Nicoll v Dobeson; Nicoll v The Workers Compensation Nominal Insurer (No 4)

[2014] NSWDC 255

District Court

New South Wales

Medium Neutral Citation:	Nicoll v Dobeson; Nicoll v The Workers Compensation Nominal Insurer (No 4) [2014] NSWDC 255
Hearing dates:	25 August 2014
Decision date:	25 August 2014
Jurisdiction:	Civil
Before:	P Taylor SC
Decision:	(1) Orders 1 to 4 of 16 July 2014 be set aside. In proceedings 2009/339941: (2) Grant leave to the Third Defendant, Sussex Inlet RSL Club Ltd, to file in court today a Notice of Change of Solicitor. (3) Judgment in favour of the Third Defendant against the Plaintiff. (4) Plaintiff to pay the Third Defendant's costs as agreed or assessed. (5) Plaintiff to pay the Third Defendant's costs on an indemnity basis from 9 May 2013. (6) Cross-Claim against the First Cross-Defendant, Dean Dobeson, dismissed with no order as to costs. (7) Cross-Claim against the Second Cross-Defendant, Robert Hammond, dismissed with no order as to costs. (8) First and Second Defendants, Dean Dobeson and Robert Hammond, to pay the Plaintiff’s costs of the proceedings. In proceedings 2012/281640: (9) Grant leave to the First Cross-Defendant, Sussex Inlet RSL Club Ltd, to file in court today a Notice of Change of Solicitor. (10) Cross-claim against the First Cross-Defendant dismissed. (11) Defendant to pay the First Cross-Defendant’s costs of the cross-claim as agreed or assessed. (12) Judgment for the plaintiff against the Defendant, the Workers Compensation Nominal Insurer, in the amount of $6,913.95. (13) As between the Plaintiff and the Defendant, each party bear their own costs. (14) Judgment for the Defendant against the Second Cross-Defendant, Dean Dobeson, in the amount of $118,044.42. (15) The cross-claim against the Third Cross-Defendant, Robert Hammond, is not pressed and is dismissed. (16) The Second Cross-Defendant pay the Defendant’s costs of the cross-claim against him save for those costs that relate exclusively to the Third Cross-Defendant.
Catchwords:	NEGLIGENCE - personal injury - negligence by employee - assault by third parties - apportionment - final orders - proceedings - two claims - multiple defendants in one claim
Legislation Cited:	Uniform Civil Procedure Rules 2005, r 42.1 Workers Compensation Regulation 2010, cl 105, cl 106, cl 109
Cases Cited:	Khan As Trustee for the Khan Family Trust v Hadid; Hadid v Khan As Trustee for the Khan Family Trust (No 2) [2008] NSWSC 119 Nicoll v Dobeson; Nicoll v The Workers Compensation Nominal Insurer (No 3) [2014] NSWDC 109
Category:	Consequential orders (other than Costs)
Parties:	2009/339941 Kathaleen Nicoll (plaintiff) Dean Dobeson (first defendant) Robert Hammond (second defendant) Sussex Inlet RSL Club Ltd (third defendant)   2012/281640 Kathaleen Nicoll (plaintiff) The Workers Compensation Nominal Insurer (defendant/cross-claimant) Sussex Inlet RSL Club Ltd (first cross-defendant) Dean Dobeson (second cross-defendant) Robert Hammond (third cross-defendant)
Representation:	Counsel: Mr G Smith (plaintiff) Mr J Wilson (The Workers Compensation Nominal Insurer) Mr R Sheldon (Sussex Inlet RSL Club Ltd) Solicitors: Lough & Wells (plaintiff) TurksLegal (The Workers Compensation Nominal Insurer) Lee and Lyons Lawyers (Sussex Inlet RSL Club Ltd)
File Number(s):	2009/339941; 2012/281640

Judgment

1. On 16 July 2014, I made orders that dealt with the plaintiff's claims, but stood the matter over to determine the appropriate orders in respect of the cross-claims and costs; and also deferred the entry of orders, pending final orders being made.

2. The matter comprises two proceedings, one by Ms Nicoll against the Sussex Inlet RSL Club (“the Club”), Dean Dobeson and Robert Hammond (proceedings 2009/339941); and a second statement of claim by Ms Nicoll against the Workers Compensation Nominal Insurer (“the Insurer”) (proceedings 2012/281640), who stands in the position of the insurer of her employer, Men in Black.

