Vision Australia Ltd v Elisha [No 2]
[2023] VSCA 288
•28 November 2023
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2023 0018 |
| VISION AUSTRALIA LIMITED | Applicant |
| v | |
| ADAM ELISHA [NO 2] | Respondent |
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| JUDGES: | McLEISH, KENNEDY and MACAULAY JJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | Determined on the papers |
| DATE OF JUDGMENT: | 28 November 2023 |
| MEDIUM NEUTRAL CITATION: | [2023] VSCA 288 |
| JUDGMENT APPEALED FROM: | [2022] VSC 754 (O’Meara J) |
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DAMAGES – Respondent successful in establishing breach of contract – Whether award of nominal damages prohibited under Workplace Injury Rehabilitation and Compensation Act 2013, s 340(c) – Whether nominal damages are damages ‘in respect of an injury’ in proceedings in accordance with pt 7 div 2.
COSTS – Where leave to appeal granted and appeal allowed – Where applicant substantially successful party – Respondent ordered to pay 80 per cent of costs – Chen v Chan [2009] VSCA 233, applied.
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| Counsel for written submissions | |||
| Applicant: | Mr PM O’Grady KC with Mr LR Howard and Mr GA Worth | ||
| Respondent: | Mr JP Brett KC with Ms E Latif and Mr E Makowski | ||
Solicitors | |||
| Applicant: | IDP Lawyers | ||
| Respondent: | Arnold Thomas & Becker | ||
MCLEISH JA
KENNEDY JA
MACAULAY JA:
On 1 November 2023 we delivered reasons in this matter.[1] We found that the trial judge erred in awarding the damages he did by reason of breach of contract. However, he made no error in holding that Vision Australia Limited (‘Vision’) did not owe the alleged duty of care, with the result that the case in negligence also failed.
[1]Vision Australia Ltd v Elisha [2023] VSCA 265 (‘Reasons’); these reasons should be read together with those Reasons.
Accordingly, we determined that we would grant leave to appeal, allow the appeal, and set aside the damages award of $1,442,404.50.
We did not pronounce final orders on 1 November, but directed the parties to file written submissions as to a form of final order disposing of the appeal, in the absence of agreement.
Following the receipt of further submissions,[2] three issues arise for consideration:
•whether the Court should award nominal damages;
•what order should be made as to the costs of the trial; and
•what order should be made as to the costs of the application for leave to appeal and the appeal.
[2]Both parties filed submissions on 15 November 2023. Further submissions were also filed on 21 November 2023, subsequent to our request that the parties address, inter alia, whether an award of nominal damages was ‘in respect of an injury’ for the purposes of s 340 of the Workplace Injury Rehabilitation and Compensation Act 2013.
It is convenient to deal with the first two issues together, given that any award of nominal damages may affect the appropriate order as to the costs of the trial under the Workplace Injury Rehabilitation and Compensation Act 2013 (the ‘Act’).[3]
[3]Both parties apparently accepted that the provisions of pt 7 div 2 of the Act applied to the trial proceeding on the basis that it was a proceeding ‘in accordance with this Division’ for the purposes of s 340.
Nominal damages and the costs of the trial
Vision submitted that any nominal damages could only be characterised as ‘damages of any other kind’ awarded to a worker ‘in respect of an injury’ and are hence prohibited by s 340(c) of the Act.
In so doing Vision emphasised that the words, ‘in respect of’ are of very wide import. In a not dissimilar context, the words had been interpreted to refer to damage payable and assessed ‘by reference to’ an injury.[4]
[4]Citing Workers’ Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642, 655 (Deane, Dawson and Toohey JJ); [1988] HCA 49 (‘Workers’ Compensation Board of Queensland’).
Vision submitted that s 340 of the Act prescribes a code for the damages that can be awarded under div 2 pt 7. To award nominal damages would circumvent and render nugatory the carefully calibrated scheme governing awards of damages and treatment of costs in such proceedings as set down in div 2 pt 7.[5]
[5]It suggested that each of ss 326–327, 340, 343–344, and 347 would have no application.
