| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : MIKKELSEN -v- UNITED GROUP LIMITED [2005] WADC 24 CORAM : PRINCIPAL REGISTRAR GETHING HEARD : 3 FEBRUARY 2005 DELIVERED : 18 FEBRUARY 2005 FILE NO/S : CIV 1234 of 2003 BETWEEN : HENNING MIKKELSEN Plaintiff
AND
UNITED GROUP LIMITED
Defendant
Catchwords: Workers' compensation - Stay of action pending degree of disability determination
Legislation: Workers' Compensation and Rehabilitation Act 1981
Result: Plaintiff's action stayed
(Page 2)
Representation:
Counsel:
Plaintiff : Mr G Droppert
Defendant : Mr M M Gismondi
Solicitors:
Plaintiff : Ilberys
Defendant : Mullins Handcock
Case(s) referred to in judgment(s):
Adams v The Roman Catholic Archbishop of Perth [2002] WADC 28
Belcher v Austal Ships Pty Ltd [2002] WADC 259
Berg v Hamersley Iron Pty Ltd [2005] WADC 3
Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334
Gardner Merchant (Australia) Pty Ltd v Herft [2001] WADC 136
Hastie v Iluka Midwest Ltd [2003] WADC 95
Hunt v Multiplex Constructions Pty Ltd [2000] WADC 175
Midgley v Murray River North Pty Ltd [2003] WADC 31
Robe River Mining Co Pty Ltd & Anor v Morseu [2004] WADC 142
Thomas v Arimco Mining Pty Ltd (2000) 24 SR (WA) 142
Wentworth v Attorney-General (NSW) (1984) 154 CLR
Western Metals Zinc NL v Wesfarmers Transport Ltd & Anor [2003] WASCA 152
Case(s) also cited:
Tringali v Stewardson Stubbs & Collett Pty Ltd (1966) 1 NSWR 354
(Page 3)
1 PRINCIPAL REGISTRAR GETHING: This is an application for the stay of an action in the District Court pending the determination of an appeal by the applicant/defendant against a decision by a WorkCover Review Officer as to the respondent/plaintiff's degree of disability for the purposes of the Workers' Compensation and Injury Management Act 1981 (the "Act"), formerly titled the Workers' Compensation and Rehabilitation Act 1981.
2 On 29 May 2003, the plaintiff commenced proceedings in this Court seeking damages arising out of an injury he alleges he sustained in the course of his employment with the defendant in November 2001. The relief that the plaintiff seeks is of a kind that can only be granted in accordance with Division 2 of Part IV of the Act. Section 93B of the Act provides that a court is not to award damages to a person contrary to the provisions in the Division. Section s 93E of the Act provides that:
"(3) Damages can only be awarded if ¾ (a) it is agreed or determined that the degree of disability is not less than 30% and that agreement or determination is recorded in accordance with the regulations; or (b) the worker has a significant disability and elects, in the prescribed manner, to retain the right to seek damages and the election is registered in accordance with the regulations. (4) For the purposes of subsection (3)(b) the worker has a significant disability if it is agreed or determined that the degree of disability is not less than 16% and that agreement or determination is recorded in accordance with the regulations." 3 On or about 24 September 2003, the plaintiff filed a Form 22 "Referral of Question of Degree of Disability" with the Conciliation & Review Directorate of WorkCover. The plaintiff alleges that his degree of disability is "not less than 30 per cent". 4 On 3 November 2004 a WorkCover Review Officer determined that the plaintiff had a degree of disability of not less than 30 per cent. On 2 December 2004, the defendant lodged a notice of appeal with the
(Page 4)
Compensation Magistrate's Court against the decision of the Review Officer. The appeal is listed for hearing on 1 March 2005. 5 In the meantime, the District Court action had proceeded to a pre-trial conference on 19 May 2004. The matter failed to settle at the pre-trial conference. Subject to some issues regarding a stay of the action, the pre-trial conference was adjourned indefinitely. The parties subsequently filed a minute of consent orders staying the action pending a final determination of the plaintiff's Form 22 application. 6 On being advised of the decision of the Review Officer, the plaintiff's solicitors contacted the defendant's solicitors advising that they intended to re-list the pre-trial conference previously adjourned on 19 May 2004. This correspondence ultimately led to the current application. The pre-trial conference was re-listed for 22 December 2004, proceeded on that date but was again adjourned indefinitely.
