Kabic v AAI Limited t/as GIO (No 2)

[2019] NSWCA 311

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Kabic v AAI Limited t/as GIO (No 2) [2019] NSWCA 311
Hearing dates:	On the papers; Respondent’s submissions filed 1 November 2019; Appellant’s submissions filed 8 November 2019
Decision date:	19 December 2019
Before:	Meagher JA at [1]; White JA at [1]; McCallum JA at [1]
Decision:	(1)   Set aside order 1 entered on 16 March 2018 and in its place give judgment for the appellant against the respondent in the sum of $986,464.91. (2)   Order that as between the appellant and the respondent such judgment is to take effect as and from 16 March 2018.    (3) Judgment for the second cross respondent against the respondent/cross appellant pursuant to s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) in the amount of $545,115.73. (4)   The respondent/cross appellant pay interest to the second cross respondent in the amount of $157,227.80. (5)   In relation to Orders 1 and 3 above note: (a)    payment of the amount of $545,115.73 is to be made to the second cross respondent by the respondent/cross appellant; (b) payment of the above amount of $545,115.73 to the second cross respondent satisfies and discharges the appellant's obligation, pursuant to s 151Z(1)(b) of the Workers Compensation Act 1987 (NSW), to repay workers compensation payments made to him by the second cross respondent in the agreed amount of $545,115.73; (c) payment of the above amount of $545,115.73 to the second cross respondent pursuant to s 151Z(1)(e1) of the Workers Compensation Act 1987 (NSW) partly satisfies and partly discharges the respondent/cross appellant's obligation to the appellant, pursuant to the order against it and in favour of the appellant entered on 16 March 2018 as substituted by Order 1 above; and (d) payment of the sum of $441,349.18 and interest thereon pursuant to s 101 of the Civil Procedure Act 2005 (NSW) satisfies the appellant's judgment as against the respondent/cross appellant.
Catchwords:	JUDGMENTS AND ORDERS — interest — award of on judgment — where appeal successful — whether post-judgment interest should run from date of first instance orders or orders allowing appeal
Legislation Cited:	Civil Procedure Act 2005 (NSW), ss 100, 101 Workers Compensation Act 1987 (NSW), s 151Z Civil Liability Act 2002 (NSW), s 14B Uniform Civil Procedure Rules 2005 (NSW), r 36.4
Cases Cited:	Gacic v John Fairfax Publications Pty Ltd [2015] NSWCA 99 Government Insurance Office (NSW) v Healey (No 2) (1991) 22 NSWLR 380 Hartley Poynton Ltd v Ali [2005] VSCA 53 Kabic v AAI Limited t/as GIO [2019] NSWCA 247 Najdovski v Crnojlovic (No. 2) [2008] NSWCA 281 Nicol v Allyacht Spas Pty Ltd (No. 2) (1988) 165 CLR 306; [1988] HCA 48 Zoef v Nationwide News Pty Ltd (No 2) [2017] NSWCA 2
Category:	Costs
Parties:	Milan Kabic (Appellant/First Cross-Respondent) AAI Limited t/as GIO (Respondent/Cross-Appellant) Workers Compensation Nominal Defendant (Second Cross-Respondent)
Representation:	Counsel: B J Gross QC (Appellant/First Cross-Respondent) R Perla (Respondent/Cross-Appellant) N E Chen SC with J C Lee (Second Cross-Respondent)     Solicitors: Carters Law Firm (Appellant/First Cross-Respondent) Moray and Agnew (Respondent/Cross-Appellant) HWL Ebsworths (Second Cross-Respondent)
File Number(s):	2018/89704
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Division Citation: [2017] NSWSC 1281 Date of Decision: 22 September 2017 Before: Button J File Number(s): 2014/129949

Judgment

1. THE COURT: On 11 October 2019 the Court made orders allowing the appeal in part and dismissing the cross-appeal (Kabic v AAI Limited t/as GIO [2019] NSWCA 247). The Court set aside some orders made by the primary judge on 11 July 2018 and directed that the parties provide short minutes of order for the judgments to be entered for the appellant and first cross-respondent (“Mr Kabic”) against the respondent (“the GIO”) and the second cross-respondent (“the Workers Compensation Nominal Insurer”) against the cross-appellant (the GIO) consistently with the reasons for judgment.

2. The first respondent (“the GIO”) submitted the following draft short minutes of order based on orders being made as at 24 October 2019:

“1    Vary the judgment entered on 16 March 2018 in favour of the first cross respondent in the sum of $452,395.18 to $986,464.91.

2 Judgment for the second cross respondent against the respondent/cross appellant pursuant to s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) in the amount of $545,115.73.

3 The respondent/cross appellant to pay interest to the second cross respondent in the amount of $152,840.20 pursuant to s 100 of the Civil Procedure Act 2005 (NSW), with such interest accruing at a daily rate of $64.24 and $14.11 respectively, in accordance with the schedule annexed and marked "A".

