Speziali v Nortask Pty Ltd (No 2)
[2023] QSC 204
•14 September 2023
SUPREME COURT OF QUEENSLAND
CITATION: Speziali v Nortask Pty Ltd and anor (No 2) [2023] QSC 204 PARTIES: STEVEN SPEZIALI
(plaintiff)
v
NORTASK PTY LTD(first defendant) and
DALBY BIO-REFINERY LIMITED
(second defendant)
FILENO: BS1557/21 DIVISION: Trial Division PROCEEDING: Claim ORIGINATING COURT: Supreme Court at Brisbane DELIVEREDON: 14 September 2023 DELIVEREDAT: Brisbane HEARINGDATE: On the papers JUDGE: Hindman J ORDER: (a)The first defendant pay the plaintiff’s costs of the proceeding against the first defendant on the standard basis.
(b)The second defendant pay the plaintiff’s costs of the proceeding against the second defendant on the standard basis.
(c)The second defendant pay the first defendant’s costs of the contribution claim (including the third party proceeding) on and from 17 December 2020 on the indemnity basis.
(d)The second defendant pay:
(i)the first defendant for the plaintiff’s costs of the proceeding ordered against the first defendant on and from 25 June 2021 on the standard basis that are paid by the first defendant;
(ii)the first defendant’s costs of the plaintiff’s proceeding against the first defendant on and from 25 June 2021 on the standard basis.
CATCHWORDS: PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - OFFERS TO SETTLE – where the
proceeding involved a successful claim for damages by the plaintiff for negligence – whether the first and second defendants should pay the costs – whether any costs should be the subject of a Bullock order
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS - INFORMAL OFFERS AND
CALDERBANK LETTERS – where offers made pursuant to s 292 of the Workers Compensation and Rehabilitation Act – where an offer was made jointly by the plaintiff and the first defendant to the second defendant after mediation – where the joint offer was a Calderbank offer
Personal Injuries Proceedings Act 2002 (Qld), s 40(8)
Workers Compensation and Rehabilitation Act 2003 (Qld), ss 292, 313, 316A, 323(2)
Workers Compensation and Rehabilitation Regulation 2014
(Qld), s 135
Merle v BM Alliance Coal Operations Pty Ltd and ors (No 2)
[2017] QSC 7
COUNSEL: PJ Woods and G Hampson for the plaintiff
RM Treston KC and S McNeil for the first defendant
SOLICITORS:
LHD Lawyers for the plaintiff
Hede Byrne & Hall Lawyers for the first defendant McCabes for the second defendant
Introduction
The plaintiff claimed damages for injuries suffered by him in an accident on 15 June 2017 that occurred during the course of his employment with the first defendant. On the day of the accident the first defendant was carrying out repair works at the premises of the second defendant including to the metal flooring of a 14.5m cyclone structure. The plaintiff suffered significant injuries when he slipped from a ladder used to access the site of the repair works, falling approximately 10 metres onto a concrete slab at ground level.
The plaintiff sued both defendants for damages for negligence. The defendants claimed contribution (including by way of a third-party proceeding) against each other.
After a trial, judgment was awarded in favour of the plaintiff against the defendants on 1 August 2023 as follows:
(a)Judgment for the plaintiff against the first defendant in the sum of $899,254.00 [inclusive of the WorkCover refund of $355,177.33 and the common law rehabilitation refund of $15,934.55];
(b)Judgment for the plaintiff against the second defendant in the sum of
$1,341,573.00 (comprising $899,254.00 [inclusive of the WorkCover refund of
$355,177.33 and the common law rehabilitation refund of $15,934.55] plus
$442,319.00 on account of past and future care);
(c)The aforementioned damages of $899,254.00 are apportioned between the defendants as 25% to the first defendant, 75% to the second defendant;
(d)The parties provide either an agreed proposed costs order or written submissions on costs within 14 days.
The parties did not agree a costs order and made written submissions on costs, including in reply. The parties agreed that costs be determined on the papers.
The costs orders I will make are:
(a)The first defendant pay the plaintiff’s costs of the proceeding against the first defendant on the standard basis.
(b)The second defendant pay the plaintiff’s costs of the proceeding against the second defendant on the standard basis.
(c)The second defendant pay the first defendant’s costs of the contribution claim (including the third-party proceeding) on and from 17 December 2020 on the indemnity basis.
