Ace v AAI Limited t/as GIO
[2021] NSWPIC 289
•13 August 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | ACE v AAI Limited t/as GIO [2021] NSWPIC 289 |
| CLAIMANT: | ACE |
| INSURER: | AAI Limited t/as GIO |
| MEMBER: | Brett Williams |
| DATE OF DECISION: | 13 August 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Miscellaneous Claims Assessment; dispute about legal costs and other costs and expenses that the Claimant is entitled to recover from the insurer in connection with the proceedings; claimant sought order that insurer pay his costs on the basis that exceptional circumstances exist within the meaning of s8.10(4)(b) of the Motor Accidents Injuries Act 2017; insurer submitted exceptional circumstances did not exist; AAI Limited v Moon considered; Held- issues in these proceedings did not represent a departure from the norm; not satisfied exceptional circumstances exist; claimant entitled to recover the maximum regulated amount for legal costs. |
| DETERMINATIONS MADE: | 1. The proceedings are discontinued. 2. The amount of the Claimant’s reasonable and necessary legal costs in connection with the proceedings assessed in accordance with the Motor Accident Injuries Act 2017 and Regulation 2017 is $1,660 plus GST. 3. The Claimant is entitled to recover from the Insurer expenses incurred obtaining documents from the NSW Police in the sum of $30 and the NSW Ambulance Service in the sum of $30. 4. A brief statement of my reasons for this determination are attached to this certificate. 5. I note that the Insurer has accepted liability to pay the Claimant statutory benefits in accordance with Part 3 of the Motor Accident Injuries Act 2017. |
Reasons for Decision
Issued under section 7.36(5) of the Motor Accident Injuries Act 2017
Background
The Claimant alleged that he suffered injury in circumstances that gave rise to entitlements under Part 3 of the Motor Accident Injuries Act 2017 (the MAI Act).
The Insurer initially accepted liability to make payments to the Claimant under Part 3 for the first 26 weeks post-accident.
Liability was subsequently declined by the Insurer on 4 January 2019 on the basis that the Claimant did not suffer injury as a result of a motor accident and that he was wholly or mostly at fault for the accident.
An internal review decision issued by the Insurer on 18 March 2019 determined that the Claimant did not suffer injury as a result of a motor accident. As a consequence, he did not satisfy section 3.1(1) of the MAI Act and was therefore not entitled to benefits under Pt 3. Given those findings, the internal reviewer did not determine whether the Claimant was wholly or mostly at fault for the accident.
The Claimant lodged an Application with the Dispute Resolution Service on 3 November 2020. The dispute constituted a miscellaneous claims assessment matter in accordance with Sch 2 of the MAI Act.
The Personal Injury Commission (the PIC) was established on 1 March 2021. These proceedings were commenced before the PIC was established. In accordance with Sch 1 Part 2 cl 14A and cl 14B of the Personal Injury Commission Act 2020 (the PIC Act), the proceedings constitute pending proceedings and pre-establishment proceedings that I am empowered to determine.
The matter was set down for assessment on 8 July 2021. In submissions dated 23 June 2021 the Claimant took the position that, given the insured driver was not available for cross examination, the proceedings could be determined on the papers.
By letter from its lawyers dated 29 June 2021 the Insurer informed the Claimant that it accepted liability for his claim for statutory benefits. In the circumstances, the assessment was vacated.
That left a dispute about the legal costs and other costs and expenses that the Claimant is entitled to recover from the Insurer in connection with the proceedings.
The Claimant seeks an order from the Commission that the Insurer pay his costs of the proceedings on the basis that exceptional circumstances exist within the meaning of s 8.10(4)(b) of the MAI Act.
The Insurer argues that exceptional circumstances don’t exist and that the Claimant should only recover his costs in accordance with the regulations. In those circumstances, his costs would be capped by the regulated maximum.
At the teleconference conducted on 14 July 2021 I informed the parties of my preliminary views in relation to the costs dispute as follows:
(a) the question of whether the claim fell within the ambit of the MAI Act, specifically whether the circumstances of the accident constituted a ‘motor accident’ as defined in s 1.4, was a complex issue and is a factor that would be taken into account when determining the costs dispute. I noted, however, that this consideration was not, on its own, determinative in terms of whether exceptional circumstances exist;
(b) the regulated maximum was not a mandatory allowance for costs. The matter to be determined is the quantum of the Claimant’s reasonable and necessary costs in connection with the dispute.
I encouraged the parties to engage in further discussions in relation to the Claimant’s legal costs with a view to agreement being reached. The parties have been unable to resolve the costs dispute.
The parties agreed that if I was required to make a determination about the Claimant’s costs I should also make an order that the proceedings are discontinued and note that the Insurer has accepted liability for the statutory benefits claim.
The parties submitted that the dispute about costs should be determined on the papers. Having considered both s 52 of the PIC Act and Procedural Direction PIC2 I concluded that the costs dispute could be determined on the papers. I am satisfied that sufficient information is available in connection with the proceedings to allow me to determine the dispute without holding any conference or formal hearing.
