Group 4 Securitas v Naidu

[2005] NSWCA 470

CITATION:	Group 4 Securitas v Naidu [2005] NSWCA 470
HEARING DATE(S):	13 December 2005
JUDGMENT DATE:	13 December 2005
JUDGMENT OF:	Ipp JA at 22; Basten JA at 1; Brownie AJA at 23
DECISION:	Appliction for leave to appeal dismissed with costs.

CATCHWORDS:	DAMAGES – application for leave to appeal against an order for interim payment made pursuant to s82(1) of the Civil Procedure Act 2005 (NSW) – whether claimant had been denied procedural fairness in that it had not had an opportunity to present full submissions as to why an order should not be made under s82 – whether the case falls within any of the three paragraphs of subs 82(3) of the Civil Procedure Act – the term “judgment” in paragraph (b) of subs 82(3) construed – the interaction of s82 of the Civil Procedure Act and s151B(1)(b) of the Workers Compensation Act 1987 (NSW), now repealed – whether an order that the appellant is not entitled to recover workers compensation payments out of the money ordered to be paid is contrary to the appellant’s statutory entitlement to recovery under s151B(1)(b) – whether the failure to take into account the compensation payment rendered the separate contributions of the two defendants disproportionate, and therefore contrary to the requirements of s82(5) and (6).
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW) Workers Compensation Act 1987 (NSW)
PARTIES:	Group 4 Securitas Pty Ltd (Claimant) Devandar Naidu (First Opponent) Nationwide News Limited (Second Opponent)
FILE NUMBER(S):	CA 40729/05
COUNSEL:	G. Parker (Claimant) B. Slowgrove (First Opponent) S. Torrington (Second Opponent)
SOLICITORS:	TurksLegal (Claimant) Albert A. Macri Partners (First Opponent) No appearance (Second Opponent)

LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 20188/2001
LOWER COURT JUDICIAL OFFICER:	Adams J

CA 40729/05

IPP JA
BASTEN JA
BROWNIE AJA

13 December 2005

GROUP 4 SECURITAS PTY LTD v NAIDU & ORS

Judgment

1 BASTEN JA: This is an application for leave to appeal against an order made by Adams J on 2 September 2005 for an interim payment in relation to claims for damages.

2 The plaintiff made a claim for damages against two defendants, being Group 4 Securitas Pty Ltd (“Group 4”) and Nationwide News Ltd (“Nationwide”). On 24 June 2005 his Honour handed down judgment in which, although we were not taken to it, it appears that his Honour upheld the plaintiff’s claims on questions of liability in respect of both defendants. No final orders were made as there were issues outstanding in relation to the quantification of damages, on which he heard the parties further on 1 September 2005.

3 Following some brief discussion on 1 September, his Honour indicated on 2 September that he intended to order pursuant to s 82(1) of the Civil Procedure Act 2005 (NSW) that each defendant make, what is described in the heading to that section, as “interim payments”, His Honour made an order that an amount of $400,000 be paid to the plaintiff. On the basis of the likely orders for contribution between the defendants, his Honour ordered that Group 4 pay an amount of $140,000, being 35% of the total figure. The balance was required to be paid by Nationwide.

4 The claimant, Group 4, applied for leave to appeal against the order made with respect to it. It put forward four main grounds of appeal.

5 The first ground was that it had been denied procedural fairness in that it had not had an opportunity to present full submissions to his Honour as to why an order should not be made under s 82. However, there had been preliminary discussion as to the possibility of such an order on the afternoon of 1 September, the matter being stood over until 2 September. Group 4 had an opportunity to consider its position overnight and, if of the view that it was simply not reasonably practicable to present submissions the following morning, it could have made an application for an adjournment on such basis as it was able to muster, prior to the orders being made on 2 September. That step was not taken and, accordingly, it cannot now complain of procedural fairness. I would refuse leave to agitate that ground.

6 The second ground was based on the proposition that the case did not fall within any of the three paragraphs of sub-s 82(3) of the Civil Procedure Act. The only paragraph relied upon is paragraph (b), which applies where “the plaintiff has obtained judgment against the defendant for damages to be assessed”. The claimant conceded that there could be circumstances in which a finding with respect to liability would constitute a “judgment” for the purposes of this provision. However, it submitted that that could only occur in the case of a default judgment, or a finding of liability following an order for a separate trial.

7 If the term “judgment” is wide enough to encompass these examples, it is difficult to see why it should not encompass the present case, where there was a finding with respect to liability in the course of a trial, but in circumstances where the Court was not yet in a position to give final judgment. Given that sub-s 82(3) envisages orders being made where the defendant has merely admitted liability and where there has been no trial, but the Court is satisfied that the plaintiff would obtain judgment for substantial damages against the defendant at trial, no restrictive reading should be given to par (b). This ground does not warrant a grant of leave to appeal.

8 The third ground concerned the interaction of s 82 of the Civil Procedure Act and s 151B(1)(b) of the Workers Compensation Act 1987 (NSW), now repealed.

9 In the draft notice of appeal, the ground was expressed in the following terms:

“His Honour’s order that the appellant is not entitled to recover workers compensation payments out of the money ordered to be paid is contrary to the appellant’s statutory entitlement to recovery under s 151B(1)(b) of the Workers Compensation Act 1987.”