(d)The second defendant pay:
(i)the first defendant for the plaintiff’s costs of the proceeding ordered against the first defendant on and from 25 June 2021 on the standard basis that are paid by the first defendant;
(ii)the first defendant’s costs of the plaintiff’s proceeding against the first defendant on and from 25 June 2021 on the standard basis.
These are the reasons for those costs orders.
Summary of the parties’ positions on costs
Plaintiff’s submissions
The plaintiff contends that there are no offers between himself and the defendants that would alter the usual position about costs of the proceeding.
The plaintiff therefore submits for costs orders as follows:
(a)The first defendant pay the plaintiff’s costs on the standard basis;
(b)The second defendant pay the plaintiff’s costs on the standard basis.
First defendant’s submissions
The first defendant submits that there are two offers to be considered that would alter the usual position about costs.
First, concerning the plaintiff, an offer on 16 December 2020 to resolve the plaintiff’s claim for the sum of $455,177.33 (inclusive of the WorkCover refund), which the first defendant submits it has beaten. It submits that s. 323(2) of the Workers Compensation and Rehabilitation Act 2003 (WCRA) is enlivened.
Second, concerning the second defendant, an offer on 16 December 2020 to resolve the issue of contribution between the defendants on the basis of a 50/50 apportionment, which the first defendant submits it has beaten.
The first defendant therefore submits for costs orders as follows:
(a)The first defendant pay the plaintiff’s costs up to and including 16 December 2020, with such costs to be calculated pursuant to s. 135 of the Workers Compensation and Rehabilitation Regulation 2014 (Qld) (WCRR);
(b)The plaintiff pay the first defendant’s costs on and from 17 December 2020 on the standard basis;
(c)The second defendant pay the plaintiff’s costs on the standard basis, including the costs the plaintiff is ordered to pay the first defendant above;
(d)The second defendant pay the first defendant’s costs of the contribution claim, including the third party proceeding, on and from 17 December 2020 on the indemnity basis.
If the court finds the first defendant is not entitled to a costs order against the plaintiff, the first defendant makes an alternate submission for costs orders as follows (:
(a)The first defendant pay the plaintiff’s costs on the standard basis;
(b)The second defendant pay the plaintiff’s costs on the standard basis;
(c)The second defendant pay:
all the costs the first defendant is ordered to pay the plaintiff;
(ii)the first defendant’s costs of the contribution claim, including the third- party proceeding, on and from 17 December 2020 on the indemnity basis.
The second defendant’s submissions
The second defendant submits for costs orders as follows:
(a)The second defendant pay the plaintiff’s costs on the standard basis;
(b)The second defendant pay the first defendant’s costs of the contribution claim:
up to and including 16 December 2020 on the standard basis;
(ii)on and from 17 December 2020 on the indemnity basis, pursuant to s. 316A of the WCRA.
Relevant offers to consider
In this proceeding there have been multiple offers, formal and of a Calderbank variety, made by the parties. Whilst I have had regard to all of them, there only appears to be three offers that require careful assessment to determine where costs ought to lie. They are the only offers which arguably have “beaten” the outcome at trial.
The first offer was an offer made by the first defendant to the plaintiff on 16 December 2020 and it was a written final offer made pursuant to s. 292 of the WCRA. The relevant terms of the offer were:
“offer to settle the claim for $455,177.33 inclusive of the refund to WorkCover but subject to any other refunds, if applicable.”
Section 313 of the WCRA provides:
313 Costs if written final offer by insurer
(1) This section applies if -
(a)the insurer makes a written final offer that is not accepted by the claimant; and
(b)the claim is dismissed, the court makes no award of damages or makes an award of damages that is equal to or less than the insurer’s written final offer; and
(c)the court is satisfied that the insurer was at all material times willing and able to carry out what was proposed in the written final offer.
(2) The court must -
(a)order the insurer to pay the claimant’s costs, calculated on the standard basis, up to and including the day of service of the written final offer; and
(b)order the claimant to pay the insurer’s costs, calculated on the standard basis, after the day of service of the written final offer.
The second offer was an offer made by the first defendant to the second defendant on 16 December 2020 and it was a written final offer made pursuant to s. 292 of the WCRA. The relevant terms of the offer were:
“offers to settle the contribution claim against the Contributor … on the following terms:
1. The Contributor pay 50% of any damages (being a sum inclusive of a refund due to WorkCover under the 2003 Act together with all other statutory refunds) adjudicated in favour of the Claimant against the Employer.
2. Each of WorkCover, the Employer and the Contributor bear their own costs to date…”
Section 316A(1)-(3) of the WCRA provides:
316A Principles about order as to costs
(1) This section applies to the extent proceedings in a court relate to a contribution claim.