3. The proceedings were heard together, and evidence in one matter was evidence in the other. The parties have proposed orders in accordance with my judgment, which at least to some extent contemplate orders being made in the separate proceedings. In view of the submissions made, and noting that no party opposes the proposed orders, I shall first order that orders (1) to (4), made on 16 July 2014, be set aside.

4. The following orders shall be made in proceedings 2009/339941, that is, the proceedings by Ms Nicoll against Mr Dobeson, Mr Hammond and the Club, namely:

• Judgment in favour of the third defendant against the plaintiff.

• Plaintiff to pay the third defendant's costs as agreed or assessed.

• Plaintiff to pay the third defendant's costs on an indemnity basis, from 9 May 2013.

• Cross-claim against the first cross-defendant, Dean Dobeson, dismissed, with no order as to costs.

• Cross-claim against the second cross-defendant, Robert Hammond, dismissed, with no order as to costs.

5. The parties accepted that those orders follow from the decision made by me on 16 July 2014. In that decision, order (5) was an order giving “Judgment in favour of Ms Nicoll in the sum of $139,000.44 against Mr Dobeson and Mr Hammond”, which shall remain, subject to matters dealt with below.

6. The plaintiff having been successful, it is appropriate that costs be dealt with in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005. Hence, there shall be an order that Mr Dobeson and Mr Hammond pay the plaintiff's costs in the proceedings 2009/339941.

7. That brings me to the other component of the matter, namely, proceedings 2012/281640, which is Ms Nicoll's claim against the Workers Compensation Nominal Insurer. Three matters arise in relation to the orders to be made in those proceedings.

8. First, the proportion of the plaintiff’s damage for which the Insurer is liable.

9. Secondly, the amount of damages to be awarded on the cross-claims by the Insurer against Mr Dobeson and Mr Hammond.

10. Thirdly, the costs orders between the plaintiff and the Insurer.

11. It is common ground, as mentioned in paragraph 133 of my judgment of 16 July 2014 (Nicoll v Dobeson; Nicoll v The Workers Compensation Nominal Insurer (No 3) [2014] NSWDC 109), that the Insurer has paid compensation in the amount of $91,746.38. However, there are other aspects in my decision that need to be corrected. Paragraphs 126 and 132 refer to an amount of out-of-pocket expenses of $7,868.60. It is accepted between the parties that that amount should not be included as part of the damages payable by the Insurer, and the reference in paragraph 133 to "agreed payback" also does not correctly describe the position, in respect of this amount. In the result, in accordance with my judgment of 16 July 2014, it is accepted by the parties that the proper amount payable by the Insurer in damages is the sum of $20,741.84.

12. Both parties also accept that that amount must be reduced to reflect a judgment sum that properly represents that part of the amount of $20,741.84 in damages that should be apportioned to the Insurer. I note that the other two parties who must bear the liability to the plaintiff, Mr Dobeson and Mr Hammond, were found, in prior proceedings, and by me in the judgment, to have engaged in criminal conduct, causing damage to Ms Nicoll.

13. Generally, a party engaging in criminal conduct would ordinarily bear the greater proportion of the damages as against a party who was merely negligent.

14. However, that apportionment depends upon the level of the duty and the gravity or severity of the breach of duty. In some cases, a negligent party might be liable for as much as 40%, compared to a dishonest or criminal party, see Khan As Trustee for the Khan Family Trust v Hadid; Hadid v Khan As Trustee for the Khan Family Trust (No 2) [2008] NSWSC 119.

15. In the present case, it is difficult to determine the level of culpability of the employer, because the employer admitted liability at the outset. There was little or no exploration of the precise breach by the employer, or its gravity. The Insurer submitted that the matter was fully ventilated in the cross-claim against the Club by the Insurer for contribution. But the focus of evidence in that cross-claim was upon the conduct of the Club, rather than the conduct of the employer.

16. The particulars of negligence in the plaintiff's claim against the Insurer were as follows:

“a. Failed to take any or any adequate precautions for the safety of the plaintiff.

b. Exposed the Plaintiff to a risk of injury which could have been avoided by reasonable care.

c. Failed to warn the Plaintiff of the dangers to which she was exposed during the course of her employment.

d. Failed to observe that the Plaintiff was in a position of peril in the circumstances.

e. Failed to provide the Plaintiff with a safe system of work.

f. Failed to properly train, instruct and supervise the Plaintiff in the carrying out of her work.

g. Placed the plaintiff in a position of peril;

h. Failed to have any, or any adequate, regard for the safety of the plaintiff;

i. Failed to provide a safe working environment for the plaintiff;

j. Failed to have an adequate level of security at the premises.

