Fuller v Avichem Pty Ltd trading as Adkins Building and Hardware Supplies

[2019] NSWDC 125

District Court

New South Wales

Medium Neutral Citation:	Fuller v Avichem Pty Ltd trading as Adkins Building & Hardware Supplies [2019] NSWDC 125
Hearing dates:	5 April 2019
Date of orders:	12 April 2019
Decision date:	12 April 2019
Jurisdiction:	Civil
Before:	Scotting DCJ
Decision:	(1) The plaintiff is entitled to an award of interest pursuant to section 151M Workers Compensation Act 1987 in the sum of $55,389.00; (2) There will be judgment entered for the plaintiff in the sum of $477,041.00; (3) The defendant is to pay the plaintiff’s costs pursuant to Regulation 94 Workers Compensation Regulations 2016 on a party/party basis noting that such costs are governed by Schedule 7 of the Workers Compensation Regulations 2016.
Catchwords:	COSTS — Party/Party — Workers Compensation Regulations 2016 INTEREST Workers Compensation Act 1987
Legislation Cited:	Workers Compensation Act 1987 Workers Compensation Regulation 2016 Workplace Injury Management and Workers Compensation Act 1998
Cases Cited:	Batchelor v Burke (1981) 148 CLR 448 Furina v Transfield Construction Pty Limited (1994) 10 NSWCCR 23 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 Sharman v Evans (1977) 138 CLR 563
Category:	Costs
Parties:	Fuller v Avichem Pty Ltd trading as Adkins Building & Hardware Supplies
Representation:	Counsel: J de Greenlaw (Plaintiff) R Perla (Defendant)   Solicitors: Gerard Malouf & Partners (Plaintiff) TurksLegal (Defendant)
File Number(s):	2017/359791
Publication restriction:	None

Judgment

1. On 4 March 2019 I published my reasons for awarding a verdict in favour of the plaintiff.

2. The parties agree that the total of the heads of damage referred to in that judgment amount to $421,652.00.

3. The plaintiff seeks an order for interest pursuant to section 151M Workers Compensation Act 1987 (WCA) and an order for costs which is governed by section 151T Workers Compensation Act 1987, section 346 Workplace Injury Management and Workers Compensation Act 1998 (WIM Act) and clauses 94 to 99 of the Workers Compensation Regulation 2016 (the Regulation).

4. The parties have agreed that:

1. the mathematical calculation for interest is $55,389.00, if the Court determines that the plaintiff is entitled to interest.

2. on 5 November 2018 the defendant made a verbal offer of settlement to the plaintiff in the sum of $500,000.00 inclusive of costs and clear of workers compensation payments to that date, which offer was not accepted by the plaintiff (the Verbal Offer);

3. the amount of workers compensation payments as at 5 November 2018 was $306,351.00;

4. the parties participated in a compulsory mediation pursuant to section 318A of the WIM Act on 7 September 2017. The final offers for each party recorded by the mediator were:

1. for the plaintiff - $470,000.00 plus costs clear of workers compensation payments made to date;

2. for the defendant - $350,000.00 plus costs clear of workers compensation payments made to date.

The Plaintiff’s Claim for Interest

5. The plaintiff has a limited statutory entitlement to interest that is provided by section 151 Workers Compensation Act 1987. Section 151M provides:

151M Payment of interest

(1)    Limited statutory entitlement. A plaintiff has only such right to interest on damages as is conferred by this section.

(2), (3) (Repealed)

(4)

(a)    Interest is not payable (and a court cannot order the payment of interest) on damages unless:

(i)    information that would enable a proper assessment of the plaintiff’s claim has been given to the defendant and the defendant has had a reasonable opportunity to make an offer of settlement (where it would be appropriate to do so) in respect of the plaintiff’s full entitlement to all damages of any kind but has not made such an offer, or

(ii)    the defendant has had a reasonable opportunity to make a revised offer of settlement (where it would be appropriate to do so) in the light of further information given by the plaintiff that would enable a proper assessment of the plaintiff’s full entitlement to all damages of any kind but has not made such an offer, or

(iii)    the defendant has made an offer of settlement, the amount of all damages of any kind awarded by the court (without the addition of any interest) is more than 20% higher than the highest amount offered by the defendant and the highest amount is unreasonable having regard to the information available to the defendant when the offer was made.

(b)    The highest amount offered by the defendant is not unreasonable if, when the offer was made, the defendant was not able to make a reasonable assessment of the plaintiff’s full entitlement to all damages of any kind.

(c)    For the purposes of this subsection, an offer of settlement must be in writing.

(5) Calculation of interest

If a court is satisfied that interest is payable under subsection (4) on damages:

(a)    the amount of interest is to be calculated for the period from the date of the death of or injury to the worker until the date on which the court determines the damages, and

(b)    the amount of interest is to be calculated in accordance with the principles ordinarily applied by the court for that purpose, subject to this section.