(2) Subsections (3) to (5) apply if the contributor or other party (including an insurer) made an offer that was not accepted.
(3) If the court later awards an amount of contribution that is equal to or more than the other party’s written final offer, the court must order the contributor to pay the other party’s costs on the indemnity basis from the day the written final offer was made.
The third offer was an offer jointly made by the plaintiff and the first defendant to the second defendant after mediation on 25 June 2021, and it was a Calderbank offer. The relevant terms of that offer were that the defendants pay the plaintiff $1.6m ($600,000 from the first defendant and $1,000,000 from the second defendant) plus costs.
Costs as between the plaintiff and the first defendant
I am not satisfied that the offer in [16] above engages s. 313 WCRA.
The award of damages that was made against the first defendant was in the amount of
$899,254.00 which is not equal or less than the insurer’s (the first defendant’s) written final offer. That there was an order dealing with the apportionment of damages between the defendants does not change the amount of the award made against the first defendant in favour of the plaintiff. The mandatory requirements of s. 313(2) WCRA are therefore not enlivened.
That does not mean the offer is to be ignored. It may still justify a different costs order as between the plaintiff and the first defendant.
However, as this matter proceeded, at trial all parties agreed that the quantum of the damages (excluding any care claim) was $899,254.00. I did not make any independent assessment of those damages. Therefore, I am unable to make any proper assessment of whether the plaintiff’s refusal of the first defendant’s offer was unreasonable. I am not
prepared to conclude that the plaintiff’s refusal of the first defendant’s offer was such that it justifies a costs order other than the usual costs order (of costs following the event).
Accordingly, as between the plaintiff and the first defendant I will order that the first defendant pay the plaintiff’s costs of the proceeding against the first defendant on the standard basis. I note, although I do not think it is a matter that needs to be incorporated into the order, that costs pre-commencement of the proceeding will be governed by s. 135 of the WCRR.
Costs as between the plaintiff and the second defendant
Although I am required to and do have regard to the mandatory final offers by reason of
s. 40(8) of the Personal Injuries Proceedings Act 2002 (Qld), there is no offer or other reason that justifies a costs order other than the usual costs order (of costs following the event) as between the plaintiff and the second defendant. Neither the plaintiff nor the second defendant submit otherwise.
Accordingly, as between the plaintiff and the second defendant I will order that the second defendant pay the plaintiff’s costs of the proceeding against the second defendant on the standard basis.
I note, for the purpose of assisting any cost assessor appointed, that where a cost incurred by the plaintiff is a cost of both the proceeding against the first defendant and the proceeding against the second defendant, the principles set out by McMeekin J in Merle v BM Alliance Coal Operations Pty Ltd and others (No 2) [2017] QSC 7 at [53]-[58] properly apply.
Costs as between the first defendant and the second defendant
The first defendant offered to settle the issue of contribution between itself and the second defendant on the basis of a 50/50 apportionment (see [18] above). That offer was substantially beaten by the first defendant with contribution being determined at trial as 25/75.
That may impact on costs between the defendants in two ways:
(a)how the costs of the contribution claim (including the third party proceeding) ought be dealt with;
(b)whether the second defendant should be required to indemnify the plaintiff or the first defendant in respect of any costs ordered to be paid by one of them to the other.
Contribution claim
The defendants appear agreed, and I also agree, that the first defendant’s offer at [18] engages s. 316A of the WCRA such that I will order that the second defendant pay the first defendant’s costs of the contribution claim (including the third-party proceeding) on and from 17 December 2020 on the indemnity basis.
The second defendant also submits that it should pay the first defendant’s costs of the contribution claim (including the third-party proceeding) up to and including 16 December 2020 on the standard basis. No such order is sought by the first defendant.
I consider the first defendant’s position is the proper position. Absent the applicability of s. 316A of the WCRA, as between contributors there would usually be no award of costs. I cannot identify any proper basis on which to make the second defendant responsible for any of the first defendant’s costs of the contribution claim prior to the relevant offer, when I have found that there was properly contribution between the parties. The position might be different in a case where a claim for contribution completely fails.
Claim for Bullock type costs order
A Bullock type costs order is a discretionary costs order that may made in circumstances where a plaintiff succeeds against one defendant but not another. Insofar as the plaintiff is ordered to pay the successful defendant’s costs, it may (if a Bullock order is made) add those costs to its costs to be paid by the unsuccessful defendant. The circumstances must make it reasonable that the unsuccessful defendant (rather than the plaintiff) bear the costs of the successful defendant.
