Quality Plumbing & Building Contractors Pty Ltd v Schloss 
[2015] NTSC 80

PARTIES:	QUALITY PLUMBING & BUILDING CONTRACTORS PTY LTD

	v

	SCHLOSS, Rodney William

TITLE OF COURT:	SUPREME COURT OF THE NORTHERN TERRITORY		

JURISDICTION:	SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING APPELLATE JURISDICTION

FILE NO:	LA 6 of 2015 (21354573)

DELIVERED:	7 DECEMBER 2015

HEARING DATES:	18 SEPTEMBER 2015

JUDGMENT OF:	KELLY J

APPEAL FROM:	J NEILL SM

REPRESENTATION:

Counsel:
	Appellant:	W Roper
	Respondent:	B O’Loughlin

Solicitors:
	Appellant:	Hunt & Hunt
	Respondent:	Priestleys

Judgment category classification:	C
Judgment ID Number:	KEL15020
Number of pages:	6
IN THE SUPREME COURT 
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Quality Plumbing & Building Contractors Pty Ltd v Schloss 
[2015] NTSC 80

No. LA 6 of 2015 (21354573)

	BETWEEN:

	QUALITY PLUMBING & BUILDING CONTRACTORS PTY LTD
	Appellant

	AND:

	RODNEY WILLIAM SCHLOSS
	Respondent

CORAM:	KELLY J

REASONS FOR JUDGMENT

(Delivered 7 December 2015)

[1]	On 9 September 2015 I allowed the appeal in this matter and remitted it to a differently constituted Work Health Court for determination with the following directions:
(a)	The Worker is to have leave to amend his defence to counterclaim to plead the case ultimately argued before the Work Health Court on 25 February 2015.
(b)	The Employer is to have leave to adduce the further evidence referred to in the affidavit of Ms Peggy Cheong sworn on 25 February 2015 including requiring the Worker for cross-examination as a precondition for admission of the Worker’s affidavit.
(c)	The Worker is to have leave to adduce further evidence limited to evidence in reply to the evidence referred to in (b).
I also directed that when the amount of the Worker’s loss of earning capacity has been determined by the Work Health Court, the arrears of benefits payable are to be calculated on the basis that the amended benefits are to apply from the date of the notice of decision (9 October 2013).
[2]	The successful appellant has applied for orders:
(a)	that the respondent pay the appellant’s costs of and incidental to the appeal on an indemnity basis, and
(b)	that the respondent pay the appellant’s costs of the proceedings below from 21 February at 100% of the Supreme Court scale.
[3]	The appellant claims to be entitled to indemnity costs on the appeal on two bases:
(a)	alleged misconduct in the conduct of the case by counsel for the respondent; and
(b)	what is asserted to have been an imprudent refusal of a Calderbank offer by the respondent before the hearing at first instance which, if it had been accepted, would have rendered all subsequent proceedings (including the appeal) unnecessary.
[4]	The Calderbank offer is also the basis of the application for costs of the proceedings below.
Alleged misconduct in the conduct of proceedings
[5]	The alleged misconduct relied on by the appellant is a forensic decision by counsel for the respondent to abandon the pleaded case at the trial in the Work Health Court after the close of the appellant’s case.  The appeal was allowed on the ground that the learned magistrate ought not to have allowed the respondent to do this except on conditions that would ensure procedural fairness to the appellant.  The fact that the appeal succeeded on that ground does not mean that the conduct of counsel for the respondent was improper or amounted to misconduct and I am not prepared to find that there was any impropriety or misconduct.  In fact I specifically noted in my reasons for decision on the appeal: “I am not implying any criticism of counsel for the Worker who had formed the view that the case as pleaded was legally untenable and put forward an alternative, arguable case.  It was up to the learned magistrate to ensure that fairness was accorded to both parties in the process.”

Effect of the Calderbank letter
[6]	The appellant offered to settle the Work Health proceeding on the basis that it would pay benefits to the respondent based on an earning capacity of $505 per week.  The offer was rejected by the making of a counteroffer that benefits be assessed on the basis of an earning capacity of $388 per week.  The appellant submits that the rejection of this offer was unreasonable as the Work Health Court found the respondent’s earning capacity was $515.30 per week and the only matter still to be determined is the respondent’s earning capacity (if any) during the 12 weeks school holidays.  
[7]	It is too soon to determine whether the refusal of this offer was unreasonable.  It is too soon even to determine whether any judgment the respondent ultimately achieves in the Work Health Court will be more or less favourable than the offer made by the appellant.  The matter has been remitted to the Work Health Court for determination.  As I noted in the judgment on the appeal, this will require a consideration of the relevant evidence in relation to “the amount, if any, the Worker is from time to time reasonably capable of earning in a week in work he or she is capable of undertaking”.  It is only when that determination has been made that it will become clear whether the judgment of the Work Health Court is more or less favourable than the Calderbank offer.
[8]	I therefore decline to award costs of the appeal on an indemnity basis.  
[9]	I also decline to make an award of costs in relation to any part of the proceedings below.  The question of those costs would be more appropriately determined by the Work Health Court at the conclusion of those proceedings.
[10]	The respondent has submitted that the appellant should be deprived of a percentage of its costs on the appeal on two grounds:
(a)	that the appellant was only partially successful on the appeal; and
(b)	that the appellant did not make an application to reopen its case in the Work Health Court, and that if such an application had been made and allowed, the appeal on the ground on which the appellant succeeded would have been unnecessary. 
[11]	I do not think that this is a case in which it is appropriate to deprive the successful appellant of part of its costs.
(a)	The appellant was substantially successful and was not unsuccessful in any aspect of the appeal.  (The appellant succeeded on Ground 4; Ground 5 was not argued; Ground 3 was conceded and I found it unnecessary to decide Grounds 1 and 2.)
(b)	It is true that the appellant did not formally make application to re-open its case and that counsel for the appellant confined his submissions to arguing that the respondent ought not be allowed to make submissions on the basis of a case which had not been pleaded and of which he had no notice.   However, it needs to be kept in mind that he was faced with a case which had not been pleaded and of which he had no notice.  I do not think that the forensic decisions of either counsel necessarily made under pressure and without time for reflection and planning (in the one case following a last minute awareness that the pleaded case was doomed to fail, and in the other case following a surprise change of approach by the other side) warrant any departure from the usual costs order. 
[12]	I order the respondent to pay the appellant’s costs of and incidental to the appeal to be agreed or taxed on the standard basis.