Howells v Mandalong Pastoral Management Pty Ltd

[2017] NSWDC 423

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Howells v Mandalong Pastoral Management Pty Ltd & Ors [2017] NSWDC 423
Hearing dates:	9 November 2017
Date of orders:	09 November 2017
Decision date:	09 November 2017
Jurisdiction:	Civil
Before:	Neilson DCJ
Decision:	I order the defendant to pay the plaintiff’s costs, which I assess at $250.
Catchwords:	WORKERS COMPENSATION – PRACTICE AND PROCEDURE – COSTS – In an award made on 25 May 2016 a general order under WCA 1987 s 60 was made – A dispute arose as to whether certain expenses were payable under the Award – Delay by defendant – Plaintiff commenced fresh proceedings before defendant paid disputed expenses – Whether plaintiff entitled to costs – Quantum of costs – Incorrect procedure adopted by plaintiff
Legislation Cited:	Workers Compensation Act 1926 Workers Compensation Act 1987
Cases Cited:	Verginis v Cleana Service Pty Ltd (1995) 11 NSWCCR 273
Category:	Procedural and other rulings
Parties:	Stephen Howells (Plaintiff) Mandalong Pastoral Management Pty Ltd (Defendant)
Representation:	Solicitors: Whitelaw McDonald (Plaintiff) Sparke Helmore (Defendant)
File Number(s):	RJ 11/17
Publication restriction:	Nil

Judgment

1. HIS HONOUR: This is the 23rd year in which I have intoned the mantra that, nothing excites the zeal, the ardour and the passion of the legal profession more than an argument about costs. The application before me is that the defendant pay the plaintiff's costs of the commencement of the current proceedings. On 25 May 2016 her Honour Judge Quirk ordered the defendant to pay the plaintiff's expenses under s 60 of the Workers Compensation Act 1987.

2. That was after her Honour made an award for weekly payments pursuant to s 11(1) of the Workers Compensation Act 1926 for the period from 13 December 2014 to 26 January 2016 and also made awards under s 66 for 25% impairment of the back, 10% impairment of the neck, 15% loss of efficient use of the right arm at or above the elbow, and 20% loss of efficient use of the right leg at or above the knee, and her Honour also awarded a consequential lump sum under s 67. Her Honour granted the parties liberty to apply on seven days’ notice.

3. There was then an attempt to comply with the order that her Honour had made concerning the payment of plaintiff's s 60 expenses. By letter dated 4 October 2016 the plaintiff's solicitors forwarded to the defendant a HIC notice of charge and requested that certain expenses mentioned therein be paid. It would appear from a schedule dated 8 September 2016, provided by Medicare, that there were outstanding expenses of $1,737.95. On 24 October 2016 the defendant's insurer promptly replied to the plaintiff's letter of 4 October 2016 pointing out that they were persuaded that of the $1,737.95, $1,161.85 were recoverable under s 60 but there was a dispute about expenses amounting to $576.10.

4. It should be observed that there was some "antiquity" about the outstanding expenses. There were three expenses incurred on 13 May 1985. There was one expense incurred on 19 August 1988 and there were three expenses incurred on 6 August 2013. All of those expenses appear to be expenses incurred with respect to radiology. For example, I know well from sitting here regularly in Newcastle that Dr Stuart Slater is a radiologist, and it is clear from the par 3 on the statement of claim that he was working at the Hunter Valley Medical Imaging Centre at Cardiff when he rendered fees on 6 August 2013.

5. The fees rendered in 1985 were by Dr Ang of Toronto. I know from the HIC document that he also is a radiologist who was for example providing "spine functional views" which is apt to describe certain radiological investigations. The final doctor for whom expenses were incurred was Dr L. Smith, who is described in the statement of claim as being at Hunter Imaging, again likely to be a radiologist.

6. This was pointed out to Coal Mines Insurance by the plaintiff's solicitor on 8 November 2016. On 11 November 2016 the insurer wrote to the plaintiff's solicitors saying inter alia this: "With respect to the remaining expenses totalling $576.10, I confirm CMI are currently reviewing this further and will provide you with an update within 14 days from today."

7. The claims manager at CMI then wrote to the defendant's solicitor outlining the nature of the issue it was then considering and requesting the defendant's solicitor to review its file and provide the insurer with any advice the solicitor could at the solicitor's earliest convenience. They did not receive a response from Messrs Sparke Helmore until 19 January 2017, over two months later. The email in reply apologised for the delay but it was necessary to obtain the solicitor's file from archives. When the file was retrieved the solicitor was unable to find any medical evidence that the services were provided as stated.

8. On 25 January 2017 the insurer reimbursed the plaintiff the sum of $576.10. A letter confirming that payment was sent to the plaintiff's solicitors at its post office box at Kotara Fair on 24 January 2017. Unfortunately, things had gone awry in the meantime. On 13 January 2017 the plaintiff's solicitor completed a statement of claim and a certificate of compliance and forwarded those two documents to the Newcastle registry of this Court for filing. They passed under the seal of the Court on 25 January 2017, then returned to the plaintiff's solicitors who served the statement of claim on 2 February 2017.

9. The plaintiff's solicitor did not need to serve the statement of claim as the proceedings could have been discontinued once it was realised that the claim had been paid. However, the plaintiff’s solicitor says that she never received the letter from Coal Mines Insurance of 24 January 2017. That is rather curious since earlier correspondence addressed to the plaintiff's solicitors post office box at Kotara Fair had been received. Once, however, it was realised that the claim had in fact been paid, the remaining question concerns costs.

10. It has been the time-honoured practice of solicitors in this State and in England prior to 26 January 1788 to send a letter before action informing the person who might be affected by the commencement of proceedings that proceedings would be commenced unless certain steps were taken such as paying a claim or, for example, in a defamation action, making an apology. There was no letter before action sent by the plaintiff's solicitor. This is unfortunate and poor practice.

11. Nevertheless, on 11 November 2016 the insurer of the defendant had advised the plaintiff's solicitors that they would provide the plaintiff's solicitor with "an update" within 14 days, but the updating did not occur until more than two months later. This is, unfortunately, objectively unacceptable conduct, especially when it ought to have been clear to both the insurer and the solicitor that the expenses that had been incurred were in fact radiological investigations of parts of the body that formed the subject of the award announced by her Honour Judge Quirk on 25 May 2016. The plaintiff claimed by way of costs $4,096.58. The claim is in my view outrageous. The amount in question was $576.10. In Verginis v Cleana Service Pty Ltd (1995) 11 NSWCCR 273, I said this:

"I have been asked by the applicant to make a costs order and I have been invited to assess the applicant's costs. There has been no demur to that. Costs follow the event. Therefore, the applicant is prima facie entitled to her costs.

However, she has recovered but a small amount of money. There was no appropriate letter before action, to which my attention has been drawn. It, to me, is of great concern that where a worker recovers an award of $1,120 plus interest for eight years at 12%, the recovery would be approximately $2,250.

It appears to me a scandal that the costs should exceed the value of the claim. Public policy must be brought into account. People should not recover in costs a substantial amount of money more than the value of their claim. Costs should be proportionate, in my view, to the amount recovered. Doing the best, I can, on the evidence before me, I assess the applicant's costs as being $2,220."

The plaintiff is in my view entitled to a nominal amount of costs. Where there is an issue as to whether certain expenses are covered by an Award of the Court, the appropriate procedure is to file a Notice of Motion in the completed proceedings, not to commence fresh proceedings. I order the defendant to pay the plaintiff's costs which I assess in the sum of $250.

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Amendments

01 March 2018 - Typographical error corrected.

Decision last updated: 01 March 2018