(6) Rate of interest

The rate of interest to be used in any such calculation is three-quarters of the rate prescribed for the purposes of section 101 of the Civil Procedure Act 2005 for the period concerned.

(7) Judgment debts

Nothing in this section affects the payment of interest on a debt under a judgment or order of a court.

6. Section 149 Workers Compensation Act 1987 provides:

149 Definitions

(1) In this Part:

damages includes:

(a)    any form of monetary compensation, and

(b)    without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted),

but does not include:

(c)    compensation under this Act, or

(d)    additional or alternative compensation to which Division 8 of Part 3 applies, or

(e)    an award of compensation or direction for compensation under Part 2 or Part 4 of the Victims Compensation Act 1996, or

(f)    a sum required or authorised to be paid under a State industrial instrument, or

(g)    any sum payable under a superannuation scheme or any life or other insurance policy, or

(h)    any amount paid in respect of costs incurred in connection with legal proceedings, or

(i)    damages of a class which is excluded by the regulations from this definition.

(2) A reference in this Part to compensation payable under this Act includes a reference to compensation that would be payable under this Act if a claim for that compensation were duly made.

7. Section 318E of the WIM Act provides:

318E Offers made at mediation not to be disclosed to court

The amount of any offer of settlement made by a party in the course of mediation of a claim is not to be specified in any pleading, affidavit or other document filed in or in connection with court proceedings on the claim, and is not to be disclosed to or taken into account by the court, before the court’s determination of the amount of damages in the proceedings.

8. Section 151M is clearly aimed at encouraging responsible compromise of claims: Furina v Transfield Construction Pty Limited (1994) 10 NSWCCR 23.

9. The defendant submits that it is entitled to rely on its final offer at mediation as noted in the Mediation Certificate as a “written offer” as referred to in section 151M(4)(c). It is common ground that the defendant did not make any other written offer of settlement.

10. Section 318E of the WIM Act provides that any offer of settlement made by a party in the course of a mediation cannot be taken into account by the Court before the Court’s determination of the amount of damages in the proceedings. In my view, the calculation of interest payable pursuant to section 151M of the WCA is part of the Court’s determination of damages.

11. The defendant relies on the opening words of section 151M(1) of the WCA to argue that interest should be construed as a separate award and not a head of damage. In my view, this construction of an award of interest is strained.

12. Damages are defined inclusively but with specific exceptions by section 149 of the WCA. “Damages” includes ‘any monetary compensation payable’ and interest is not a specified exception.

13. An award of damages is calculated by the addition of allocations given to particular heads of damages: Sharman v Evans (1977) 138 CLR 563. Interest itself is a head of damage that is allocated at different rates or for different periods according to the particular head of damages it applies to. The allocation of pre-judgment interest is now usually provided for by statute.

14. It follows that the defendant did not make an offer of settlement in accordance with section 151M(4)(a)(i) of the WCA and the Court’s discretion to make an award for interest is enlivened.

15. The defendant further contends that no award for interest should be made on discretionary grounds because there were inconsistencies in the plaintiff’s case which lead to a reasonable decision on behalf of the defendant to put liability in issue, that the plaintiff’s claim for past economic loss was inflated and that there was a dispute as to the plaintiff’s ongoing earning capacity.

16. An award for interest is to compensate the plaintiff for a loss suffered by being kept out of money during the relevant period: Batchelor v Burke (1981) 148 CLR 448. The defendant submits that the plaintiff was paid $306,351.00 in compensation payments against a calculated past loss of wages of $386,711.00. The defendant submits that this discrepancy was relatively insignificant. However, the plaintiff was kept out of the money for an extended period and the defendant accepts that the appropriate calculation of interest to be $55,389.00, which is a significant potential component of the plaintiff’s award of damages.

17. In my view, the plaintiff has satisfied the requirements of section 151M(4)(a)(i) of the WCA and in the exercise of my discretion is entitled to an award of interest in the sum of $55,389.00.

The Plaintiff’s Claim for Costs

18. The award of interest is a head of damage that forms part of the judgment to which the plaintiff is entitled, which amounts to $477,041.00.

19. In those circumstances, the plaintiff has received a judgment no less favourable to him than the terms of his final offer of settlement at mediation and is entitled to an order that the defendant pay his costs in accordance with clause 94 of the Regulation.

20. For the sake of completeness, the plaintiff’s entitlement to that judgment sum (on the defendant’s argument) also exceeds the Verbal Offer made by the defendant on 5 November 2018.

Orders

21. The orders I make are:

1. The plaintiff is entitled to an award of interest pursuant to section 151M Workers Compensation Act 1987 in the sum of $55,389.00;

2. There will be judgment entered for the plaintiff in the sum of $477,041.00;

3. The defendant is to pay the plaintiff’s costs pursuant to Regulation 94 Workers Compensation Regulation 2016 on a party/party basis noting that such costs are governed by Schedule 7 of the Workers Compensation Regulation 2016.

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Decision last updated: 15 April 2019