Cost of amendment and non disclosure – the WCRA straight jacket

15 April 2009 Topics: Workers’ compensation

Shields v State of Queensland (unreported) No 75/2007
Supreme Court Application 10 February 2009
McMeekin J

This recent Supreme Court application again highlights the constraints of the Workers’ Compensation and Rehabilitation Act 2003 (the “WCRA”) when it comes to awarding costs in another’s favour and how judicial creativity can be used to restore equitable balance.

The plaintiff applied for leave to amend her statement of claim on the eve of trial. The proposed amendments pleaded a completely different description and cause of accident to that advanced at the compulsory conference. The revised pleading reflected the content of a video prepared by the plaintiff some years earlier and prior to the compulsory conference.  The plaintiff’s solicitors had failed to disclose the video although conceded that it ought to have been disclosed. This rendered the compulsory conference a wasted exercise as were some of the investigations carried out by the insurer.

Ultimately, Justice McMeekin felt he had little choice but to allow the amendment. When it came to awarding costs he recognised that the WCRA prevented him from awarding costs in the insurer’s favour, other than in respect of the delayed application to amend and in respect of costs thrown away prior to the commencement of proceedings. His Honour recognised that he had no power to award costs in the insurer’s favour, for the period after the claim was issued in the Court, pursuant to Sheridan v Warrina Community Co-Operative Limited & Anor [2004] QCA 3008.

However, Justice McMeekin did declare that the previous compulsory conference and written final offers were nullities, and ordered that a further conference be held, and further offers be exchanged.

His Honour was initially tempted to award indemnity costs against the plaintiff’s solicitors personally. Ultimately, however, a standard costs order was made against the plaintiff’s solicitors, with their consent. His Honour thought the case came close to one where an indemnity cost order would be made, but not close enough. For such an order to be made, the insurer would have needed to demonstrate something out of the “ordinary, special or unusual”.

(His Honour made no finding with respect to the validity of the proceedings commenced following the original compulsory conference, although on the principles in Australian Meat Holdings Pty Ltd v Hamling [2005] QCA 415, such proceedings would be considered to be valid, but subject to discretionary strike-out. We assume that if the matter proceeds beyond the re-ordered compulsory conference, the parties will agree (or the plaintiff will seek an order) that the original litigated steps be deemed to be valid steps in the action.

The decision is another example of the severe limitation the legislation places on the Courts, in respect of costs, once a Court claim has been issued.

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