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Conway v Victorian WorkCover Authority (Ruling as to Costs) [2021] VCC 1157 (18 March 2021)

Last Updated: 20 August 2021

Case No. CI-19-05493

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RULING AS TO COSTS
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Subject: COSTS

Catchwords: WorkCover (Litigated Claims) Legal Costs Order 2016 – application by plaintiff for certification of counsel’s fees

Legislation Cited: WorkCover (Litigated Claims) Legal Costs Order 2016, s4, Part A; Workplace Injury Rehabilitation and Compensation Act 2013;

Cases Cited: Santos v SS Formwork Pty Ltd (Ruling) (Unreported) County Court of Victoria, 30 May 2019; Gellard v Victorian WorkCover Authority [2017] VCC 1919; Dowling v Myers Street Family Medical Practice Pty Ltd (Ruling as to Costs) [2018] VCC 2314; Grech v Victorian WorkCover Authority [2020] VCC 968; Traumanis v State of Victoria (Ruling) (Unreported) County Court of Victoria, 26 May 2017; Calderbank v Calderbank [1975] 3 All ER 333; Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; Giankos v SPC Ardmona Operations Ltd [2011] VSCA 121; Tralongo v Malios & Ors [2007] VSC 239; Cladingboel v Newcrest Mining Limited  [2007] VSC 345 ; Ripper v Kotzman [2008] VSC 448; Jasky v Dr Cooney & Ors [2009] VSC 51; Smith v Commonwealth of Australia [2009] VSC 419; Mikhman v Royal Victorian Aero Club & Ors [2012] VSC 42; Karabinis v Bendrups & Ors [2017] VSC 648; Herald & Weekly Times Ltd and Anor v Jessop [2014] VSCA 292

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HIS HONOUR:

1 This Ruling concerns an application made by the plaintiff for certification of counsel’s fees in relation to an appearance on 16 July 2020 and in relation to the preparation of documents and submissions in relation to the referral of medical questions to the Medical Panel.

2 On 11 February 2021, I commenced hearing submissions and was assisted in that regard by an affidavit filed by the solicitor for the defendant. In the course of counsel for the plaintiff’s submissions, a number of matters were raised by counsel for the plaintiff of which there was no evidence, and for this reason, and because the time remaining on the 11^th was insufficient, the matter was adjourned until 12 February for further hearing. On the morning of 12 February 2021, the plaintiff’s solicitor swore an affidavit exhibiting much of the material that had been referred to earlier, and counsel for the plaintiff provided written submissions.

Background

3 In respect of an injury to his right hand and thumb, the plaintiff made application for a serious injury certificate in order to be able to bring a proceeding for the recovery of damages in respect of the pain and suffering and the loss of earnings consequences of the injury.

4 After the request had been made, the Victorian WorkCover Authority solicitors, by letter of 22 October 2019, refused the plaintiff’s request and served documents that included the response affidavit.

5 On 18 November 2019, the plaintiff commenced these proceedings by originating motion.

6 After discussions between the parties’ solicitors, the defendant’s solicitors, by letter dated 18 February 2020, informed the plaintiff that it was their view that the plaintiff would not be able to satisfy the economic loss requirements of s325(2) of the Workplace Injury Rehabilitation and Compensation Act 2013 and served a Notice pursuant to Section 4, Part A, of the WorkCover (Litigated Claims) Legal Costs Order 2016 (“the LCO”). Part A2 provides that if the offer contained in the Notice is not accepted within 28 days of the making of it, and leave is not obtained for pecuniary loss damages, then the costs are those payable under the LCO at the time the offer was made. Part A3 provides that such offers are without prejudice.

7 The effect of the offer was that the plaintiff would consent to the dismissal of his application for leave in respect of the economic consequences of his injury and would be granted a certificate that allowed him to pursue a claim for damages in respect of the pain and suffering consequences only.

8 The offer was not accepted by the plaintiff within 28 days, or at any time before the opinion of the Medical Panel was received.

9 On 16 July 2020, I referred medical questions to the Medical Panel for its opinion. I did so on the application of the defendant. The application was not opposed and (according to the records kept in the list of referrals), no issues were raised by the plaintiff as to the relevance of, or form of, any of the medical questions.

