Berhane v Woolworths Limited (No 2) [2013] QDC 208

DISTRICT COURT OF QUEENSLAND CITATION: Berhane v Woolworths Limited (No 2) [2013] QDC 208 PARTIES: BERHANE GHEBREIGZIABIHER BERHANE (applicant) and WOOLWORTHS LIMITED (respondent) FILE NO/S: OA2512/2013 DIVISION: PROCEEDING: Originating Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 12 September 2013 DELIVERED AT: Brisbane HEARING DATE: Submissions in writing JUDGE: McGill DCJ ORDER: The respondent pay the applicant’s costs, of and incidental to the application, to be assessed. CATCHWORDS: EMPLOYMENT LAW – Injury of employee – pre-litigation procedures – application to court – whether restriction on the power to award costs. COSTS – Indemnity costs – when ordered – whether application made necessary by respondent’s taking a position contrary to all relevant authorities – whether respondent behaved unreasonably. Workers' Compensation and Rehabilitation Act 2003 s 318C. Brown v Marine Contracting Pty Ltd (No 2) [2012] QSC 345 – followed. Calvert v Mayne Nickless Ltd (No 2) [2006] 1 Qd R 141 – applied. Clarkson v Australian Meat Holdings Pty Ltd [2003] 2 Qd R 122 – followed. Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 – considered. Di Carlo v Dubois [2002] QCA 225 – considered. Kidd v Toll North Pty Ltd [2012] QSC 220 – followed. Ley v Woolworths Ltd (No 2) [2013] QSC 193 – followed. -- 1 of 6 -- 2 Morris v Woolworths Limited (D3198/2012, 14.9.12, unreported) – considered. Muckerman v Skilled Group Ltd (No 2) [2013] QSC 194 – followed. Rosniac v GIO (1997) 41 NSWLR 608 – considered. Sheridan v Warrina Community Cooperative Ltd [2004] QCA 308 – applied. Woolworths Limited v Rodionov [2011] QDC 169 – followed. COUNSEL: R W Morgan for the applicant J S Miles for the respondent SOLICITORS: Shine Lawyers for the applicant DLA Piper Australia for the respondent [1] In this matter I dealt with the applicant’s substantive application on 23 August 2013: [2013] QDC 194. I subsequently received written submissions in relation to costs. The respondent submitted that the Workers' Compensation and Rehabilitation Act 2003 (“the Act”) s 318C applies, the applicant’s application was an “interlocutory application” within that section, and this was not a case where there was any unreasonable delay by one of the parties. The applicant submitted that s 318C does not apply. I also received submissions, at my prompting, as to whether the costs, if not restricted by s 318C, should be awarded on the indemnity basis. I will deal with the two questions separately. Power to award costs [2] Section 318C was introduced into the Act by the Workers' Compensation and Rehabilitation and Other Legislation Amendment Act 2010, commencing on 1 July 2010. Previously, there was a provision to similar effect but in slightly different terms in s 316 of the Act, and earlier still in the WorkCover Queensland Act 1996 s 325. Whether s 318C applied to an application brought under the Act in relation to the pre-litigation procedure provisions was considered by me in Woolworths Limited v Rodionov [2011] QDC 169 when I noted that prior to the 2010 amendment there had been differing views expressed by Supreme Court Judges as to the correct interpretation of s 316, or the earlier equivalent.1 I expressed the view that the effect of the 2010 amendment was to clarify the situation by confirming the analysis in Clarkson v Australian Meat Holdings Pty Ltd [2003] 2 Qd R 122. I set out my reasons in that decision, based on an analysis of the relevant provisions of chapter 5 part 12 of the Act in their amended form. 2 I have not been persuaded to 1 Applied: Re Reeves [2000] 2 Qd R 665; Maconachie v Woolworths Ltd [2005] QSC 250; Edmunds v D Dunn Industries Pty Ltd (No 2) [2007] 2 Qd R 128; Handover v Consolidated Meat Group Pty Ltd [2009] 2 Qd R 133; Karaka v Woolworths Ltd (5878/2009, Daubney J, 15-6-09, unreported). Not applied: Re Lankeet [1994] QSC 73; Clarkson (infra); Brown v Marine Constructing Pty Ltd (No 2) [2012] QSC 345. 2 I could have added a reference to the statement of Williams JA in Sheridan v Warrina Community Cooperative Ltd [2004] QCA 308 at [6], concerning s 325 of the 1996 Act: “The scope of operation -- 2 of 6 -- 3 depart from them by the submissions on behalf of the respondent, which were essentially that I should follow the earlier decisions to the contrary. [3] In case those reasons were insufficiently clear, specifically apropos s 318C, I will set them out again.3 That section provides as follows: “An order about costs for an interlocutory application may be made under division 2 only if the court is satisfied that the application has been brought because of unreasonable delay by 1 of the parties.” (emphasis added) [4] Section 315 provides that division 2 “applies if the claimant is a worker who has a WRI of less than 20% or no WRI.” Section 316 then goes on to provide in subsection (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.” [5] It then goes on to deal with orders for costs in a context where there has been final judgment in the proceeding litigating the claim for damages brought by the claimant. It seems to me necessarily to follow that s 316 is talking about the claimant’s proceeding by which that claim for damages is litigated. In division 3 then s 318A provides: “(1) A court may make no order about costs to which division 1, 2 or 2A applies except the orders for costs provided for in the division. (2) Subsection (1) applies subject to this division.” [6] The restriction in s 318A, when speaking relevantly about costs to which division 2 applies, is therefore speaking about costs in the claimant’s proceeding by which the claimant’s claim for damages is being litigated. It