Perkins v Commonwealth Bank of Australia Ltd

[2003] NSWSC 761

CITATION:	Perkins v Commonwealth Bank of Australia Ltd & Ors [2003] NSWSC 761
HEARING DATE(S):	11 August 2003
JUDGMENT DATE:	19 August 2003
JUDGMENT OF:	Simpson J
DECISION:	plaintiff allowed 50% of travel expenses claimed; claim for kitchen appliances covered in previous judgment; Adecco to pay Commercial Union's costs of the second cross-claim; Commonwealth Bank to pay Adecco's costs incurred in defending the claim of negligence including the costs of the cross-claim brought by it against Commercial Union so far as the costs were incurred in relation to the claim in tort; cost assessor to determine costs to Adecco of the cross-claims
CATCHWORDS:	supplementary judgment - out of pocket expenses - costs of second cross-claim
CASES CITED:	Perkins v Commonwealth Bank of Australia Ltd & Ors [2003] NSWSC 346, unreported
PARTIES :	Shelley-Lyn Perkins - Plaintiff Commonwealth Bank of Australia Ltd - Defendant/1st Cross-claimant Adecco Centacom Pty Ltd - 1st Cross-defendant to 1st Cross-claim/2nd Cross-claimant Commercial Union Workers Compensation (NSW) Ltd - 1st Cross-defendant to 2nd Cross-claim
FILE NUMBER(S):	SC 20160/00
COUNSEL:	J Mrsic - Plaintiff J Gracie - Defendant / 1st Cross-claimant P Braham - 1st Cross-defendant to 1st Cross-claim/ 2nd Cross-claimant PC Sweeney - 1st Cross-defendant to 2nd Cross-claim
SOLICITORS:	Carroll & O"Dea - Plaintiff Goldrick Farrell Mullan - Defendant / 1st Cross-claimant Corrs Chambers Westgarth - 1st Cross-defendant to 1st Cross-claim, 2nd Cross-claimant Goldbergs - 1st Cross-defendant to 2nd Cross-claim

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SIMPSON J

Tuesday 19 August 2003

20160/00 Shelley-Lyn PERKINS v COMMONWEALTH BANK OF AUSTRALIA Ltd & Ors

SUPPLEMENTARY JUDGMENT

1 HER HONOUR: On 1 May 2003 I delivered judgment (Perkins v Commonwealth Bank of Australia Ltd & Ors [2003] NSWSC 346, unreported) containing my conclusions and findings of fact, to the extent that I was able to do so on the evidence then available. This supplementary judgment should be read in conjunction with that judgment. Other than where it is strictly necessary to do so, I do not propose to restate the facts and circumstances already extensively documented. Because of what I considered to be the unsatisfactory state of the evidence, I specifically reserved determining the plaintiff’s claim for already incurred out of pocket expenses. My reasons for taking that course are set out at [191]. I then gave the parties the opportunity to put further material before me in relation to that issue. Since that date the parties have been able to reach agreement on a significant portion of the plaintiff’s claim but two matters remain unresolved. These involve the plaintiff’s claim for expenses incurred in travelling to medical appointments and consultations, and the provision of certain equipment in modification of her home. An issue also remains outstanding in relation to the costs of the second cross-claim.

out of pocket expenses

2 On 4 August 2003 I was provided with an affidavit sworn by the plaintiff explaining these claims. Put briefly the plaintiff puts her claim in the following way.

3 She and her family live on a farm near a village called Fullerton, 96 kilometres from Goulburn and 322 kilometres from Sydney. By reason of her injury, she is unable to drive a manual motor vehicle. Although members of her family between them own five motor vehicles, none has automatic transmission. The plaintiff is therefore dependent on another member of her family for transport. From the date of her injury to the date of trial the plaintiff has travelled from her home to Sydney approximately twelve times per month for medical treatment and consultations. The consultations are primarily, but not exclusively, with a general practitioner, Dr Meyers, a psychologist, Mr Borenstein, and a hand therapist, Ms Wild. On each occasion she has been driven by a family member, most commonly her husband or her son, but on occasions her daughter. She has also consulted a physiotherapist, Ms Beckett, in Goulburn, initially once a week, and later as much as three times per week. On these occasions also the plaintiff was taken to Goulburn by her husband, her son or her daughter. The plaintiff deposed that she travelled to Sydney, for medical reasons, more than 672 times. Taking into account travel to both Sydney and Goulburn, she travelled about 375,000 kilometres.