Relevant Principles 7 The principles governing the grant of a stay for a damages claim in the District Court pending a plaintiff clearing the hurdle set out in s 93E of the Act have been traversed in a number of cases in the Court, most recently, Berg v Hamersley Iron Pty Ltd[2005]WADC 3. Unless there are sound reasons not to, I should follow decisions of Judges of this Court: Berg(supra), at par 23. 8 The Court has an inherent power to order a stay to prevent its processes from being abused: Wentworth v Attorney-General (NSW) (1984) 154 CLR 518; Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334; Berg (supra), at par 19. The rationale for the Court's intervention is ensure that the Court can operate effectively – or put it in the negative, the Court will act where "to abstain from intervening could prevent the Court from acting effectively" (Geraldton Building (supra) at 345). 9 In order to determine whether there has been an abuse of process, the Court must balance the private interests of the parties against the broader public interest considerations involved in the administration of justice: Geraldton Building (supra), at p345; Belcher v Austal Ships Pty Ltd [2002] WADC 259, at par 29. Thus, three sets of interests must be balanced:
(Page 5)
(a) The interests of the party seeking the stay (in cases concerning s 93E, usually the defendant/employer), in particular whether that party would suffer any prejudice if the stay is not granted; (b) The interests of the party opposing the stay (in cases concerning s 93E, usually the plaintiff/employee), in particular whether that party would suffer any prejudice if the stay is granted; and (c) The public interest in the administration of justice, in particular ensuring that scarce public resources, both in terms of time and facilities, are applied in the best and most efficient means possible (Geraldton Building (supra) at 345). 10 Overriding these perspectives is the caveat that the power to order a stay must be used with caution (Geraldton Building (supra) at 345). 11 Dealing first with the interests of the party seeking the stay, in Western Metals Zinc NL v Wesfarmers Transport Ltd & Anor[2003] WASCA 152the Full Court of the Supreme Court stated that (at par 31): "Of course, it would plainly be vexatious to institute proceedings where there was no possibility that it could ever be established that a relevant degree of disability existed, and in an appropriate case such a proceeding might be struck out. Further, it would generally be oppressive to require a defendant to incur expense in defending proceedings where it was not clear whether or not damages could be awarded, and one would usually expect the Court to order a stay of proceedings until the provisions of s 93E(3) had been complied with". 12 Deane DJC in Berg(supra)commented that in"appropriate cases the purpose of interlocutory proceedings such as an application for stay of proceedings might be seen as a method of avoiding litigation which has little or no point and which will involve considerable expense" (par 19), citing Hastie v Iluka Midwest Ltd[2003] WADC 95 and Robe River Mining Co Pty Ltd & Anor v Morseu [2004] WADC 142. 13 Thus in cases like the present one, the Court will inquire as to whether or not the litigation has any point. This will usually involve a consideration of whether the plaintiff has any prospect of clearing the hurdles set out in s 93E of the Act. If the plaintiff has no prospect of clearing the hurdles, then there is considerable prejudice to the defendant in allowing the litigation to continue.
(Page 6)
14 In Berg(supra), Deane DCJ considered the issue of whether to grant a stay in the context of a dispute as to whether or not the plaintiff's claim was of a kind, like the present, which could only be granted in accordance with Division 2 of Part IV of the Act. The plaintiff in that case was employed by a subcontractor of the defendant's contractor. The defendant alleged that it was the deemed employer of the plaintiff for the purposes of the Act by virtue of the extended definition of "principal" in s 175(6) of the Act. The plaintiff challenged whether the defendant was a deemed employer, which if successful would have meant that whether the plaintiff had cleared the hurdles in s 93E of the Act was irrelevant. Her Honour concluded (at par 17):
"It would seem that if this were a case where there was a complete lack of evidence before the Court to support [the defendant’s] application, it would be appropriate to proceed to trial, but that in my view is not the case. This is an action that has been commenced by the plaintiff, and if it is asserted that there is no contract of employment between him and for example, Roche Mining Pty Ltd, then notwithstanding the argument to the contrary put by counsel for the plaintiff, one would in my view expect the plaintiff to place some material before the Court to demonstrate that is the case, rather than simply putting any of the other parties to proof. Further, the Court was advised that the contract of employment in its entirety has been discovered. At this point there is nothing before the Court to suggest the assertions or statements in the affidavits [filed by the defendant] are inaccurate or unreliable." 15 Her Honour was of the view that a stay was appropriate. 16 InMidgley v Murray River North Pty Ltd[2003] WADC 31, O'Sullivan DCJ ordered a stay of proceedings ina matter which had been listed for trial. The application was heard on 31 January 2003 and delivered on 20 February 2003. The matter was listed for a trial in late March 2003. The case was again one in which the plaintiff sought damages of a kind which can only be granted in accordance with Division 2 of Part IV of the Act. A determination had been made that the plaintiff's level of disability was "not less than 16 per cent". This meant that the plaintiff could be awarded damages, but subject to statutory limits (see s 93E and s 93F of the Act). The defendant had sought to have the Review Officer reconsider his decision. The Judge found that it might not be possible for a hearing for that purpose to be held before the date of the trial. Hence the stay application. His Honour considered that the
