Gellard v Victorian WorkCover Authority

[2017] VCC 1919

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

Case No. CI-16-04659

ALISON GELLARD

Plaintiff
v
VICTORIAN WORKCOVER AUTHORITY	Defendant

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JUDGE:	DYER
WHERE HELD:	Melbourne
DATE OF HEARING:	20 September 2017
DATE OF RULING:	21 December 2017
CASE MAY BE CITED AS:	Gellard v VWA
MEDIUM NEUTRAL CITATION:	[2017] VCC 1919

REASONS FOR RULING
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Subject:  Costs

Catchwords:   Accident Compensation; serious injury; settlement after service
 of notice; certification of counsels’ fees.

Legislation Cited:                Accident Compensation Act 1985 s134AGA(1); WorkCover
  (Litigated Claims) Legal Costs Order 2010

Cases Cited:Oldaker v Currington [1987] VR 712 at 715; Monty v CSR Viridian Operations Pty Ltd [2013] VCC 686; Peile v Nobel (Australasia) Pty Ltd [1966] VR 433; Wadley v Ron Finemore Bulk Haulage (No 3) [2013] VSC 181; Traumanis v State of Victoria (Unreported County Court of Victoria 26 May 2017); Hazeldene Chicken Farm Pty Ltd v VWA (No 2) (2005) 13 VR 435

Ruling:  Application dismissed

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. O’Dwyer QC with Ms M. Pilipasidis	Maurice Blackburn
For the Defendant	Mr D. Masel SC with Mr S. Smith	Russell Kennedy

HIS HONOUR:

Introduction

1       The dispute  between the parties relates to an issue of costs.  Specifically the plaintiff seeks certification for counsels’ fees for both senior and junior counsel in circumstances where the plaintiff’s proceeding was resolved on the first day of a listed hearing and subsequent to a notice being given by the defendant pursuant to the WorkCover (Litigated Claims) Legal Cost Order 2010. (“LCO”)[1]

[1]Order in council made pursuant to section 134AG(1) of the Accident Compensation Act 1985 Victorian Government Gazette 28 October 2010.

2       The defendant opposes the order sought by the plaintiff in respect of counsels’ fees, but has already consented to an order for professional costs in accordance with the lump sum figure set out in Clause 4, Paragraph 1, Part A of the LCO.

3       Both parties provided written outlines of their submissions and full oral argument proceeded before me on 20 September 2017.  The matter had initially been listed for trial on 7 August 2017 before His Honour Judge Jordan.  On that date the matter was settled save for the issue of costs.  On the following day His Honour made formal orders but adjourned the question of the certification for counsels’ fees to 20 September 2017.

4       In the hearing before me court books were tendered by the parties.[2]  The plaintiff also tendered a notice for cross-examination.[3]

[2]Exhibits A & 1 respectively

[3]Exhibit B

5       The brief chronology relevant to the present application is as follows:-

·    18 October 2016, the plaintiff issued an originating motion seeking leave to commence common law proceedings for both pain and suffering and pecuniary loss damages;

·    8 March 2017, the defendant served a notice pursuant to section 4, Part 4A of the LCO stating it was prepared to grant a serious injury certificate for pain and suffering damages subject to the plaintiff abandoning her claim for pecuniary loss damages;

·    7 August 2017, substantive application resolved by plaintiff agreeing to accept a serious injury certificate for pain and suffering damages and abandoning her claim for pecuniary loss damages.

The plaintiff’s submissions

6       The essential argument advanced by Mr O’Dwyer QC, who appeared with Ms Pilipasidis on behalf of the plaintiff, was that the consequence of non‑acceptance of a notice impacted the professional costs to be awarded to a solicitor, but did not affect the payment of disbursements which included counsels’ fees.  I was referred in both written and oral submissions to Part A 4(1)(D) of the LCO, and noted that the consequence of non‑acceptance of a notice was to reduce the professional costs payable from $5,431 to $2,496.[4]

[4]These were indicative figures prior to indexation

7       The argument advanced on behalf of the plaintiff then referred to the entitlement to counsels’ fees as described in Part B.4 of the LCO.  This states:

“In addition to the sum specified in Part A above, the worker’s legal practitioner shall be entitled to be paid as a disbursement:

…

4.  the cost of counsel’s fees (including brief fee) incurred not more than 28 days prior to day 1 of the hearing.  The counsel fees payable will be calculated in accordance with item 31 in the Scale of Costs or any other sum which is agreed or ordered by the Court.”

