Kutlovac v Ready Workforce (a Division of Chandler Macleod) Pty Ltd
[2017] VCC 1570
•2 November 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
WORKCOVER LIST
Case No. CI-13-03219
| MEDINA KUTLOVAC | Plaintiff |
| v | |
| READY WORFORCE (A DIVISION OF CHANDLER MACLEOD) PTY LTD | First Defendant |
| and | |
| CGU WORKERS COMPENSATION (VIC) PTY LTD | Second Defendant |
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JUDGE: | HIS HONOUR JUDGE BOWMAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 and 26 October 2017 | |
DATE OF RULING: | 2 November 2017 | |
CASE MAY BE CITED AS: | Kutlovac v Ready Workforce (a Division of Chandler Macleod) Pty Ltd & Anor | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 1570 | |
RULING
Catchwords: Offer of compromise – Order 26.08 of Civil Procedure Rules – Workplace Injury Rehabilitation and Compensation Act 2013 – referral to Medical Panel – Offer of Compromise based upon incorrect calculation of number of weeks remaining until end of second entitlement period – such error at least in part based upon erroneous information supplied by defendants’ solicitor to plaintiff’s solicitor – both Offer of Compromise and Statement of Claim, along with Amended Statement of Claim, set out more injuries than those in fact relied upon – Medical Panel Certificate of Opinion based upon correct date of termination of second entitlement period and confined entitlement to medical and like expenses to those resulting from principal injuries as opposed to expanded list of injuries – consent orders subsequently made in terms of Medical Panel’s findings – whether plaintiff entitled to indemnity costs – factors to be considered.
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R H Stanley | Adviceline Injury Lawyers |
| For the Defendants | Ms M Tait | Russell Kennedy |
HIS HONOUR:
General background
1 This matter comes before me by way of a costs dispute involving an Offer of Compromise pursuant to Order 26 of County Court Civil Procedure Rules 2008, with particular attention being focused on Order 26.08. It is in the context of the Workplace Injury Rehabilitation and Compensation Act 2013 (hereinafter referred to as “the Act), Part 6, Division 3 – Medical Panels. The essence of the dispute concerns whether orders made following a Certificate of Opinion of a Panel represent a judgment no less favourable to the plaintiff than the terms of the Offer. The relevant details will be set out shortly.
2 Mr R H Stanley of counsel appeared on behalf of the plaintiff. Ms M Tait of counsel appeared on behalf of the defendants. The interests of the defendants overlap entirely and hence they have the same legal representation. No oral evidence was called, various documents being put before me, including affidavits and exhibits.
Factual background
3 The plaintiff issued proceedings out of this Court seeking, in essence, weekly payments of compensation in respect of injuries suffered in the course of her employment with the first defendant, such employment being that of a process worker. Such weekly payments were sought from 21 April 2012 to date and to continue in accordance with law. In paragraph 6 of the Amended Statement of Claim issued in July 2016, the injuries relied upon were listed as follows:
Spine, in particular the lumbar spine;
Right lower extremity, in particular the right leg;
Right upper extremity, in particular the right shoulder;
Mental and behavioural systems; and
Digestive system.
4 Without going into such matters in unnecessarily great detail, it is apparent that the plaintiff received weekly payments of compensation commencing on or about 6 June 2011. Such weekly payments were terminated on or about 21 April 2012. By notice dated 4 April 2012, the plaintiff’s entitlement to medical and like expenses, with the exception of psychological treatment, was terminated as of 4 May 2012. A subsequent claim for weekly payments and medical and like expenses was made on 9 May 2016 and this was rejected.
5 A Defence and Amended Defence have been filed. These basically admit that the plaintiff was a worker who made a claim for compensation, received some weekly payments of compensation and payment of some medical and like expenses and agreed with various paragraphs of the Amended Statement of Claim concerning the history of events in relation to the filing of claims and the like. However, the principal assertions are that the employment no longer materially contributes to incapacity for work and that the medical and like expenses claimed are not in relation to an injury entitling the plaintiff to compensation. Thus, it can be seen that, in essence, the plaintiff is seeking the resumption of weekly payments of compensation and of payment of medical and like expenses, the defendants denying that the plaintiff is so entitled.