(Page 7)
defendant had a "clearly arguable" case for review based on decisions of the Full Court handed down since the initial determination going to the jurisdiction of the Review Officer to determine the extent of the plaintiff's disability. 17 His Honour concluded that until the reconsideration of the Review Officer's decision has taken place there would be a "great deal of uncertainty surrounding the plaintiff's claim" (par 11). 18 Consistently with these cases, the Court is more likely to grant a stay where a plaintiff has taken no steps to seek a determination, including where the plaintiff contests the application of the regime in the Act. In Hastie (supra), the plaintiff had taken no steps to seek a determination. French DCJ commented that "in the circumstances of this case the plaintiff's position can only be seen as an attempt to delay the inevitable" (at par 7). A stay was granted. The decisions in Adams v The Roman Catholic Archbishop of Perth [2002] WADC 28 and Robe River Mining Co Pty Ltd (supra) are along similar lines. 19 As regards the interests of the party opposing a stay, usually the plaintiff/employee in s 93E cases, one factor that has been taken into account is whether the plaintiffs is in receipt of weekly workers compensation payments. In Blecher (supra)Commissioner Gilesgave weight to the fact that the weekly payments of the plaintiff in that case had been exhausted, "making his quest for damages more urgent than it may otherwise be" (par 60). The Commissioner also considered that costs would be adequate compensation if the costs of the proceeding were ultimately thrown away if no favourable determination was reached (par 60). It appeared that the plaintiff's then current Form 22 application was subject to a defect that could be easily overcome (par 43). In other words, there was real prejudice to the plaintiff if the stay was granted, and no real prejudice to the defendant if it was not. The Commissioner declined to grant a stay. 20 As regards the public interest, in Berg(supra)Deane DJC summarised the issue by stating that (at par 19): "Litigation is expensive and time consuming, and for that reason the courts are charged with a responsibility for ensuring that public resources are applied as efficiently as possible. To this end, the court must closely monitor the manner in which parties to a dispute seek access to those resources, and the way in which they are expended".
(Page 8)
(see also Geraldton Building (supra) at 345)).
21 One theme emerging from the cases is that the closer the matter is to trial, the more likely it is that a stay will be granted. The starting point here is that s 93C of the Act does not preclude the bringing of an action by an employee in circumstances where the Act does not permit the award of damages: Western Metals Zinc NL (supra), at par 30. It would seem to conflict with the statutory regime for the Court to immediately stay every actioncommenced in which there is a claim for damages falling within the Division 2 of Part IV of the Act. Blecher (supra), at par 52; Thomas v Arimco Mining Pty Ltd(2000) 24 SR (WA) 142, at 144-145; Hunt v Multiplex Constructions Pty Ltd [2000] WADC 175, at par 18-19. 22 In Gardner Merchant (Australia) Pty Ltd v Herft[2001] WADC 136 Commissioner Greaves declined to grant a stay in a mater that was "nowhere near" being entered for trial (par 8). In doing so, the Commissioner rejected the defendant's argument to the effect that it was an abuse of process to pursue an action in circumstances where the plaintiff may never recover an award of damages at common law. Implicit in the Commissioner's decision is that more is required. 23 At the other end of the timeline, in Midgley (supra), discussed above, the Court granted a stay just over a month prior to the commencement of the trial. Where the effect of an unsuccessful determination would be to waste the time and resources of the Court in holding a trial, and the defendant's trial costs, the case for a stay must be strong.
Application to the present case 24 Dealing first with the public interest issues, this action has been entered for trial. It has had two pre trial conferences, and the pre trial conference is currently adjourned indefinitely. The next step in the action would, in the ordinary course, be to list the matter for a further pre trial conference. If the matter did not settle, then, again in the ordinary course, it would be listed for a listing conference approximately four to six weeks later. 25 As was pointed out by counsel for the plaintiff, under the Court's current listing practices for pre-trial conferences, there would be minimal, if any, waste of the Court's time in the matter having a further pre trial conference. This would be the case whether or not the matter settled at the pre trial conference.