8       There was no dispute between the parties that the LCO made provision in Part C for the County Court Rules of Civil Procedure (“the rules”) to apply to the dispute resolution process insofar as it concerned the allowance of an item claimed or the reasonable cost of a disbursement – in this case a quantum allowable for counsels’ fees.

9       I was also referred to the authority of Giankos v SPC Ardmona Operations Limited[5] insofar as it relates to the interrelationship between the provisions of section 134AB(27)(a) of the Accident Compensation Act 1985 (“the Act”) and operation of the LCO.

[5][2011] VSCA 121

10      It was submitted on behalf of the plaintiff that in line with the analysis made by the Court of Appeal in Giankos the service of a notice in accordance with the LCO should not preclude the court from exercising its discretion to certify fees for counsel in an appropriate case and generally in accordance with authority. 

11      I was referred to the longstanding authorities relevant to the retention of senior counsel as discussed in Oldaker v Currington.[6]  The question posed on that occasion was whether the retention of two counsel was appropriate in the circumstances for the proper attainment of justice.  Earlier authorities had taken a similar approach. 

[6][1987] VR 712 at 715

12      I was also referred to a decision of His Honour Judge Smith in Monty v CSR Viridian Operations Pty Ltd.[7]  In that case His Honour considered the particular circumstances of serious injury applications relevant to the retention of senior counsel on behalf of the plaintiff.  I accept as a matter of principle the conclusion reached by His Honour, although that case did not concern the question of certification following the service of a notice.

[7][2013] VCC 686

13      Mr O’Dwyer QC argued further that the medical evidence available to the plaintiff’s solicitors at the time when counsel were retained were such that it was appropriate to have done so for the proper attainment of justice.[8]

[8]Oldaker v Currington [1987] VR 712 at 715

14      Absent the situation where it was patently obvious that the plaintiff would fail on economic loss, the proper test to be applied in considering the question of certification was whether a reasonable and prudent but not over cautious solicitor in all the circumstances would seek the service of two counsel notwithstanding the expense.[9]

[9]Peile v Nobel (Australasia) Pty Ltd [1966] VR 433 at 437-438

The defendant’s submissions

15 The defendant’s submissions initially focused on the legislative framework giving rise to the LCO which somewhat confusingly is described as being made “under section 134AG(1) of the Act”, whereas it is in fact made under section 134AGA(1).

16 Mr Masel SC, who appeared with Mr Smith on behalf of the defendant, also provided written submissions stressing the object of the relevant provisions of the Act and the LCO as being a scheme to encourage early settlement of litigated serious injury applications. It was argued that the particular sections of the Act and the LCO were to be construed accordingly.

17      I was referred to both the explanatory memorandum, the amending Act and the Parliamentary Second Reading Speech in support of the defendant’s submission.

18      The LCO prescribes and regulates both professional costs and disbursements which include the cost of counsels’ fees.  The LCO contains as a notation to Part A, a further provision which is applicable in the event the Authority or a self-insurer gives a notice, as was the situation in the present case.

19      There was no issue as between the parties that the notice in the present case was given 131 days after the filing of a Notice of Appearance by the defendant’s solicitors.  The defendant’s submission was that a settlement on the terms specified in the notice at a point between 120 days after the Notice of Appearance and 14 days prior to the first day of hearing entitled the plaintiff’s solicitors to professional costs determined by reference to “Price Point B” as set out in the table forming part of Part A of the LCO.