This ground would have required reformulation because his Honour made no such order. It was, however, apparent from the exchanges recorded in the transcript of 2 September that his Honour intended the amount already paid by way of statutory payments to be deducted from his “ultimate judgment and not from this amount”. The orders sought in the draft notice of appeal, so far as relevant, required the plaintiff to pay to Group 4 “out of the interim payment of damages an amount of $214,667.38 in reimbursement of workers compensation payments”. Although it does not matter for present purposes, no order in those terms was sought from his Honour.

10 Section 151B(1)(b), as in force at the relevant time, and so far as relevant, provided:

(1) If a person recovers damages in respect of an injury from an employer liable to pay compensation under this Act:
…
(b) the amount of any compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation.

11 There are a number of possible issues of construction which could be ventilated in relation to this now repealed provision. This exercise should be resisted as far as possible. Although s 151B had been inserted in the Workers Compensation Act prior to the enactment of the predecessor to s 82 of the Civil Procedure Act, it had been repealed prior to the enactment of the current s 82.

12 The inter-relationship of the two provisions should be understood, according to the submissions for Group 4, on the basis that s 82 was intended to provide to plaintiffs generally a mechanism for obtaining interim payments of the kind which had been available to injured workers for many years under the workers compensation legislation. That may be so, in a general sense, but s 82 is not limited to cases where interim payments are not otherwise available.

13 On the one hand, s 151B was enacted against a background in which no periodic payments of damages were available under the general law. Although it is not limited to recovery of damages awarded by judgment of a court, to the extent that damages were payable pursuant to a court order, historically it would only have been expected to operate in relation to a final judgment. In its terms it does not seek to address the new circumstance created by s 82.

14 There is further support for this conclusion to be found in the terminology of s 151B. Thus, each of the subsections, other than sub-s (1), assumes that it is known when the person recovers damages whether those damages are for economic or non-economic loss and, if for one but not the other, whether the reason why damages have not been awarded in respect of one particular head is failure to satisfy the preconditions in ss 151H or 151G of the Workers Compensation Act. Those are questions which could not be answered unless a final judgment had been given.

15 On the other hand, s 82 operates, and only operates, prior to a final judgment. Indeed, it is expressed to operate in circumstances where no assessment of damages has yet been made. As counsel for the plaintiff pointed out, the order is made in proceedings “for the recovery of damages”, and is not an order for payment of damages, but rather an order for the payment of part of the damages “sought to be recovered in the proceedings”. The amount ordered to be paid must be assessed according to the Court’s estimate of the damages or the amount “likely to be recovered by the plaintiff”: see sub-ss 82(5) and (6). In other words, receipt of a payment pursuant to an order s 82 does not involve a person recovering damages in respect of an injury, but rather receiving an advance payment of an amount which may form part of such damages, at a point, which is not inevitable, when a final judgment is delivered. Although the section seeks to limit, it does not rule out, the possibility that the plaintiff will have received an order for payment under this provision and yet fail to establish liability.

16 It follows, in my view, that an amount ordered to be paid under s 82 is not an amount of “damages”, nor does the person who receives such an amount “recover damages” at that time, for the purposes of s 151B(1).

17 Fourthly, Group 4 sought to challenge his Honour’s order on the basis that the failure to take into account the compensation payment rendered the separate contributions of the two defendants disproportionate, and therefore contrary to the requirements of s 82(5) and (6).

18 There are a number of difficulties with this argument. First, it assumes that, because the claimant, as employer, was responsible for the workers compensation payments, that figure should be added to the $140,000 interim payment which the Court had ordered it make to the plaintiff. On that basis, it was said that the claimant was being required to pay between 63% and 72% of its share of the expected final award, whereas the amount payable by Nationwide, as a proportion of its total liability, was significantly less. Although each portion is a factor to be taken into account, no particular result is dictated by the statutory provisions. The fact that the trial judge was required to take into account the contributions payable by the respective defendants does not imply that an award against one which is less than an a reasonable proportion of its total liability is inappropriate, just because, on one view, another defendant is paying a smaller proportion. Similarly, the direction in s 82(5) that the amount payable should not exceed a “reasonable proportion” of the expected damages provides no formula giving rise to some specific arithmetical result in particular circumstances. In any event, there is no requirement that workers compensation payments be taken into account in this discretionary exercise in any particular manner.

19 This fourth complaint is a challenge to the exercise of the discretion in a particular manner, is not identified in terms in the draft notice of appeal and demonstrates no sufficient grounds for interfering with a discretionary judgment.

20 There are other reasons which suggest that leave should not be granted. One is that a final judgment is expected shortly, with the result that the interim payment will no longer be interim. A second and related reason is that there would be discretionary factors which would need to be addressed before the consequential relief, namely that the plaintiff repay the interim payment received from Group 4, would be made.

21 For all these reasons, in my view the application for leave to appeal should be dismissed with costs. Subject to any suggestion which might be made as to the appropriate form of a costs order I propose that the application for leave to appeal against the order made on 2 September 2005 be dismissed.

22 IPP JA: I agree.

23 BROWNIE AJA: I also agree.

24 IPP JA: The Court is of the view that there should be no special order as to costs. Leave to appeal will be dismissed with costs. That is the order of the Court.

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