Wang v Costa Holdings Pty Ltd
[2023] WADC 4
•20 JANUARY 2023
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: WANG -v- COSTA HOLDINGS PTY LTD [2023] WADC 4
CORAM: TOVEY DCJ
HEARD: 9 JUNE 2022
DELIVERED : 20 JANUARY 2023
FILE NO/S: CIV 2501 of 2020
BETWEEN: LI FANG WANG
Plaintiff
AND
COSTA HOLDINGS PTY LTD
Defendant
Catchwords:
Review of taxation - Calderbank offer - Scope of item 37
Legislation:
Rules of the Supreme Court 1971 (WA)
Workers' Compensation and Injury Management Act 1981 (WA)
Result:
Application for review allowed
Representation:
Counsel:
| Plaintiff | : | Mr B L Nugawela & Mr G K Sim |
| Defendant | : | Mr D P Coster & Mr Z Bosman |
Solicitors:
| Plaintiff | : | AH2 Legal |
| Defendant | : | Moray & Agnew Lawyers |
Case(s) referred to in decision(s):
Bullhead Pty Ltd v Brickmakers Place Pty Ltd (in liq) (No 2) [2019] VSCA 7; (2019) 58 VR 129
City of Belmont v Saldanha [No 2] [2018] WASC 278
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
KWLD v The State of Western Australia [2020] WASCA 94
Millensted v Grosvenor House (Park Lane) Ltd [1937] 1 All ER 736; [1937] 1 KB 717
Wang v Costa Holdings Pty Ltd [2021] WADC 120
West's Process Engineering Pty Ltd v Westralian Sands Ltd (1998) 144 FLR 340
TOVEY DCJ:
This is an application by the plaintiff for a review of the taxation of her bill of costs by a deputy registrar of this court. The reasons of the deputy registrar are found at: Wang v Costa Holdings Pty Ltd [2021] WADC 120 (Reasons for decision).
Background
On 9 July 2020, the plaintiff commenced these proceedings (the Action) by writ of summons with the indorsement of claim as follows:
The Plaintiff claims damages from the Defendant in respect of injuries to her neck, back, left and right shoulders, left and right elbows, buttock and right hip/leg which she sustained by way of gradual onset culminating on or around 30 May 2018 together with any recurrences, aggravations or exacerbations arising therefrom (and any secondary symptoms/sequelae of whatsoever nature, including any psychological/psychiatric symptoms) which were caused by the negligence and/or breach of statutory duties and/or breach of contract of the Defendant.
The writ of summons was, in fact, filed by Moray & Agnew Lawyers, the solicitors for the defendant.
On 10 July 2020, the plaintiff and defendant signed a settlement agreement (Agreement). The Agreement was stated to have been made pursuant to s 92(f) of the Workers' Compensation and Injury Management Act 1981 (WA) (the Act). The Agreement stated the plaintiff had commenced the Action, and the defendant denied that the plaintiff suffered the injury, loss or damage as alleged by the plaintiff in the Action (the Dispute). The Agreement also stated that the plaintiff and defendant had agreed to resolve the Dispute in the manner set out in the Agreement.
Clause 1.1 of the Agreement provided that, in consideration of the Agreement and the lump sum of $87,500 plus 'costs and disbursements to be taxed if not agreed', the plaintiff released and forever discharged the defendant from all liability.
Clause 1.2 of the Agreement provided that the plaintiff covenanted that she would not:
… issue or initiate, or cause to be issued or initiated, fresh proceedings in respect of or arising out of the matters referred to in the Action and in respect of any claim or entitlement (pursuant to the Workers' Compensation & Injury Management Act 1981 ('the Act') including, but not limited to, weekly payments, medical expenses, statutory allowances and rehabilitation expenses arising from the injuries.
Clause 7 of the Agreement stated that the plaintiff covenanted with the defendant:
… to dismiss the Action with costs to be taxed if not agreed and the Plaintiff hereby covenants with the Defendant that she would sign a Consent Order that the Action be dismissed and that costs to be taxed if not agreed.
On 16 September 2020, a consent order was filed in the Action for orders that the plaintiff's claim be dismissed and for 'costs to be taxed if not agreed'. An order was made in those terms. It was common ground that the beneficial party of the provision for costs was the plaintiff.[1]
[1] Reasons for decision [2].
On 10 August 2021, the plaintiff lodged a bill of costs for taxation. The bill of costs (the Bill) claimed costs totalling $14,218.60, comprising legal fees of $11,468.60 and disbursements of $2,750. The Bill was drawn to include counsel's fees amounting to $5,726.60. The Bill was drawn pursuant to the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (2018 Determination). The fee earners who undertook the work were counsel, Brian Nugawela, whose hourly rate was $418, and a solicitor, Guan Kai Sim, whose hourly rate was $495.
