Ortlipp v Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer (No 4)
[2014] NSWDC 162
•02 July 2014
District Court
New South Wales
Medium Neutral Citation: Ortlipp v Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer (No 4) [2014] NSWDC 162 Hearing dates: On the papers Decision date: 02 July 2014 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Amend the orders made on 20 June 2014 in the following respects:
(a) Delete order 1 made on 20 June 2014.
(b) Make the order sought in paragraph 1 of the notice of motion filed 27 May 2014.
(c) In respect of the order sought in paragraph 2 of the notice of motion filed 27 May 2014, order that order 4 made on 21 May 2014 be set aside and replaced with an order that the plaintiff pay the defendant's costs of the proceedings pursuant to clause 105(2) of the Workers Compensation Regulation 2010 save that the maximum costs are those costs set out in schedule 7 of the Regulation, in accordance with clause 102 of the Regulation.
(d) In respect of order 2 made on 20 June 2014, delete the word "noting" and all words following thereafter so that the order is varied to read "Order that the defendant pay the plaintiff's costs of the motion filed 27/5/14".
Catchwords: AMEND ORDERS - after entry - by court's own motion - misapprehension of the law - not solely attributable to party's neglect - ancillary proceedings Legislation Cited: Uniform Civil Procedure Rules 2005, r 36.16
Workers Compensation Regulation 2010, cl 102, cl 105, cl 106, cl 108, sch 7Cases Cited: Aktas v Westpac Banking Corporation (No 2) (2010) 241 CLR 570; [2010] HCA 47
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander [2012] HCA 56
Chubs Constructions Pty Ltd v Sam Chamma (No 2) [2010] NSWCA 225
Deputy Commissioner of Taxation v Zammitt [2014] NSWCA 104
Ortlipp v Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer [2014] NSWDC 157
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Rockcote Enterprises Pty Ltd v Fs Architects Pty Ltd (No2); Carelli v Fs Architects Pty Ltd (No2) [2008] NSWCA 205
Wentworth v Woollahra Municipal Council (1982) 149 CLR 672Category: Costs Parties: Patricia Anne Ortlipp (plaintiff)
Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer (defendant)Representation: Ms E Welsh (plaintiff)
Brydens Compensation Lawyers (plaintiff)
Edwards Michael Lawyers (defendant)
File Number(s): 2013/177741 Publication restriction: None
Judgment
On 20 June 2014 I gave an ex tempore judgment and made orders in respect of a notice of motion filed by the defendant (to amend previous orders) as follows:
"1. Order that the defendant's notice of motion (filed 27/5/14) be dismissed.
2. Order that the defendant pay the plaintiff's costs of the motion noting that they should be governed by regulation 102 and Schedule 7 of the Workers Compensation Regulation 2010."
Those orders were entered that day. In that application although sch 7 was considered neither party made reference to the detail of the contents of sch 7, referred to in order two above. After giving judgment I reflected on the orders given and reviewed the contents of sch 7, and thought that I may have misapprehended the law. On the next working day, Monday, 23 June 2014, the parties were given notice of a possible change of the orders, pursuant to Pt 36, r 36.16(3B) of the Uniform Civil Procedure Rules 2005.
I received submissions from both parties. The plaintiff referred to the passage in Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684:
"The public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard."
That general test contained in the second sentence of the quotation, is quoted by Mason CJ in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 302, and in Rockcote Enterprises Pty Ltd v Fs Architects Pty Ltd (No2); Carelli v Fs Architects Pty Ltd (No2) [2008] NSWCA 205 at [9]. Yet Mason CJ also stated in Autodesk Inc at pp 301-302, in a passage not referred to in Rockcote:
"The exercise of the jurisdiction to reopen a judgment and to grant a rehearing is not confined to circumstances in which the applicant can show that, by accident and without fault on the applicant's part, he or she has not been heard."
This other passage from Autodesk Inc, but not the passage from Wentworth v Woollahra Municipal Council earlier quoted, is quoted in the majority judgment in Aktas v Westpac Banking Corporation (No 2) (2010) 241 CLR 570; [2010] HCA 47 at [6]. Read together, the two passages from Autodesk Inc endorse a general rule in relation to re-opening a judgment, but state that the exercise of the jurisdiction is not confined to the general rule. In these circumstances, the authoritative principle appears to be that there must be some misapprehension of the facts or the law which is not solely attributable to the neglect or default of the party seeking the re-hearing, see Autodesk Inc at 303, Aktas v Westpac Banking Corporation at [7] and Rockcote at [9].
In the present case, the contents of sch 7 of the Workers Compensation Regulation 2010 ("the regulation") indicate that I may have misapprehended the law. Schedule 7 does not provide fees for certain components of work, but rather provides that the fees (which are maximum fees by reason of cl 102 of the regulation) are a fixed sum determined by the stage at which the proceeding has reached. The relevant part of the schedule for present purposes is "Stage 8", which provides:
"Column 1
Column 2
Stage
Costs
...