contains no restriction on orders which may be made in other proceedings brought by the claimant or indeed anyone else. Section 318C, in dealing with costs of an interlocutory application “made under division 2”, can therefore only operate in relation to an order within s 316(1), that is an interlocutory order in the claimant’s proceeding. That is not what this is. [7] The point is not whether the order is interlocutory or final, whether for the purpose of the application of some statutory test in relation to appeal, or for the purpose of a rule restricting the use of hearsay in affidavits, which were the relevant purposes in the cases relied on by the respondent in its submissions before me,4 or for any other purpose. The relevant restriction is that the sections are concerned with orders for costs “in the claimant’s proceeding”.5 This is obviously a reference to the of s 325 is highlighted by subsection (4) which deals with all interlocutory applications brought in the proceeding.” (emphasis added) 3 They are the same reasons expressed more eloquently by Peter Lyons J in Brown v Marine Contracting Pty Ltd (No 2) [2012] QSC 345, concerning the Act prior to the 2010 amendments. 4 Hall v Nominal Defendant (1966) 117 CLR 423 at 440; ex parte Britt [1987] 1 Qd R 221. 5 It has occurred to me that if in 1996 the legislature had used the old fashioned term “action” rather than the modern term “proceeding” all this debate should have been avoided, since it would have been obvious that the restrictions did not apply to an application under the Act commenced (then) by Originating Summons or Notice of Motion. -- 3 of 6 -- 4 proceeding to enforce the claim for damages.6 Indeed, that is the whole purpose of chapter 5, within which these provisions lie. It regulates the commencement of a proceeding claiming damages for personal injury, how that proceeding is to be conducted, and, in part 12, the cost orders that can be made in such a proceeding. For example, part 7 division 1, states the conditions that must be satisfied before a complainant can start a court proceeding. That obviously refers to the proceeding for damages, as indeed is stated in s 295. Plainly it cannot apply to a proceeding started by a claimant seeking a declaration under s 297. Indeed, s 295 talks about a proceeding in a court for damages, and the subsequent sections in division 1 talk about “the proceeding”, that is the proceeding in a court for damages. [8] As I said in Rodionov, when one reads the Act in its amended form, and particularly chapter 5 as a whole, it is clear to the point of demonstration that part 12 of chapter 5 is applying only to costs in the proceeding by which the claimant claims damages. It has nothing whatever to do with any other proceeding, such as a proceeding arising out of a dispute in relation to the application of the pre-litigation procedures. In these circumstances, it is unsurprising that there have been several decisions in relation to the provisions of the Act following the 2010 amendments all of which interpret part 12 in this way.7 The respondent has not been able to refer me to a single decision of any court in which the interpretation it contended for has been accepted, in relation to the Act in its amended form, and I know of none. In my opinion the interpretation of s 318C contended for by the respondent in this case should now be recognised as unarguable. Indemnity costs [9] That then raises the further question, of whether, in relation to the substantive application, the applicant should have his costs on the indemnity basis. It occurred to me that, where all of the relevant authorities support the view that in circumstances such as this there is only one injury and the relevant documents are all relating to the same injury, so that the point taken by the respondent was without foundation, and where there has been, not all that long ago, a case involving the respondent itself, Ley v Woolworths Limited [2013] QSC 59, which is not meaningfully distinguishable from the present case, in which the position contended for by the respondent was rejected by the Supreme Court, and where there was no appeal brought to the Court of Appeal8 from that decision, the persistence of the respondent in taking this point is due to obduracy on the respondent’s part, and if the respondent is going to adopt that attitude, so that in substance applicants are being forced to come to the court in order to get their rights under the Act because the respondent is refusing to accept judicial interpretation of the relevant provisions of the Act, the respondent should pay costs incurred by such applicants on the indemnity basis. 6 As was recognised, in relation to s 325 of the 1996 Act, by Jerrard JA with whom the other members of the Court agreed in Calvert v Mayne Nickless Ltd (No 2) [2006] 1 Qd R 141 at [9]: “By its terms s 325 can only apply where a court awards damages to the worker.” This was not the only reason for that decision, but it strikes me as clear authority against the conclusion reached in Edmunds (supra) at [23]. 7 Kidd v Toll North Pty Ltd [2012] QSC 220; Ley v Woolworths Ltd (No 2) [2013] QSC 193; Muckerman v Skilled Group Ltd (No 2) [2013] QSC 194, in the Supreme Court alone. 