4    In relation to Orders 1 and 2 above note:

(a)    payment of the amount of $545,115.73 is to be made to the second cross respondent by the respondent/cross appellant; and

(b) payment of the above amount of $545,115.73 to the second cross respondent satisfies and discharges the appellant's obligation, pursuant to s 151Z(1)(b) of the Workers Compensation Act 1987 (NSW), to repay workers compensation payments made to him by the second cross respondent in the agreed amount of $545,115.73.

(c) payment of the above amount of $545,115.73 to the second cross respondent pursuant to s 151Z(1)(e1) of the Workers Compensation Act 1987 (NSW) partly satisfies and partly discharges the respondent/cross appellant's obligation to the appellant, pursuant to the judgment against it and in favour of the appellant entered on 16 March 2018 and varied by Order 1 above.

(d)    payment of the sum of $441,349.18 satisfies the appellant's judgment as against the respondent/cross appellant, pursuant to the judgment against it and in favour of the appellant entered on 16 March 2018 and varied by Order 1 above.”

3. The draft orders propose that judgment be entered against the GIO rather than its insured, the third defendant, Calcono Pty Ltd (“Calcono”). The GIO was substituted on appeal for Calcono and the proposed orders reflect that substitution.

4. Attached to the draft short minutes as annexure “A” were calculations of the interest payable to the Workers Compensation Nominal Insurer on periodical and lump sum payments of workers’ compensation paid to Mr Kabic. Those calculations were not disputed. Orders 2, 3, 4(a), 4(b) and 4(c) were agreed as between the GIO and the Workers Compensation Nominal Insurer.

5. The only dispute was between Mr Kabic and the GIO in relation to orders 1 and 4(d).

6. Order 1 in the proposed short minutes refers to varying a “judgment” entered on 16 March 2018 in favour of Mr Kabic. The orders entered on JusticeLink on 16 March 2018 do not refer to a judgment. The orders made on that day were as follows:

“1.   Verdict for the plaintiff against the third defendant, Calcono Pty Ltd, in the sum of $452,395.18.

2.   Costs are reserved.”

7. Juries give verdicts. A jury’s verdict might or might not result in a judgment. The parties treated the reference to a verdict as a slip which was to be understood to be a judgment. The orders made on 11 July 2018 (that were set aside by order 3 made by this Court on 11 October 2019) also treated order 1 made on 16 March 2018 as if it were a judgment entered in favour of Mr Kabic for $452,395.18. We proceed accordingly. In substance, what is sought is the variation of a judgment, but the appropriate order is that order 1 made on 16 March 2018 be set aside and judgment be entered for Mr Kabic against the GIO for $986,464.91.

8. Mr Kabic accepts that the quantum of damages for which judgment is to be entered, calculated in accordance with this Court’s reasons of 11 October 2019, is $986,464.91. That sum does not include any amount of pre-judgment interest. Prima facie Mr Kabic would be entitled to pre-judgment interest on that part of the award of damages referable to past economic loss (and any out-of-pocket expenses paid by him) at the rate prescribed by s 14B of the Civil Liability Act 2002 (NSW), adjusted for the proportion of the damages to be paid to the Workers Compensation Nominal Insurer pursuant to s 151Z of the Workers Compensation Act 1987 (NSW).

9. No such pre-judgment interest was allowed for in the judgment below. Interest was not claimed in Mr Kabic’s notice of appeal. Nor does he claim pre-judgment interest on any part of the damages award now. The GIO does not submit that Mr Kabic should be awarded pre-judgment interest nor proffer a calculation of pre-judgment interest.

10. Instead, Mr Kabic submits that order 1 proposed by the GIO should be amended by adding the words “such judgment to take effect from 16 March 2018”. It is common ground that without such an order the proposed order 1 would take effect from the date of this Court’s order. Rule 36.4(3) of the Uniform Civil Procedure Rules 2005 provides that a judgment or order may take effect as of a date earlier or later than the date fixed by subrr (1) or (2).

11. Mr Kabic seeks the additional words so that post-judgment interest pursuant to s 101 of the Civil Procedure Act will be payable on the judgment as from 16 March 2018. The rationale for the proposed amendment is that, on the basis of this Court’s findings, judgment should have been given on 16 March 2018 in favour of Mr Kabic in the sum of $986,464.91. If that judgment had not been paid within 28 days then, unless the Court otherwise ordered, interest at the higher rate applicable to post-judgment interest would have been payable on it. Presumably post-judgment interest would have been payable on a judgment of $986,464.91 to Mr Kabic and to the Workers Compensation Nominal Insurer in the proportion of 44.74 per cent and 55.26 per cent, reflecting the proportions of the judgment payable to each of them.

12. The GIO does not submit that it is prejudiced by the proposed amendment to its draft orders on the basis that it would have paid such a judgment had it been given on 16 March 2018. It is clear from the orders agreed as between it and the Workers Compensation Nominal Insurer that it did not pay the judgment of $452,395.18. Indeed, on 7 August 2018 the judgment was stayed by consent pending the outcome of the appeal.