...
...
8
If the matter is finalised after the commencement of court proceedings other than by settlement or an award of damages-from service of the pre-filing statement to finalisation of the matter
(a) in the case of a legal practitioner acting for a claimant-nil
(b) in the case of a legal practitioner acting for an insurer-$20,600
...
...
..."
This provision makes little sense in respect of ancillary proceedings, since it would make the costs order in an application dependant upon when the application was heard, and the outcome of the primary proceedings. The outcome of the application itself would have nor bearing on the costs.
In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] (see also Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander [2012] HCA 56 at [24] and Deputy Commissioner of Taxation v Zammitt [2014] NSWCA 104 at [67]), the plurality said:
"the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed".
In my view, it is both inconsistent and unfair to have these sch 7 provisions apply to an ancillary application, because to do so would be to ignore the substance and outcome of the application, and would require the Court to act on the ordinarily irrelevant consideration of the stage at which the application was brought. In particular, if a justified and successful application is brought by a claimant in proceedings that are ultimately unsuccessful, nil costs are payable to the claimant. In the present case, this appears to mean that the plaintiff is not entitled to any costs of applications including unsuccessful or even misconceived applications made by the defendant. This problem is overcome if sch 7 applies only to the primary proceedings and not ancillary applications. Such a construction is open on the terms of cl 108. Costs in ancillary proceedings are awarded "in accordance with the rules of the court". This quoted phrase must properly be read as meaning, for the reasons I have indicated bearing in mind the contents of sch 7, that such costs are "unaffected by sch 7".
Was this oversight or misapprehension of the proper meaning of cl 108 and the application of sch 7 attributable solely to the neglect or default of the defendant? The defendant in its submissions in respect of costs did not call in aid the nature of the provision in sch 7, but neither did the plaintiff, and I cannot overlook that cl 108, if not sch 7, was referred to and could have been considered by the Court. In these circumstances, I do not think I should attribute this oversight and misapprehension solely to the defendant, and so the jurisdiction to correct the judgment remains available to be exercised.
Rule 36.16(3A) to (3C) of the Uniform Civil Procedure Rules 2005 provides:
"(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.
(3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.
(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B)."
This matter is complicated because I am exercising (within time) the jurisdiction under subrule (3B) to amend orders made on the motion. But the motion was an application under subrule (3A) to amend orders. I note that these subrules are not subject to the limitations imposed in subrule (3): see Rockcote at [10]. Although the consequence of my orders will be to amend orders made more than 14 days earlier, those orders remain open to be amended by reason of the effect of subrule (3A), the motion filed by the defendant, and subrule (3B). Because the motion was filed within the time specified in subrule (3A), the court's jurisdiction to amend the orders remained until it was no longer possible to make orders in respect of that motion.
For reasons I have given, the order for costs made on 17 April 2014 in respect of the plaintiff's notice of motion should not be subject to sch 7 and reg 102, and thus order 2 made on 21 May 2014 should be set aside.
In respect of the proceedings generally, the contents of sch 7 inform the meaning of cl 105(2) of the regulation. As quoted above, stage 8 of sch 7 applies "[i]f the matter is finalised after the commencement of court proceedings other than by settlement or an award of damages". This, in my view, applies to the circumstances of this case. Informed by these provisions of sch 7, cl 105(2) properly read does not require a determination of the factual merits of the claim when it says, "the court finds the insurer has no liability", or "[i]f a claimant does not obtain an order or judgment on a claim".
In this light, cl 105(2) does apply to the present dispute and requires the claimant to pay the insurer's costs on the primary claim on a party/party basis, up to the maximum specified in sch 7, in accordance with cl 102.
Thus, order 4 made on 21 May 2014 should be set aside or varied by being deleted and replaced with an order that the plaintiff pay the defendant's costs of the proceedings pursuant to clause 105(2) of the regulation on a party/party basis to the maximum allowed under sch 7 of the regulation.
That leaves the costs of the application made by the defendant on 27 May 2014 to amend the orders. Although the defendant has ultimately been successful on that application, as I indicated in the previous judgment given, the defendant gave no explanation as to why it did not initially make submissions in respect of the mandatory rule in cl 105 of the regulation. On the contrary, the defendant referred to the court's discretion in respect of costs. In large measure, the defendant appeared to accept the proposition that it bore responsibility for the additional costs incurred in having to bring a further application to raise matters that it did not previously properly ventilate. Whilst I have concluded that that failure of the defendant should not preclude the proper orders being made, the further application was only necessary because of the failure of the defendant to refer earlier to cl 105 and to refer at any stage to the terms of sch 7.