The following costs were claimed in the Bill:
Plaintiff's Bill of Costs Particulars
No Description Rate Scale Item Time (hours) Cost $ 1 Writ of summons, whether specially or generally endorsed, including instructions, but excluding Statement of Claim $495 1(a) 0.3 $148.50 2 Consent Orders $495 10(c) 0.3 $148.50 3 Preparation of Case $418
$495
18 9.5
7.0
$3,971.00
$3,465.00
4 Settlement of a claim pursuant to section 92(f) of the Workers' Compensation and Injury Management Act $418
$495
37 2.2
2.0
$919.60
$990.00
5 Taxation - drawing bill of costs $495 30 2.0 $990.00 6 Taxation - preparation and attendance $418 30 2.0 $836.00 SUBTOTAL 13.7 hrs
@ $418
+
11.6 hrs @ $495
$5,726.60
+
$5,742.00
=
$11,468.60
Disbursements 7 Special Evaluation Report by Dr Rob Will $2,750 TOTAL $14,218.60
The costs claimed in item 3 of the Bill included work done by the solicitor and counsel in respect of a contemplated common law action by the plaintiff.[2] This work included obtaining a report from Dr Will concerning the assessment of whole person impairment for the plaintiff for the purposes of common law, an application to extend the 'termination day' for the plaintiff to make an election pursuant to s 93K(4)(a) of the Act, and advice to the plaintiff regarding the termination date that she must elect or choose to pursue a common law claim and advice concerning a common law claim.[3]
[2] Annexures A and B to the affidavit of Guan Kai Sim sworn 17 September 2021.
[3] Book of Documents for Taxation (Book of Documents), pages 24 - 26, 32 - 33, 43 - 48, 64 - 67.
I also note a report was obtained, on 28 May 2019, from Dr Ozanne, a consultant occupational physician. Dr Ozanne also certified that the plaintiff's condition had not, at the time of assessment on 17 May 2019, stabilised to the extent required for an evaluation to be made for common law assessment.[4] Dr Ozanne was of the opinion that the termination date for making an election be extended so as to retain the right to seek common law damages for the purpose of s 93M(4)(a)(ii) of the Act.
[4] Book of Documents, pages 68 - 82.
Item 7 of the Bill related to the report of Dr Will, a physician in bone and joint diseases, dated 25 May 2020. By that report, and the certificate of degree of permanent impairment dated 5 June 2020, the plaintiff's whole person impairment for the purposes of common law, and the degree of permanent impairment for the injury, was 26%.[5]
[5]Book of Documents, pages 35 - 42.
The deputy registrar taxed the plaintiff's Bill on 6 September 2021. The deputy registrar disallowed the amounts claimed at items 1, 2 and 3 of the Bill.
After the deputy registrar disallowed those items, the plaintiff sought, and was granted leave, to amend the claim for item 4 in the Bill from $1,909.60 to the maximum $4,950 allowed under item 37 of the 2018 Determination. Of that claim, the amount of $3,450 was taxed off, so that the amount allowed under item 4 of the plaintiff's Bill was $1,500.[6]
[6]Reasons for decision [30].
The deputy registrar had previously disallowed the amount claimed under item 7 of the Bill concerning the disbursement claimed for the report by Dr Will.
During the taxation hearing before the deputy registrar, and just after item 4 of the Bill had been determined, counsel for the defendant informed the deputy registrar that the defendant had made a Calderbank offer to the plaintiff for an amount that was 'significantly more' than the $1,500 which had been allowed at that stage.[7]
[7]Paragraph 11 of the affidavit of Guan Kai Sim sworn 17 September 2021.
The plaintiff's Bill was taxed in the sum of $1,500.
As noted in the defendant's outline of submissions, the deputy registrar awarded the costs of the taxation, fixed in the sum of $1,600, to the defendant.[8]
[8]Defendant's Outline of Submissions dated 5 April 2022.
The outcome of the taxation was that costs of $100 were allowed in favour of the defendant.
Plaintiff's amended request for review of taxation to the deputy registrar
On 17 September 2021, the plaintiff filed an amended request for review of the taxation pursuant to O 66 r 53 of the Rules of the Supreme Court 1971 (WA) (RSC). The plaintiff made the following submissions in the amended request for review:
1.The plaintiff submitted that the deputy registrar should not continue to hear the taxation of costs and should refer the taxation to another taxing officer. It was submitted that before the Bill had been taxed to completion the defendant's representative informed the deputy registrar that a Calderbank offer had been made for a sum 'significantly in excess' of the amount taxed up to that point, and which had been allowed at $1,500 (par 1 of the amended request for review).