Vision also submitted that an award of nominal damages would have drastic consequences for the operation of the compensation scheme which, by s 5, applies to the entitlement of a worker to compensation in respect of an injury. Under s 70(2) the Authority (ie the Victorian WorkCover Authority) will not be bound by the nominal damages order, or the costs order which would flow from it, in circumstances where Vision had subjugated the rights to conduct this litigation to the Authority under s 71(4).
Vision highlighted that Mr Elisha had not sought nominal damages at trial, or on appeal, and did not commence proceedings to vindicate a legal right, but to recover substantial damages. He could not be regarded as the successful party.[6]
[6]Citing Actrol Parts Pty Ltd v Coppi (No 3) (2015) 49 VR 573, 597–600 [90]–[99] (Bell J); [2015] VSC 758.
Given that the Court was prohibited from awarding nominal damages by s 340(c), Vision submitted that ss 344(1)(b)(i) and 344(2)(a) required the Court to order that Mr Elisha pay Vision’s costs of the trial below.
Mr Elisha submitted that the Court was not prohibited from awarding nominal damages under s 340 of the Act because nominal damages were in a ‘class of their own’ and are not awarded ‘in respect of an injury’. He relied on the definition of ‘nominal damages’ in The Owners of the Steamship ‘Mediana’ v The Owners, Master and Crew of the Lightship ‘Comet’ (The ‘Mediana’) as follows:
‘nominal damages’ is a technical phrase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though it gives you no right to any real damages at all, yet gives you a right to the verdict or judgment because your legal right has been infringed.[7]
[7][1900] AC 113, 116 (Earl of Halsbury LC).
Mr Elisha contended that there should be an award of nominal damages in the sum of $100 because he had established a breach of contract, which finding was not disturbed on appeal. It followed that no costs should be awarded under s 344(2)(d) of the Act.[8]
Consideration
[8]Given the statutory offer was nil and the statutory counter offer was $550,000 plus retention of no‑fault benefits, the award of nominal damages would fall between the statutory offer and 90 per cent of the statutory counter offer for the purposes of s 344(2)(d).
Section 340 of the Act reads as follows:
340 Proceedings—limitations on awards
A court must not, in proceedings in accordance with this Division, award to a worker in respect of an injury—
(a) pecuniary loss damages—
(i)if the total pecuniary loss damages assessed, before the reduction (if any) under section 26(1) of the Wrongs Act 1958 and before the reduction (if any) under section 343(1), is less than $56 650 or that amount as varied in accordance with Division 1 of Part 13 as at the date of the award; or
(ii)in excess of $1 275 570 or that amount as varied in accordance with Division 1 of Part 13 as at the date of the award; or
(b) damages for pain and suffering—
(i)if the total damages for pain and suffering assessed, before the reduction (if any) under section 26(1) of the Wrongs Act 1958 and before the reduction (if any) under section 343(1), is less than $54 730 or that amount as varied in accordance with Division 1 of Part 13 as at the date of the award; or
(ii)in excess of $555 350 or that amount as varied in accordance with Division 1 of Part 13 as at the date of the award; or
(c) damages of any other kind, other than damages in the nature of interest.
It may be possible to treat a nominal damages award for an infraction of a legal right as unrelated to, and thereby not ‘in respect of’, an injury for the purposes of s 340(c) (as Mr Elisha suggests). Nevertheless, s 340(c) can also be read in a different way, which focuses on the nature of the proceeding which is the subject of s 340. Thus, where an award of nominal damages is made in a proceeding brought ‘in respect of an injury’, that award may constitute an ‘award … in respect of an injury’ for the purposes of s 340(c).