(k) Failed to provide appropriately trained and qualified support staff.”

17. These particulars do not indicate with precision the nature of the breach by the employer. That breach would, however, include, for example, the conduct of Paul Serbatoia in leaving the plaintiff alone with Mr Dobeson and Mr Hammond when she was escorting them out of the Club. It may also include any inadequate training of Ms Nicoll.

18. The significance of either of these breaches in the conduct of the employer's business was also not the subject of evidence. I do not think it appropriate that I draw inferences in favour of the insurer of the employer, to the effect that the breaches are minor or only just reaching the level of negligence when the Insurer could have lead evidence to minimize the gravity of these breaches, but did not.

19. Both parties (but the Insurer in particular) referred to the circumstance of a labour hire company that provides workers for a system of work managed by a third party, and submitted that the normal apportionment was in the order of 20 to 25%. This was said to be relevant to the present circumstances. The Insurer suggests that the apportionment should be much lower here because of the criminal conduct. Ms Nicoll says that that apportionment of 20 to 25% should be the minimum amount awarded against the Insurer. In my view, the circumstances attending labour hire companies are not a useful analogy in the present proceedings, given what I have found in the judgment about the work done by the security guards for the Club.

20. By reason of this lack of evidence, I am unable properly to assess the level of culpability of the employer as against the criminal conduct of Mr Hammond and Mr Dobeson. In those circumstances, I incline to the view that, in terms of apportionment, equality is equity and that amongst the three parties liable for the damage, it is fair that each should be responsible for one-third of the damages.

21. I accept that one-third apportionment to the employer would be very much at the higher end of the scale in apportioning liability between a party who has engaged in criminal conduct and one who has not. But it is less than the proportion determined in Khan As Trustee for the Khan Family Trust v Hadid and I do not think I should discount the gravity of the breach by inference, where the Insurer called no evidence.

22. For those reasons, I determine that the Insurer is responsible for one-third of the damages of $20,741.84, or $6,913.95.

23. Accordingly, in proceedings 2012/281640 I order judgment for the plaintiff against the defendant, Workers Compensation Nominal Insurer, in the amount of $6,913.95.

24. The next issue is the question of costs between the plaintiff and the Insurer. The insurer seeks an order for costs under cl 105 of the Workers Compensation Regulation 2010, on the basis that the claimant has obtained a judgment less favourable than the terms of the Insurer's final offer of settlement in mediation.

25. The Insurer has established, and it is not in contest, that the offer of the Insurer was in excess of the amount awarded even taking into account the inclusion by the Insurer in the amount offered of "past payments to date". However, the plaintiff says that this is a case where multiple parties are involved, under cl 109 of the Regulation, and therefore, the Subdivision, including cl 105, does not apply to an offer of settlement. If that is the case, under cl 106, the appropriate order is that each party bear their own costs.

26. Clause 109 refers to the Subdivision not applying to an offer of settlement. There is no suggestion that cl 106, which is part of the Subdivision but is not concerned with an offer of settlement, would not apply if cl 109 operated to exclude the applicability of the offer of settlement made by the plaintiff. The plaintiff’s offer forms the basis of the application under cl 105.

27. The question of whether cl 109 applies to the present matter depends upon whether, "2 or more defendants are alleged to be jointly or jointly and severally liable". The plaintiff alleged that the Club, the Insurer, Mr Dobeson, and Mr Hammond were all liable. However, the Insurer submits that I should not look at the whole matter, but only the particular proceedings against the Insurer, in which the Insurer was the only defendant.

28. The word "defendant" is not defined in the regulation. The application of s 109 depends on whether attention is directed to the form of the particular statement of claim, where only the Insurer is named, or the substance of the matter which involved claims by the plaintiff against the Club, the Insurer, Mr Dobeson and Mr Hammond, with evidence in one proceeding being evidence in the other. Notably the Insurer, in the proceedings against it made cross-claims against the Club and Mr Dobeson, and also intended to take proceedings against Mr Hammond.

29. Ordinarily one might expect that the plaintiff would join those cross-defendants as defendants to the proceedings. But in this case, there were already proceedings on foot against those cross-defendants as defendants in the related claim, and the proceedings were being heard together. The plaintiff, in my view reasonably, perceived the addition of defendants to the proceedings against the Insurer to be of no utility.