2.The deputy registrar erred in disallowing the disbursement, namely the report of Dr Will, in its entirety. It was submitted that the deputy registrar must have accepted all or some of the defendant's submissions that the s 92(f) of the Act settlement and writ were solely to give effect to a settlement of workers' compensation benefits and not common law rights, and that the word 'Determination' in cl 10 of the 2018 Determination referred to the Workcover Determination. It was submitted that the approach of the deputy registrar was in error for a number of reasons, including that the Book of Documents showed that the plaintiff had common law rights that she wanted to protect and pursue; that what was compromised was the plaintiff's common law rights and not merely her statutory entitlements; that the word 'Determination' referred to other items within that 2018 Determination; and that the report of Dr Will was solely commissioned in relation to the plaintiff's common law rights (pars 3 - 5 of the amended request for review).
3.The deputy registrar erred in disallowing the writ of summons, consent orders and preparation of case items. It was submitted that whilst the originators of items 1 and 2 of the Bill were not the plaintiff's lawyers, the plaintiff's lawyers still had to settle and approve the writ of summons and consent orders and some allowance should have been made. It was submitted that, in relation to item 3 of the Bill, the 2018 Determination allows for 'work reasonably and necessarily undertaken prior to commencement of proceedings'. It was submitted that the deputy registrar erred in principle in reasoning that item 18 only applied 'after the close of pleadings'. It was further submitted that, in any event, if item 18 was unavailable, the taxing officer should apply the item by analogy under O 66 r 18, or O 66 r 21, of the RSC (pars 6 - 9 of the amended request for review).
4.An allowance of 10 hours under item 37 of the 2018 Determination was not unreasonable (pars 10 - 12 of the amended request for review).
On 9 December 2021, the deputy registrar provided reasons for his view that the plaintiff had not been successful in any objection to the particular determinations made at taxation.
The deputy registrar stated, at Reasons for decision [7] - [8]:
7Item 37 of the scale provides for recovery of a fee for settlement of a claim pursuant to s 92(f) of the Workers' Compensation and Injury Management Act to a maximum of $4,950. It was introduced to the scale in 2018 along with cl 10 of the relevant determination of the Legal Costs Committee. Clause 10 is as follows:
'10. New item 37
Item 37 has been introduced to provide for a specific item to cover work performed in relation to effecting a settlement under s 92(f) Workers' Compensation & Injury Management Act 1981 (WA). Whilst the Committee is of the view that this work is already claimable under other items in the determination, the introduction of a special item is intended to remove any doubt in that regard'.
8It was common ground that the parties had agreed to settle whatever differences they had in relation to injuries sustained by the plaintiff on or about 30 May 2018, in part by obtaining an order for dismissal of an action in the District Court of Western Australia that was expressed to relate any claim of the plaintiff for breach of duty of care and/or breach of statutory duty and/or breach of contract by the defendant.
The deputy registrar further stated, at Reasons for decision [9] ‑ [13]:
9The meaning of the term by which item 37 is expressed is informed by the steps taken in this action. Those steps follow the usual course where the parties reach such an agreement. It is appropriate to consider that the Committee had been so aware when it made its determination. Clause 10 renders clear that by item 37 the Committee had intended to facilitate recovery for services that are part of the process of such a settlement.
10The significance of the Committee's review remains for consideration.
11According to that view, it would remain open to a party to claim as a separate item for a service that the Committee has constituted as part of item 37. To do so would establish the prospect that the beneficial party would recover a greater sum than would be permitted by comprehensive recovery under item 37.
12The result of the introduction of item 37 to the scale is that settlement of a claim pursuant to s 92(f) of the Workers' Compensation and Injury Management Act is now constituted as a service under which recovery is available upon taxation.
13Whilst I have no difficulty with the view expressed at cl 10 that other items are claimable, because item 37 embraces all items required to be provided to the end of such a settlement, those items are now properly regarded as parts of item 37 and it is no longer appropriate to so allow their recovery.
The deputy registrar took the view that, in the event it was considered he erred in disallowing either, or both, items 1 or 2 on the plaintiff's Bill, he would allow only a modest fee given the writ and consent order was prepared and filed by the defendant. The deputy registrar said that such an allowance would result in a reduction of the amount recovered for item 37 by a corresponding amount or amounts.[9] The deputy registrar said that an additional reason for disallowing item 3 on the plaintiff's Bill was that there had been no case to prepare.[10]
[9]Reasons for decision [14].
[10]Reasons for decision [15].