20      The defendant conceded that any determination of the particular dispute in this case was to be conducted in accordance with the County Court Rules of Civil Procedure.  It was not particularly relevant whether the test to be applied was the one relevant to a “party and party” costing basis or the substituted “standard basis” of taxation.  I was referred to Wadley v Ron Finemore Bulk Haulage (No 3)[10] where the repeal of the rules dealing with party and party taxation was discussed.  In that case it was stated:

“… no side suggested in this application that this (the repeal of the rule) affected the operation of s134AB(28)(b) of the Act. This was no doubt because the concept of party and party costs predates the relevant rules – the concept being well known as encompassing all costs ‘necessary and proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed.’”[11]

[10][2013] VSC 181

[11]Ibid at [9]

21      I was also referred to a decision of His Honour Judge Carmody in Traumanis v State of Victoria.[12]  In that case His Honour refused to certify counsels’ fees. A notice had been served by the defendant’s solicitors some seven months earlier.  In that case His Honour stated:

“The scheme is set up to encourage an early settlement of serious injury applications including the litigated claims costs order, that part of the Act. The offer was made in writing in November 2016 and is now the result of this application. The fact that the general damages have been settled is a matter to consider in the overall exercise of the court’s discretion on costs. However, based on what I have been told, that is that all doctors have said at all times the plaintiff had a work capacity all along, it is not until recently that the plaintiff has obtained work brings to the fore that the offer of – that the November offer, 2016, should have been accepted at that time, and that the resolution of the damages issue could have been dealt with or achieved prior to today, so for that reason I’m not going to certify counsel’s fees, in this case.”[13]

[12]Unreported County Court of Victoria 26 May 2017

[13]Ibid (Transcript page 7, lines 13-28

22      I was also referred by the defendant in argument to Hazeldene Chicken Farm Pty Ltd v VWA (No 2).[14]  The Hazeldene case is a leading authority in relation to Calderbank offers and the consequences of their unreasonable rejection. 

[14](2005) 13 VR 435 at [21] to [29]

23      The present case does not involve the rejection of an offer by the plaintiff, but rather its delayed acceptance.

24 It was argued by the defendant that the LCO is a subordinate instrument made under the provisions of the Act. In accordance with section 35 of the Interpretation of Legislation Act 1984 the LCO must be construed in a manner that would promote its purpose or object and further, that consideration may be given to explanatory memoranda and Hansard in aiding such an interpretation.

25 The defendant further argued that a clear purpose and object of the LCO is to encourage early settlement of litigated serious injury applications. As such it is harmonious with and promotes the purposes of the Act as is apparent from the Hansard extracts that were relied upon in support of the defendant’s submissions.

26      I was urged to apply such a construction to the LCO when applying the court’s rules of civil procedure to the resolution of a dispute.  Part C of Clause 4 of the LCO authorises the application of the rules to apply to the dispute resolution process.  The submissions made on behalf of the defendant recognised that in the present application the dispute concerned an exercise of discretion relevantly for three items:

a)    That the cost of briefing two counsel be certified as a cost to be paid by the opposite party;

b)    that such costs should include the cost of senior counsel; and

c)    that the rate of each counsel’s fee be in the sum to be determined by the court.

27      The defendant argued that in the present case counsels’ fees should not be allowed as a disbursement to be paid by the defendant, and referred by way of analogous reasoning to the approach taken to Calderbank offers in Hazeldene Chicken Farm Pty Ltd v VWA (No 2)[15]

[15](2005) 13 VR 435, [2005] VSCA 298 at [21] to [29]

Analysis

28      I accept as a general proposition that the LCO is a subordinate instrument and its proper interpretation must be one that would promote the purpose or object underlying the enabling legislation.

29      I further accept that one of the purposes of the legislation is to ensure that costs associated with litigated serious injury applications remain reasonable in order to promote the financial sustainability of the scheme.  Notwithstanding such an interpretation of the LCO, there is a clear distinction made between the professional costs set out in Part A and the disbursements which include limited counsels’ fees set out in Part B. 

30      The extent to which counsels’ fees are payable in accordance with the LCO must initially be determined by an assessment of whether those fees, including a brief fee, were incurred not more than 28 days prior to day one of the hearing.  In this case they clearly were.

31      I am also satisfied that where a dispute arises in relation to counsels’ fees, the rules are to apply in accordance with Part C of the LCO.  In such circumstances the tests set out in cases such as Oldaker v Currington remain valid insofar as the retention of two counsel or senior counsel is concerned. 

