McVicar v S & J White Pty Ltd T/A Arab Steed Hotel (No 2)

[2007] SASC 199

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Application)

MCVICAR v S & J WHITE PTY LTD T/A ARAB STEED HOTEL (NO 2)

[2007] SASC 199

Judgment of The Full Court

(The Honourable Chief Justice Doyle, The Honourable Justice Debelle and The Honourable Justice Anderson)

1 June 2007

PROCEDURE - COSTS - JURISDICTION - PERSONS NOT PARTIES TO PROCEEDINGS

Van Den Heuval v Tuckeer [2005] SASC 195, applied.

WORDS AND PHRASES CONSIDERED/DEFINED

"Application by respondent for order that other party pay costs of appeal."

MCVICAR v S & J WHITE PTY LTD T/A ARAB STEED HOTEL (NO 2)
[2007] SASC 199

Full Court:  Doyle CJ, Debelle and Anderson JJ

1. DOYLE CJ:          Mr McVicar worked as a cleaner for Mr Keogh.  Mr McVicar suffered personal injuries while working as a cleaner, in the course of his employment, at a hotel operated and managed by S & J White Pty Ltd (“the company”).  Mr Keogh had contracted with the company to provide cleaning services at the hotel.

2. Mr McVicar claimed damages from the company.  He claimed that the company breached a duty of care owed to him, or was liable to him for breach of a statutory duty.  The claim was dismissed by a Judge of the District Court, after a trial in that Court.

3. Mr McVicar appealed to this Court.  This Court upheld the decision of the District Court.

4. Mr McVicar does not oppose the making of an order that he pay the company’s costs of the appeal.

5. The company has applied for an order that WorkCover Corporation pay its costs of the appeal.

   Facts

6. WorkCover Corporation (“WorkCover”) is a body corporate continued in existence by the WorkCover Corporation Act 1994 (SA).  WorkCover administers the Workers Rehabilitation and Compensation Act 1986 (SA) (“the WRC Act”). As a result of his injuries Mr McVicar was entitled to payments for compensation under the WRC Act. WorkCover has paid Mr McVicar a substantial amount, at least $500,000 and probably more than that. By s 54(7) of the WRC Act WorkCover has a first charge, on any damages payable by the company to Mr McVicar, securing repayment to WorkCover of compensation paid or payable to Mr McVicar. WorkCover has given notice to the company of its entitlement, thus enlivening its charge: see s 54(7)(e).

7. The District Court action was conducted by Mr McVicar.  He is responsible for the costs that he has incurred, and for costs payable to the Company.

8. The appeal to this Court was instituted by Mr McVicar.  There is no suggestion that WorkCover was involved in the decision to appeal.

9. The appeal was instituted in May 2006.

10. About one month after the appeal was instituted, Mr McVicar’s solicitors asked the solicitors for WorkCover if WorkCover would meet the costs of retaining senior counsel for the appeal.  WorkCover agreed to do so.  In October 2006 Mr McVicar’s solicitors asked the solicitors for WorkCover if WorkCover would meet the costs of junior counsel.  WorkCover agreed to pay a fee on brief to junior counsel, but to pay no more than that.

11. I am satisfied, as a matter of inference, that WorkCover agreed to contribute to the costs of the appeal because it was concerned that otherwise Mr McVicar might not be able to afford to pursue the appeal, or to have the appeal put as well as it could be put.  I am also prepared to find that WorkCover would not have made that decision were it not because of its financial interest in the outcome of the appeal.  WorkCover will recover the payments made to Mr McVicar, or part of them, only if the appeal succeeds.

12. In August 2006 the company applied for an order that Mr McVicar give security for the costs of the appeal.  The application was dismissed:  McVicar v S & J White Pty Ltd [2006] SASC 233; (2006) 245 LSJS 177. Among other things, the Judge who dealt with the application was satisfied that although Mr McVicar was not destitute, he was unlikely to be able to meet the order for costs which would be made against him if the appeal was unsuccessful.

13. I make the same finding, mainly, that while Mr McVicar has some ability to meet his own costs and the costs of the appeal, he does not have the means to meet all of those costs.

