Zurita v Victorian WorkCover Authority (Ruling)
[2013] VCC 1999
•19 December 2013
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION LIST
SERIOUS INJURY DIVISION
Case No. CI-09-04046
| HECTOR ZURITA | Plaintiff |
| v | |
| VICTORIAN WORKCOVER AUTHORITY | Defendant |
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JUDGE: | HIS HONOUR JUDGE PARRISH | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 November 2012 | |
DATE OF RULING: | 19 December 2013 | |
CASE MAY BE CITED AS: | Zurita v Victorian WorkCover Authority (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2013] VCC 1999 | |
RULING
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Subject: ACCIDENT COMPENSATION
Catchwords: Serious injury – costs – settlement of proceeding under s134AB Accident Compensation Act 1985 – whether “statutory counter offer” made under s134AB(12)(c) of the Act – whether terms of purported statutory counter offer uncertain
Legislation Cited: Accident Compensation Act 1985, s134AB; Ministerial Directions under s134AF; Interpretation of Legislation Act 1972
Cases Cited:Shirreff v Elazac Pty Ltd (No 2) [2010] VSC 508; Raeburn v Tenix Defence Systems Pty Ltd [2007] VSCA 90; Bishop v Herald and Weekly Times [2010] VSC 471
Ruling: The plaintiff is entitled to his party and party costs pursuant to s134AB(28)(b) of the Accident Compensation Act 1985.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms A E L MacTiernan | Grace Placencio Davies & Co |
| For the Defendant | Ms R N Annersley | Herbert Geer |
HIS HONOUR:
Introduction
1 This ruling concerns whether the plaintiff is entitled to an order against the defendant for payment of his party and party costs following the settlement of a common-law claim brought by the plaintiff against the defendant.
2 The defendant contends that contrary to s134AB(12)(c) of the Accident Compensation Act 1985 (as amended) (“the Act”) and the relevant Ministerial Direction, the plaintiff failed to make a “statutory counter offer”. As a result, the defendant asserts that under s134AB(14) of the Act, the plaintiff is deemed to have made a “statutory counter offer” of the maximum amount that may be awarded as damages under s134AB(22)(a) and (b) of the Act. If that be the case, then s134AB(28)(d) of the Act applies and each party must bear its own costs.
Factual background
3 The plaintiff is a sixty-five-year old man who commenced employment with Wilkie & Co Pty Ltd in April 1976. On or about 22 October 1999, the plaintiff suffered a personal injury arising out of or in the course of his employment with Wilkie & Co Pty Ltd (“the injury”). Wilkie & Co Pty Ltd was deregistered on 26 January 2005.
4 It is convenient to set out a chronology of events which is agreed to by the parties:
(a) The plaintiff was paid weekly payments of compensation pursuant to the provisions of the Act between 2 December 1999 and 26 April 2003, amounting to $71,159.60;
(b) The plaintiff underwent surgery in relation to the injury on 5 May 2006;
(c) On 19 April 2007, the plaintiff made application under s134AB for leave to bring common-law proceedings in relation to the injury for both “pain and suffering damages” and “pecuniary loss damages”;
(d) On 22 April 2009, Her Honour Judge Millane granted leave to the plaintiff to bring common-law proceedings in respect of the injury for both “pain and suffering damages” and “pecuniary loss damages”;
(e) By letter dated 16 July 2009, the solicitors for the defendant served a “statutory offer”. The solicitors for the plaintiff were served:
(i) a letter dated 16 July 2009 which omitting formal parts, states:
“Enclosed is a statutory offer for the purposes of Section 134AB(12)(b) of the Accident Compensation Act 1985 (‘the Act’).
The sum recorded in the offer of $165,000.00 is a net amount, after the reduction required by Section 134AB(25) of the Act.
For the avoidance of doubt, if the offer is accepted, there is no requirement for Hector Edmundo Zurita to repay statutory compensation already received pursuant to the Act.”[1]
[1]Joint Court Book “JCB” 14
(ii)a document headed:
“FORM B
SECTION 134AB(12)(b) Statutory Offer”.
That document sets out the names of the worker, employer and insurer, together with the date of the plaintiff’s application under s134AB. The document then states that the statutory offer for the purposes of s134AB(12)(b) is $165,000. (Such offer is stated in words and figures). The document is signed “Herbert Geer, Legal Representative of the Authority or Self Insurer” and is dated 16 July 2009; [2]
[2]JCB 15
(f) On 30 July 2009, the defendant paid the plaintiff the sum of $5,040.00 pursuant to s98C of the Act;
(g) By letter dated 5 August 2009 (also faxed on that date), the solicitors for the plaintiff served the solicitors for the defendant with three documents consisting of:
(i) A letter which, omitting formal parts, states:
“We refer to our letter dated 29 July 2009.
We enclose by way of service the Plaintiff’s Statutory Counter Offers (x2) in the sum of $380,000.00 which was also faxed on 5 August 2009.