The deputy registrar further stated, at Reasons for decision [17]:
… At taxation I was satisfied that under the agreement the parties had agreed to dismissal of an action yet to be commenced. I was satisfied that it had been implicit if not explicit that that result would be achieved efficiently. To that end the defendant would prepare each of the writ and the consent order. I was satisfied that preparation of any case had not been necessary in order to carry out the agreement. It was patent that the agreement had been put into effect with the desired result without the necessity for any preparation of case being undertaken on the part of the plaintiff.
The deputy registrar also considered whether the work claimed by the plaintiff was work which 'includes work reasonably and necessarily undertaken prior to commencement of proceedings'. As to that, the deputy registrar stated, at Reasons for decision [26] - [29]:
26Regardless when work to the end of preparation of the case is undertaken, the extent to which provision of the service had been necessary will be established on the pleadings at the point of the close of pleadings.
27Because in this case there was no such event, no preparation of case had been necessary. That result is not an unusual occurrence. It usually emerges in circumstances where a defendant has not filed a defence. Of course there would be many more instances that do not come to the attention of the taxing officer as beneficial parties would recognise that upon the close of pleadings some allegations have not been contested.
28Whilst a solicitor may choose to provide all manner of services related to a proposed action prior to its institution, the extent of such provision establishes a risk to recovery, of their cost from the adverse party.
29The fact that the plaintiff made the claim, pursued the claim at taxation and now objects to its disallowance establishes her endeavour to recover for services that I take it her solicitor had provided to her that would relate to an action that she had contemplated bringing against the defendant. With reference to that prospect I need only state that the order for costs was made in the action that was commenced under the agreement. Under that order she is entitled to recover for services provided for the purposes of the action in which it is made.
The deputy registrar then considered the disallowance of $3,450 from the amended claim for the maximum amount allowable under item 37 of the 2018 Determination.
The deputy registrar then stated, at Reasons for decision [35]:
… the proposition that a quantum determination is sufficient to qualify as an error in principle would only be established upon a contention that no taxing officer acting reasonably could have reached the determination made. The plaintiff does not so contend.
The deputy registrar then dealt with the plaintiff's objection to the disallowance of the disbursement relating to the report of Dr Will. The deputy registrar stated, at Reasons for decision [39]:
The taxation was undertaken in accordance with the terms of the order taking into account the context from which it emerged. That context is established by the claim under the statutory provision and was informed by the submissions of the parties. The claim for the disbursement was disallowed simply because neither commissioning the report nor considering its content falls within the scope of work necessarily undertaken either for the purpose of commencing the action or dismissing the plaintiff's claim in accordance with the agreement. Regardless the reason for commissioning the report, at no time could it have had any utility for the purposes of the action that was commenced.
The deputy registrar stated that, in the context established by the costs order, the fact that the plaintiff had not yet been recompensed for the cost of the report of Dr Will was of no consequence.[11]
[11]Reasons for decision [40].
Finally, the deputy registrar dealt with the objection to his continuing with the taxation review after being informed of the existence of a Calderbank offer 'significantly in excess' of the amount taxed. The deputy registrar stated, at Reasons for decision [42]:
Whilst the defendant [sic, plaintiff] may have a valid logical point, in the event an objection is lodged, the process of taxation extends to review of determinations made in the course of taxation. Once a party files an objection, the taxing officer has no alternative than to conduct a review.
The current review application
On 17 December 2021, the plaintiff applied for the taxation review by the deputy registrar to be reviewed by a judge.
The plaintiff submitted that the deputy registrar made the following errors in principle:
3.1error in conducting the review after being made aware of a Calderbank offer;
3.2error in principle in entirely disallowing a disbursement (Dr Will's report), when the said report was commissioned solely in respect of determining common law rights;
3.3errors in principle in disallowing other items in the 2018 Determination (Writ; Consent Orders; Preparation of case).
(footnotes omitted)
The plaintiff also submitted that the deputy registrar erred in concluding that item 37 was all-inclusive, erred that item 18 of the 2018 Determination (preparation of case) was inapplicable, and erred in disallowing the disbursement.
Further, the plaintiff submitted that the allowance of only $1,500 under item 37 of the 2018 Determination was so low as to manifest an erroneous approach to the taxation and/or was unreasonable.
Finally, the plaintiff submitted that the deputy registrar erred in principle in failing to exercise his discretion pursuant to O 66 r 18 and/or O 66 r 21 RSC as requested, and/or at least failed to provide adequate reasons in this regard.
Provisions of the Rules of the Supreme Court relating to taxation of costs
Order 66 r 32(1) RSC provides:
Unless the Court in a particular case otherwise directs, bills of costs and fees which are payable to legal practitioners admitted and entitled to practise in the Court in respect of business transacted by them in the Court or its offices, and which have been directed by judgment or order to be taxed, shall be taxed, allowed and certified by the taxing officer who shall appoint a time for taxation on the application of the party claiming taxation.