10 On 22 November 2020, the Medical Panel gave its Certificate of Opinion, after examining the plaintiff on 17 November 2020. Of relevance to the plaintiff’s application for leave to bring proceedings in respect of loss of earnings consequences, the Panel found as follows:

“Q4 Does any medical condition of the Plaintiff’s right thumb/hand/arm which results from, or is materially contributed to by, the accepted right thumb/hand/arm injuries (excluding any psychological or psychiatric consequences of those conditions) result in him having an incapacity for work as a Crane Driver/Trades Assistant?
Answer: The Panel is of the opinion that the Plaintiff has an incapacity for work and the incapacity for work as a crane driver/trades assistant results from and is materially contributed to by the Plaintiff’s mild residual dysfunction of the right thumb and wrist secondary to an aggravation of pre-existing mild first CMC degenerative change and de Quervain’s tenosynovitis treated operatively.
Q5 If any incapacity is identified in response to question 4, is such incapacity likely to be ‘permanent’ meaning ‘likely to last for, during or through the foreseeable future’?
Answer: The Panel is of the opinion that Plaintiff’s incapacity for his pre-injury duties (crane driver/trades assistant) is permanent (i.e. likely to last for, during or through the foreseeable future).
Q6 Does any medical condition of the Plaintiff’s right thumb/hand/arm which results from, or is materially contributed to by, the accepted right thumb/hand/arm injuries (excluding any psychological or psychiatric consequences of those conditions) result in him having:
6.1. a ‘current work capacity’ within the meaning of the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) (‘the Act’); or
6.2. ‘no current work capacity’ within the meaning of the Act?
Answer: 6.1 Yes.
6.2 No.
Q7 If ‘yes’ to question 6.1:
7.1. What employment would constitute ‘suitable employment’ for the Plaintiff?
7.2. Would employment as a:
i. Spotter;
ii. Quality Controller;
iii. Fleet Controller/Dockhand;
iv. Transport and Despatch Coordinator;
v. Traffic Controller;
vi. Counter Sales Assistant;
vii. Sales Assistant;
viii. Weight bridge Operator;
ix. Administration Assistant – Manufacturing;
x. Sales Executive/Representative – Trucks/Cranes;
xi. Trade Assessors – Welding/Boiler making;
xii. Clerk - Sales;
xiii. Call Centre Information Clerk;
constitute suitable employment with the meaning of the Act?
7.3. For how many hours per week is the Plaintiff capable of working in each of the roles identified in questions 7.1 and 7.2?
7.4. If the number of hours per week as stated in answer to question 7.3 is less than full-time (i.e. 38 hours per week), will the Plaintiff be capable of working a greater, and if so what, number of hours per week in each of the ‘suitable employment’ roles identified in questions 7.1 and 7.2 in the foreseeable future?
Answer: 7.1 The Panel is of the opinion that ongoing employment in his current role of counter sales assistant constitute suitable employment for the Plaintiff at full-time hours
7.2 i. Yes
ii. Yes
iii. No
iv. Yes
v. No
vi. Yes
vii. Yes
viii. Yes
ix. Yes
x. Yes
xi. Yes
xii. Yes
xiii. Yes
7.3 Full time in his current employment as a counter sales assistant and:
i. Full-Time
ii. Full-Time
iii. Not applicable
iv. Full-Time
v. Not applicable
vi. Full-Time
vii. Full-Time
viii. Full-Time
ix. Full-Time
x. Full-Time
xi. Full-Time
xii. Full-Time
xiii. Full-Time
7.4 Not Applicable
Q8 If any incapacity is identified in response to question 6, is such incapacity likely to be ‘permanent’ meaning ‘likely to last for, during or through the foreseeable future’?
Answer: Not Applicable.”

11 Following receipt of the Medical Panel’s opinion, the defendant sent proposed consent orders to the plaintiff in these terms:

“(a) The opinion of the Medical Panel dated 22 November 2020 be adopted and applied by the Court pursuant to section 313(4) of the Workplace Injury Rehabilitation and Compensation Act 2013.
(b) The plaintiff have leave to bring proceedings for the recovery of pain and suffering damages.
(c) The defendant pay the plaintiff's costs pursuant to the WorkCover (Litigated Claims) Legal Costs Order 2016, to be determined by the Costs Court in default of agreement.
(d) Proceeding otherwise dismissed.”^[1]

12 By email of 23 December 2020, the plaintiff’s solicitors accepted the offered pain and suffering certificate and accepted that the proposed orders were appropriate, save for the question of the counsel’s fees that this ruling concerns.