To avoid any doubt, if the Plaintiff’s Offer is accepted, we confirm the Plaintiff will not be required to reimburse the Victorian WorkCover Authority any amounts already paid to him as compensation pursuant to the provision of the Accident Compensation Act 1985.”[3]
[3]JCB 17
(ii) The second document, seemingly in no particular order, is a document headed:
“FORM C
SECTION 134AB(12)(c) STATUTORY
COUNTER OFFER”.
The document then sets out the name of the worker and the employer, and notes that the plaintiff’s application under s134AB was 19 April 2007 but served on 24 April 2007.
Thereafter, the document states:
“Three Hundred and Eighty Thousand Dollars
(Amount in words)
Less any amounts of weekly payments of compensation
or other statutory entitlements, made to the Plaintiff (Worker) between the date of this offer and further determination or judgment.
$380,000
(Figure)
Less any amounts of weekly payments of compensation
or other statutory entitlements, made to the Plaintiff (Worker)
between the date of this offer and further determination or judgment.”[4]
[4]JCB 18
The document again names the plaintiff and his legal representatives and is dated 5 August 2009; [5]
[5]JCB 18
(iii) The third document is headed:
“FORM C
SECTION 134AB(12)(c) STATUTORY
COUNTER OFFER”.
The document then again sets out the name of the worker and the employer, together with the date of the plaintiff’s application under s134AB, being 19 April 2007 (but served 24 April 2007).
It is then stated that the statutory counteroffer for the purposes of s134AB(12)(c) is:
““Three Hundred and Eighty Thousand Dollars
(Amount in words)
$380,000
(Figure).”
The document again names the plaintiff and his legal representatives, and is dated 5 August 2009;[6]
[6]JCB 19
(h) On 29 September 2009, the solicitor for the plaintiff wrote to the agent of the Victorian WorkCover Authority requesting reinstatement of weekly payments of compensation from the date of surgery (5 May 2006). In November 2009, the solicitors for the plaintiff were advised that weekly payments would not be reinstated;
(i) On 30 November 2009, the decision not to reinstate weekly payments was reviewed by the Accident Compensation Conciliation Service and it was agreed at such conciliation that:
(i) the defendant would reinstate payments of compensation from 22 April 2009 (which was the date of the decision by Judge Millane granting leave to the plaintiff to bring common-law proceedings in respect of the injury) and for such payments to continue in accordance with law;
(ii) that the plaintiff’s entitlement to weekly payments from 5 May 2006 (the date of the surgery) up until 21 April 2009 be the subject of a “genuine dispute”;
(j) On 10 December 2009, pursuant to the agreement reached at the Accident Compensation Conciliation Service, the defendant paid over the period from 22 April 2009 to 15 December 2009, weekly payments of $21,079.20, some of which was deducted for tax, some of which was reimbursed to Centrelink, and from 16 December 2009, the plaintiff continued to receive weekly payments of compensation up until 2 September 2011. Such compensation up until 6 August 2011 amounted to $82,460.89;
(k) On 26 August 2010, the plaintiff issued proceedings in the Magistrates’ Court seeking weekly payments of compensation from 5 May 2006 until 21 April 2009 (being that period that was subject of a genuine dispute before the Accident Compensation Conciliation Service);
(l) On 28 August 2009, the plaintiff issued common-law proceedings seeking “pain and suffering” and “pecuniary loss” damages;[7]
[7]Proceedings were issued against the Victorian WorkCover Authority as Wilkie & Co Pty Ltd had been deregistered
(m) By letter dated 9 August 2011, the solicitors for the defendant advised the solicitors for the plaintiff that they were seeking to adjourn the claim for damages from its listed date on 29 August 2011 as a result of one of their main witnesses being unavailable. The letter goes on to further state:
“In the meantime, we are instructed to make an offer to resolve the matter on the following basis:
·The Defendant pay the Plaintiff $165,000 for both pain and suffering and economic loss damages.
·This sum being less than 90% cent of the Plaintiff’s Statutory Counter Offer therefore does no[t] entitle the plaintiff to ministerial or legal costs.
·Your client’s Magistrates’ Court proceedings be resolved on the basis he be entitled to the period of payments sought from 5 May 2006 until 21 April 2009.
·The Defendant pay the Plaintiff’s reasonable party party costs associated with the Magistrates’ Court proceeding only.
This offer entitles the worker to retain the benefits that he has received to date including his Section 98C entitlement of $5,040 and his weekly payments to date which total $152,088 and are continuing.
We note that your client’s serious injury application was lodged prior to 17 June 2009 and therefore, the Raeburn amendments to the Act at Section 134AB(28A) do not apply to your client. Section 325(1) of the Act states that those amendments only relate to such applications lodged after 17 June 2009.
