Di Petro v International Airline Services Pty Ltd (Ruling)
[2011] VCC 499
•12 April 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
Case No. CI-10-01077
| PASQUALE DI PETRO | Plaintiff |
| v | |
| INTERNATIONAL AIRLINE SERVICES PTY LTD | Defendant |
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| JUDGE: | HIS HONOUR JUDGE PARRISH |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 21-25, 28-31 March and 1 April 2011 |
| DATE OF RULING: | 12 April 2011 |
| CASE MAY BE CITED AS: | Di Petro v International Airline Services Pty Ltd (Ruling) |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 499 |
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RULING ON COSTS
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Catchwords: Industrial personal injury jury trial – costs – brief fee for counsel for the plaintiff – refresher or daily fees.
| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R McGarvie SC with | Nowicki Carbone |
| Ms M Pilipasidis | ||
| For the Defendant | Mr A Moulds SC with | Wisewould Mahony |
| Ms M Britbart | ||
| HIS HONOUR: |
1 In this proceeding, heard by a jury over the period from 21 March 2011 to 1 April 2011, the plaintiff sought damages for a psychiatric injury suffered by him as a result of alleged bullying and harassment during the course of his employment with the defendant over the period from November 2005 to 8 February 2006.
2 The defendant denied liability for negligence and in particular, relied on the plaintiff not being able to discharge his onus of proof in establishing that it was reasonably foreseeable on the part of the defendant that the plaintiff would suffer a recognisable psychiatric injury.[1] The defendant also initially relied on an allegation of contributory negligence on the part of the plaintiff but such allegation was withdrawn during the trial.
[1] See Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; Tame v State of New South Wales; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317
3 The plaintiff gave evidence that during the course of his employment, he was generally harassed and bullied by a leading hand/supervisor, Ms Gail Jenkins, and in particular, referred to several incidents of such bullying. In support of such allegations, evidence was given by three lay witnesses who described the attitude of Ms Jenkins to both the plaintiff and them.
4 Three psychiatrists were called on behalf of the plaintiff, one of whom was the treating psychiatrist and the other two being medico-legal specialists retained by the plaintiff. The defendant called evidence from two psychiatrists, both of whom were medico-legal specialists. All psychiatrists, bar one called on behalf of the defendant, considered the plaintiff to be suffering from a psychiatric condition, a cause of which was the harassment and bullying by the leading hand-supervisor. The other psychiatrist, although accepting that the plaintiff had a psychiatric condition, considered such condition no longer related to his employment with the defendant.
5 The defendant called its operations manager employed at that time, together with two lay witnesses who worked with Ms Jenkins and the plaintiff over the relevant time. The thrust of their evidence was that Ms Jenkins was “firm but fair”.
6 Evidence was also given by the de facto partner of the plaintiff who described the present state of the plaintiff as compared to that prior to the advent of his psychiatric injury.
7 On 1 April 2011, the jury returned a verdict finding the defendant to be negligent and assessing pain and suffering damages at $100,000 and pecuniary loss damages at $225,000.
8 At that time, the parties jointly sought to have the matter adjourned for a short period to allow issues of interest, repayment of compensation and appropriate costs orders to be determined.
9 On 7 April 2011, I was informed by the parties that it was agreed that judgment could be entered for the plaintiff in the sum of $290,190, being the amount of the jury verdict less accident compensation payments in the sum of $41,310 plus damages by way of interest agreed in the sum of $6,500. Furthermore, I was informed that there was no issue that the defendant would pay the costs of the plaintiff, including any reserved costs, to be taxed in default of agreement on Scale D of the County Court Scale of Costs, together with certificates for the retention of two counsel and the reasonable costs of the court books. It was agreed that there would be a stay of execution on the judgment sum for twenty-eight days and that liberty be granted to the plaintiff to apply within twenty-eight days to make application pursuant to s.134AB(3) and (31) of the Accident Compensation Act 1985, as amended (“the Act”).