Order 66 r 53(1) RSC provides:
(1)A party who contends that the taxing officer has made an error in principle in allowing or disallowing any item or part of an item in a bill of costs taxed by him may, at any time before a certificate of taxation dealing finally with that item is signed, or at such earlier time as may, in any case, be fixed by the taxing officer -
(a)deliver to the other party interested in the allowance or disallowance and carry in before the taxing officer, an objection in writing to the allowance or disallowance specifying in the objection by a list, in a short and concise form, the items or parts of items objected to, and the grounds and reasons for the objections; and
(b)thereupon apply to the taxing officer to review the taxation in respect of those items or parts.
Further, O 66 r 54(1) and O 66 r 54(2) RSC provide for the taxing officer's role on review as follows:
(1)Upon an application under rule 53 to review the taxation, the taxing officer shall reconsider and review his taxation in relation to the objections, and he may, if he thinks fit, receive further evidence in respect of the objections.
(2)If so required by a party, the taxing officer shall state in his certificate of taxation or by reference to the objection, the ground and reason of his decision on the objection, and any special facts or circumstances relating to his decision.
Order 66 r 55 provides for the review of a taxation by a judge. It states:
(1)If a party is dissatisfied with the certificate of the taxing officer as to any item or part of an item objected to under rule 53 of this Order, he may, within 14 days from the date of the certificate, or such other time as the Court, or the taxing officer at the time he signs his certificate, allows, apply to a judge in chambers for an order to review the taxation as to that item or part of an item.
(2)The judge, if of opinion that the taxing officer has made an error in principle, may thereupon make such order to rectify the error as the judge thinks just.
(3)The certificate of the taxing officer is final and conclusive as to all matters which have not been objected to in accordance with these rules.
By O 66 r 56 RSC, the review of the taxation shall be heard and determined by the judge upon the evidence which has been brought in before the taxing officer, and further evidence shall not be received upon the hearing of the application unless the judge otherwise directs.
The way the court should exercise its review jurisdiction was considered by Vaughan J in City of Belmont v Saldanha [No 2] [2018] WASC 278 [37] - [39]:
37The applicant for review (here the defendants) bears the onus of satisfying the court that the decision reached by the taxing officer is wrong. For a decision to be 'wrong' it must be shown that there is an error in principle.
38The review of a taxing officer's decision attracts the usual principles that apply where appellate jurisdiction is exercised in respect of decisions involving a discretionary judgment. There is a strong presumption in favour of the correctness of the decision. The decision will be affirmed unless the court is satisfied that it is clearly wrong.
39Errors in principle may be made both in determining whether an item should be allowed and in determining the amount that should be allowed for an item. However, it is unusual for an error in principle to be made as to quantum. An 'error in principle' on such a basis can only be established if it is shown that no taxing officer, acting reasonably, could ever have taxed the item at that amount. The amount allowed must be so extraordinary as to be demonstrable of an error in principle. Thus, a decision of a taxing officer as to quantum is generally final except in an exceptional case.
(citations omitted)
Almost all the work claimed in the plaintiff's Bill was performed prior to 1 July 2020, when the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020 (WA) came into operation. As the provisions of the two determinations are relevantly the same, I will refer only to the terms of the 2018 Determination in these reasons.
The plaintiff's Bill claimed amounts under the following items of Table B to the 2018 Determination:
Item Time Fee earner $ 1. Writ -
(a) Writ of summons, whether specially or generally endorsed, including instructions but excluding Statement of Claim
1.5 hours Senior Practitioner 742 10. Chambers -
(c) Consent Orders including conferral but excluding extraction
1.5 hours Junior Practitioner 528 18. Preparation of case -
Preparation of case for trial (includes work reasonably and necessarily undertaken prior to commencement of proceedings)
120 hours Senior Practitioner 59,400 30. Taxing including drawing -
(a) Drawing bill of costs and service; and
(b) Taxation of costs (including the time spent in preparing for the taxation)
Senior Practitioner An amount which is reasonable in the circumstances 37. Settlement of a claim pursuant to section 92(f) of the Workers Compensation and Injury Management Act 10 hours Senior Practitioner 4,950
Relevant provisions of the Act relating to common law proceedings
Section 92 of the Act operates to prevent both common law damages and workers' compensation to be recoverable under the Act against an employer, or some other person, in certain circumstances.