13. The GIO and the Workers Compensation Nominal Insurer have agreed on the orders to be made on the Workers Compensation Nominal Insurer’s cross-claim against Calcono for indemnity under s 151Z(1)(d) of the Workers Compensation Act. The proposed orders include judgment of $545,115.73 by way of indemnity for the amount of the principal of workers’ compensation payments made to Mr Kabic. Those orders also provide for the payment of pre-judgment interest on those payments at the rates prescribed for the purposes of s 100 of the Civil Procedure Act up to 24 October 2019 and thereafter continuing on a daily rate until the rate changes. As at 24 October 2019 the amount of interest agreed to be payable by the GIO to the Workers Compensation Nominal Insurer was $152,840.22. Adding the agreed amounts of daily interest up to 19 December 2019 (the date of the orders), the amount of pre-judgment interest payable to the Workers Compensation Nominal Insurer is $157,227.80

14. The fact that the GIO and the Workers Compensation Nominal Insurer have agreed to orders which contemplate that the orders to be made so far as they are concerned will take effect from the date of this Court’s orders, and provide for pre-judgment interest up to that date, does not preclude Mr Kabic from seeking an order that as between the GIO and him the judgment take effect as from 16 March 2018.

15. Mr Kabic proposes that order 4(d) submitted by the GIO be amended to add after “441,349.18” the words “together with interest thereon under s 101 of the Civil Procedure Act as from 16 March 2018.”

16. In our opinion this is an appropriate case for making an order under r 36.4(3) that as between Mr Kabic and Calcono the judgment for $986,464.91 is to take effect as from 16 March 2018. There has been delay between the adjudication of Mr Kabic’s claim at trial and the final determination of that claim on appeal (Hartley Poynton Ltd v Ali (2005) 11 VR 568; [2005] VSCA 53 at [73] and [76]-[80]; Gacic v John Fairfax Publications Pty Ltd (2015) 89 NSWLR 533; [2015] NSWCA 99 at [146]-[147]). In Government Insurance Office (NSW) v Healey (No 2) (1991) 22 NSWLR 380 Kirby P said (at 387) that the power under Pt 40, r 3(5) of the Supreme Court Rules, a predecessor of r 36.4(3), to order that a judgment take effect earlier than the date on which it would otherwise do was to allow the making of the order that would do what is just in the particular case where the usual position provided by the Act would produce unfairness. In Zoef v Nationwide News Pty Ltd (No 2) [2017] NSWCA 2 Gleeson JA (with whom Ward and Payne JJA agreed) considered that the delay of about a year between the dismissal of the appellant’s claim by the District Court and the making of final orders by the Court of Appeal was a good reason to backdate the judgment of the Court (at [47]). An additional reason was that no claim for pre-judgment interest had been raised by the appellant in his notice of appeal. It would have been unjust not to backdate the judgment to the date damages had been contingently assessed by the primary judge. Gleeson JA said (at [48]):

“The respondent complains that the effect of back-dating the judgment of this Court is that interest after judgment pursuant to s 101 of the Civil Procedure Act, would run from an earlier date than the date of delivery of this Court’s decision. However, that would have been the case but for the error of the primary judge, now corrected on appeal, in upholding the defence of reasonable offer of amends under s 18 of the Defamation Act. The effect of that error is that Mr Zoef was deprived, during the period since 16 October 2015, of the damages to which he was entitled.”

17. The same reasoning applies, mutatis mutandis, in the present case. It would be unfair for Mr Kabic not to be paid interest on the proportion of the judgment sum which would have been payable to him had judgment for $986,464.91 been given on 16 March 2018, where the GIO does not suggest that that judgment, if given, would have been paid. The GIO’s proposed draft orders accept that judgment should be entered against it rather than its insured, Calcono. The GIO did not submit that the power under UCPR r 36.4(3) to order that a judgment or order take effect earlier than the date of this Court’s order could not be made differentially between those entitled to parts of the judgment sum.

18. For these reasons we make the following orders:

1. Set aside order 1 entered on 16 March 2018 and in its place give judgment for the appellant against the respondent in the sum of $986,464.91.

2. Order that as between the appellant and the respondent such judgment is to take effect as and from 16 March 2018.   

3. Judgment for the second cross respondent against the respondent/cross appellant pursuant to s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) in the amount of $545,115.73.

4. The respondent/cross appellant pay interest to the second cross respondent in the amount of $157,227.80.

5. In relation to Orders 1 and 3 above note:

(a)    payment of the amount of $545,115.73 is to be made to the second cross respondent by the respondent/cross appellant;

(b) payment of the above amount of $545,115.73 to the second cross respondent satisfies and discharges the appellant's obligation, pursuant to s 151Z(1)(b) of the Workers Compensation Act 1987 (NSW), to repay workers compensation payments made to him by the second cross respondent in the agreed amount of $545,115.73;

(c) payment of the above amount of $545,115.73 to the second cross respondent pursuant to s 151Z(1)(e1) of the Workers Compensation Act 1987 (NSW) partly satisfies and partly discharges the respondent/cross appellant's obligation to the appellant, pursuant to the order against it and in favour of the appellant entered on 16 March 2018 as substituted by Order 1 above; and

(d) payment of the sum of $441,349.18 and interest thereon pursuant to s 101 of the Civil Procedure Act 2005 (NSW) satisfies the appellant's judgment as against the respondent/cross appellant.

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Decision last updated: 19 December 2019