This case is not a Bullock type case. The plaintiff has succeeded against both defendants and I am not ordering that the plaintiff pay any part of the first defendant’s costs. The occasion to consider whether the plaintiff should be reimbursed for any costs to be paid to the first defendant does not arise.
I turn then to consider whether there are circumstances that justify the second defendant being ordered to pay costs that the first defendant is required to pay the plaintiff, or any part of the first defendant’s costs of the plaintiff’s proceeding (as distinct from the contribution claim).
In that respect it is relevant to consider the offer made at [20]. This offer made by the plaintiff and the first defendant to the second defendant was more favourable than the outcome the second defendant achieved at trial (liability of $1,000,000 under the offer as compared to $1,341,573, or $1,116,759 after apportionment is taken into account, under the judgment). Had the offer been accepted by the second defendant when made, the whole of the proceedings would have come to an end and no further costs would have been incurred by the plaintiff or the first defendant.
Whilst the second defendant’s rejection of the first defendant’s offer at [18] was not causative of the first defendant needing to engage further in the proceeding with the plaintiff, the same cannot be said of the second defendant’s conduct in rejecting the plaintiff’s and first defendant’s offer at [20]. The second defendant’s conduct in rejecting the first defendant’s offer at [18] justifies the costs order in [31], but nothing more. The second defendant’s conduct in rejecting the plaintiff’s and first defendant’s offer at [20] arguably justifies a costs order that the second defendant should reimburse the first defendant for the plaintiff’s costs and pay the costs of the first defendant of the proceeding from 25 June 2021.
As none of the parties addressed the relevance of the offer made at [20] in any substance in their submissions on costs, I invited further submissions from the parties about same which were received on 12 September 2023.1
The first defendant has submitted that the offer made at [20] justifies an order that the second defendant pay the first defendant’s costs of the proceeding from 25 June 2021 on an indemnity basis. I am not prepared to go so far as an award of indemnity costs. Whilst I am prepared to and do conclude that the second defendant’s rejection of the offer made at [20] was sufficiently unreasonable so as to justify standard costs orders against the second defendant, it was not so unreasonable as to justify indemnity costs orders.
1 The defendants provided further submissions; the plaintiff did not.
The second defendant has submitted that the offer made at [20] was not more favourable to the second defendant than the judgment because the offer was a collective offer that in terms required the defendants to pay the plaintiff $1,600,000. I agree that the amount to be paid to the plaintiff under the terms of the offer was “collective”, but the offer specifically provided that of the $1,600,000, $600,000 was to be paid by the first defendant and $1,000,000 was to be paid by the second defendant. The offer was more favourable to the second defendant than the judgment.
I conclude that the second defendant’s conduct in rejecting the plaintiff’s and first defendant’s offer at [20] justifies a costs order that the second defendant should reimburse the first defendant for the plaintiff’s costs ordered against the first defendant and pay the costs of the first defendant of the proceeding from 25 June 2021 on the standard basis.
Accordingly, further as between the first defendant and the second defendant I will order that the second defendant pay:
(a)the first defendant for the plaintiff’s costs of the proceeding ordered against the first defendant on and from 25 June 2021 on the standard basis that are paid by the first defendant;
(b)the first defendant’s costs of the plaintiff’s proceeding against the first defendant on and from 25 June 2021 on the standard basis.
Costs related to the costs submissions
The second defendant submitted that I ought make no order for costs in respect of the costs submissions, or at least not award those costs against the second defendant.
The resolution of costs is simply part of the whole of the proceedings (including the contribution claim and third-party proceeding). I do not consider that any party’s submissions about costs have been so unreasonable as to justify some special costs order dealing with the costs submissions separately to the costs of the proceedings.
Orders
Accordingly, the costs orders I make are:
(a)The first defendant pay the plaintiff’s costs of the proceeding against the first defendant on the standard basis.
(b)The second defendant pay the plaintiff’s costs of the proceeding against the second defendant on the standard basis.
(c)The second defendant pay the first defendant’s costs of the contribution claim (including the third-party proceeding) on and from 17 December 2020 on the indemnity basis.
(d)The second defendant pay:
(i)the first defendant for the plaintiff’s costs of the proceeding ordered against the first defendant on and from 25 June 2021 on the standard basis that are paid by the first defendant;
(ii)the first defendant’s costs of the plaintiff’s proceeding against the first defendant on and from 25 June 2021 on the standard basis.
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