13 Accordingly, it is not in dispute that the failure of the plaintiff to accept the offer has the costs consequences provided for by Section 4, Part A2 of the LCO as the parties, after receipt of the Medical Panel’s Certificate of Opinion, have agreed that orders should be made granting the plaintiff leave only in respect of pain and suffering.

14 It was not in contest that I have a discretion as to whether counsel’s fees in respect of the interlocutory steps of referral to the Medical Panel should be allowed.^[2]

15 I was referred to earlier decisions of Judges of this Court: Judge Dyer in the matter of Gellard,^[3] to a ruling of Judge Coish in the matter of Dowling,^[4] to a ruling by Judicial Registrar Gurry in a matter of Grech,^[5] and I have had regard also to transcript of the ruling given by his Honour Judge Carmody in Traumanis.^[6]

16 The correctness of the approach taken in those cases was not controversial – what emerges from them is that the purpose of the relevant provisions of the LCO is to promote early resolution and to reduce costs. By its terms where, as here, the end result is the grant of leave in respect of pain and suffering damages only, the costs consequences for the plaintiff are not, so far as the solicitor’s costs are concerned, discretionary. In that sense, the service of the notice operates quite differently from Calderbank^[7] offers, as the plaintiff faces no risk of not getting the reduced costs, nor is there the risk of paying the defendant’s costs of continuing to pursue leave in respect of economic loss, and failing on that question, much less of having to pay the defendant’s costs on a solicitor/client or indemnity basis.

17 Although each of the parties referred to an examination of the reasonableness of the plaintiff’s actions in not accepting the offer by reference to the principles set out in the Court of Appeal decision in Hazeldene’s Chicken Farm v Victorian WorkCover Authority (No 2),^[8] the cases referred to approach that proposition with some caution:

“Some degree of caution needs to be exercised in adopting a similar analysis that would be relevant in determin[in]g the question of costs following a Calderbank offer. In the case of the LCO the sole determinant of the quantum of professional costs recoverable in an originating motion seeking leave for both heads of damages is the service of the notice. It does not matter whether the notice is given at an early or very late stage of the proceeding. The result for the plaintiff’s solicitor is exactly the same in terms of the fixed fees recoverable. Considerations which might seem relevant to the reasonableness of the offer or the unreasonableness of its refusal at the time it was made, are simply not relevant within the framework of the LCO.”^[9]

18 As Judge Dyer observed, it is the result that determines the costs recoverable by the plaintiff’s solicitor – and here it is conceded that the grant of leave entitles the plaintiff to costs in accordance with the LCO.

19 Each of the parties made detailed reference to the medical and vocational material that had come into being before the offer lapsed. It suffices to say that there was a body of material that suggested the plaintiff retained a capacity for suitable employment, although the estimations of what he might do varied in degrees between the various doctors and vocational experts who wrote reports bearing upon the subject.

20 It was the plaintiff’s case that the failure to accept the offer was a reasonable decision on the basis of the material then available to the plaintiff and his lawyers. It was the defendant’s case that, having regard to what was to be found in the reports, and other information available in the case about the plaintiff’s earnings, it should have been apprehended that his chances of success were very low.

21 By the time the offer lapsed, the plaintiff had completed all the operative treatment that he was likely to undergo and had found himself employment as a sales representative. He commenced this employment in November 2018. According to his affidavit sworn on 1 July 2019:

“Eventually, I found employment through my own enquiries. I commenced with All Lifting in November 2018. After I commenced employment Nabenet offered the WISE scheme to my employer. My boss has been very understanding about my injury. He said that he would get other employees to do any heavy lifting. I was certified not to lift above 10kg with both hands or above 6kg with my right hand, and to take regular rest breaks and avoid repetitive typing or writing. I remain employed by All Lifting as a counter sales assistant on a fulltime basis. I take orders either on the phone or face-to-face. I answer the phones dealing with enquiries as required. Unfortunately I have to regularly use a computer and write and complete forms. This aggravates my right thumb pain which spreads up the forearm and is generally bad by the end of a working day. After I cool down after a day’s work, I am very sore. I have great difficulty sleeping. I am struggling to work full-time. I asked my boss if I could decrease my hours by taking Wednesday off due to the pain. However, my boss informed me that this was not possible.”^[10]

22 His earnings from that employment as at July 2019 on an annual basis were $56,160.^[11]

23 The plaintiff’s case as to his “without injury” earnings calculated in the six-year window three years before and three years after his injury (sustained in July 2015) was set out in his affidavit of 25 November 2019. Shortly, in the year ended 2014, he earned $84,782, and in the year ending 2015, he earned $77,576.