4 On occasions, when in Sydney, she stayed overnight with her mother.

5 On each occasion the plaintiff travelled to Sydney, she incurred motor vehicle expenses, including fuel, wear and tear on the motor vehicle (a large four wheel drive) and tollway charges. On the occasions she stayed overnight with her mother she contributed $30.00 for meal expenses. Her husband and son, who conducted a business of bulk haulage of firewood, sacrificed income by providing transport for her.

6 The plaintiff was in receipt of workers’ compensation benefits. Her medical expenses were met by the workers’ compensation insurer, Commercial Union. Each of the plaintiff’s claims appears to have been met without question by Commercial Union (the second cross-defendant). At the instigation of the officer handling the claim, the plaintiff claimed compensation for the income losses incurred by her husband and son. Commercial Union paid approximately $400 for each trip to Sydney, and between $150 and $200 for each trip to Goulburn.

7 In the light of this evidence it is less difficult than it previously was to see how it is that the travel expenses claim mounted as it did. Each payment for travel appeared in Commercial Union’s records as attributed to “ambulance”, thus explaining one of the mysteries or confusions concerning this claim.

8 Not all mysteries and confusions are so clarified, however. The facts that the plaintiff travelled as frequently as she did to Sydney and Goulburn, that she actually incurred the expenses she claimed, and that Commercial Union paid the claims without question, do not establish that the claims are reasonable, nor that Adecco (which will, ultimately, as a result of the judgment, be ordered to pay the damages awarded to the plaintiff) should be held liable in that amount. The question whether the claims were reasonable remains to be determined.

9 The other outstanding matter concerns the provision of appliances, said to be to assist the plaintiff to cope with her injury. A rehabilitation consultant, retained by Commercial Union (on the plaintiff’s evidence) recommended that she be provided with a number of appliances. These included an oven, a cook top, a “tap-shower head mixer”, a super silent multi-programme dishwasher in stainless steel and a dishwasher worktop. The total cost of these appliances is shown to be $8,236.00. The plaintiff, in her affidavit, said that all of these devices are specialised for people with hand disabilities and are “operated by the touch of a finger”. She said that they enabled her to cook. Commercial Union met the bill for these appliances.

10 The question I now have to determine is the extent to which the plaintiff is entitled to be compensated, by the Bank (which will, in turn, be indemnified by Adecco) in respect of the travel and the purchase of the appliances. The question is further complicated by the circumstance that the Bank and the plaintiff have agreed upon which of the medical expenses should be met. I have not been made privy to that agreement. (I do not say that by way of criticism; there is no reason that I should be burdened by the detail of any agreement of this kind. But it means that one possible foundation for reaching a just result is closed to me. In any event, having regard to the position adopted by the Bank, the fact that the Bank is prepared to acknowledge its liability for a given number of general practitioner consultations does not determine the question of whether it was reasonable for the plaintiff to attend a general practitioner in Sydney rather than in a location closer to her home.)

11 The Bank has produced evidence that equivalent services, of a general practitioner, and hand therapist and a psychologist, are available in Goulburn, Queanbeyan and the Australian Capital Territory. The Australian Capital Territory is about 200 kilometres by road from the plaintiff’s farm; some additional travel would be required within the Australian Capital Territory to reach the locality where the medical services exist, but the travel distance is still significantly less than the travel distance to Sydney. Goulburn is 96 kilometres from the plaintiff’s farm and involves a round trip of approximately two hours.

12 The plaintiff resisted any suggestion put to her in cross-examination that she may have consulted medical practitioners and paramedical practitioners closer to home. She said she was very satisfied with the treatment that she received from her care providers and saw no reason why she should go through the exercise of acquainting herself with alternative practitioners. When cross-examined about one general practitioner who practises in Crookwell (a town which, on the evidence – see exhibit 21, a map of the general area – is considerably closer to the plaintiff’s home than Goulburn), the plaintiff replied that she did not like him.

13 I am unable to accept that the plaintiff’s position in this respect is reasonable. True it is that she appears to have been encouraged in what I can only describe as self indulgence by the claims officer in Commercial Union, and that the attitude of that officer has, in the end, done her no favours. But I must bear firmly in mind that the question is what it is reasonable to require the Bank (and Adecco) to pay. That cannot be determined by reference to decisions made by Commercial Union.

