Javor v ACN 096 712 337 Pty Ltd formerly known as Formtec Group Pty Ltd (No 2)

[2012] NSWDC 209

District Court

New South Wales

Medium Neutral Citation:

Javor v ACN 096 712 337 Pty Ltd formerly known as Formtec Group Pty Ltd (No 2) [2012] NSWDC 209

Hearing dates:

2 November 2012 and subsequent written submissions concluding on 9 November 2012

Decision date:

14 November 2012

Jurisdiction:

Civil

Before:

Levy SC DCJ

Decision:

1.The plaintiff's application for interest is refused;

2.The plaintiff is to pay the defendant's costs of the refused application;

3.The written submissions and supporting materials are to remain with the court file pending further orders made either by this Court, or the Court of Appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

INTEREST - whether claim for interest pursuant to s 151M of Workers' Compensation Act 1987 has been established

Legislation Cited:

Civil Liability Act 2002: s 3B, s 5B
Workers' Compensation Act 1987, s 151M
Workplace Injury Management and Workers' Compensation Act 1998, s 315

Category:

Consequential orders

Parties:

Damir Javor (Plaintiff)
ACN 096 712 337 Pty Ltd formerly known as Formtec Group Pty Ltd (Defendant)

Representation:

Mr F Curran (Plaintiff)
Mr H Halligan (Defendant)
Carters Law Firm (Plaintiff)
Hicksons (Defendant)

File Number(s):

2012/104654

Publication restriction:

None

Judgment

Application

1. This is an application made on behalf of the plaintiff, Damir Javor, pursuant to s 151M of the Workers' Compensation Act 1987 ["WC Act"], for interest to be added to the damages he was awarded against the defendant on 25 September 2012: Javor v ACN 096 712 337 Pty Ltd formerly known as Formtec Group Pty Ltd [2012] NSWDC 157.

Basis of application for interest

1. The result of the principal proceedings was that the plaintiff's damages were assessed in the amount of $1,021,888. After offsetting the statutory defence comprising the amounts received by or on behalf of the plaintiff for workers' compensation payments and benefits in the total sum of $271,952.32, the plaintiff obtained a final judgment of $749,935.70. The interest claimed by the plaintiff is quantified at $45,457.

Procedural pathway of claim

1. The parties were unsuccessful in their attempts to resolve the interest question. That question was listed for argument on 2 November 2012, however, counsel for the plaintiff became unavailable, and with the consent of counsel for the defendant the application did not proceed on that day.

1. Instead, it was then agreed between the parties that the interest question could be decided on the papers, following written submissions, on the understanding that this decision would be published on the Caselaw site without the further need for the parties to incur additional costs in having to attend court for the delivery of these reasons, although the parties would be and have been notified of today's listing.

1. The plaintiff's submissions were received on 7 November 2012. The defendant's submissions in reply were received on 9 November 2012. The consideration of the application follows.

Applicable legal principles

1. Interest is only available to a plaintiff in claims such as this if the pre-requisites set out in s 151M of the WC Act have been satisfied. Amongst other things, the essential pre-requisite to be established by a claimant for interest is that before a defendant employer should be further burdened with a liability for interest, that defendant must have had a reasonable opportunity to make an offer of settlement, or a revised offer of settlement, following an opportunity to make a proper assessment of a plaintiff's full entitlement to damages of any kind. In addition to that requirement, a plaintiff must also show the achievement of an award of damages more than 20 per cent higher than a defendant's highest settlement offer: s 151M(4) of the WC Act.

Additional information underpinning claim for interest

1. In the present case, the parties attended a mediation on 13 September 2011, at which the plaintiff's last offer of settlement was $525,000. At that time, the defendant had offered $350,000, and that offer was not accepted. The difference between the respective offers was $175,000, which exceeds the 20 per cent threshold required by s 151M(4)(a)(iii) of the WC Act.