14. It is important to record here some acknowledgements or concessions made by Mr Harris QC, counsel for the Company. He does not suggest that WorkCover was in a position to direct that the appeal be instituted by Mr McVicar. Under the WRC Act, WorkCover has its own entitlement to bring proceedings to recover compensation paid: s 54(7)(d). He does not suggest that WorkCover played a part in Mr McVicar’s decision to appeal. WorkCover did not try to persuade Mr McVicar to appeal. He does not suggest that, having agreed to contribute to Mr McVicar’s costs of the appeal, WorkCover acquired in return the ability to control the handling or conduct of the appeal. He acknowledges that it cannot be said that WorkCover is the real party to the appeal.

15. Mr Harris also accepts that there is no agreement by WorkCover to indemnify Mr McVicar in respect of any order for costs made against him.

16. Mr Stratford, counsel for WorkCover, accepts that from an early stage WorkCover was on notice that the application now made to the Court might be made.

    Should the order be made?

17. The only connection between WorkCover and the appeal is the fact that by reason of the statutory charge WorkCover has a substantial interest in the outcome of the appeal, and the fact that WorkCover agreed to contribute to Mr McVicar’s costs of the appeal.

18. WorkCover’s interest in the outcome of the appeal arises under the provisions of the WRC Act. WorkCover is not in a position like that of a litigation funder. WorkCover has not voluntarily bought into the claim made by Mr McVicar. Its interest in the outcome arises because it has made payments of compensation, and because it has a statutory charge on any moneys payable by the Company to Mr McVicar. Nor is Mr McVicar pursuing the appeal wholly or substantially for the purposes of WorkCover Corporation. He brings the appeal in his own interest, although WorkCover will benefit substantially, and possibly more than Mr McVicar, if the appeal succeeds.

19. There is no suggestion that WorkCover is in any sense managing or controlling or influencing the conduct of the appeal.

20. Although the point is obvious, it should also be recorded that WorkCover’s interest in the appeal does not arise from a commercial or business relationship between it and Mr McVicar. It does not arise from any legal relationship voluntarily made between them. It arises because WorkCover is responsible for the administration of the WRC Act, and because of the statutory charge.

21. There is no doubt that the Court has the power to make the order that the company seeks.  The jurisdiction is well established:  see Vestris v Cashman (1998) 72 SASR 449 and Australasian Academy of Natural Medicine Pty Ltd v Walters [2003] SASC 56; (2003) 85 SASR 36.

22. The application made by the company invokes the broad discretion that the Court exercises in respect of the costs of proceedings:  see Knight v F P Special Assets Limited (1992) 174 CLR 178. Because the discretion is a broad one, it is not possible to say just when it will be appropriate to make an order of the kind sought by the company, and when it will not be appropriate to make such an order. As Lander J said in Vestris v Cashman at 467, the occasion for making an order will not arise:

    … unless there is some connection or association between the party to the litigation and the non-party against whom the order for costs is sought.  The connection must be of a kind that makes it just to make an order for costs in that connection …

    While that statement does no more, in a sense, than restate the issue, it correctly focuses on the association between a party to the litigation and the non-party against whom the order is sought.

23. Matters material to the exercise of the discretion are conveniently summarised by Olsson J in Vestris v Cashman at 457-458 and by Lander J at 467-469: see also Duggan J in Australasian Academy of Natural Medicine Pty Ltd v Walters at 42-43.

24. In the present case the link between WorkCover and Mr McVicar, or between WorkCover and the appeal, is a limited one, as I have pointed out.  It comprises WorkCover’s interest in the outcome, by virtue of its statutory charge, and the contribution that it has made to the costs of the appeal.  The acknowledgements by Mr Harris that I have recorded above mean that factors found to support the making of such an order in other cases are not present here.

25. WorkCover’s financial interest in the outcome of the appeal is a substantial one.  But the existence of such an interest can be no more than a starting point.  The interests of justice, or the proper exercise of the discretion as to costs, will call for the making of an order of the kind sought by the company only if WorkCover has involved itself in the course and conduct of the appeal to such an extent that it is appropriate to say, having regard as well to its interest in the outcome, that it should be responsible for the costs of the company.

26. I am not persuaded that that is the case here.  WorkCover’s involvement in the appeal is limited, and in particular it has not exercised influence, let alone any form of control, over the institution or conduct of the appeal.  No one factor is decisive.  It suffices to say that I am not persuaded that the interests of justice call for the making of the order sought by the Company.

    Conclusion

27. I would order that the appellant pay the respondent’s costs of the appeal.  I would dismiss the company’s application for an order against WorkCover.  I would order that the company pay WorkCover’s costs of the application.

28. DEBELLE J:        I agree.

29. ANDERSON J:     I agree with the conclusions of Doyle CJ and with his reasons.