32      Notwithstanding this analysis of the legal framework, the LCO makes no provision for counsels’ fees to be recoverable from the defendant if they were incurred at any time prior to 28 days preceding the first day of the hearing.  Although it is not relevant to the present case, I should comment that if the plaintiff’s solicitors had retained counsel to advise at or about the time the notice was given, there could be no prospect of those fees ever being recoverable under the LCO. 

33      The present application for certification is one that may fairly be made and the submissions advanced on behalf of the defendant effectively concede this point.  The real issue is whether or not the authorities in line with Oldaker v Currington justify such an order actually being made.

34      Some degree of caution needs to be exercised in adopting a similar analysis that would be relevant in determing the question of costs following a Calderbank offer.  In the case of the LCO the sole determinant of the quantum of professional costs recoverable in an originating motion seeking leave for both heads of damages is the service of the notice.  It does not matter whether the notice is given at an early or very late stage of the proceeding.  The result for the plaintiff’s solicitor is exactly the same in terms of the fixed fees recoverable.  Considerations which might seem relevant to the reasonableness of the offer or the unreasonableness of its refusal at the time it was made, are simply not relevant within the framework of the LCO.

35      The situation in the present case is whether counsel briefed within the 28 day window prior to the hearing should have their fees paid by the defendant for advising, presumably, to accept an offer that had been made five months beforehand. 

36      I have read the reports of the treating doctors that were available at the time the offer was made.  I have also noted that the plaintiff had in fact worked on between September 2012 and November 2015 following her workplace injury.  She was 63 years old when the originating motion was issued.  After ceasing work in November 2015 she had moved with her husband to live in Moama.  She had expressed a desire to keep working as long as she could when she swore her initial affidavit in June 2016.  In her later affidavit sworn on 2 August 2017 shortly prior to the hearing, she stated:

“Since ceasing work I have looked for jobs mainly through the local paper in Moama.  However Moama is a tourist town and most of the jobs advertised are in hospitality or in retail.  I could not work in hospitality because of the repetitive and physical nature of the job.  Work in retail would also be problematic for me.”[16]

[16]Exhibit A, p 20d [12]

37      The reports from her general practitioner, Dr Kelvin Mah, in December 2013 and March 2015 are not supportive of a viable case in respect of pecuniary loss.  Dr Mah referred to surgery performed by Mr Pullen in late May 2014 and stated:

“Post surgery, she had physiotherapy to mobilise her right shoulder and had a good range of movement.  She was subsequently certified fit for full duties from 10 November 2014.  She continued to have some stiffness in her right shoulder and sees the physiotherapist.

She is currently doing her normal duties with no restrictions and her prognosis is very good.  She has full capacity to work in the future and I don’t expect further medical treatment except continual self exercises and physiotherapy visits.”[17]

[17]Exhibit A, p 24

38      Dr Mah had treated Ms Gellard while she was living in Eltham and prior to her relocation with her husband to Moama in November 2015.  He wrote a further brief note to the plaintiff’s solicitor dated 16 April 2017 stating that he had not seen her since 1 April 2016.

39      Although I note that the plaintiff obtained further material after the service of the notice to support her application in respect of pecuniary loss, in my view there was no viable prospect that such application was ever likely to have succeeded.

40      In my view prudent advice should have been given to the plaintiff at or about the time of the notice and the matter should have been resolved at that time on the basis of the acceptance of the pain and suffering certificate. 

41      If the case truly had a viable prospect of success in respect of leave to claim pecuniary loss damages, then it could have proceeded to trial in August 2017.  Two counsel were briefed, the matter was prepared, it could have proceeded to hearing.  In those circumstances it is unlikely there would have been any argument as to the certification of fees had the plaintiff succeeded.

42      The simple fact is the plaintiff was given no doubt very prudent advice from senior counsel and junior counsel, that the prospects of success in respect of pecuniary loss were very bleak.  This is advice that could have been given at a much earlier stage and this argument avoided.

43      In my view this is not an appropriate case in which counsels’ fees for either senior or junior counsel can be certified.

44      I propose to dismiss the application.

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