Section 92 relevantly provides:
Where in respect of an injury an action is brought by a worker for damages independently of this Act against his employer …
(a)if the court decides the action should succeed, then after damages have been ascertained but before judgment is entered for the worker in the action, the worker shall be given a reasonable opportunity to elect whether to have judgment or to discontinue the action;
(b)if the action proceeds to judgment, including the acceptance of an offer to consent to judgment, against the employer only or against the employer and the defendant, there shall be deducted from the amount of the judgment and be paid to the employer a sum representing the amount (after apportionment in respect of any contributory negligence of the worker) actually recoverable by the worker by way of weekly or lump sum compensation, medical and other expenses paid pursuant to this Act …;
…
(e)if the action proceeds to judgment, including the acceptance of an offer to consent to judgment, against the employer or the defendant or both or is settled by the acceptance of money paid into court by the employer or the defendant or by both of them, the worker shall not commence or continue proceedings for, or in relation to, compensation under this Act in respect of the same injury;
(f)if a worker's claim for damages against the employer or the defendant is settled by agreement otherwise than by a judgment, an acceptance of an offer to consent to judgment, or an acceptance of money paid into court -
(i)the employer or the defendant shall file a memorandum of the terms of the settlement with the Director within 3 months of the date of its execution by the worker;
(ii)the worker shall not commence or continue a claim for compensation under this Act in respect of the same injury unless the Director disapproves of the settlement within 6 weeks of the agreement for settlement being filed with the Director;
(iii)the Director shall not disapprove of the agreement unless he is satisfied the agreement was induced by fraud or misrepresentation or that it would clearly be for the worker's benefit to disapprove of it;
(iv)the Director if he disapproves of the settlement shall serve notice in writing of his disapproval on each of the parties to the settlement of his decision and of the reasons for his disapproval by pre‑paid post to the address of the party set out in the settlement or the last known address of a party, within 14 days of the making of his decision;
(g)where a claim for compensation is commenced or continued after the Director disapproves of a settlement referred to in paragraph (f), the amount recovered or recoverable under such settlement shall be brought into account in reduction of the worker's entitlement to compensation;
…
Division 2 of Part IV of the Act concerns constraints on awards of common law damages.
Section 93B(1) provides for the application of that Division, as follows:
(1)This Division applies to the awarding of damages against a worker's employer independently of this Act in respect of an injury suffered by a worker … if -
(a)it was caused by the negligence or other tort of the worker's employer; and
(b)compensation has been paid or is payable in respect of it under this Act, or would have been paid or be payable but for section 22.
Section 93C of the Act provides that, if Division 2 applies, a court is not to award damages to a person contrary to that Division.
Section 93K concerns constraints on awards.
In particular, s 93K(4) of the Act provides:
(4)Damages in respect of an injury can only be awarded if -
(a)the worker elects, in the manner prescribed in the regulations, to retain the right to seek the damages; and
(b)the Director registers the election in accordance with the regulations; and
(c)court proceedings seeking the damages are commenced after the Director gives the worker written notice that the Director has registered the election; and
(d)the court is satisfied that the worker's degree of permanent whole of person impairment is at least 15%.
Section 93K(5) limits the damages that can be awarded unless the court is satisfied that the worker's degree of permanent whole of person impairment is at least 25%.
Section 93L of the Act concerns the election under s 93K to retain the right to seek damages. Section 93L, as it was prior to 19 August 2020, stated:
(1)In this section -
termination day has the meaning given in section 93M.
(2)A worker can only elect under section 93K(4) to retain the right to seek damages if -
(a)the worker and the employer agree -
(i) that the worker's degree of permanent whole of person impairment is at least 15%; and
(ii) as to whether or not the worker's degree of permanent whole of person impairment is at least 25%;
or
(b)the worker's degree of permanent whole of person impairment has been assessed to be a percentage that is not less than 15%,
and the Director has, at the written request of the worker, recorded that agreement or assessment in accordance with the regulations.
…
(4)If a claim for compensation by way of weekly payments has been made wholly or partially with respect to the injury or injuries concerned, an election cannot be made after the termination day.
Section 93M of the Act defined the 'termination day' to be the last day of the period of one year after the day on which the claim for compensation by way of weekly payments is made.
Section 93M also provided for the Director to extend the termination day in certain circumstances. By s 93M(4), those circumstances include where the Director received from an approved medical specialist certification that the worker's condition has not stabilised to the extent required for a normal evaluation of the worker's degree of permanent whole of person impairment to be made. By s 93M(6), the termination day could not be extended by more than a year, except where s 93M(4)(d) applied.
Should the deputy registrar have continued with the taxation after the Calderbank offer had been disclosed?
The first question of principle raised by the plaintiff's application is whether the deputy registrar should have continued to determine the taxation after disclosure that the defendant had made a Calderbank offer 'significantly more' than the amount the deputy registrar had allowed to that point of the taxation.