10 The outstanding issue was counsels’ fees.
11 The preferred position of those acting for the plaintiff was that there be certification for the following matters:
(a) Brief fee for Senior Counsel at $6,000; (b) A further ten daily fees for Senior Counsel, each of $6,000 (which would encompass the further nine days of the trial, together with the argument regarding costs on the afternoon of 7 April 2011); (c) Two hours of special conferences for Senior Counsel at $600 per hour; (d) Fifty per cent of the above for Junior Counsel. 12 The fallback position of the plaintiff was that such costs to be on a brief and refresher basis with the following certification:
(a) Brief fee for Senior Counsel at $6,600, together with eleven refreshers at two-thirds of brief fee (the eleven refreshers encompassing the afternoon of 7 April 2011); (b) Four hours of special conferences for Senior Counsel at $660 per hour; (c) Fifty per cent of the above for Junior Counsel. 13 Those acting for the defendant submitted that the appropriate costs order for counsel was on a brief fee and refresher basis with the following certifications:
(a)
Brief for Senior Counsel at $5,500, together with eleven refreshers at two-thirds of brief fee (the eleven refreshers encompassing the afternoon of 7 April 2011);
(b) Four hours of special conferences at $550 per hour for Senior Counsel; (c)
Scale fee for Junior Counsel, together with four hours of conferences on scale. No arguments were advanced to support such submission and Senior Counsel for the defendant acknowledged that Junior Counsel for the plaintiff had played a significant role in the plaintiff prosecuting his case.
Relevant Legal Principles
14 Order 63A(82) of the County Court Civil Procedure Rules 2008 provides:
“(1)
Notwithstanding anything to the contrary in Appendix A, the fees payable to counsel to appear at a hearing or trial shall be at the discretion of a Judge who may fix such fees—
(a) on the basis of daily fees; (b) on the basis of a brief fee and refreshers; (c)
as a lump sum fee covering the whole of the hearing or trial; or
(d) on such other basis as the Judge considers appropriate. (2) Where such fees are fixed on the basis of daily fees—
(a)
the daily fee for the second or any subsequent day of the hearing or trial, shall, unless the Judge determines otherwise by reason of the special circumstances of the case, include all time spent by counsel in preparation and conferences on that day of the hearing or trial as well as the actual time spent by counsel in Court on the hearing or trial on that day; and
(b)
the Judge may allow differing amounts in respect of various days of the hearing or trial.
(3)
Where such fees are fixed on the basis of a brief fee and refreshers and where a hearing or trial occupies either on the first day or partly on the first day and partly on a subsequent day or days more than six working hours (including any luncheon adjournment) without being concluded—
(a)
the Judge may allow a refresher fee for every five working hours (including any luncheon adjournment) subsequent to the expiration of the first six hours; and
(b)
the final refresher may be allowed for any period less than five hours that the hearing or trial may occupy.”
15 Item 31 of Appendix A to the County Court Civil Procedure Rules 2008 provides for a brief fee, depending upon the scale involved, and a refresher fee.
16 In particular, Item 31(h)(v) states:
“Despite anything contained in these Rules—
(A) where a trial has commenced, the Judge ONLY may allow such higher fee for counsel for the trial and may allow fees for more than one counsel as the Judge thinks fit, save that this sub-item does not apply to the allowances set out in item 21. (B) where no trial has commenced, the Registrar or Costs Court may allow such higher fee for counsel and may allow fees for more than one counsel as the Registrar or Costs Court thinks fit.”
Although there is no reference in the scale of fees to a daily fee, it does not mitigate against a daily fee being allowed given the opening words of Order 63A(82)(1) of the County Court Civil Procedure Rules 2008.
17 I also refer to Part 3 of Order 63A of the County Court Civil Procedure Rules 2008 which states, in part:
“63A.27 Application
This Part applies to costs in a proceeding which by or under any Act or these Rules or any order of the Court are to be paid to a party to the proceeding either by another party or out of a fund.
63A.28 Bases of taxation
Subject to this Part, costs in a proceeding which are to be taxed shall be taxed on—
(a) a party and party basis; (b) a solicitor and client basis; (c) an indemnity basis; or (d) such other basis as the Court may direct. 63A.29 Party and party basis On a taxation on a party and party basis all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed shall be allowed.
63A.30 Solicitor and client basis On a taxation on a solicitor and client basis all costs reasonably incurred and of reasonable amount shall be allowed.
63A.30.1 Indemnity basis
(1)
Subject to paragraph (2), on a taxation on an indemnity basis all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred.
(2)
Any doubt which the Costs Court may have as to whether the costs were unreasonably incurred or were unreasonable in amount shall be resolved in favour of the party to whom the costs are payable.
63A.31 General basis
Except as provided by these Rules or any order of the Court costs shall be taxed on a party and party basis.”
