Citation: Nicoll v Dobeson; Nicoll v The Workers Compensation Nominal Insurer (No 4) [2014] NSWDC 255
Court: District Court of New South Wales
Date: 25 August 2014
Judge: P Taylor SC DCJ
Background
The plaintiff was a security guard employed by a labour hire company called Men in Black and placed at the Sussex Inlet RSL Club. She was assaulted by two individuals she was escorting from the Club. Both assailants were subsequently found to have engaged in criminal conduct.
The dispute came before the District Court across two sets of proceedings heard together. The first was the plaintiff's negligence claim against her two assailants and the Club. The second was a separate claim against the Workers Compensation Nominal Insurer, which stood in the position of her employer's insurer and had already paid workers compensation to her. Both proceedings were resolved in the substantive judgment of 16 July 2014 (No 3), and this fourth judgment dealt with the outstanding questions of final orders, apportionment, and costs.
Legal Issues
- What proportion of the plaintiff's damages should be attributed to the Workers Compensation Nominal Insurer (as the employer's insurer), given that the other liable parties had engaged in criminal conduct?
- What final monetary orders should flow in each of the two sets of proceedings?
- How should costs be allocated between the plaintiff and the Insurer, given that the Insurer had made a pre-judgment settlement offer exceeding the amount ultimately awarded?
- How should the Insurer's cross-claims against the assailants and the Club be resolved?
Decision
Apportionment between negligent and criminal parties
The court acknowledged that parties who engage in criminal conduct ordinarily bear a greater proportion of damages than a party who was merely negligent. However, the appropriate apportionment depends on the nature and gravity of the duty breached by each party. In this case, the employer had admitted liability at the outset, meaning there was little evidence before the court about the precise character or seriousness of its breach.
The court declined to infer in the Insurer's favour that the employer's breaches were minor, particularly because the Insurer had the opportunity to lead evidence minimising the gravity of those breaches and did not do so. Faced with insufficient evidence to distinguish the relative culpability of the three liable parties, the court applied the principle that "equality is equity," allocating one-third of the damages to the Insurer. The court recognised this was at the higher end of the scale where criminal conduct was involved but noted it was less than the proportion awarded to a negligent party in the comparable decision in Khan v Hadid (No 2).
Quantum of the Insurer's liability
The total damages for which the Insurer bore responsibility were calculated at $20,741.84 (after correcting an error in an earlier judgment about out-of-pocket expenses). One-third of that figure produced a judgment sum of $6,913.95 against the Insurer.
Costs between plaintiff and Insurer
The Insurer sought a costs order under the Workers Compensation Regulation 2010 on the basis that its mediation offer exceeded the amount the plaintiff ultimately recovered. The court accepted that the offer was higher than the judgment sum and ordered each party to bear their own costs, rather than awarding costs in the plaintiff's favour.
Cross-claims
The Insurer's cross-claim against the Club was dismissed and the Insurer was ordered to pay the Club's costs of that cross-claim. The cross-claim against one assailant produced a judgment for the Insurer of $118,044.42. The cross-claim against the other assailant was not pressed and was dismissed.
Orders Made
Setting aside prior orders:
- Orders 1 to 4 made on 16 July 2014 were set aside.
In proceedings 2009/339941 (plaintiff v assailants and Club):
- Judgment in favour of the Club against the plaintiff.
- Plaintiff to pay the Club's costs as agreed or assessed.
- Plaintiff to pay the Club's costs on an indemnity basis from 9 May 2013.
- Cross-claim against the first cross-defendant (Dobeson) dismissed, no order as to costs.
- Cross-claim against the second cross-defendant (Hammond) dismissed, no order as to costs.
- First and second defendants (Dobeson and Hammond) to pay the plaintiff's costs of the proceedings.
In proceedings 2012/281640 (plaintiff v Workers Compensation Nominal Insurer):
- Cross-claim against the Club dismissed.
- Insurer to pay the Club's costs of the cross-claim as agreed or assessed.
- Judgment for the plaintiff against the Insurer in the amount of $6,913.95.
- As between the plaintiff and the Insurer, each party to bear their own costs.
- Judgment for the Insurer against Dobeson in the amount of $118,044.42.
- Cross-claim against Hammond not pressed and dismissed.
- Dobeson to pay the Insurer's costs of the cross-claim against him, except for costs relating exclusively to the Hammond cross-claim.
Key Takeaways
- Where evidence of an employer's precise breach of duty is sparse, a court may decline to draw inferences in favour of the employer's insurer on the gravity of those breaches, particularly where the insurer had the opportunity to call evidence and did not.
- The District Court applied the "equality is equity" principle to achieve a one-third apportionment among three liable parties when the relative culpability of a negligent employer could not be properly assessed against the criminal conduct of two co-defendants.
- Criminal conduct by co-defendants does not automatically reduce a negligent party's share to a minimal proportion. The court noted that a one-third share for a negligent party, while high, remained below the proportion approved in Khan v Hadid (No 2) [2008] NSWSC 119.
- Under the Workers Compensation Regulation 2010, a claimant who recovers less than a defendant's settlement offer made in mediation may face an adverse costs outcome, or at least lose the benefit of a costs order in their favour.
- Running two related proceedings together, with evidence in one being evidence in the other, does not prevent the court from making separate and distinct final orders in each set of proceedings.
Legislation and Cases Referenced
Legislation:
- Uniform Civil Procedure Rules 2005 (NSW), r 42.1
- Workers Compensation Regulation 2010 (NSW), cl 105, cl 106, cl 109
Cases:
- Khan As Trustee for the Khan Family Trust v Hadid; Hadid v Khan As Trustee for the Khan Family Trust (No 2) [2008] NSWSC 119
- Nicoll v Dobeson; Nicoll v The Workers Compensation Nominal Insurer (No 3) [2014] NSWDC 109