The contents of without prejudice communications made to settle a dispute cannot be admitted into evidence without the consent of both parties. Without prejudice negotiations are not admissible on questions of costs. However, a party may make an offer, known as a Calderbank offer, marked 'without prejudice save as to costs'. The contents of such an offer are privileged in respect of the determination of the substantial issues between the parties but may be used after those issues are determined for the purpose of determining the appropriate costs orders.[12]
[12]Heydon JD, Cross on Evidence (13th ed, 2021) [25350] and [25360].
One manner in which a Calderbank offer can inform the exercise of a discretion as to costs was discussed by the Court of Appeal in Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1. The unreasonable rejection of a Calderbank offer can lead the court to make an indemnity costs order. As that decision illustrates, reference to a Calderbank offer is permissible in the exercise of a court's discretion concerning costs.
In the present case the substantive issue in dispute was the amount at which the plaintiff's costs of the Action should be taxed. The deputy registrar was informed of the existence of the Calderbank offer only after item 4 of the plaintiff's Bill had been determined. The defendant referred to the Calderbank offer when the deputy registrar was determining the appropriate costs to be allowed in respect of the conduct of the taxation.
In my view, the Calderbank offer was not privileged for that purpose. The information about the Calderbank offer was properly placed before the deputy registrar at the appropriate time.
I note that where a prohibited disclosure is made the judge has a discretion to refuse to hear the matter further if it is thought that course is necessary in the proper administration of justice. The judge may also continue hearing the matter if satisfied that no injustice will be done.[13]
[13] Civil Procedure Western Australia, vol 1 (167-09-15) [24A.7.2] concerning the effect of disclosure of offer to the Court; Millensted v Grosvenor House (Park Lane) Ltd [1937] 1 All ER 736; [1937] 1 KB 717. This was cited with approval by White J in West's Process Engineering Pty Ltd v Westralian Sands Ltd (1998) 144 FLR 340, 342 - 343.
I also note that the Victorian Court of Appeal in Bullhead Pty Ltd v Brickmakers Place Pty Ltd (in liq) (No 2) [2019] VSCA 7; (2019) 58 VR 129 [10] - [11], regarded a factor to consider to be whether, in the particular circumstances of that case, a fair-minded lay observer might reasonably apprehend that the court might not bring an impartial mind to the resolution of the remaining questions to be decided by reason of knowledge of an offer of compromise that has been prematurely disclosed.
Even if the Calderbank offer had been prematurely disclosed in the present case, I do not see any basis on which a fair-minded lay observer might reasonably apprehend that the deputy registrar might not bring an impartial mind to the resolution of the remaining questions for determination in the taxation.[14] In that regard, I accept, as was submitted by the defendant, that at the conclusion of a taxation a party can disclose any offers it may rely upon on the question of the costs of the taxation.
[14] For a discussion of the test to be applied in determining whether a judge should recuse himself or herself by reason of apprehension of bias, see, for example, KWLD v The State of Western Australia [2020] WASCA 94 [81].
Further, the remaining questions were the exercise of the deputy registrar's review jurisdiction of an objection made under O 66 r 53 RSC. That review raised the question of whether there was an error in principle in allowing or disallowing an item in the plaintiff's Bill. In my view, a fair-minded lay observer would appreciate the capacity of a judicial officer to put aside irrelevant information in considering those matters of principle.
I also note that the plaintiff did not submit that my knowledge of the existence of a Calderbank offer 'significantly more' that the $1,500 allowed by the deputy registrar on taxation means that I should not conduct the review under O 66 r 55 RSC. In that regard, I note that the nature of my jurisdiction is similar to that of the deputy registrar.
In my view, the existence of the Calderbank offer was properly disclosed to the deputy registrar at the point in time it was disclosed. Even if it had been prematurely disclosed, the plaintiff has not demonstrated that, in all the circumstances, the deputy registrar erred in declining to exercise a discretion to recuse himself from further determination of the taxation of costs.
Did the deputy registrar err in disallowing items 1, 2, 3 and 7 of the plaintiff's Bill on the basis that item 37 of the 2018 Determination was 'all‑inclusive'?
As I have noted, it appears that the deputy registrar regarded the 2018 Determination as providing for an exclusive operation of item 37 in a case to which it applied. That is, the deputy registrar appears to have been of the view that, in a case where a worker's claim for damages against his or her employer is settled by an agreement referred to in s 92(f) of the Act, then the only costs which may be awarded in an action claiming those damages are those provided for by item 37 of the 2018 Determination.
I take a different view as to the interpretation of the scope of item 37.
In my view, the agreement referred to in s 92(f) of the Act is an agreement to settle a claim for damages otherwise than by a judgment, an acceptance of an offer to consent to judgment, or an acceptance of money paid into court. An agreement of that kind may be reached at any stage of a proceeding prior to final judgment. The proceedings may or may not be contested up to the point when agreement is reached. I can see no policy reason for denying a worker an entitlement to the various costs which may be properly incurred in the pursuit of a claim for damages in this court because the worker settles the case by an agreement.