6 That is a very brief summary of the matter which has a comparatively long litigation history.
7 I turn now to the matters that lie at the heart of the dispute that is before me. Apparently there were some discussions or negotiations between the parties in 2016. These negotiations broke down, and the plaintiff, via her solicitor, Ms Naomi Riggs, informed the solicitor for the defendants, Mr Jacob Luca, that she wished to refer the matter to a Medical Panel. Of course, this would be pursuant to Division 3 of Part 6 of the Act. There were further communications between Ms Riggs and Mr Luca and also between Mr Luca and Ms Emma Hermans, who was Ms Riggs’ senior legal assistant at the time. It would seem that on 2 August 2016 there was a discussion between Mr Luca and Ms Riggs as to the number of weeks that remained between the date of termination of payments and the expiration of the second entitlement period pursuant to Part 5, Division 2 of the Act.
8 In his affidavit of 18 October 2017, Mr Luca, whilst apparently not having a clear recollection or note, does not dispute that he may have told Ms Riggs that there were 88 weeks left until the end of the second entitlement period (and for which period the plaintiff did not receive weekly payments). He asserts that he did not represent this with precision or certainty, but may have given that estimate.
9 Ms Hermans recorded a note of a subsequent conversation with Mr Luca on 19 September 2016. (Ms Hermans refers to it as being on 14 September 2016, although the exhibited photocopy note appears to read 19 September 2016. In any event, nothing of significance hinges upon this.) Ms Hermans’ note of the discussion is to the effect that the second defendant would have commenced making weekly payments on 22 June 2011, but the first defendant would have paid the first two weeks, so that, overall, payments would have commenced on 8 June 2011 and the 130 week second entitlement period would have expired on 3 December 2013. Payments had ceased as at 21 April 2012 and the balance would be 88 weeks.
10 It is against this background that the Offer of Compromise and the referral to the Medical Panel, ultimately resulting in the Panel’s Certificate of Opinion, occurred. As stated, the Panel’s Certificate of Opinion then became embodied in the consent orders. The relevant parts of the Offer of Compromise read as follows:
“TAKE NOTICE that the Plaintiff offers to compromise this proceeding on the following basis:
(1) The Defendants pay the plaintiff weekly payments of compensation at the rate of no current work capacity from 21 April 2012 for a period of 88 weeks and not thereafter; and
(2) The Defendants pay reasonable medical and like expenses pursuant to Section 224 of the WIRC Act relating to the injuries particularised in paragraph 6 in the Plaintiff’s Amended Statement of Claim.”
I have previously referred to the list of injuries contained in paragraph 6 of the Amended Statement of Claim.
11 The Medical Panel delivered its Certificate of Opinion and Reasons for Opinion on 12 December 2016. Because of matters that need not concern us, it would appear that there were two referrals back to the Panel in relation to clarification of some matters. What is of importance is that, on 18 September 2017, consent orders were obtained from his Honour Judge Wischusen. Whilst, in the arguments before me, there was considerable attention paid to the Opinion and, indeed, to some extent the Reasons of the Panel, the bottom line is that consent orders were obtained. This is the judgment to which the Offer of Compromise must be compared for the purposes of Order 26.08. The relevant consent orders read as follows:
“1. Pursuant to Section 313(4) of the Workplace Injury and Compensation Act 2013 … the court adopts and applies the Medical Panel Opinions dated 12 December 2016, 25 April 2017 and 28 July 2017.
2. The Second Defendant pay the Plaintiff weekly payments of compensation at the rate for no current work capacity, from 21 April 2012 to 2 December 2013 and not thereafter, in accordance with the Act.
3. The Second Defendant pay the Plaintiff’s reasonable medical and like expenses, in respect to the claimed spinal and mental injuries, to date and to continue in accordance with the Act.”
12 When viewed in this way, the task is comparatively simple. The Offer of Compromise is to be compared with the judgment obtained.