Submissions of the Parties
18 In support of his preferred position, Senior Counsel for the plaintiff initially referred to the decision of Koetsveld v Whitehorse City Council[2] wherein his Honour Judge O’Neill declined to order fees for counsel on a daily basis as the proceeding raised no “particularly complex nor novel issues”.[3] His Honour then awarded costs on the basis that “there should not be a departure from the recent and current practice of awarding fees to counsel, even in jury trials, on a brief and refresher basis, unless there is good reason to do so”.[4]
[2] [2009] VCC 0544 (20 May 2009)
[3] Koetsveld (op cit) at paragraph 16
[4] Koetsveld (op cit) at paragraph 17
19 In that decision, Judge O’Neill made reference to the comments of Fullagar J in Magna Alloys & Research Pty Ltd v Kevin Lindsay Coffee (No 2)[5] where he stated:
“The time honoured basis of charging counsel's fees in respect of a court hearing remains the basis of a brief fee and refreshers of two- thirds of that fee, and prima facie this is the basis upon which counsel's fees will be taxed as between party and party. There must, in my opinion, be an onus upon the party who seeks a departure on taxation from that traditional and usual basis, and the onus must be one of satisfying the taxing officer that the traditional method of fee marking could not reasonably have been followed in all the circumstances of the case.”[6]
[5] [1982] VR 97
[6] See Magna Alloys (op cit) at page 112
20 Judge O’Neill also referred to the later decision of Prudential Finance Ltd v Davander Nominees Pty Ltd & Ors,[7] wherein Ashley J stated:
“Where a case is such as to require considerable out of court work during trial, recompense for that out of court work has been traditionally provided by an increase in the brief fee - and hence each refresher. However, there may be cases where a daily fee on brief should properly be allowed. In 1982, Fullagar J [in Magna] said that such cases ‘must necessarily be exceptional’, although he observed that the complexity and difficulty of litigation had in his opinion substantially increased over the preceding 30 years. As I have already said, it is my clear impression that, in the last decade, the course of litigation has become generally more complex still. It may well be that the ‘exceptional’ case of a decade ago is now a more common phenomenon.”[8]
[7] [1992] 1 VR 468
[8] Prudential Finance (op cit) at page 474
21 Judge O’Neill also referred to a decision of Byrne J in Brenner v First Artists’ Management Pty Ltd,[9] wherein Byrne J fixed daily fees for counsel. It is to be noted that that trial ran for thirty-three sitting days, including four days of oral submissions. In fixing such fees, Byrne J made reference to striking a balance between two important principles – that although the costs awarded to successful plaintiffs may not indemnify them for the actual costs incurred, plaintiffs are entitled to all costs in accordance with scale which are necessary and proper for the attainment of justice (see Order 63.29) and that the unsuccessful litigant ought not to be required to bear a greater burden than the Rules and the practice of the Court customarily impose.
[9] [1993] 2 VR 221
22 Senior Counsel for the plaintiff submitted that the relevant principle to be applied was that as stated by Judge O’Neill, that there need be “a good reason” to depart from the traditional basis of awarding counsels’ fees on a brief and refresher basis. In this respect, Senior Counsel referred to two relatively recent decisions of Van Koll v Rolling Hills Pre-School Inc[10] and Lever v McCormick Foods Australia Pty Ltd.[11] Daily fees were allowed because the presiding judge considered each case involved “significant complexity”.
[10] (Unreported) VCC, delivered by Judge Saccardo on 29 September 2010
[11] (Unreported) VCC, delivered by Judge Saccardo on 16 March 2011
23 Senior Counsel for the plaintiff referred to the following matters to support his contention that there is “good reason” to award daily fees rather than brief fee and refreshers.
(a)
The length of the trial which, as stated, ran for ten days from opening to verdict;
(b)
The complexity of the trial which involved the principle that the plaintiff had to discharge his onus in establishing that it was reasonably foreseeable on the part of the defendant that the plaintiff would suffer a recognisable psychiatric injury. Part of this submission also stressed the need for careful evidence-in-chief and cross-examination of various lay witnesses called by the defendant;
(c)
Recognising that it is virtually a universal practice for counsel to mark daily fees and the longer a trial goes the greater is the gap between amounts allowed on brief and refresher compared to the amounts charged for daily fees. Accordingly, it cannot be said that the party- party requirement that “all costs necessary or proper for the attainment of justice” has been satisfied;
(d)
It is relevant, so it was submitted, that in fixing party-party costs, for the Court to be aware that the plaintiff has bettered, not only the statutory offer of the defendant of “nil” but his own statutory counter offer which was “significantly less” than the jury verdict. It was asserted that if the defendant had accepted the statutory counter offer, the plaintiff would not have been put to the expense of any of the trial costs for which certification is now sought. Further, it was said that the plaintiff, of course, was unable to make a Calderbank or other type of offer of compromise to ensure an entitlement of solicitor/client costs.