14 As I have repeatedly said, the evidence is in an unsatisfactory state and that remains the case even after the further hearing on the question of out of pocket expenses. I am left with evidence that the plaintiff has run up what I previously described (and continue to regard) as astronomical expenses which it is not, in my firm opinion, reasonable to pass on to the party which is ultimately liable to compensate the plaintiff for her injury. But there is no basis on which I can reasonably or properly determine what would have been a reasonable claim. It would be quite impractical, for example (even if the evidence were available), to assess the reasonable need for the plaintiff to undertake each individual trip to Sydney. I am forced, in an attempt to do justice between the parties, to make the best assessment I can. I do not accept that it was reasonably necessary for the plaintiff to travel to Sydney almost 700 times, three times each week. I do not accept that it was reasonable for her to insist on consulting practitioners in Sydney when equivalent services were available locally. In cross-examination of the plaintiff, some attempt was made to show that, if she had to travel to Sydney, alternative (and less costly) means of transport were available, such as a bus. It was also suggested that the plaintiff might have purchased an automatic vehicle, which would have enabled her to drive herself, and would have obviated the need for her husband or son to take time out from their business. The first of these matters (the bus option) was not seriously pressed, and I need say no more about it, except to note that I am not satisfied that it would have been a reasonable alternative. The second also has its difficulties: the proposition that a plaintiff might be obliged to expend a large capital sum in order to reduce the costs of medical treatment is taking the duty to mitigate to new levels, and was not fully explored. Failure to mitigate raised its head for the first time in the cross-examination of the plaintiff, and only in response to a question asked by me. I do not consider the failure to purchase an alternative vehicle to be a matter that operates in the assessment of the reasonableness of the plaintiff’s claim.

15 Doing the best I can on the evidence, I propose to allow the plaintiff 50% of the travel expenses claimed. I recognise that this is no more than an estimate based upon wholly inadequate information but I am not in a position to manufacture the evidence that would enable a proper determination of the issue. The estimate I have made takes into account the sums claimed in respect of the income losses of the plaintiff’s husband and son. Just how this was put as a head of damages was not clear, and I retain some doubts about its reasonableness.

16 As to the kitchen appliances the plaintiff claims, I am of the view that these are adequately covered in the decision I made in relation to the claim for future out of pocket expenses. I dealt with this at [216] – [223] inclusive of the judgment. In my opinion the claim made is extravagant and does not take into account the fact that the plaintiff is entitled only to an allowance for the difference in cost between what might be called normal appliances and appliances especially adapted for a person with a hand injury. No evidence was put before me to enable that determination to be made.

second cross-claim: Adecco v Commercial Union

17 At [318] I concluded that the cross-claim brought by Adecco against Commercial Union must be dismissed. My reasons are set out at [308] – [317].

18 Notwithstanding that it failed in its cross-claim, Adecco seeks orders, in the alternative:

(i) that Commercial Union pay Adecco’s costs of the proceedings on an indemnity basis;

(ii) that the Bank pay 80% of Adecco’s costs, including any costs Adecco is required to pay Commercial Union.

the costs claim against Commercial Union

19 In support of this claim, Adecco tendered in evidence a letter written by its solicitors to Commercial Union on 10 September 2001. In that letter, the solicitors for Adecco quoted from an earlier letter from Commercial Union’s solicitors, dated 16 March 2000 as follows:

“Having perused the cross-claim and considered same, it is in our view and the view of Commercial Union that this is a matter where the Workers Compensation policy would not attach due to the fact that what is pleaded against your company principally consists of a failure by Adecco to comply with the terms of a contract entered into between Adecco and the Commonwealth Bank.”

(I pause to note that this encapsulates precisely what I ultimately found.)

20 The letter from Adecco’s solicitors continued:

“We acknowledge that Adecco is not entitled to claim indemnity under the policy in respect of the cross claim claiming damages for breach of the Agreement. However, it is clear from the allegations pleaded against Adecco in the cross-claim filed by [the Bank] that:
(a) Adecco will be found by the Court to be the plaintiff’s employer; and
(b) [Commercial Union] had agreed to indemnify Adecco for injury to any person who is employed by them; and
(c) The cross-claim filed by [the Bank] against Adecco alleges a breach of duty and a failure to maintain a safe system of work.
These are allegations to which the policy clearly responds. It follows that in our view, Adecco is entitled to indemnity under the policy in respect of the cross-claim for indemnity and/or contribution.”