24 The plaintiff also set out the earnings of a fellow worker, who was also a dogman/crane driver with his pre-injury employer. That worker earned, over a period of five years ending June 2018, more than $120,000 per annum on average and in that last year, $135,000. The plaintiff said he would have, had he not been injured, spent more time “on site” and that, if he did so, his earnings would have been more like the those of the nominated fellow worker.

25 The plaintiff’s affidavit also asserted (and no issue was taken with this during submissions) that under the relevant EBA, his earnings would have been indexed by 5 per cent each year, so on three occasions in the three-year window after the injury.

26 In relation to this material, counsel did various mathematical calculations. Counsel for the defendant asserted that, indexed in that way, the plaintiff’s best figure for “without injury” earnings would be $98,145, of which 60 per cent is $58,887 – on those bare figures, the plaintiff’s actual earnings in full-time employment were less than 60 per cent and had that been determined to be the extent of his “after injury” capacity, leave would have been granted.

27 The defendant submitted that not only could the plaintiff do the work he had obtained and was performing, but that he had the capacity to also work in a number of jobs suggested in the vocational reporting in the case, a view later upheld by the Medical Panel when it gave its opinion. Of those, the highest remuneration was that of a “quality controller” earning $1,149 a week, on an annual basis $59,748 – which is just above the 60 per cent figure. The defendant’s submission was that the plaintiff, knowing that he could work full-time in the occupation he had, should have appreciated a very substantial risk that he would be found to be able to do other full-time light work that would make more than 60 per cent of his “without injury” earnings.

28 In response to these contentions, the plaintiff submitted that in the 28 days that the offer remained open to be accepted, there was a body of evidence supporting the proposition that the plaintiff was working beyond his realistic capacity and would have to reduce the hours that he worked. Shortly:

(a) The plaintiff’s affidavit of 1 July 2019 describing the work and the plaintiff’s difficulty performing it because of his injury (as set out in paragraph 21 of these reasons);

(b) The file note of the plaintiff’s telephone conversation with his solicitor on 30 March 2020 – exhibit BW-4;

(c) The letter from Dr Jagdish Trivedy dated 18 February 2020.

29 Plaintiff’s counsel, eventually, submitted that the plaintiff, even working full time, earned less than 60 per cent of his “without injury” earnings.

30 No explanation was offered for the important difference between the plaintiff’s case on these matters, as it stood when the offer lapsed, and the very clear history the Medical Panel recorded when it examined the plaintiff on 17 November 2020. The Medical Panel clearly recorded^[12] that no physically-based difficulty attended the plaintiff’s performance of his work, and that his hours had been reduced to 30 hours per week in about May 2019 because of stress problems unrelated to the physical injury.

31 If the plaintiff’s instructions were that no such history was given to the Medical Panel, but rather the Medical Panel was told by him (consistently with material that came into being before and around the time the offer lapsed) that he had reduced his hours because the work with pens and computers caused increased symptoms in the injured hand, other courses were open to him.^[13]

32 If the plaintiff and his advisers had then, at the time the offer was available, a view of the “with injury” and “without injury” earnings figures the evidence might produce that would have led to the grant of leave for economic loss^[14] – based perhaps on an assessment of “without injury” earnings approached in the Herald & Weekly Times^[15] manner, and the apparently uncontroversial operation of the relevant EBA’s indexation provisions – not much has changed, and if the prospects of succeeding are as finely balanced as some of the calculations referred to in submissions suggest, there was no barrier to testing that in a hearing after the Medical Panel’s opinion was received.

33 In the event, the plaintiff took neither course, but rather agreed to an order granting leave for pain and suffering only.