In order for your client to be entitled to his legal costs, if the proceedings were to run to judgement, then he would have to receive an award of damages of at least 90% of his statutory counter offer plus his weekly payments received to date. We calculate that current figure as follows:
Statutory counter offer – $380,000.00
Weekly payments to date – $152,088.00
Total: $530,088.00
90% =$478,859.20
Therefore your client would have to receive a judgment in the sum of $478,879.20 if his matter was determined today in order for him to be entitled to receive his legal costs.
We confirm that in the event that your client was successful at trial and was awarded a sum lesser than the amount, then not only would he not be entitled to his legal costs, but his weekly payments would also cease.
We look forward to your response to the above offer.”[8]
[8]JCB 27-28
(n) By letter dated 11 August 2011, the solicitors for the defendant forwarded to the solicitors for the plaintiff a printout detailing the total weekly payments made to the plaintiff;
(o) By letter dated 11 August 2011, the solicitors for the plaintiff advised the solicitors for the defendant that:
“We refer to your facsimile transmission of even date.
Thank you for providing the print out of payments which is in gross figures.
We are very curious to know how you came to the figure of $152,008.00 for weekly payments paid to date in your letter dated 9 August 2011.
The print out you provided today which covers the period 2/12/1999 up to and including 26/4/2033 (when payments terminated on 1/5/2003) and then when they recommenced on 29 August 2009 (not 22 April 2009 as ordered by the Court), and from 22 August 2009 to 2 July 2011, the amount of weekly payments is only $134,772.60 gross.
… .”[9]
[9]JCB 38-39
(p) By further letter dated 11 August 2011, the solicitors for the defendant advised the solicitors for the plaintiff that (omitting formal parts):
“We refer to your recent correspondence in relation to your client’s statutory counter offer.
Having reconsidered your statutory counter offer, we are of the opinion that [it] is invalid on the basis that it is not certain.
It is worded, we note, almost if not identically to the statutory counter offer in the decision of Justice Williams in Bishop v The Herald and Weekly Times [2010] VSC 471 which was found to be invalid. The effect of which was that the Plaintiff was deemed to have not made a statutory counter offer and was therefore deemed to have offered the maximum in accordance with the Act. This decision was considered and affirmed by the Court in Shirref [sic] which we rely on.
In the circumstances we put you on notice in the event your client proceeds with the matter to judgement that we will maintain that his statutory counter offer is invalid.
In response to your request for details of weekly payments we now enclose a print out of all weekly payments. Please note these detail gross payments and we suggest that your client will have further information you seek. We will seek our client’s instructions in relation to your request for a further mediation.
We are instructed to reput our previous offer forwarded on 9 August 2011.”[10]
[10]JCB 40
(q) By way of facsimile and/or letter dated 18 August 2011, the solicitors for the plaintiff advised the solicitors for the defendant that (omitting formal parts):
“We are prepared to settle the current County Court proceedings on the basis of a ‘plus costs’ figure which on your calculation is $342,000, and on our calculation is $380,000 less weekly payments received since the 6 August 2009. Our offer is set out below:-
1(a).that the Defendant pay the Plaintiff the sum of $290,500 plus costs including reserved costs on County Court Scale ‘D’ and Ministerial costs;
(b).that the Defendant pay Counsel’s fees certified in the sum of $3,500.00 and (x2) hours Conferences at $350.00 each;
2(a).that the Magistrates’ Court proceedings be dismissed;
(b).that the Defendant pay the Plaintiff’s costs on the Magistrates’ Court proceedings, including amounts reserved on Magistrates’ Court Scale ‘G’.
We wish to refer you to the Judgement in Shirreff -v- Elazac Pty Ltd (No2) [2010] VSC 508 (11 November 2010), at paragraph 32 set out below:-
“Thirdly, the offer must be one that can properly fulfil the function of being compared to the [sic] judgment, settlement or comprise [sic] reached in the matter. Judgment is calculated, inter alia, by subtracting from the assessment of loss made by the tribunal of fact the compensation payments made to the plaintiff as required under s 134AB(25). In my view, that purpose is not under mind [sic] by the statutory counter offer being calculated by a formula which takes account of compensation payments made. On the contrary, it appears reasonable that a statutory counter offer may be structured to allow for the calculation of the offer to be made without any prejudice to a plaintiff through the passing of time.”
We remind you we served two Statutory Counter Offers on 5 August 2009.
We are prepared to proceed with a Case Conference in this matter.
… .”[11]
[11]JCB 42-43
(r) By letter (and facsimile) dated 23 August 2011, the solicitors for the defendant advised those acting for the plaintiff that (omitting formal parts):
“We refer to our previous correspondence and discussions.
As discussed we are instructed to offer to resolve the matter on the basis that your client receive the sum of $290,500.00, being the sum offered in your facsimile of 19 August 2011, on the basis that the Magistrates’ Court proceedings are dismissed and there being no costs payable to the Defendant for the Magistrates’ or County Court Proceedings. The Plaintiff be entitled to seek an order for their costs from the Court if they so choose to in relation to the County Court proceedings.
