence.  Chronologically, the first in time is the WorkCover (Litigated Claims) Legal Costs Order 2010 (“the 2010 Order”), and its successor, the WorkCover (Litigated Claims) Legal Costs Order 2016 (“the 2016 Order”).

11      The parties were in agreement that at the time of the filing of the Originating Motion, that it was the 2016 Order which applied, and not the 2010 Order.  That means that the 2010 Order has no relevance to the costs which the plaintiff is potentially entitled to.

12      Paragraph 2 of the 2016 Order makes it abundantly clear that it is the relevant Order:

“This Order applies to proceedings issued by a worker in accordance with section 134AB(16)(b) of the Accident Compensation Act 1985 or section 335(2)(d) of the Workplace Injury Rehabilitation and Compensation Act2013, following a section 134AB(4) of the Accident Compensation Act 1985 or section 328(2) of the Workplace Injury Rehabilitation and Compensation Act2013 application where that application was made on or after 1 July 2016 … .”

13      Clearly, the offer dated 4 June 2018 has been made under the wrong Order.

The parties’ submissions

14      The defendant submitted that I should conclude that because the 2016 Order is the applicable Order, that the reference in the offer to the 2010 Order can be ignored, because it was always the intention of the defendant to make an offer under the relevant applicable Order.  I reject that submission.

15      The offer is essentially a contract.  It is trite contract law that an offer must contain a clear statement of its terms.  The offer must convey to the other party an invitation to accept and, upon acceptance, confers on the accepting party the power to bind both parties to the contract.

16      The fact is that if the plaintiff had accepted the offer, both the plaintiff and the defendant would have been bound to a contractual arrangement which neither could perform.  Again, it is trite contract law that, faced with that situation, it would result in the termination of the contract by operation of law on the basis of frustration.

17      So, where would that have left the plaintiff and the defendant?  There would have been no binding contract, and therefore, they would have found themselves back in the same position as they were before acceptance of the offer had occurred.

18      It is for these reasons that I have concluded that the offer is bad, and amounts to no offer at all which can have any effect upon the determination of the plaintiff’s application for costs.

19      The secondary position of the defendant is set out in the affidavit of Mr Ramanan Rajendran sworn 6 July 2018.  On 18 December 2017, and before the plaintiff filed the Originating Motion, an offer was made by the defendant to settle with the plaintiff by offering a certificate for pain and suffering in consideration of the plaintiff abandoning his application for loss of earning capacity.

20      The plaintiff rejected the offer and filed the Originating Motion.  Subsequently, the offer dated 4 June 2018 was then made, making the same offer, but under the wrong Order.

21 The defendant submitted that because pain and suffering was on offer, that the plaintiff is only entitled to a proportion of his costs by the application of Order 63A.04 (1) and (2) of the County Court Civil Procedure Rules 2008 (“the Rules”):

“(1) The Court may make an order for costs in relation to a particular question in or a particular part of a proceeding.

(2)Where the Court makes an order under paragraph (1), the Court shall by order fix the proportion of the total costs of the proceeding which is attributable to the particular question in or the particular part of the proceeding.”

22      The basis for the submission is that at the commencement of the application, it was open to the plaintiff to accept the offer for pain and suffering irrespective of the problems which the offer dated 4 June 2018 may have had inherent in it. Therefore, the costs incurred in prosecuting the application were wholly or partly incurred in prosecuting loss of earning capacity.

23      The defendant referred me to Giankos v SPC Ardmona Operations Ltd[2] in which the Court of Appeal considered the use of a Calderbank offer and an offer of compromise under Rule 26.08 of the Rules.  It considered that in the appropriate case, Rule 63A.04 authorises an order for costs fixed proportionally where a question in a serious injury application goes against the party seeking leave in circumstances similar to that of the plaintiff here.

[2](2011) 34 VR 120 at paragraphs [129]-[131]

24      The difficulty I have with the defendant’s submission is that after the offer was made on 18 December 2017, it was rejected.  After the offer dated 4 June 2018 was made, it was rejected at least by the conduct of the plaintiff in commencing the application before me.  Again, it is trite contract law that once an offer is rejected, the offer ceases to exist unless it is expressly restated or kept open. 

25      The additional difficulty I have is that on one view, the offer dated 4 June 2018 was left open until 4.00pm on 8 June 2018; however, much depends upon whether the single page document comprising the offer dated 4 June 2018 is the offer or whether the offer is the aggregate of the covering letter dated 4 June 2018 and the offer dated 4 June 2018.

26      I think the answer to this question is that the single page document comprising the offer dated 4 June 2018 is the offer, because it refers to the authority to make the offer being the 2010 Order; it identifies the parties to the offer and the substance of the offer.  The covering letter appears to me to be an explanation of the offer and no more.

27      The best I can do in these circumstances is to work on the limited evidence I have before me which has driven me to conclude that the offer dated 4 June 2010 was invalid, and therefore, no offer at all, which, in any event, had been rejected.  Therefore, it was the concession made at the commencement of the application which then defined the basis upon which the application was to proceed, and by that time, the stage had been set for an application under both heads to be heard and determined by me.

28      Therefore, I reject the submission that the surrounding circumstances prior to the concession being made at the commencement of the hearing for pain and suffering must lead to the engagement of Rule 63A.04(1) and (2) and costs being ordered proportionally.

Conclusion

29      The authority is to be commended for taking up the position that time will not run against the plaintiff until I have formally handed down this Ruling.  It merits comment, because it is sound evidence of the conduct of a model litigant.

30      I will grant the plaintiff to leave to bring a proceeding at common law for pain and suffering only. I will order that the defendant pay the plaintiff’s costs pursuant to the 2016 Order.  I am inclined to certify for two counsel, but will hear from the parties again before I reconsider that application.

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