Southern Cross Community Healthcare Pty Ltd v Blacktown City Council

[2023] NSWSC 1347

Supreme Court

New South Wales

Medium Neutral Citation:

Southern Cross Community Healthcare Pty Ltd v Blacktown City Council [2023] NSWSC 1347

Hearing dates:

7 November 2023

Date of orders:

7 November 2023

Decision date:

07 November 2023

Jurisdiction:

Common Law

Before:

Campbell J

Decision:

The hearing fixed to commence on 7 November 2023 is adjourned. Parties’ costs in the cause.

Catchwords:

CIVIL PROCEUDRE — application for adjournment — employer’s claim for statutory indemnity from third party tortfeasor — worker’s injury alleged to have occurred during employment while on public road within defendant’s local government area — defendant has insufficient particulars as to notional damages and workers compensation payments

Legislation Cited:

Civil Liability Act 2002 (NSW)

Workers Compensation Act 1987 (NSW), s 151Z

Category:

Procedural rulings

Parties:

Southern Cross Community Healthcare Pty Ltd (Plaintiff)
Blacktown City Council (Defendant)

Representation:

Counsel:
R Perla (Plaintiff)
SL Flett (Defendant)

Solicitors:
Moray & Agnew (Plaintiff)
Sparke Helmore Lawyers (Defendant)

File Number(s):

2022/89875

ex tempore JUDGMENT (revised)

1. Listed before me today for hearing, with an original estimate of two days, is an employer’s claim for the statutory indemnity created by s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) (“WCA”), against the Blacktown City Council in respect of an injury suffered by the worker on a footpath within the defendant’s local government area on 30 May 2018.

2. I am informed that the worker was leaving residential premises, fronting the footpath, after working an overnight shift as a carer when she slipped on a seed pod on the concrete footpath, which had fallen from a tree planted on the nature strip. On those bare facts, one could postulate a close contest as to liability. However, there are additional facts and the gravamen of the plaintiff’s case, as to breach of duty owed by the council to the worker, is that from at least about two years prior to the receipt by the worker of her injuries, the council had been put on notice of the very risk of slipping that these seed pods posed for pedestrians lawfully passing along the footpath. On the worker’s case, an assessment was made by the council that the tree was “inappropriate” for the location and a work order was apparently issued, which was never acted upon until after the worker’s accident, as I have said, some two years later. On the material that was forwarded to my chambers in preparation of the hearing, it seems that there was more than one such report about the same tree over that period, which appeared to result in a further work order, but still no action was taken. The plaintiff’s case is also supported by the opinion of an expert arborist in relation to the specie involved. The arborist also speaks of his experience in relation to the practice of councils generally to respond promptly to complaints about this species of tree.

3. The worker appears to have suffered, on the medical evidence, a relatively serious injury involving a complete tear of her hamstring, which resulted in surgery to reattach it to the insertional tendon. Regrettably, without a great deal of success in as much as she has had ongoing, very significant difficulties on the face of the medical evidence in relation to infections resulting in a large defect in her thigh. Multiple attempts by plastic surgeons to repair this have not been successful. In May 2023, a medical assessment under the provisions of the workers compensation legislation resulted in the issue of a medical assessment certificate assessing the worker as suffering a 59% whole person impairment because of her injury. While such an assessment does not necessarily inform the assessment of common law damages as modified by the Civil Liability Act 2002 (NSW), it certainly bespeaks a very significant degree of ongoing disability, and it is in relation to this matter that I am asked by the council to adjourn the proceedings.

4. As is well known, under s 151Z(1)(d) of the WCA an essential part of the Court’s task on the determination of the employer’s claim is the making of a notional assessment of the damages that would have been payable to the injured worker, had she successfully sued the third-party tortfeasor, in this case the council. That is significant because that assessment puts a cap on the maximum amount that the employer may recover by way of statutory indemnity. In assessing those notional damages, it is also necessary to make a notional assessment of any contributory negligence by the worker to reach the final figure. The position is illustrated in the present case, if I may say so with respect, by the competing schedules prepared by Mr Flett of learned counsel on behalf of the defendant, and Mr Perla of learned counsel on behalf of the plaintiff. Mr Flett informs me he has taken a realistic view of the material available to him. His figure is around $1.3 million after a reduction for contributory negligence. Mr Perla’s figure, without any deduction for any contributory negligence, produces a figure in the order of $3.9 million. Obviously, a wide difference of opinion. For context, the worker is a comparatively young person of only 47 years of age. She has had ongoing treatment since May 2018, including multiple surgeries to deal with the wound infection and attempted repairs of the defect. She has received ongoing nursing care of a sophisticated type in relation to wound management in between the various surgeries.

5. That brings me to the point. Currently, the cost of ongoing nursing care, medical treatment, pharmaceuticals and the like, leaving aside weekly payments of compensation for incapacity for work, is accruing at about $10,500 per month on average, a figure which, on its own, would obviously translate actuarially into very significant notional damages. Although the notional damages are not directly payable by the defendant, as I have said, they inform the maximum that the plaintiff employer is able to recover under the statutory indemnity if it otherwise establishes liability in the defendant.