Alternatively the Plaintiff can receive the same sum of money, $290,500.00, comprising of the weekly payments sought in the Magistrates’ Court proceedings, which were are advised by the agent total $100,520,00 gross and the balance of $189,980.00 as a settlement in the County Court proceedings. The Defendant would therefore pay the costs on the Magistrates’ Court proceedings and not the County Court proceedings.
… .”[12]
[12]JCB 44
(s) By letter dated 24 August 2011, the solicitors acting for the plaintiff advised those acting for the defendant that (omitting formal parts):
We refer to our telephone conversations (x4) of even date with you and our facsimile transmission likewise on even date.
We are instructed to accept the sum of $290,500.00 by way of Common Law Damages in relation to the County Court Action proceeding Number CI-09-04046 in settlement of the Plaintiffs’ claim for Damages.
We are also instructed to discontinue the Magistrate’s Court proceedings Action Number A11738328 with no order as to costs.
We have enclosed Consent Orders which you are required to sign and return to our office so we can file same with the County Court prior to 29 August 2011.
We also confirm in relation to our Party/Party County Court costs, and Counsel’s fees and indirectly our entitlement to Ministerial Costs, the Defendant consents that this issue of costs will be argued at the County Court as per your letter dated 23 August 2011 at a date to be agreed.
We take this opportunity to also advise we have prepared one copy of the Plaintiff’s Court Book and put you on notice that when and if we recover County Court costs, we will also claim the preparation of one Court Book. We do not propose to make further copies as the matter has now resolved.
Should you wish for our office to deliver the first copy of the Court Book please advise and it will be made available to you forthwith.
We look forward to receiving the Release document by return facsimile transmission together with the signed Consent Orders.
… .”[13]
[13]JCB 45-46
(t) The weekly payments of compensation paid to the worker ceased as at 2 September 2011;
(u) Various letters were exchanged between the respective solicitors in relation to the issue of whether the plaintiff’s solicitors were entitled to costs and a Release was executed on 26 August 2011, where it is noted, in part:
“I.The settlement sum means $290,500 being a net settlement amount after the reduction required by Section 134AB(25) of the Act.
JThe Costs Agreement means:
·The Releasor is entitled to make application for their costs pursuant to the Ministerial Directions and the party/party costs of the action on County Court Scale D of the Supreme … (ibid) Court Scale of Costs subject to the provisions of Section 134AB(29) by way of application to the County Court.
·Subject to the determination of the Court on the issue of the costs, the Releasor is otherwise not entitled to any costs.”[14]
[14]JCB 88-89
The relevant legislation
5 There is no issue between the parties that the relevant part of the Act is in its form prior to the amendments brought about by s57(5) of the Accident Compensation Amendment Act 2010 (“the Amending Act”). The Amending Act inserted new ss28A and 28B following the decision of the Court of Appeal in Raeburn v Tenix Defence Systems Pty Ltd.[15]
[15][2007] VSCA 90
6 Section 325(1) provides that s134AB, as amended by s57(5) of the Amending Act, applies in respect of any proceeding to recover damages in accordance with s134AB where the initial serious injury application was served on or after the commencement date.
7 Section 2(4) of the Amending Act deems s57(5) to come into operation on 17 June 2009. In this matter, the plaintiff lodged his serious injury application on or about 19 April 2007.
8 Accordingly, s134AB of the Act relevantly states:
“(1)A worker who is, or the dependants of a worker who are or may be, entitled to compensation in respect of an injury arising out of or in the course of, or due to the nature of, employment on or after 20 October 1999—
(a)shall not, in proceedings in respect of the injury, recover any damages for non-pecuniary loss except—
(i)in accordance with the Transport Accident Act 1986 and subsections (25)(b), (26) and (36)(b) of this section; or
(ii)in proceedings of a kind referred to in section 134AA(b) and in accordance with subsections (25)(b), (26) and (36)(b) of this section; or
(iii)if subparagraphs (i) and (ii) do not apply, as permitted by and in accordance with this section; and
(b)shall not, in proceedings in respect of the injury recover any damages for pecuniary loss except—
(i)in proceedings of a kind referred to in a paragraph of section 134AA and in accordance with subsections (25)(a), (26) and (36)(a) of this section; or
(ii)if subparagraph (i) does not apply, as permitted by and in accordance with this section.