Claimant’s submissions
The Claimant relies on written submission dated 30 June 2021, 4 August 2021 and 10 August 2021.
It is argued that what constitutes "exceptional circumstances" should be considered against the totality of disputes for which the regulated fee is payable rather than the individual category of disputes in which the particular dispute under consideration happens to fall.
It is submitted that what is "exceptional" in terms of departure from the norm should be considered as against the totality of dispute types and categories for which the $1,660 fee applies and not the singular category of dispute under consideration (liability disputes).
The Claimant relies on San v Rumble (No. 2) [2007] NSWCA 259, a case addressing s 153(1) of the Motor Accidents Compensation Act 1999 and the "exceptional case" provision. In San, Campbell JA (with whom Beazley JA and Ipp JA concurred), relevantly stated [at 67]:
“A litigant who seeks to have a court displace, under Section 153(1), the regime that Section 151 creates, bears the onus of proving facts and presenting arguments that persuade the court that it is appropriate to make such an order. In deciding whether it is an "exceptional case" within the meaning of Section 153(1), the court needs to find that the circumstances of the instant case are unusual or out of the ordinary, whether that unusualness or being out of the ordinary arises from qualitative or quantitative factors. But, to adopt Kelly, the case need not be one that is unique, unprecedented or very rare. The conclusion that the case is exceptional can arise in any of the ways identified by Rares J in Ho. Beyond that, it seems to me, it is not possible for general guidance. As the New Zealand courts have found concerning the discretion that was the subject of Awa, it will be necessary to approach each application by careful consideration of the facts of the individual case.”
The Claimant also relies on the decision of Rares J in Ho v Professional Services Review Committee No 295 [2007] FCA 388 [at 26] that exceptional circumstances:
“...can include a single exceptional matter, a combination of exceptional
factors or a combination of ordinary factors which, although individually of
no particular significance, when taken together, are seen as exceptional.”
The Claimant submits that in this case the Commission would find that exceptional circumstances exist that justify payment of the legal costs incurred beyond the sum permitted by the regulated fee. It is emphasised that all that is required is that the Commission consider the circumstances to be unusual or out of the ordinary. The case need not be unique, unprecedented or very rare. Further, a combination of factors can be taken into account in considering the case exceptional.
The Claimant argues that exceptional factors in these proceedings include:
(a) the Insurer determined that the Police Report “should take precedence” over the Ambulance report. The Insurer relied upon opinion evidence, which is inadmissible, per section 76(1) of the Evidence Act, when initially denying liability for the accident. There was no indication of specialised knowledge on the part of Police and therefore the exception to the rule does not apply;
(b) statements contained in the Ambulance report were dismissed by the Insurer;
(c) statements contained in the Hospital clinical records were dismissed by the Insurer;
(d) statements provided by the Claimant as to his version of events were dismissed by the Insurer;
(e) the Insurer relied on the insured driver’s statement which has a significant omission in not indicating or explaining how the Claimant fell to the ground;
(f) the Insurer relied on the insured driver’s claim form in which she concedes that she was not looking at the time of the accident;
(g) the Insurer continued to rely on the evidence of the insured driver despite not being able to contact her and she would, in all likelihood, not be available for cross examination, and
(h) the Claimant was denied statutory benefits after 26 weeks of the accident as a result of the liability decision of the Insurer. The accident occurred on 9 August 2018 and the Claimant has been attending to all his treatment and care needs as a result of injuries sustained in the accident since 7 February 2019.
It is argued that had the above factors been taken into account by the Insurer, an Application to the DRS would have not been required.
It is submitted that the Commission would be comfortably satisfied that the circumstances can be considered "exceptional" and would ultimately allow costs above and beyond the regulated fee.
The Claimant argues that cases which involve “exceptional circumstances” may have an unusual degree of factual or legal complexity or for some other reason and requires the incurring of more substantial legal costs by a claimant. The Act permits the amount of legal costs recoverable under s 8.10 to exceed the maximum fixed by regulation, where that was reasonably required to prevent injustice, hardship or some other relevant adverse consequence.
It is submitted that the costs incurred by the Claimant in the proceedings are reasonable and necessary and have been incurred in circumstances giving rise to a liability on behalf of the Insurer.
Costs were initially claimed in the sum of $10,962.87 inclusive of GST, as particularised in a tax invoice dated 3 August 2021.
An amended tax invoice dated 10 August 2021 was provided to the Commission by the Claimant on 11 August 2021. The invoice is said to take into account the submissions made by the Insurer. This tax invoice is in the sum of $9,510.87 inclusive of GST, and is comprised as follows:
(a) professional fees - $7,000;
(b) photocopying and printing - $391.70;
(c) NSW Police GIPA application fees - $30;
(d) NSW Ambulance Service Records - $30;
(e) counsel’s fees - $1,200, and
(f) GST - $859.17.