13 When the task is approached in this way, the end result seems to me to be fairly obvious. However, the background which I have set out may have the potential to support arguments based upon the words “unless the Court otherwise orders” as contained in Order 26.08(2).
14 When the appropriate comparison is made, it seems to me that the judgment is less favourable to the plaintiff than the Offer of Compromise. There is no argument but that Order 2 of 18 September 2017 represents weekly payments for 84.3 weeks. I would refer, for example, to Transcript 5. The Offer of Compromise specifically referred to a period of 88 weeks. Further, Order 3 of 18 September 2017 specified payment of reasonable medical and like expenses in respect of the claimed spinal and mental injuries. The Offer of Compromise sought payment of such expenses relating to the injuries particularised in paragraph 6 of the Amended Statement of Claim. As earlier stated, the injuries so specified included injury to the right leg; injury to the right shoulder; and injury to the digestive system.
15 In each instance, in my view the plaintiff must be seen as having obtained a judgment less favourable to her than the terms of the Offer of Compromise.
16 The next issue is whether there exist grounds for exercising the discretion contained in the words “unless the Court otherwise orders”. In this regard, I would refer to the following extract from the Judgment of the New South Wales Court of Appeal in Maitland Hospital v Fisher(No 2) (1990) 27 NSWR 721 at 725 as follows:
“Litigation is inescapably chancy. The purpose of the rule is to put a premium on realistic assessment of cases. It is not to demand perfect foresight which is denied even to the judges. That is why a discretion is retained, under the rule, for the court to order otherwise than as the rule provides. But the ordinary provision is expected to apply in the ordinary case. It has added a new duty to the functions of legal practitioners advising litigants. It is a duty which is both protective of the interests of litigants and of the public interest in the prompt and economical disposal of litigation. It is the duty of courts, allowing for exceptions in particular cases, to give effect to the purpose of the rule.”
17 Mr Stanley, on behalf of the plaintiff, advanced various arguments as to why the plaintiff should be entitled to her costs on an indemnity basis in accordance with Order 26.08(2). He pointed to the fact that it was the defendants’ solicitor, Mr Luca, who had suggested that the duration of the relevant period was 88 weeks. He argued that there was, in essence, unsatisfactory or undesirable conduct by the defendants to have suggested, through their solicitor, that there were weekly payments for some 88 weeks remaining before the expiration of the second entitlement period and then take the point that, despite this erroneous assertion, the correct period was in fact 84.3 weeks. He also argued that the plaintiff, by reason of the consent orders, had in fact obtained what she had said she was prepared to accept – namely, payments for the balance of the second entitlement period. That an error, emanating from the defendants’ solicitor, was made should not defeat the validity of the Offer of Compromise. He argued that, as a matter of substance and reality, the plaintiff had won. In so doing, he referred me to the decision of the Queensland Court of Appeal in Clift v Timms [1997] QCA 61 and to an extract in it from the decision of the English Court of Appeal in Roache v News Group Newspapers Ltd [1992] TLR 551 as follows:
“The judge had to look closely at the facts of the particular case before him and ask: Who, as a matter of substance and reality, had won? Had the plaintiff won anything of value or anything it could not have won without fighting the action through to a finish? Had the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?”
18 In relation to the medical and like expenses, Mr Stanley argued that the parties were well-aware that the substance of the plaintiff’s claim related to her spine and to her mental condition. Other matters were essentially included as part of the Statement of Claim as drafted and in which all possibly relevant injuries were pleaded.
19 Whilst this was a well-presented and researched argument, I am afraid I am against Mr Stanley and the plaintiff. I accept the basic submission of Ms Tait to the effect that the plaintiff simply did not obtain a result that was no less favourable than the terms of the Offer of Compromise. Ms Tait’s arguments were considerably more extensive than this, but she highlighted what is the essential and fundamental question concerning the comparison to be made.
20 I do not consider that there have been established grounds sufficient to warrant a departure from the fundamental provisions of Order 26.08(2). In other words, I am not persuaded that the words “unless the Court otherwise orders” should be brought into operation so as to bring about a result in favour of the plaintiff. Viewed another way, I am not of the view that, in this particular case, an exception has been established which impacts upon the duty of the Court to give effect to the purpose of the rule, to employ the wording used in Maitland Hospital.