…
(12)The worker must not commence proceedings in accordance with this section, other than an application under subsection (16)(b) or the commencement of proceedings with the consent of the Authority under subsection (20) or (20A), unless—
(a)the worker and the Authority or self-insurer hold, or begin, a conference within 21 days after the response date; and
(b)the Authority or self-insurer makes a statutory offer in writing in settlement or compromise of the claim at that conference, or after the conference begins but no later than 60 days after the response date; and
(c)if the worker does not accept that statutory offer within 21 days after it is made, the worker, before the expiration of that period, makes a statutory counter offer in writing in settlement or compromise of the claim; and
(d)the Authority or self-insurer does not accept that counter offer within 21 days after it is made; and
(e)the proceedings are commenced not earlier than 21 days, and not more than 51 days, after the counter offer is made or, if a counter offer is deemed to have been made under subsection (14), not more than 30 days after the day on which the counter offer is deemed to have been made.
(13)If the Authority or self-insurer does not make a statutory offer under subsection (12), the Authority or self-insurer is deemed, for the purposes of that subsection, to have made, on the 60th day after the response date, a statutory offer of nothing.
(14)If the Authority or self-insurer makes a statutory offer under subsection (12) and the worker does not make a statutory counter offer under that subsection, the worker is deemed, for the purposes of that subsection, to have made, on the 21st day after the statutory offer was made, a statutory counter offer of the maximum amount that may be awarded as damages under subsection (22)(a) and (b).
…
(25)If a judgment, order for damages, settlement or compromise is made or entered in favour of a worker or the dependants of a worker in respect of proceedings referred to in subsection (1), the amount of the judgment, order for damages, settlement or compromise must be reduced by—
(a)to the extent that it is in respect of pecuniary loss, the amount of compensation (if any) paid otherwise than under section 98C, 98E and 99 or to the extent that section 93(10)(a) of the Transport Accident Act 1986 applies, except any such compensation paid in respect of the whole or any part of the period of 18 months after the relevant transport accident;
(b)to the extent that it is in respect of non-pecuniary loss, the amount of compensation (if any) paid under section 98C and 98E.
…
(28)In proceedings for the recovery of damages commenced in accordance with this section after a statutory offer was made, or deemed to have been made, under subsection (12)—
(a)if no liability to pay damages is established, the worker must pay the party and party costs of the employer, Authority or self-insurer and the worker's own costs;
(b)if judgment is obtained or a settlement or compromise is made in an amount not less than 90 per cent of the worker's statutory counter offer under subsection (12) and more than the statutory offer of the Authority or self-insurer, the Authority or self-insurer must pay the worker's party and party costs and its own costs;
(c)if judgment is obtained or a settlement or compromise is made in an amount not more than the statutory offer of the Authority or self-insurer under subsection (12), the worker must pay the party and party costs of the Authority or self-insurer and the worker’s own costs;
(d)if judgment is obtained or a settlement or compromise is made in an amount that is more than the statutory offer of the Authority or self-insurer under subsection (12) but less than 90 per cent of the worker’s statutory counter offer under that subsection, each party bears its own costs—
and the court must not otherwise make an order as to costs.
… .”
(my emphasis)
9 I also refer to s134AF of the Act, which states, relevantly:
“(1)For the purposes of section 134AB, the Minister may issue directions for or with respect to procedures under that section.
(1A)…
…
(3)The directions may include directions about the provision of information by affidavit and the attending of conferences.
(4)A person to whom a direction under this section applies, and the legal representatives and agents of such a person, must comply with the direction.
(5)The directions may specify that a failure to comply with a particular provision of the directions has the effect of altering a period applicable under that section.”
10 Ministerial Directions have been made pursuant to s134AF, and I note the following:
(a) Pursuant to Direction 2(c), every attempt is to be made by the Authority, authorised agents, self insurers, the worker and all legal representatives to settle or compromise claims for the appropriate amount of damages, without resort to legal processes;
(b) Direction 3 defines “offer” to mean an offer in settlement or compromise of a claim and includes an offer of a nil amount. Furthermore, “statutory offer” and “statutory counter offer” is defined to mean the offers referred to in s134AB(12) of the Act;
(c) Direction 12, under the heading “Offers”, states:
“12.1A statutory offer by the Authority or self-insurer must be recorded by the Authority or self-insurer’s legal representative in accordance with Form B attached to these Directions and is to be open for acceptance for 21 days and a copy is to be served on the worker or the worker’s legal representative;
12.2 A statutory counter offer must be recorded by the worker or the worker’s legal representative in accordance with Form C attached to these Directions and a copy is to be served on the Authority or self-insurer or their legal representatives;
12.3 Where a claim or proceeding under Section 134AB is settled or compromised, the worker must execute a release if and when called upon to do so by the employer, authorised agent, Authority or self-insurer (or their legal representatives). Such a release must be forwarded to the worker or the worker’s legal representative within one business day of such settlement or compromise.”
(my emphasis)
Submissions of the parties
11 Counsel for the defendant submits that the purported “statutory counter offer” consisting of the three documents served by the solicitors for the plaintiff on or about 5 August 2009 is not a valid “statutory counter offer” within the meaning of s134AB(12)(c) of the Act. Accordingly, so it is submitted, if the plaintiff has not made a “statutory counter offer” within the meaning of ss(12)(c), then s134AB(14) deems the worker, for the purposes of ss(12)(c), to have made, 21 days after the “statutory offer”, a “statutory counter offer” of the maximum amount that may be awarded for “pecuniary loss damages” and “pain and suffering damages”.