(e)
Because of the evidence of Dr Jager, the issue of causation was not “straightforward” particularly so given that the plaintiff had returned to some employment after ceasing work;
(f)
That because s.134AB of the Act encourages the parties to avoid litigation (through the processes of conferences, statutory offers and statutory counter offers) and to the extent that unreasonably low offers such as a nil offer in this case ultimately attracted a jury verdict of $325,000 “may well contain a salutary lesson to a defendant who is ordered to pay daily fees on top of that not to be as unreasonable in making a nil offer in the next case like this one”.
24 Senior Counsel for the defendant submitted that the appropriate basis for awarding counsels’ fees was on the brief and refresher basis rather than a daily basis consistent with the well-established principles in relation to payment of such fees unless there were “exceptional” circumstances.
25 Senior Counsel for the defendant acknowledged that the Court has a clear discretion to fix fees and Order 63A(82) makes clear that one of the bases of fixing fees is on a daily fee basis. However, in the circumstances of this matter, the trial was “a hard trial, but far from an exceptional trial”. The issue in relation to the foreseeability of psychiatric injury is well-established in law and ultimately turns on whether the jury is satisfied that the plaintiff has discharged his or her onus in satisfying that legal test. Beyond that issue, there was no particularly difficult issue, certainly no more than what one is confronted with in any jury trial.
Conclusions
26 I make the following observations:
(a)
I tend to the view that litigation has become more complex over the years which in turn increases the workload of counsel. In particular, the civil jurisdiction of the County Court has expanded dramatically over the years and accordingly, has attracted larger and more complex cases;
(b)
From my experience as a barrister and indeed my observations sitting on the bench, I accept that counsel appearing for plaintiffs almost universally accept their retainers from their respective instructing solicitors on a daily fee basis. I also acknowledge that in a lengthy trial the gap between what is recovered on a brief and refresher basis and what is charged by counsel appearing for a plaintiff may be significant;
(c)
I also tend to the view that the operation of s.134AB of the Act cannot be the springboard for any particular argument for the awarding of counsels’ fees on a daily basis. I accept that part of the scheme of s.134AB of the Act is to encourage settlement between the parties through a process of conferences, statutory offers and statutory counter offers. I do not accept that it is a relevant consideration in determining the appropriate method of awarding counsels’ fees to take account of whether the Authority made a “nil” offer which was substantially bettered by a plaintiff or indeed a plaintiff making an unreasonably high statutory counter offer and ultimately recovering far less. The Act has in place a scheme whereby there are various cost consequences flowing from statutory offers and counter offers.
27 In the circumstances of this proceeding, I take the view that the starting point is the traditional approach of awarding counsel brief fee and refreshers unless there are particular circumstances which warrant an exercise of my discretion to award counsels’ fees on a different basis. I am not persuaded that the length of the trial or indeed the alleged complexity of the matter satisfies such test. Although acknowledging that reasonable foreseeability of a psychiatric injury is perhaps generally more difficult than establishing reasonable foreseeability of an organic injury, the principles of law are well- established and as in most cases, ultimately turns on the evidence.
28 In all the circumstances, I rule that counsels’ fees are to be paid on a brief and refresher basis. I note that the “normal” fee for counsel appearing in serious injury matters is $5,500 on brief. I accept that given the ambit of a damages claim, which encompasses various issues, counsel are required to be involved in wider preparation of the case for trial. Consistent with relevant principle, such further preparation should be reflected in the brief fee awarded to counsel. In all the circumstances, I consider that a brief fee for Senior Counsel of $6,000 to be appropriate.
29 I make the following orders:
(1)
There be judgment for the plaintiff in the amount of $290,190 being the amount of the jury verdict less accident compensation payments paid to the plaintiff in the sum of $41,310 plus damages by way of interest agreed in the sum of $6,500.
(2)
The defendant to pay the costs of the plaintiff, including any reserved costs, to be taxed in default of agreement on Scale D of the County Court Scale of Costs.
(3) There be certificates for the following matters:
(a) the retention of two counsel by the plaintiff; (b)
fee for Senior Counsel on brief, being $6,000, together with eleven refreshers at two-thirds of brief fee, four hours of special conferences for Senior Counsel at $600 per hour;
(c)
fee for Junior Counsel on brief at $3,000, together with eleven refreshers at two-thirds of brief fee;
(d)
four hours of special conferences for Junior Counsel at $300 per hour;
(e)
for the reasonable costs of the preparation, filing and service of court books, with one copy on scale and subsequent copies at commercial copying rates to be determined by the Costs Court plus necessary attendances.
(4) There be a stay of execution on judgment of twenty-eight (28) days. (5) Liberty to apply within twenty-eight (28) days is reserved to the plaintiff
to make application pursuant to s.134AB(3) and (31) of the Act.
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