(Page 9)
26 By the time the matter reaches a listing conference then it may well be that the same considerations as motivated the Court to grant a stay in Midgley(supra), would make the Court reluctant to list the matter for trial. However, this would, as always, depend on all the facts of the case at the time.
27 For present purposes, the salient point is that until the matter is before the Court at a listing conference, there is not likely to be any risk of a significant waste of the Court's time or resources. 28 Moving then to the prejudice to the parties if a stay is either granted or refused, the first issue to consider is whether the plaintiff has any prospect of clearing the hurdles set out in s 93E of the Act. This is not a case like Berg(supra)or Midgley (supra) in which, on an interlocutory basis, I can have doubts about the prospects of the plaintiff being able to clear the hurdles set out in section 93E. In addition, the plaintiff has prosecuted his Form 22 application with reasonable diligence (unlike the circumstances in cases like Hastie (supra) and Robe River Mining Co Pty Ltd (supra)). On the other hand, I cannot conclude that the appeal has no prospect of success (see Blecher (supra)). At best, all I can conclude is that there are some real issues to be tried in the appeal. Accordingly, there is no particular prejudice to either party flowing from the merits or otherwise of the plaintiff’s Form 22 application. 29 The defendant put on affidavit evidence showing that the plaintiff is currently in receipt of workers compensation payments. As at 28 January 2005, he had received some $131,385.80 in weekly compensation payments, and was being paid at the rate of $796.78 gross per week. I was advised by counsel that the statutory limit on weekly payments is just under $140,000. The plaintiff thus has about ten more weeks of weekly payments. In submissions, counsel for the defendant made the point that once the plaintiff's workers compensation payments cease, the plaintiff becomes like many other litigants in the Court who have to wait until their action is determined before receiving any money. Counsel also noted that it is also open for the plaintiff to seek an extension of weekly payments under the Act. 30 The fact that a plaintiff has a limited right to weekly compensation payments is perhaps best viewed as a factor in favour of allowing the plaintiff's action to proceed in parallel with his or her determination under the Act for as long as is practicable – hence the decision in Belcher (supra). At some point, however, the prejudice to the defendant and the
(Page 10)
risk that scarce Court resources will be wasted must be given more weight. 31 From the defendant's submissions, it is evident that the major, if not only, prejudice it will suffer by a stay not being granted at this stage is one of incurring considerable costs in defending a claim which may ultimately be rendered nugatory. The plaintiff submitted that these costs will be minimal until the pre trial conference. There is some force in that argument. However, in between the pre trial conference and the listing conference, the defendant's costs are likely to escalate significantly. Prior to the listing conference, the parties may well have had to provide the information in O 5 r 8 of the District Court Rules 1996. Counsel would have to be briefed to the extent necessary to inform the Court of the matters set out in O 5 r 9 of the Rules, either by certificate or attendance at the listing conference. 32 The key question is whether the matter should be allowed to proceed to a further pre-trial conference. Counsel for the plaintiff outlined number of scenarios in which the matter could settle by way at a pre trial conference. To my mind, the defendant faced a choice at the point in time the Review Officer's decision was given. The stay made in August 2004 came to an end in accordance with its terms. The defendant could have acquiesced to the plaintiff's request to have the pre trial conference re-listed. Alternatively, it could have chosen to seek a further stay. By choosing the latter course, I am able to infer that the defendant does not see any utility in any further pre-trial conferences at this stage. This conclusion was confirmed in submissions by counsel for the defendant. 33 That being so, the case falls within the category of cases identified by the Full Court in Western Metals (supra) in which "it would generally be oppressive to require a defendant to incur expense in defending proceedings where it was not clear whether or not damages could be awarded, and one would usually expect the Court to order a stay of proceedings until the provisions of s 93E(3) had been complied with". 34 There is no particular prejudice to the plaintiff that would outweigh position set out in the preceding paragraph. Moreover, the case is fast approaching the stage in which there is a real risk of the Court's resources being wasted if the matter proceeds without the inherent uncertainly of the s 93E issue being resolved. 35 I have heard counsel on the issue of costs, so am in a position to make orders. Accordingly, I make the following orders:
(Page 11)
|