12 In such circumstances, if the plaintiff obtained a compromise or settlement sum more than in the “statutory offer” of the Authority but less than 90 per cent of the plaintiff’s deemed “statutory counter offer” pursuant to s134AB(28)(d), each party bears its own costs. The defendant submits that the proceeding was settled for a sum more than its “statutory offer” but less than 90 percent of the Plaintiff’s deemed “statutory counter offer”.
13 Counsel for the defendant submits:
(a) The scheme of the Act and in particular, the statutory language of s134AB is “clear”. The Act contemplates and permits the making of “a statutory offer in writing” and “a statutory counter offer in writing”. There is only the one statutory offer and one statutory counter offer.
(b) Reference is made to the decisions of Bishop v Herald & Weekly Times Ltd[16] and Shirreff v Elazac Pty Ltd (No 2)[17] where, respectively, Williams J and Robson J cited, with approval, the observations of Gillard J in White v Director of Housing[18] concerning the need for clarity of expression in an offer of compromise. His Honour said:
[16]Op cit
[17]Op cit
[18][2003] VSC 124 at [17]
“…It is trite to observe that the terms of the offer must be clear, precise, certain and capable of acceptance so that if a party fails to accept the offer, the Court is in a position to give effect to the Rules relating to a failure to accept, where the offeree obtains a judgment less favourable than the terms of the offer. … .”
(c) It is not open for the plaintiff to make a “series” of “statutory counter offers” as such would lead to uncertainty as different statutory counter offers would lead to different outcomes, allowing a party to “select the offer that most suited their case to argue for a particular operation of s134AB(28) of the Act”.
14 The defendant submits that the two purported Form C documents[19] “were and were intended to be to different effect and the plaintiff does not suggest that both could be accepted”. Each of the purported Form C documents, it is submitted, now gives rise to different calculations giving rise to different outcomes and, when compared with the settlement figure, different costs consequences. Accordingly, for that reason the whole of the purported “statutory counter offer” (comprising of the three pages) cannot be compared to the subsequent settlement figure.
[19]See JCB 18, 19
15 In this instance, the plaintiff now seeks to select the purported Form C that suits his circumstances[20] and “disclaim” the Form C that does not suit his circumstances. Such a course of action, so it is submitted, is to select only a part of what has said to have been the “statutory counter offer” and ignore the rest. It is tantamount to making a series of statutory counter offers and later selecting the one that suits, which is clearly inconsistent with the language and purpose of the section.
[20]The Form C at JCB 18
16 Counsel for the plaintiff submits that the plaintiff made a valid “statutory counter offer” which is comprised of the three documents served on the solicitors for the defendant on or about 5 August 2009.[21] It is further submitted by counsel for the plaintiff that the proper approach is that the “value” of the “statutory counter offer” as at the date the parties agreed to settle the proceedings (24 August 2011), was $294,663.33. This figure was calculated by deducting from $380,000.00 the amount of $85,336.89, being the amount of compensation paid to the plaintiff after the service of the Form C documents on 5 August 2009 to the date of the settlement. Thus, it is submitted the plaintiff only had to achieve a settlement of no less than $265,196.79, which is 90 per cent of $294,663.11.
[21]See JCB 17, 18 and 19
17 Considering that the plaintiff settled for $290,500.00 plus retention of benefits, such sum was greater than $265,196.79 and greater than the “statutory offer” made by the defendant.
18 In such circumstances, it is submitted that s134AB(28)(b) of the Act is applicable and the plaintiff is entitled to his party and party costs.
19 In support of her primary submission, counsel for the plaintiff submits:
(a) The “statutory offer” made by the defendant was made pursuant to s134AB(12)(b). Direction 12 of the Ministerial Directions directs that “a statutory offer” be recorded in accordance with Form B. Such form does not make any allowance for the reduction or retention of statutory payments made by the defendant up to the date of the statutory offer;
(b) Section 134AB(25) of the Act requires that if a “judgment, order for damages, settlement or compromise” is made in favour of a worker, such judgment, order, settlement or compromise must be reduced by those statutory benefits paid to the plaintiff. Seemingly, the amount of money recorded in the “statutory offer” must be reduced by the amount of compensation already paid to the plaintiff. In practice, realising the deficiencies in the Form B and for that matter, the Form C, which is the document used to make a “statutory counter offer”, it is the “usual practice” for solicitors acting for defendants and plaintiffs to serve the “statutory offer” and/or “statutory counter offer” under cover of a separate letter which clarifies the net amount payable to a worker by adding a collateral term to the statutory offer and/or statutory counter offer;
(c) Such a course is exemplified in the circumstances of this matter where the solicitors for the defendant state, in the covering letter with the “Form B” document, that:
“Enclosed is a statutory offer for the purposes of Section 134AB(12)(b) of the Accident Compensation Act 1985 (‘the Act’).
