Johnson v HCC Underwriting Agency Ltd as trustees for Syndicate 4040 of Lloyds

[2013] NSWSC 1156

Supreme Court

New South Wales

Medium Neutral Citation:

Johnson v HCC Underwriting Agency Ltd as trustees for Syndicate 4040 of Lloyds [2013] NSWSC 1156

Hearing dates:

17 June 2013

Decision date:

23 August 2013

Before:

Simpson J

Decision:

(i) The cross-claimant (Commonwealth Bank of Australia) pay the costs of the second cross-defendant (Workers Compensation Nominal Insurer) of the cross-claim.

(ii) Costs be assessed on an ordinary basis until 21 April 2012, and on an indemnity basis thereafter.

Catchwords:

COSTS - cross-claim dismissed - application for ordinary and indemnity costs - offer of compromise made - no issue of principle

Legislation Cited:

Corporations Act 2001 (Cth)
Law Reform (Miscellaneous Provisions) Act 1946 (NSW)

Category:

Costs

Parties:

Steven Craig Johnson (Plaintiff/First Cross-Defendant)
HCC Underwriting Agency Ltd as trustees for Syndicate 4040 of Lloyds (First Defendant/First Cross Defendant)
Commonwealth Bank of Australia (Second Defendant/Cross Claimant)
The Workers' Compensation Nominal Insurer (Second Cross Defendant)

Representation:

Counsel:
M Daley/L Friedwald (Plaintiff)
D A Lloyd (First defendant/First Cross Defendant)
J A Gracie (Second Defendant/Cross Claimant)
P N Khandhar (Second Cross Defendant)
Solicitors:
George West (Plaintiff)
Lee & Lyons (First defendant/First Cross Defendant)
Goldrick Farrell Mullan (Second Defendant/Cross Claimant)
DLA Piper (Second Cross Defendant)

File Number(s):

2009/338399

Judgment

1. By Statement of Claim filed in the District Court on 4 December 2009, the plaintiff sued Multi-Dimensional Security Pty Ltd, as first defendant, and the Commonwealth Bank of Australia ("CBA") as second defendant, claiming damages for personal injury suffered by him on 4 December 2006 arising out of his employment by Site Workforce Pty Ltd as a security guard. The cause of action against both defendants was negligence. The plaintiff did not sue his employer, Site Workforce. Site Workforce held a policy of Workers Compensation insurance with Workers Compensation Nominal Insurer ("WCNI"). In July 2008 a liquidator was appointed to Site Workforce.

1. In December 2009 the first defendant (Multi-Dimensional Security Pty Ltd) was de-registered. HCC Underwriting Agency Ltd as trustee for Syndicate 4040 of Lloyds ("HCC") was, pursuant to s 601AG of the Corporations Act 2001 (Cth) and s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), substituted as first defendant.

1. In due course, CBA filed a cross-claim naming HCC as first cross-defendant and WCNI as second cross-defendant. WCNI was sued by CBA pursuant to s 601AG of the Corporations Act.

1. The allegation in the cross-claim made by CBA against WCNI adopted the pleading of the plaintiff. Essentially, by its cross-claim against WCNI, CBA sought to pass on to WCNI any liability it was found to have to the plaintiff. It sought to place WCNI in the position of the plaintiff's employer.

1. By virtue of the provisions of the Workers Compensation Act 1987, the plaintiff's employer was liable to the plaintiff for damages for personal injury only if it could be shown that the plaintiff's injuries represented at least 15 per cent whole person impairment ("WPI"). CBA's claim against WCNI depended upon that fact being established. It was not.

1. The trial was fixed to commence on 17 June 2013. At the commencement of the proceedings on that day counsel for CBA announced that the issues between the plaintiff and CBA had been resolved with consent orders that included a verdict for CBA against the plaintiff.

1. That verdict had the necessary consequence that CBA's cross-claim against WCNI was to be dismissed. The only outstanding issue was costs between CBA and WCNI.

1. WCNI sought costs against CBA, on an ordinary basis until 21 April 2012, and an indemnity basis thereafter. It was not in contest that if WCNI was entitled to costs, by reason of an Offer of Compromise duly made, it was further entitled to an order that they be assessed on an indemnity basis from that date.

1. The argument of WCNI was that there was never any realistic prospect that the plaintiff could be shown to have sustained at least 15 per cent WPI. Only one of many medical reports suggested that he could. Most tellingly, the plaintiff himself had not sued his employer. That, it could be inferred, was in recognition that his injuries did not reach the statutory threshold.

1. At the end of argument on costs, the best that counsel for CBA could do was to ask the Court to "exercise ... generosity of spirit" towards CBA. To do so would be to exercise ungenerosity of spirit, unfairly, to WCNI. There is no principled basis for taking such a course. The orders sought by WCNI must be made.

1. The orders I make are:

(i)   The cross-claimant (Commonwealth Bank of Australia) pay the costs of the second cross-defendant (Workers Compensation Nominal Insurer) of the cross-claim.

(ii)   Costs be assessed on an ordinary basis until 21 April 2012, and on an indemnity basis thereafter.

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Decision last updated: 23 August 2013