30. The issue should be resolved by preferring substance over form. As a matter of substance, there were four defendants.

31. If there are multiple defendants, the Insurer accepts that its offer did not satisfy cl 109, as it did not offer to settle the claims against all the other defendants.

32. It follows that the proper order in respect of costs between the plaintiff and the Insurer is that each party should bear their own costs.

33. The third aspect of the matter concerns the amount of the judgment by the plaintiff, and by the Insurer, against Mr Hammond and Mr Dobeson. Order (5) made on 16 July 2014 was judgment in favour of the plaintiff against Mr Dobeson and Mr Hammond in the sum of $139,040.44. The plaintiff concedes, or submits, that that amount should be reduced to reflect the finding that the damages against the Insurer are to be apportioned one-third to it, and two-thirds to Mr Hammond and Mr Dobeson, leaving an amount of $85,753.02, which I accept.

34. In respect of the claim by the Insurer against Mr Dobeson and Mr Hammond, the Insurer submits that the proper amount is the agreed amount of work and compensation expenses of $91,746.38, less the amount liable to the plaintiff of $6,913.95, which leaves an amount of $84,832.43. The Insurer has conceded that it was unable to (and did not) serve the cross-claim against Mr Hammond, and accordingly does not press for a judgment against him. It thus submits that the amount of $84,832.43 should be the amount of the judgment against Mr Dobeson, although that amount must be increased to take account of interest.

35. In my view, the appropriate rate of interest over the period from November 2006 to August 2014, bearing in mind the statutory amounts of various periods, should be 8%. Although it appears the Insurer's payments were principally made at the commencement of that period, it has only sought to apportion those payments equally over that period, and thus, that interest rate applied to the whole sum should be reduced to 4%.

36. Interest on the amount of $84,832.43 at 4% over seven and three-quarter years, from November 2006 to 25 August 2014; calculates to an amount of interest of $26,298.04. The judgment by the Insurer against Mr Dobeson shall be $118,044.42.

37. Accordingly, in proceedings 2012/281640 I will also order that, as between the plaintiff and the Insurer, each party should bear their own costs; the cross-claim by the Insurer against the Club, that is, the first cross-defendant, should be dismissed; the Insurer should pay the first cross-defendant's costs of the cross-claim as agreed or assessed; and there should be judgment for the cross-claimant insurer against the second cross-defendant, Mr Dobeson.

38. The cross-claim against Mr Hammond, the third cross defendant, is not pressed, and is dismissed. I make no order in respect of the costs of that cross-claim. Mr Dobeson should pay the defendant's costs of the cross-claim against him, which should include all the costs of that cross-claim, save for those costs which exclusively relate to the claim against Mr Hammond.

39. Accordingly, the orders of the Court are:

1. Orders 1 to 4 of 16 July 2014 be set aside.

In proceedings 2009/339941:

2. Grant leave to the Third Defendant, Sussex Inlet RSL Club Ltd, to file in court today a Notice of Change of Solicitor.

3. Judgment in favour of the Third Defendant against the Plaintiff.

4. Plaintiff to pay the Third Defendant's costs as agreed or assessed.

5. Plaintiff to pay the Third Defendant's costs on an indemnity basis from 9 May 2013.

6. Cross-Claim against the First Cross-Defendant, Dean Dobeson, dismissed with no order as to costs.

7. Cross-Claim against the Second Cross-Defendant, Robert Hammond, dismissed with no order as to costs.

8. First and Second Defendants, Dean Dobeson and Robert Hammond, to pay the Plaintiff’s costs of the proceedings.

In proceedings 2012/281640:

9. Grant leave to the First Cross-Defendant, Sussex Inlet RSL Club Ltd, to file in court today a Notice of Change of Solicitor.

10. Cross-claim against the First Cross-Defendant dismissed.

11. Defendant to pay the First Cross-Defendant’s costs of the cross-claim as agreed or assessed.

12. Judgment for the plaintiff against the Defendant, the Workers Compensation Nominal Insurer, in the amount of $6,913.95.

13. As between the Plaintiff and the Defendant, each party bear their own costs.

14. Judgment for the Defendant against the Second Cross-Defendant, Dean Dobeson, in the amount of $118,044.42.

15. The cross-claim against the Third Cross-Defendant, Robert Hammond, is not pressed and is dismissed.

16. The Second Cross-Defendant pay the Defendant’s costs of the cross-claim against him save for those costs that relate exclusively to the Third Cross-Defendant.

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Decision last updated: 09 February 2015