In resolving the competing constructions, it is necessary to have regard to all of the words of s 340, as well as the context and purpose of the Act.[9]
[9]Visser v The King (2023) 68 VR 188, 219 [100] (Emerton P, Priest, McLeish, T Forrest and Kennedy JJA); [2023] VSCA 10, citing R v A2 (2019) 269 CLR 507, 520–2 [32]–[36] (Kiefel CJ and Keane J), 545 [124] (Bell and Gageler JJ); [2019] HCA 35.
Turning first, to the text of s 340, the words ‘in respect of’ have a very wide meaning.[10] Moreover, those words are described as having a ‘chameleon-like quality’ taking their character from the context in which they appear.[11] The contextual words ‘proceedings in accordance with this Division’ are also more broadly concerned with proceedings brought ‘in respect of an injury’. Thus, under s 326, subject to limited exceptions, a worker can only recover damages ‘in respect of an injury’ as permitted by, and ‘in accordance with [Division 2]’ (s 326(c)). As provided in s 318, the injury must be one that is caused either by the negligence (or other tort) of the injured worker’s employer, or by a breach of contract by that employer. A proceeding in accordance with pt 7 div 2 is therefore a proceeding ‘in respect of an injury’ such that an award of nominal damages in that proceeding will itself have a clear nexus with an injury.
[10]See Technical Products Pty Ltd v State Government Insurance Office (Queensland) (1989) 167 CLR 45, 47 (Brennan, Deane and Gaudron JJ); [1989] HCA 24.
[11]Ibid; see also Workers’ Compensation Board of Queensland (1988) 165 CLR 642, 653–4 (Deane, Dawson and Toohey JJ); [1988] HCA 49.
On that basis, an award of nominal damages in a proceeding in accordance with pt 7 div 2 would be an award in respect of an injury.
The construction we favour is also consistent with the legislative scheme provided by pt 7 div 2 sub-div 2 of the Act. That scheme contains a detailed, prescriptive set of provisions limiting the circumstances in which a worker may bring proceedings ‘in accordance with this Division’ (eg see ss 328 and 333). In particular, a worker may not bring proceedings for the recovery of damages ‘in respect of the injury’ at all unless the injury is a ‘serious injury’ (s 335(2)).[12] The scheme also makes very specific provision for the awards of damages and costs which may be made in relation to that proceeding (in ss 340 and 344).
[12]Unless the injury is deemed to be a serious injury under s 335(1).
Consistent with this scheme, then, s 340 is clearly intended to prescribe a codified statement of the monetary thresholds and statutory maximum awards of damages which may be made in the relevant proceeding. Those awards are limited to pecuniary loss damages (s 340(a)) and damages for pain and suffering (s 340(b)) of certain amounts, with no damages of ‘any other kind’ to be awarded (s 340(c)).
In summary, s 340 falls within a legislative context that allows for the bringing of particular kinds of proceedings. Those proceedings must arise out of particular causes of action, concern an injury that has been found or conceded to exceed a particular threshold of whole person impairment and will result in an award of compensatory damages that exceeds minimum monetary limits for pecuniary loss or pain and suffering. In short, the section falls within a scheme designed to weed out claims for low-level injuries for low-level sums of compensation. It is inconceivable in that context, that Parliament intended to permit proceedings to be brought in accordance with div 2 of pt 7 for claims for nominal damages for breach of contract in connection with a claim for compensation for injury. An award of nominal damages on the basis that it is not ‘in respect of an injury’ would undermine the operation of such a codified regime.
Overall, then, we consider that, consistent with the evident purpose of s 340, the grant of an award of nominal damages for an infraction of a legal right made in a proceeding brought ‘in respect of an injury’ is properly characterised as an award ‘in respect of an injury’ for the purposes of s 340(c).
It follows that, although we had been minded to award nominal damages in an amount of $100, s 340(c) prohibits the making of such an award. Mr Elisha must therefore pay the costs of the trial under s 344(2)(a).[13]
[13]This appears to be the correct provision given that a statutory offer was made. However, Vision also sought this order under s 344(1)(b)(i) of the Act. The result is the same and Mr Elisha did not cavil with this result if s 340(c) applied.