The sum recorded in the offer of $165,000.00 is a net amount, after the reduction required by Section 134AB(25) of the Act.
For the avoidance of doubt, if the offer is accepted, there is no requirement for Hector Edmundo Zurita to repay statutory compensation already received pursuant to the Act.”[22]
[22]JCB 14
(d) Both Form C documents relied on by the solicitors for the plaintiff were under a similar covering letter, wherein it was stated:
“To avoid any doubt, if the Plaintiff’s Offer is accepted, we confirm the Plaintiff will not be required to reimburse the Victorian WorkCover Authority any amounts already paid to him as compensation pursuant to the provision of the Accident Compensation Act 1985.”[23]
[23]JCB 17
[My emphasis]
(e) Each Form C stipulates a figure of $380,000.00 on its face. At the time of serving the Form C documents, the plaintiff had only received statutory benefits up until 26 April 2003. Whereas one Form C stipulates the sum of $380,000.00 on the basis that any compensation paid to date will be kept, the second Form C, although stipulating $380,000.00, adds the further condition that the sum of $380,000.00 is to be reduced by any statutory benefit paid to the plaintiff between the date of the statutory counter offer in any final determination. As matters turned out, the plaintiff did receive further payments of statutory benefits after the making of the “statutory counter offer” and accordingly, that had to be taken into account.
Counsel for the plaintiff notes that the statutory counter offer was “open” for 21 days pursuant to s134AB(12)(d) of the Act. If the statutory counter offer had been accepted during that period, each Form C document would give rise to the same result, as no further statutory benefits would have been paid.
Disposition
20 After considering the competing submissions, I consider that the three documents served by the solicitors for the plaintiff on or about 5 August 2009[24] do constitute a “statutory counter offer” within the meaning of s134AB(12)(c) of the Act. Furthermore, I also find, consistent with the submissions of counsel for the plaintiff, that the settlement of $290,500.00 plus keep all payments of statutory benefit in settlement or compromise of the proceedings brought by the plaintiff against the defendant is an amount not less than 90 per cent of the plaintiff’s “statutory counter offer” under ss(12) and more than the “statutory offer” made by the defendant. In such circumstances, the plaintiff is entitled to have his party and party costs paid by the defendant.
[24]JCB 17, 18 and 19
21 I have come to such conclusion for the following reasons:
(a) Although there is a reference in the correspondence from the plaintiff’s solicitors to two statutory counter offers, it appears clear enough that at all times the solicitors for the plaintiff made a “statutory counter offer” in writing within the meaning of s134AB(12)(c) of the Act constituted by the letter dated 5 August 2009 and the two Form C documents. Other than the requirement under the Ministerial Guidelines that the “statutory counter offer” be recorded in accordance with Form C, there is no legal basis limiting the nature of a “statutory counter offer”. In this respect, I refer to and respectfully adopt the comments of Robson J in Shirreff v Elazac Pty Ltd[25] at paragraphs [25] – [34].
[25]Op cit
Perhaps this is best exemplified by the solicitors for the defendant by way of their letter dated 16 July 2009[26] wherein effectively a further term is added to what is set out in the Form B document;
[26]JCB 14
(b) Contrary to the submission of the defendant, I do not consider that the plaintiff made two statutory counter offers. The critical figure in both Form Cs is the sum of $380,000.00 which, if accepted by the defendant at the relevant time, would have been on the basis that the plaintiff keeps payment of statutory benefits up to that time. However, just as past payments were clarified by the respective accompanying letters, the other Form C made clear that the sum of $380,000.00 was to be reduced by any payment of statutory benefits after the making of such “statutory counter offer”.
Such a course of action merely reflected the prospect that the plaintiff may recover payments made after the statutory counter offer, which would have to be taken into account at any settlement.
I do not accept any submission that there is uncertainty brought about by such a course of action. In the event that a proceeding is compromised or settled, those standing in the shoes of the defendant would know precisely what amount of compensation the plaintiff has been paid prior to a “statutory counter offer” and also precisely know what amount of compensation, if any, that the plaintiff has been paid since the making of the “statutory counter offer”.
22 Some assistance is obtained from Bishop v Herald and Weekly Times[27] and Shirreff,[28] both of which were decided well after the subject “statutory counter offer”.