6. Given the assessment of 59% whole person impairment, the worker’s comparatively young age of 47, and what the assessment says about the nature and extent of her ongoing injury and disability, one can readily see that this is capable of translating into very significant, ongoing payments under the WCA over the coming decades. The total at the moment, I am told, is $911,000, a large sum. That figure has accumulated over a period of five and a half years. One can tell, without getting out one's calculator, that notional damages are likely to be very large if the present pattern of expenditure is justified and continues for the foreseeable future.

7. It is unfortunate that perhaps the parties have concentrated somewhat on liability issues rather than the intermediate question about the assessment of notional damages. That is explicable perhaps given that the worker had sued the council in own right and the claim for statutory indemnity was travelling as companion litigation with her case. However, the worker’s case settled on terms of a judgment for the defendant, I am informed, in May 2022. It was only when this matter was fixed for hearing that, if I may say so, that the council appreciated the rapidly accumulating amount of compensation paid to and on behalf of the injured worker.

8. Given the amount now potentially involved, the council is applying for an adjournment, and the application is supported by the affidavit of its solicitor, Ms Laura Rush, affirmed on 7 November 2023. Ms Rush's affidavit largely analyses the nature of the information provided by way of various schedules of payments provided over recent times by the employer to the council.

9. I must say, having been taken through the most recent full list of payments by Mr Flett, both in executive summary form and by reference to various aspects of the around 150 pages of the full document, it is rather opaque. Although it sets out amounts paid, date of payment and the identity of the payees, it does not break down in any chronological way the nature of the service provided in respect of each payment made. It is very difficult from that document - which might have been useful for the injured worker's case but not for this case - to work out what has actually been paid in respect of what service, and whether there is any apparent duplication or aspect of overservicing so that one can determine whether the evidence supports the idea that, in particular, the high rate of ongoing medical treatment is reasonable and necessary in the context of the worker's injury and disabilities.

10. Although the qualified plastic surgeons of the parties met as recently as 1 November 2023 and produced the required joint report on 3 November 2023, the report itself does not really cast any light upon the detail of the worker's ongoing need for medical treatment. The experts agreed on the answer to every question put to them. Their expressions of agreement are a model of brevity which is all the rules require when they agree. However, as Mr Flett pointed out in his submissions, neither Dr Howard De Torre, for the plaintiff, nor Dr James Masson for the defendant have seen the injured worker recently. On this critical question about past treatment, the experts simply agree that the treatment received by the plaintiff has been reasonable and necessary without in any way specifying the detail of the treatment. And so far as future treatment is concerned, the experts agree that future treatment is possible. The experts say, "The costs of any future treatment will depend upon what the treatment was and cannot be predicted". This begs the very question about which the defendant is concerned.

11. Although I would be very reluctant ordinarily in a case of this nature to grant an adjournment on the hearing date when the substance of the application relates to the particulars of notional damages, I am of the view, with respect, that the information provided to the defendant by the plaintiff is insufficient to really inform the defendant about the nature of the case it needs to meet, and the likely full extent of its liability if the plaintiff successfully establishes the liability conditions of s 151Z(1)(d) of the WCA. Without criticising the parties, doubtless more could have been done by the defendant to better inform itself. It is a common enough thing for a workers compensation insurer's file to be subpoenaed. It must be said, again with no disrespect, that the request for particulars, or further particulars, that was made in September 2023 really focused upon recent developments rather than an attempt to get an accurate picture of the detail of the total payments made, especially in relation to hospital, medical, and like expenses.

12. Although Mr Perla informed me that he was instructed to oppose the adjournment application, he did not do so with his characteristic vigour, and I assume that there is a certain acceptance, realistically enough, on the side of the plaintiff about the current state of both parties' preparation in relation to the question of notional damages.

13. The matter is, as it is sometimes put by the profession in the vernacular, “a fight between two insurers”. While the Court seeks to deal with all cases equally and understands that even for insurance companies a reasonably early resolution of the dispute is desirable, it does seem to me that no particular injustice is done to any person by granting the adjournment. In particular, the injured worker's rights are intact and will be unaffected by this adjournment. It seems to me that both parties will benefit from the opportunity to attend to the necessary preparation of the damages issue. Time set aside, of course, will be lost but forcing both sides on when neither is ready benefits no-one. I propose to grant the adjournment.

14. Inevitably there will be a question about costs and Mr Perla has already indicated that he has instructions to make that application. Again, without being critical of anybody, one needs to bear in mind that the onus of establishing the amount of the notional damages rests upon the plaintiff, and that the material currently available given its opaque nature would probably fall short in that regard. I have no doubt as I have already indicated, both sides would benefit from a further opportunity to reassess and remarshal their case. It seems to me that the most sensible approach to costs, given, as I have already remarked that the parties are commercial entities, is to order that the costs of each party are that party’s costs in the cause. I have come to that conclusion as it seems to me that there is a mutual need for this adjournment, even if the defendant is the party forced into the position of actually articulating it.

(See transcript for further discussion about orders and the direction that the parties bring in agreed short minutes.)

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Decision last updated: 08 November 2023