21 In relation to the first limb of the Offer of Compromise relating to the 88 weeks, it could be said that the conduct of the defendants has not been ideal. To have conveyed, via its solicitors, an incorrect assessment of the number of weeks of compensation remaining before the expiration of the second period and then rely upon that incorrect information in order to defeat the Offer of Compromise might not be seen as the behaviour expected from or on behalf of a Model Litigant.
22 On the other hand, it is obvious that the solicitor for the plaintiff well-knew the date upon which the second entitlement period expired. For example, Ms Riggs had arranged a medical examination of the plaintiff by Dr David Middleton, who reported back on 12 August 2016. He stated in his preliminary remarks that, amongst other things, he would respond to the specific questions contained in the solicitor’s letter of request of 12 July 2016. Those questions are set out in the body of the report. One of them commences as follows:
“Whether as a consequence of Ms Kutlovac’s injuries materially contributed to by her employment at General Mills up to and including the 3rd of May 2011, and from the 2nd of December 2013 (the date at which 130 weeks of payments would have been paid) …”
23 In other words, the solicitor for the plaintiff had been aware for some time of the date of the accident and the date upon which the 130 week period would be reached. Even after being told by Mr Luca that some 88 weeks of payments represented the balance, and whether this was stated as a firm calculation or as an estimate, she should have done her own calculation as to the period remaining. Alternatively, she could have worded her Offer of Compromise so that it referred to weekly payments of compensation from 21 April 2012 until the expiration of the second entitlement period and not thereafter. Another alternative would have been to express the Offer of Compromise as being weekly payments of compensation from 21 April 2012 until 2 December 2013, being the specific date of which she was aware. Unfortunately, it would appear that she neither did her own calculations nor worded the Offer of Compromise in one of the alternative forms to which I have referred. Of course, the consent order ultimately obtained specifically referred to the date 2 December 2013, a date of which Ms Riggs had been aware and to which she consented as a term of the order.
24 On balance, I am not of the view that, in relation to this aspect of the Offer of Compromise, I should exercise any powers that may be conferred by the words “unless the Court otherwise orders”.
25 In any event, it seems to me that the position is even clearer in relation to the second limb of the Offer of Compromise and the consent orders. In the Offer of Compromise, what is sought is the payment of reasonable medical and like expenses particularised in paragraph 6 in the plaintiff’s Amended Statement of Claim. Thus, as stated, the plaintiff, in her Offer of Compromise, was seeking payment of reasonable medical and like expenses in relation to some five injuries. The Medical Panel only found in her favour in relation to two of those injuries – namely spinal and mental injuries. This finding was in turn embodied in paragraph 3 of the consent orders. In other words, in the Offer of Compromise the plaintiff sought payment of medical expenses in relation to five specific areas of injury. The consent orders are in respect of two. Clearly this is a less favourable outcome to the plaintiff within the meaning of Order 26.08(2).
26 In essence, Mr Stanley argued that both sides were aware of the real areas of injury and the pleading of such matters as injuries to the upper and lower extremities and the digestive system were only included because, as is commonly the case, whoever drafted the Statement of Claim made sure to cover all possible relevant injuries.
27 I do not accept this argument. The plaintiff specifically sought payment of reasonable medical and like expenses in relation to five distinct injuries and embodied this in her Offer of Compromise. The order to which she ultimately consented confined payment of such expenses to two injuries. This was clearly less favourable than the terms of the offer.
28 Furthermore, it is all the one Offer of Compromise. If the plaintiff fails in respect of one aspect of the offer, an overall less favourable result is reached and the plaintiff’s claim for costs on an indemnity basis fails. In the present case, the plaintiff has failed in relation to both ingredients of the offer.
Conclusion
29 The plaintiff is unsuccessful. She is not entitled to the payment of indemnity costs pursuant to Order 26.08(2) of the Rules.
30 I shall hear the parties as to an ancillary orders that are required.
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