For these reasons, I am not disposed to alter the order that the defendant pay the cost of that motion. The result would be that the defendant would pay the costs of its notice of motion to amend the orders. But such an order is only available if the application is ancillary proceedings under cl 108 of the regulation, otherwise cl 105(2) or cl 106 provides the appropriate order for costs.
There can be little doubt that the application to amend the order for costs in respect of the plaintiff's notice of motion is an ancillary proceeding, since the plaintiff's notice of motion, as the defendant argued and as I found (see Ortlipp v Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer [2014] NSWDC 157) was itself an ancillary proceeding. But the present notice of motion deals not only with the costs for that application, but also with the amendment of the orders regarding the costs of the primary proceedings.
In Chubs Constructions Pty Ltd v Sam Chamma (No 2) [2010] NSWCA 225 at [34], an appeal against costs was held not to be an ancillary proceeding. It was also not costs "on the claim", see Chubs Constructions at [40]. This lead the Court, in Chubs Constructions, to reject the application of both cl 108 and cl 105, and order that each party bear their own costs under cl 106 of the regulation. The Court at [41] noted that the costs order would have been the same had the Uniform Civil Procedure Rules 2005 (presumably under cl 108) applied. In Chubs Constructions, the Court of Appeal stated at [33]:
"In any event, we cannot see that an appeal could ever be described as an ancillary proceeding. An appeal against the costs awarded in court proceedings for work injury damages is itself a proceeding in which one of the substantive orders made by the lower court are challenged. It is not incidental, or subsidiary or auxiliary to the proceedings at first instance, either in the ordinary meaning of the term 'ancillary' or in the same sense as the applications to which we have referred."
It may be noted that an application to amend an order is not the same as an appeal. Whether it is analogous to an appeal and thus not ancillary under cl 108 seems arguable. On the other hand, there seemed to me to be four reasons why the defendant's motion to amend should be regarded as ancillary, or at least subject to the provisions in cl 108.
First, one of the two orders sought in respect of the costs of the motion is plainly ancillary to the primary proceedings, as decided above. It may be that if part of the notice of motion proceeding is ancillary then no additional costs are incurred in respect of matters that were not costs of the ancillary proceeding.
Secondly, the application to amend a costs order is "incidental, or subsidiary or auxiliary to the proceedings", (see Chubs Constructions at [33] and compare [41]).
Thirdly and perhaps most importantly, cl 108 applies to "costs payable in or in relation to proceedings that are ancillary". "[I]n relation to" are words of wide import. Costs in respect of the order to amend the costs order in the primary proceedings are costs related to ancillary proceedings (the costs of the plaintiff's notice of motion) because they are costs arising out of the same application.
Finally, the relevance of whether a proceeding is or is not ancillary is in respect of the matter of costs. It seems to me that the question of whether the costs of the ancillary proceedings should be determined separately from the costs of the primary proceedings is a matter not irrelevant to the question of whether the proceedings are ancillary. As I have earlier determined, the costs ought not follow the costs of the primary proceedings (nor could they, given that the application concerns in part the ancillary application). I think this is a matter that informs whether those proceedings are ancillary.
It might be thought that it is inconsistent to order the defendant to pay the costs of the application to vary the orders, even though I have found that it was not "solely responsible" for the error as part of my reasoning for determining that the Court should correct its orders. I do not think that this creates an inconsistency. The defendant is ordered to pay the costs of the application because, leaving aside the statutory provisions, it is the primary cause of those additional costs. The briefest examination of its initial submissions on costs reveals that it did not make the points it now makes. It appears to accept some responsibility for its failure to raise these points, and certainly gave no satisfactory explanation for this failure. But it is a different matter to hold it solely responsible for the Court's misapprehension of the law.
In the circumstances, in my view the costs of the defendant's application are costs within the ambit of cl 108, for the reasons given in my decision of 20 July 2014, and should be payable by the defendant. For the reasons given earlier in this decision, they are also not subject to the limitations of sch 7, but are to be assessed on a party/party basis in accordance with the rules of the court.
The orders of the Court are:
(1) Amend the orders made on 20 June 2014 in the following respects:
(a) Delete order 1 made on 20 June 2014.
(b) Make the order sought in paragraph 1 of the notice of motion filed 27 May 2014.
(c) In respect of the order sought in paragraph 2 of the notice of motion filed 27 May 2014, order that order 4 made on 21 May 2014 be set aside and replaced with an order that the plaintiff pay the defendant's costs of the proceedings pursuant to clause 105(2) of the Workers Compensation Regulation 2010 save that the maximum costs are those costs set out in schedule 7 of the Regulation, in accordance with clause 102 of the Regulation.
(d) In respect of order 2 made on 20 June 2014, delete the word "noting" and all words following thereafter so that the order is varied to read "Order that the defendant pay the plaintiff's costs of the motion filed 27/5/14".
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Decision last updated: 10 October 2014
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