34 In my view, it should have been plain to the plaintiff that, at best, his case on economic loss was very finely balanced, and that the risk of being found to be, by a court or a Medical Panel, capable of working in suitable employment on a full-time basis (as he then was) was great – leaving only the careful calculation of the two comparators to be made to assess his prospects. The later decisions not to pursue leave in respect of economic loss, or to seek judicial review of the Medical Panel’s opinion, strongly suggests that that assessment should have persuaded the plaintiff and his advisors that he would not succeed.

35 In all the circumstances of this case, and after reviewing all the material relied upon, I am not persuaded that I should exercise my discretion to certify for the fees of counsel for the plaintiff incurred in the Medical Panel referral process, which focussed on questions of work capacity, upon which issue the plaintiff has conceded.

36 One other matter. It was submitted that the offer represented no compromise at all on the defendant’s behalf (accepting for the moment the relevance of this), on the basis that it was clear the plaintiff would succeed in obtaining leave for pain and suffering damages, at the least. The medical questions referred to the Medical Panel, without complaint by the plaintiff, included Question 2:

“Q2 Does any current medical condition of the Plaintiff’s:
2.1. Right thumb/hand/arm;
as identified by the Medical Panel in answer to Question 1 result from, or is it materially contributed to by, the accepted injury to the right thumb/hand/arm?
Answer: The Panel is of the opinion that the Plaintiff’s current mild residual dysfunction of the right thumb and wrist secondary to an aggravation of pre-existing mild first CMC degenerative change and de Quervain’s tenosynovitis treated operatively results from and is materially contributed to by the accepted injury”

raising an issue as to whether his current problems were relevantly connected to the original injury. Had the Medical Panel returned a negative answer to this question, the originating motion would very likely have been dismissed altogether.

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^[1] Affidavit of Cameron Cox sworn on 10 February 2021, paragraph [10]

^[2] Santos v SS Formwork Pty Ltd (Ruling) (Unreported) County Court of Victoria, Judge Wischusen, 30 May 2019
^[3] Gellard v Victorian WorkCover Authority [2017] VCC 1919

^[4] Dowling v Myers Street Family Medical Practice Pty Ltd (Ruling as to Costs) [2018] VCC 2314, Judge Coish
^[5] Grech v Victorian WorkCover Authority [2020] VCC 968

^[6] Traumanis v State of Victoria (Ruling) (Unreported) County Court of Victoria, Judge Carmody, 26 May 2017
^[7] Calderbank v Calderbank [1975] 3 All ER 333
^[8] [2005] VSCA 298

^[9] Gellard v Victorian WorkCover Authority (supra) at paragraph [34]. See also Giankos v SPC Ardmona Operations Ltd [2011] VSCA 121, decided on the legislation before the 2010 LCO came into effect, at paragraphs [119]-[134]
^[10] Plaintiff’s affidavit sworn on 1 July 2019, paragraph [22]
^[11] Ibid, paragraph [29]
^[12] Pages 8 and 13 of the Medical Panel’s Certificate of Opinion and Reasons for Decision

^[13] For example – Tralongo v Malios & Ors [2007] VSC 239; Cladingboel v Newcrest Mining Limited  [2007] VSC 345 ; Ripper v Kotzman [2008] VSC 448; Jasky v Dr Cooney & Ors [2009] VSC 51; Smith v Commonwealth of Australia [2009] VSC 419; Mikhman v Royal Victorian Aero Club & Ors [2012] VSC 42; Karabinis v Bendrups & Ors [2017] VSC 648
^[14] In submissions, paragraph 9, counsel put it:

“The calculation of the 40% loss of earnings was based, as follows:

(a) In 2014 FY the Plaintiff earned $84,782 per annum,

(b) In 2019, in his post injury role he earned $56,160 per annum working full time hours,

(c) In order to meet the 40% test, the Plaintiff needed to earn less than $50,869.

(d) When working 30 hours per week only, the Plaintiff met the 40% test,

(e) When the EBA increases of 5% per year have been factored into, and comparable earnings of a co-worker, the income that the Plaintiff would have received was over $100,000, then the Plaintiff easily satisfies the 40% test.”

I note that if there was any force in paragraph (e), the plaintiff would have succeeded despite the Panel’s opinion and the highest suggested earnings in the vocational evidence referred to.

^[15] Herald & Weekly Times Ltd and Anor v Jessop [2014] VSCA 292