Costs of the application for leave to appeal and the appeal
Mr Elisha submitted that there were four substantial points of argument on the appeal (under each of grounds 1, 2 and 3, and the notice of contention), which were largely discrete. He highlighted that Vision had succeeded on two points, but also failed on two points. Thus, he contended that the Court should make an issues-based costs order reflecting the measure of success achieved by each party. He invited the Court to make an order that there be no order for costs, or alternatively, that he pay only a small portion of Vision’s costs — say 20 per cent.
Vision submitted that there is no basis to depart from the general rule that the successful party should recover its costs even where it has not succeeded on all heads of claim.[14] Vision submitted that this is not a case where ‘mixed success’ has been enjoyed by the parties. Rather, it has been wholly successful as the appeal has been allowed and the judgment below is to be set aside. In any event, as a matter of impression and evaluation, Vision’s lack of success on grounds 1 and 2 does not warrant any apportionment of the costs of the appeal. To the extent that Mr Elisha had any success, it was minimal and incapable of being properly reflected by way of apportionment without giving rise to unnecessary complication on taxation.
Consideration
[14]Citing Chen v Chan [2009] VSCA 233, [10] (Maxwell P, Redlich JA and Forrest AJA).
In Chen v Chan, this Court identified the following relevant principles:
(1)The general rule is that costs should follow the event. Absent disqualifying conduct, the successful party should recover its costs even where it has not succeeded on all heads of claim.
…
(3)Where there is a multiplicity of issues and mixed success has been enjoyed by the parties, a Court may take a pragmatic approach in framing the order for costs, taking into consideration the success (or lack of success) of the parties on an issues basis. Generally, if such an order is made, it is reflected in the successful party being awarded a proportion of its costs but not the full amount.
(4)A Court may, when fixing costs in a claim where there has been mixed success, take into account complications which it considers will arise in the taxation of costs, as part of its consideration of the overall interests of justice.
(5)Where a Court determines to make an order apportioning costs, then it does so primarily as ‘a matter of impression and evaluation’, rather than with arithmetical precision, having considered the importance of the matters upon which the parties have been successful or unsuccessful, the time occupied and the ambit of the submissions made, as well as any other relevant matter. …[15]
[15]Ibid [10(1), (3)–(5)] (citations omitted).
Vision has been successful in obtaining the orders sought in the application for leave to appeal — the appeal has been allowed and the judgment is to be set aside. Nevertheless, we are satisfied that it is appropriate to make some limited allowance for the fact that Mr Elisha succeeded on both grounds 1 and 2. Both were matters of substance to which significant argument was devoted.
Overall, as a matter of ‘impression’ rather than arithmetical precision, we consider that Mr Elisha should pay 80 per cent of Vision’s costs of the application for leave, and of the appeal.
Conclusion
The final orders will be as follows:
1. Leave to appeal is granted.
2. The appeal is allowed.
3. Paragraphs 1 and 2 of the orders of the Honourable Justice O’Meara made on 15 December 2022 are set aside and in their place it is ordered that the proceeding be dismissed.
4.Within 28 days of the date of these orders, the respondent repay to the appellant the total sum of $1,482,598.50 being:
(a)the amount of the damages award entered in his favour on 15 December 2022 in the sum of $1,442,404.50; and
(b) interest agreed in the sum of $40,194.
5.Paragraph 4 of the orders of the Honourable Justice O’Meara made on 15 December 2022 is set aside and in its place it is ordered that the plaintiff pay the defendant’s costs of the proceeding, including the costs referred to in paragraph 5 of the orders of the Honourable Justice O’Meara, and any reserved costs, on the standard basis.
6.The respondent pay 80 per cent of the appellant’s costs of the application for leave to appeal, and the appeal, including any reserved costs, on the standard basis.
Mr Elisha will also be granted an indemnity certificate pursuant to s 4 of the Appeal Costs Act1998.
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