[27]Op cit
[28]Op cit
23 In Bishop, a “statutory offer” was made by the defendant to the plaintiff in the sum of $230,000.00. Such offer was made under cover of letter of the same date, which stated that the sum of $230,000.00 recorded was a net amount “after reduction required by s 134AB(25) of the Act”. Furthermore, similar to the subject matter, the letter also stated:
“For the avoidance of doubt, if the offer is accepted, there is no requirement … [the plaintiff] to repay statutory compensation already received pursuant to the Act.”[29]
[29]JCB 14
24 In response to such “statutory offer”, Bishop made a purported “statutory counter offer” of $614,600.00 recorded on a Form C on which also was recorded the following:
“Six Hundred and fourteen thousand six hundred dollars (the settlement sum) less the amounts required to be deducted at settlement or judgement pursuant to Section 134AB(25)(a) and (b) of the Accident Compensation Act. For the purposes of this offer the date of settlement is the date of acceptance of this offer.
… .”
25 The “statutory counter offer” was not accepted and a proceeding was commenced by Bishop after having been deemed to have suffered a “serious injury” pursuant to s134AB(7)(a) of the Act and the procedures required by s134AB(12) of the Act had taken place.
26 The matter “settled” subject to the issue of “costs”. In that matter, the defendant submitted that the purported “statutory counter offer” was invalid because it did not state a sum, as required by the prescribed form. Williams J. accepted the submission for Bishop that the failure to record the purported “statutory counter offer as a stated sum does not alone invalidate it”. In this respect, her Honour referred to s53 of the Interpretation of Legislation Act 1972 wherein it is stated that substantial compliance with a prescribed form is sufficient.
27 Ultimately, Williams J found that a sum certain could not be determined under the terms of the “statutory counter offer”. She held, inter alia, that the amount to be deducted was not ascertainable as there was not in existence a judgment, order for damages, settlement or compromise made or entered in favour of a worker or the dependants of the worker in respect to proceedings referred to in ss(1) as no proceedings had in fact been commenced at the time the offer was made. Seemingly, her Honour perceived the difficulty to be in applying the reductions required under s134AB(25) when no such reductions were required as that section had not been activated.
28 Bishop appealed the decision of Williams J and the Court of Appeal made consent orders by which the order of Williams J in relation to costs was set aside and that the Herald & Weekly Times would pay the costs both of the initial proceedings and the appeal proceeding.
29 In Sherriff, a judgment was entered in favour of the plaintiff against a defendant on 2 December 2010 in the sum of $897,620.80. Such proceeding was pursuant to s134AB of the Act.
30 The defendant objected to the plaintiff obtaining a costs order in his favour on the basis that, contrary to s134AB(12)(c) of the Act and the relevant Ministerial Direction, the plaintiff failed to make a “statutory counter offer”. The defendant had made a statutory offer of nil and such offer was accompanied by letter of the same date from the solicitors of the defendant to the plaintiff’s solicitors which said that:
“… the sum recorded in the offer of $Nil is a net amount after the deduction required by s 134AB(25) of the Act.”
The letter also added that ‘[f]or the avoidance of doubt, if the offer is accepted, there is no requirement for Linton Shirreff to repay statutory compensation already received pursuant to the Act’.”
31 Later, the solicitors for the plaintiff made the impugned “statutory counter offer” which stated, in part:
“Six hundred and fifty thousand dollars for general damages and loss of earnings, being an amount after reduction pursuant to section 134AB(25), plus costs in accordance with the Ministerial Directions less any amounts of compensation received from the date of this statutory offer until settlement or judgment.”
[my emphasis]
32 As Robson J noted, the nub of the defendant’s argument is that the purported Form C calls for a –
“… single immutable amount to be given, not a formula that allows for different amounts to be offered as time passes after the statutory counter offer is made.”[30]
[30]Shirreff (op cit) at paragraph [10]
33 In particular, Robson J stated:
“The contention made by the defendant that a single fixed immutable figure must constitute the offer would only add difficulty to the plaintiff in making a reasonable and sensible statutory counter offer. The construction of offer contended for by the defendant would limit what may normally be constituted by an offer. That construction may lead a plaintiff to settle for less than he or she otherwise might, to guard against the risk of the case going longer than he or she might expect. I cannot see anything in the Act that would suggest the normal meaning of the word ‘offer’ (in the context of forming a contract) should be read down to accommodate such an objective.”[31]
[31]Shirreff (op cit) at paragraphs [33] – [34]
34 I do consider that there are some similarities between the subject proceeding and the factual situation in Shirreff[32]. The “statutory counter offer” in Shirreff which was found to be a valid “statutory counter offer” included a term which required that account had to be taken of past statutory benefits and future statutory benefits. In this sense, although those stipulations are set out in one document rather than two, the result is the same.
[32]Shirreff was overturned on appeal: Elazac Pty Ltd v Shirreff [2011] VSCA 405 on the basis that Shirreff was a “contractor” not an “employee” and there was no negligence. The costs ruling was not challenged.
Conclusion
35 I rule that the plaintiff is entitled to his party and party costs pursuant to s134AB(28)(b) of the Act.
36 I will hear the parties as to the appropriate orders to be made.
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