Further, cl 10 of the 2018 Determination, which the deputy registrar quoted, indicated that item 37 was introduced to remove any doubt about whether the work was already claimable under other items. As indicated by s 92(f) of the Act, the work which might not have been covered by other items was the filing of a memorandum with the Director and obtaining the Director's approval of the agreement. In my view, there is nothing in the 2018 Determination to suggest that the scope of other items was otherwise limited.
I also note that an action may be settled both by agreement and judgment, as occurred in this case. Settlement was reached by the Agreement signed on 10 July 2020, but that agreement was to consent to a judgment being entered. In this case, s 92(e) and s 92(f) of the Act both operated to prevent the plaintiff from commencing or continuing her claim for common law damages. In my view, there is no reason why obtaining a consent judgment, to give effect to the Agreement, should not be claimable under item 10(c) of the 2018 Determination.
It follows that, in my view the deputy registrar erred in principle in disallowing the plaintiff's claims under items 1, 10(c) and 18 of the 2018 Determination on the basis that the only costs claimable in the present case were under item 37 of the 2018 Determination.
In my view, an allowance should be made under items 1, 10(c) and 18 of the 2018 Determination. In that regard, of course, the taxing officer should recognise that the writ of summons and consent orders were prepared by the defendant. There would be no reason for a corresponding reduction of the amount allowed under item 37, unless the cost of the writ and consent orders had been included in the costs assessed under item 37.
Did the deputy registrar err in disallowing items 3 and 7 of the plaintiff's Bill on the basis 'there was no case to prepare'?
In my view, the deputy registrar also erred in principle in not allowing any amounts in disbursements or legal costs for work done by the plaintiff's solicitors relating to her common law claim prior to the commencement of the Action.
In order to preserve her claim for common law damages, the plaintiff needed to make an election to retain the right to seek damages by the termination day. In the absence of agreement with the defendant, this required her to obtain a medical assessment of her whole of person impairment. This was the purpose of the report of Dr Will and much of the work done by the plaintiff's lawyers prior to the commencement of the Action. That assessment was also necessary for the plaintiff to assess whether she had any right to damages under s 93K(4)(d) of the Act and, if so, whether s 93K(5) capped her entitlement. The plaintiff needed to consider these matters to make a decision about whether to make a claim for common law damages in this court. That was, in my view, apparent from the information before the taxing officer in the Book of Documents, in particular the e-mail and letter sent to the plaintiff concerning her common law claim.[15]
[15]Book of Documents, pages 64 - 67.
Item 18 of the 2018 Determination expressly includes work reasonably and necessarily undertaken prior to the commencement of the proceedings. The making of an election under s 93K(4) of the Act, and obtaining an assessment of her whole of person impairment, were necessary to enable the plaintiff to preserve and assess the potential value of her common law claim. In my view, the fact that the Action settled on terms agreed after that work was done, but before the Action was commenced, did not make the undertaking of that work unreasonable or unnecessary. Doing that work was necessary to preserve and assess the value of the plaintiff's common law claim. In my view, that work was claimable under item 18 of the 2018 Determination.
Further, in my view, there is no reason why work that was reasonably necessary to be undertaken to preserve the common law claim which is the subject of the Action cannot be allowed if the claim settles without pleadings.
What orders are appropriate?
For the above reasons, I am of the view that the deputy registrar erred in principle in disallowing items 1, 2, 3, and 7 of the plaintiff's Bill. In my view, I do not need to determine the plaintiff's other review grounds as a result.
I do not consider it appropriate for me to assess the amounts which should be allowed in respect of those items. Indeed, neither the plaintiff's solicitors nor the defendant's solicitors appeared to suggest that I do so.
In this regard, as Vaughan J noted in City of Belmont v Saldanah [No 2] at [40] - [41]:
40… A judge will not usually be as familiar with the taxing process as a taxing officer and therefore will not be as competent to say what is the proper amount to be allowed. As Kenneth Martin J has recognised:
'… taxing officers hold expertise in taxations about costs determinations. They deal in the day-to-day nitty-gritty of assessing the costs in litigation, by reference to scales and allowances at a level of detail that judges do not. That is one reason why any further review opportunity window that is allowed under O 66 r 55 to a judge is an extremely limited one.'
41There is an error in principle where a taxing officer acts on a wrong principle. The court will review the decision for the purpose of determining the principle that should be applied.
(citations omitted)
In my view, given the above, it is appropriate for me to remit the matter for the plaintiff's Bill to be taxed by a different taxing officer.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
SF
Associate to the Judge
20 JANUARY 2023
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