1. Before considering the significance of those figures to the claim for interest, it is also necessary to note that in this case, the requirements of s 315 of the Workplace Injury Management and Workers' Compensation Act 1998 ["WIM Act"] were not met, in that before commencing his proceedings, the plaintiff's pre-filing statement required under the WIM Act did not set out in full the particulars or the evidence upon which the plaintiff would rely in order to establish his economic loss claim.

1. As a result of recognition of that problem, shortly before the trial the plaintiff made an application to the List Judge of this Court for leave to serve such evidence.

1. It was not until 29 June 2012, which was the second day of the trial, that pursuant to such leave, the plaintiff introduced such material from the comparable earnings witnesses, Mr Oliveric and Mr Visic.

1. Significantly, as at the date of the mediation on 13 September 2011, no evidence of the actual comparable earnings ultimately relied upon by the plaintiff had been served on the defendant, nor had such evidence been served before the trial.

Consideration

1. It is plain that at the mediation, the defendant crafted its offer of $350,000 on the information that was available to the defendant for its consideration at the time.

1. It is also plain that at the trial, there was significant contest over the appropriate amount to be assessed for comparable earnings, as well as questions concerning the credit which were influential on the plaintiff's claim for damages, and whether the plaintiff had properly complied with his obligation to mitigate his post-injury circumstances, including by making reasonable attempts to seek and obtain suitable alternative employment. Those contested matters were determined in favour of the plaintiff: Javor v ACN 096 712 337 Pty Ltd formerly known as Formtec Group Pty Ltd [2012] NSWDC 157, at paragraphs [4] - [11]; [69] - [73]; [103] - [138] and [140] - [153].

1. Although the plaintiff ultimately prevailed on those issues, the defendant was entitled to take the view it in fact took in seeking to defend those aspects of the plaintiff's claim against it. The fact that the defendant did not ultimately prevail on those issues when findings of fact were made, is not determinative of the plaintiff's entitlement to interest in the circumstances of this case.

1. Instead, the pre-requisites of the template provided by s 151M provide the determinants of the claim for interest. Furthermore, in the legislative scheme of the historical amendments to the WC Act, that provision must be read as a restrictive limitation on the entitlement to an award of interest.

1. The plaintiff had not served the required particulars and supporting evidence of the quantum of his economic loss claim with his pre-filing statement as required by s 315(1) of the WIM Act. In my view it is insufficient compliance with the statutory requirements, in this instance, that the comparable earnings evidence relied upon at the trial was "largely in line" with the pre-filing statement. The statute required actual compliance.

1. The claim for economic loss, past and future, in aggregate, formed the most significant parts of the plaintiff's damages award.

1. I consider that the failure of the representatives of the plaintiff to comply with s 315(1) of that Act in serving the required material on the defendant in a timely fashion was instrumental in the setting of the defendant's offer at mediation.

1. If the relevant information had been available at the time, taking an objective approach, it can be fairly inferred without evidence that an insurance company claims manager acting reasonably would have prudently had regard to such material when making a proper assessment of the plaintiff's claim for damages.

1. The required material was absent at the relevant time, and accordingly, I find that the defendant was not given the necessary information that would have enabled a proper assessment of the potential quantum of the plaintiff's claim, contrary to the requirements of s 151M(4)(a)(i) of the WC Act.

1. The absence of that material until the second day of the trial necessarily meant that the defendant was not given a reasonable opportunity to make a revised offer of settlement taking the additional material into account until the second day of the trial: s 151M(4)(a)(ii) of the WC Act.

1. In the foregoing circumstances, the application for an award of interest to be added to the plaintiff's award of damages should be refused, with costs.

Orders

1. On the plaintiff's application for interest, I make the following orders:

(1)  The plaintiff's application for interest is refused;

(2)  The plaintiff is to pay the defendant's costs of the refused application;

(3)  The written submissions and supporting materials are to remain with the court file pending further orders made either by this Court, or the Court of Appeal.

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Decision last updated: 15 November 2012