WCRA: Reserved costs when the offer is not beaten

Clarricoats v JJ Richards & Sons Pty Ltd (No 2) [2018] QSC 30

McMeekin J

Background

On 29 September 2017, McMeekin J gave judgement for the defendant dismissing the plaintiff’s claim. His Honour gave leave for the parties to make submissions as to costs.

The defendant submitted that the plaintiff pay its costs, including reserved costs, from the date of a final written offer made pursuant to s 292 of the Workers’ Compensation & Rehabilitation Act 2003 (Qld) (“the Act”), having made an offer of $250,000.00 clear of the WorkCover refund which was not beaten.

Relevantly, the plaintiff’s notice of assessment under the Act stated a DPI of less than 20% and that the plaintiff did not have a terminal condition. Therefore, by reason of s 240(2) of the Act, costs in the plaintiff’s proceeding for damages was governed by s 316 of the Act.

Determination

Section 316 of the Act provides:

(1) No order about costs, other than an order allowed under this section, is to be made by the court in the claimant’s proceeding.

 (2) If a claimant or an insurer makes a written final offer of settlement that is refused, the court must, in the following circumstances, make the order about costs provided for –

 (a) if the court later awards an amount of damages to the worker that is equal to or more than the worker’s written final offer—an order that the insurer pay the worker’s costs on the standard basis from the day of the written final offer;

 (b) if the court later dismisses the worker’s claim, makes no award of damages or awards an amount of damages that is equal to or less than the insurer’s written final offer—an order that the worker pay the insurer’s costs on the standard basis from the day of the final offer.

 (3) If an award of damages is less than the claimant’s written final offer but more than the insurer’s written final offer, each party bears the party’s own costs.

Discussing the application of s 316 of the Act, his Honour stated as follows:

[4] … s 316(2)(b) requires that “the worker pay the insurer’s costs on the standard basis from the day of the final offer.” As s 316(1) makes plain there is no discretion.

[5] The only issue to determine is whether the plaintiff should pay the reserved costs. The costs came about because of an adjournment of the trial and are the costs thrown away by the adjournment.

[6] The basis of the claim for the costs thrown away is not articulated. Three possibilities occur to me. One is that it was not reasonable to delay the trial. A second is that the plaintiff pursued an unmeritorious claim and so should bear all the consequent costs, even though he was not personally at fault and could not by then reasonably avoid them. A third is that I have no discretion under the Act.

As to the first point, his Honour found that it was not reasonable to insist that the plaintiff travel to Rockhampton because of problems caused by substantial flooding affecting parts of Central Queensland and Northern New South Wales in April 2017. McMeekin J granted the adjournment on this basis. His Honour continued:

[9] As to the second point there is no rule that a party only becomes liable for costs if they are in some way personally at fault. In Electrolytic Zinc Co of Australasia Ltd v Cieslak[1], the Full Court said:

 “If a trial proves abortive for a reason beyond the control of the parties and not due to the fault of either of them, that in our view is (unfortunately) an accident of litigation of which both parties run the risk until the litigation is decided. When it is decided, we think the ordinary rule should apply — the loser should pay, in the absence of circumstances indicating some other result.”[2]

[10] Keane JA (as his Honour then was) made the same point in Queensland v Brooks & McCabe[3], where a hearing had to be vacated because of the illness of one of the judges on the Court of Appeal:

 “It is true that neither party was responsible for the circumstances which led to the vacation of the first hearing. But that is no reason to deny the successful party costs necessarily incurred by it in relation to the determination of the appeal in its favour. There is no principle of law that a successful party should recover only those costs which it has incurred by reason of the default of the other party.”[4]

McMeekin J noted that there were conflicting decisions in Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd [2012] QSC 102[7] and Zuecker v Bruggmann [2016] QSC 115[8], however his Honour stated that those cases were confined to their particular facts.

Ultimately, McMeekin J applied the principle identified by Keane J in Queensland v Brooks & McCabe [2006] QCA 523, holding that the plaintiff pay the defendant’s costs from 5 August 2015, including the costs thrown away by the adjournment, to be assessed on the standard basis.

David Cormack – Brisbane Barrister & Mediator

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