8 Conceded by counsel for the respondent during the hearing of the substantive argument. -- 4 of 6 -- 5 [10] In response the respondent draw attention to a number of general statements in a number of cases which have considered the circumstances under which costs will be ordered on an indemnity basis, other than pursuant to some particular rule such as UCPR r 360. One of these, the decision of Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, is a case which has come to be regarded as a leading case in this area, largely because it sets out a number of principles or guidelines including the provision of a list of examples which have been thought to warrant the exercise of the discretion to grant indemnity costs, which however was said not to be exhausted. These include (p 233): “the fact that the proceedings were commenced or continued … in wilful disregard of known facts or clearly established law; the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions … .” [11] Bearing in mind the collection of authorities which has now built up against the proposition for which the respondent contended, it seems to me that its position was contrary to clearly established law, and that the application had been made necessary by, and had been resisted on the basis of, groundless contentions on the part of the respondent. I am also conscious of what was said by White J, with whom the other members of the court agreed, in Di Carlo v Dubois [2002] QCA 225, particularly the proposition at [40]: “It is important that applications for the award of costs on the indemnity basis not be seen as too readily available when a particular party against whom the order is sought is seen to carry responsibility for the state of affairs calling for a costs order without some further facts analogous to those mentioned in Colgate and other considered decisions.” [12] Her Honour had just referred to Colgate, and the decision in Rosniac v GIO (1997) 41 NSWLR 608, including the observation at p 616 that: “...the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity.” [13] Accordingly it requires more than just a situation where after argument the position contended for by a party has been rejected. What concerned me was rather that the respondent, which as a self-insurer engages in a good deal of litigation including litigation governed by the Act, might be in effect refusing to accept the decisions of courts as to the application of the Act so as to make life difficult for claimants, notwithstanding that there had been a series of similar decisions, including one in an application brought against it, where its approach has been rejected, and where it could cite no example where its approach has been accepted. That would be a position which was not merely wrong, but unreasonable, and therefore also satisfies the test in Rosniac. [14] The respondent however has drawn to my attention a decision by another Judge of this court in a matter last year similar to the present case where the relief sought by the applicant claimant was refused: Morris v Woolworths Limited (D3198/2012, -- 5 of 6 -- 6 14.9.12, unreported). This decision is not available on the court website, but in fact a copy of it was enclosed with a letter from the solicitors for the respondent to the solicitors for the applicant of 28 February 2013, which with that copy is Exhibit MJB11 to an affidavit filed on 29 July 2013 and read in the substantive proceeding. So far as I can recall my attention was not drawn to it at the time. I have since read the reasons, which were delivered by her Honour ex tempore. With all due respect to her Honour, on the basis of those reasons, her Honour’s approach appears to be inconsistent with that which I have set out in my reasons of 23 August 2013, and I disagree with her Honour’s analysis. [15] Her Honour rejected the submission from the applicant in that matter that the date of the injury was irrelevant, presumably a reference to the date assigned for the injury in the notice of assessment, and said that none of the authorities went that far. Her Honour referred to the passage in paragraph [28] of the judgment of Dalton J in Andersen v Aged Care Employers Self Insurance [2011] QSC 101, a decision considered in my reasons where I pointed out at [16] that what was significant about that decision was the conclusion that the function of a notice of assessment was to assess injury and impairment and not to make findings about causation or the date of the event that caused the injury. Her Honour appears to have interpreted that decision in a different way, and distinguished it on the basis that the date allocated was in her case (as in this one) consistent with material then before the employer. As I have already said, that was not the point. It is an interpretation which disregards the important distinction between “injury” and “event” which has been emphasised in other decisions, including decisions of the Court of Appeal. [16] It may I suppose put a slightly different complexion on things that, notwithstanding the substantial weight of authority supporting the view which I have adopted in relation to the substantive application in my reasons of 23 August 2013, the respondent is able to point to one Judge of this court who has apparently adopted a different view. In circumstances where the position contended for by the respondent has in fact been accepted by another Judge, I am prepared on this occasion to give the respondent the benefit of the doubt, and I will not in this matter order costs on the indemnity basis. I should say however that if in some future matter the respondent comes before me adopting the same contention, without any prior authoritative determination that my view of the matter is wrong, I think that it will be difficult to resist the conclusion that the respondent’s attitude is motivated by sheer obduracy, so that it is appropriate to order costs on the indemnity basis. In my view, the respondent should either put up or shut up: it should either appeal my decision, or accept that the law is as stated there and in the other cases to which I have referred, and act accordingly in the future. -- 6 of 6 --