Brief submissions dated 10 August 2021 address the Insurer’s submissions in relation to the statement from Mr Brewster, a witness to the accident. It is stated that whilst the Claimant’s lawyers initially made contact with Mr Brewster on 5 October 2020, his statement was not finalised and returned by Mr Brewster until 7 June 2021. There was an extended period where Mr Brewster could not be contacted. In those circumstances, it is argued that it was not reasonable to expect the Clamant to serve and rely on an unsigned and unverified statement of a witness, it being reasonable to suggest that any such unverified evidence would have been rejected by the Insurer. It is argued that, while the Insurer contends the statement of Mr Brewster drastically altered their view of the claim, the evidence subject to the witness statement is also partly presented in the NSW Ambulance Records which were dismissed by the Insurer as inferior to those of the NSW Police in its’ initial decision and internal review decision.
Insurer’s submissions
The Insurer argues that the dispute was of very narrow compass; the only issue to be determined in order to resolve the dispute was whether or not there had been a motor accident as defined in the MAI Act.
It is submitted that by the express wording of the Regulations the starting point must be that the regulated fees are to apply to almost all disputes, except where the claimant lacks capacity per 8.10(4)(a) or where circumstances are ‘exceptional’ to justify payment of costs incurred (8.10(4)(b)).
The Insurer relies on the decision of Justice Wright in AAI Ltd t/as GIO v Moon [2020] NSWSC 714 (Moon) [at 97] that the constraints on the power arising from s 8.10(4) of the MAI Act were designed to deal with "particular, unusual situations where the maximum costs fixed by the regulations may not be adequate" and that some cases may be exceptional "because they involve an unusual degree of factual or legal complexity or for some other reason, and this requires the incurring of more substantial legal costs by a claimant".
The Insurer submits that whether costs are "reasonable and necessary" is a matter that depends on the particular circumstances of each case.
It is argued that these proceedings did not involve an unusual dispute and that the dispute was so straightforward it was capable of resolution by adjudication on the papers.
Exceptional circumstances do not arise in this dispute such as to warrant a departure from awarding the Claimant’s costs as per the Regulations.
The appropriate order is that the Insurer pay the Claimant’s costs in accordance with the Regulations, at the maximum amount contemplated ($1,660 plus GST).
Determination
Section 7.37 of the MAI Act empowers me to make an assessment of the Claimant’s costs. Part 8 of the Act deals with costs and fees. Costs and expenses in relation to claims for statutory benefits are recoverable in accordance with s 8.10. The Claimant is (subject to s 8.10) entitled to recover from the Insurer the reasonable and necessary legal costs, and other costs and expenses, incurred by him in connection with the claim.
The regulations fix the maximum costs recoverable by a claimant in a miscellaneous claims assessment matter in the amount of $1,660.
The Commission can permit payment of legal costs incurred by a claimant but only if satisfied that exceptional circumstances exist that justify payment of legal costs incurred by the Claimant[1].
[1] S 8.10(4)(b)
The Insurer concedes that the Claimant should receive the regulated maximum, $1,660. I find that the sum of $1,660 plus GST represents the Claimant’s reasonable and necessary legal costs in connection with this miscellaneous claims assessment matter payable in accordance with the regulations.
The Claimant argues that exceptional circumstances exist that justify payment of legal costs incurred by him in excess of the regulated maximum. The Insurer argues to the contrary.
In Moon Wright J held [at 97] that when regard is had to section 8.10(4), the power to permit payment of legal costs can be seen as designed to deal with particular, unusual situations where the maximum costs fixed by the regulations may not be adequate. His Honour observed [at 99] that:
“other cases can be envisaged which are exceptional, because they involve an unusual degree of factual or legal complexity or for some other reason, and this requires the incurring of more substantial legal costs by a claimant. These cases fall within s 8.10(4)”.
Although I consider that the primary issue in dispute, namely whether the circumstances of the accident fell within the terms of s 3.1, can be characterised as complex, that alone is not determinative for the purposes of establishing exceptional circumstances within the meaning of s 8.10(4)(b).
I am not satisfied that the issues in these proceedings represented a departure from the norm. Nor am I satisfied that the issues were unusual or out of the ordinary. There was not a substantial body of evidence to be considered. The Claimant ultimately took the position that the matter could be determined on the papers. The matter did not involve, in my assessment, an unusual degree of factual or legal complexity. There is no other reason that satisfies me that exceptional circumstances exist. In the circumstances I am not persuaded that an order should be made by the Commission in accordance with section 8.10(4)(b).
I have found that the Claimant is entitled to recover the maximum regulated amount for legal costs. No separate allowance is to be made for counsel’s fees.
I allow the expenses associated with the NSW Police and Ambulance Service documents in the sum of $30 each. I consider that those expenses were reasonable and necessary.
The Claimant submits that the photocopying expenses claimed are reasonable and necessary because his lawyers maintain a paper copy of his file. I am not satisfied that I should make any allowance for photocopying. It is not clear to me on what basis those expenses were incurred in connection with the proceedings.
Brett Williams
Member (Motor Accidents Division)
Personal Injury Commission
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