21 Counsel for Adecco also referred me to the statutory form of a workers’ compensation policy of the kind taken out by Adecco. That appears in Schedule 1 of the Workers’ Compensation (General) Regulation 1995. Clause 3 of that Schedule is headed:

“What the Insurer is liable for”.

22 The substance of the clause is as follows:

“The insurer will indemnify the employer [Adecco] against all of the following sums for which the employer becomes liable during or in respect of the period of insurance:
(a) compensation that the employer becomes liable to pay under the Act to or respect of any person who is a worker of the employer …,
(b) any other amount that the employer becomes liable to pay independently of the Act … for any injury to any such person …,
(c) costs and expenses incurred with the written consent of the insurer in connection with the defence of any legal proceedings in which any such liability is alleged .
The insurer will not indemnify the employer for the employer’s liability for GST payable on the settlement of a claim.” (emphasis added)

23 (I draw attention to the final note in this clause, which makes it plain that the clause that was put before me is not in precisely the same terms as any such clause that applied at the time of the plaintiff’s injury. That is because the New Tax System, by which a goods and services tax (G.S.T.) was introduced, had not been passed at that time. However, I was told that, that excepted, clause 3 as it now appears is in the form that it appeared in 1997. I propose to act upon that assurance.)

24 The argument put on behalf of Adecco is that, since a claim was made against it in tort, Commercial Union was obliged, under the terms of the policy, to conduct its defence against that claim, whether the claim was ultimately successful or not. As I understand it, by convention, when a claim in tort is made against an employer who holds a policy under the Workers’ Compensation Act, the insurance company undertakes the defence of that claim. The employer does not lose the entitlement to that defence because the claim is ultimately unsuccessful.

25 However, that may be a convention, but it is not an entitlement conferred upon an insured employer by clause 3(c). That entitles the employer only to costs and expenses incurred with the written consent of the insurer. I was not referred to any provision in the policy which entitles an insured to representation, funded by the insurer, whenever a claim against it in tort is made.

26 In any event, I am satisfied that the claim Adecco now seeks to make against Commercial Union is a claim in contract and not one properly to be determined in the context of costs orders following the determination of the various claims between the parties to these proceedings. Adecco has failed in the claim it brought against Commercial Union. There is no reason why a conventional costs order should not be made. I propose to order that Adecco pay Commercial Union’s costs of the second cross-claim.

Adecco’s cross-claim against the Bank

27 Adecco claims costs against the Bank on the basis that, in its cross-claim against Adecco, the Bank alleged that Adecco had negligently caused the plaintiff’s injuries. In this the Bank was unsuccessful. The Bank succeeded against Adecco only in a claim in contract. However, Adecco went on to argue:

“In respect of that allegation [of negligence] Adecco was entitled to indemnity from the insurer. Accordingly it joined the insurer to the proceedings.
Any costs referable to the question of Adecco’s negligence, including the costs of the second cross-claim, flow directly from the allegation of negligence in the first cross-claim.
The Bank should pay the costs of that issue, which on a very conservative estimate constitute 80% of the total cost of both cross-claims.”

28 In my view, Adecco is entitled, against the Bank, to the costs of successfully defending the allegation of negligence. But what does that encompass?

29 Adecco also claims to be entitled to its costs incurred in seeking to pass that part of the claim on to Commercial Union. That is because it was common ground that, had Adecco been found liable in tort, Commercial Union would have been obliged to indemnify it in relation to the verdict and costs incurred. The Bank having made a claim against Adecco in tort, which proved to be unsuccessful, it was quite reasonable for Adecco to incur costs in seeking to pass that on to Commercial Union. The costs thus incurred by Adecco are part of the costs of Adecco’s successful defence of the tort claim brought against it by the Bank.

30 I am not in a position to accept that that amounts to 80% of the total cost of the cross-claims. I have no idea what preparatory matters were involved in this aspect of the claim. It will be necessary for a costs assessor to undertake that unenviable exercise.

31 I direct the parties to bring in short minutes of order reflecting all determinations and agreements relevant to this matter.

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Last Modified: 08/28/2003