GIO General Ltd v Smith (No 2)
[2011] NSWSC 998
•01 September 2011
Supreme Court
New South Wales
Medium Neutral Citation: GIO GENERAL LIMITED v SMITH & Ors INSURANCE AUSTRALIA LTD T/as NRMA INSURANCE v SMITH & Ors (No 2) [2011] NSWSC 998 Hearing dates: 25 August 2011 Decision date: 01 September 2011 Before: HOEBEN J Decision: In proceedings 2010/426730 Mr Smith is to pay the plaintiff's (GIO) costs.
In proceedings 2011/84996 Mr Smith is to pay the third defendant's (GIO) costs.
In proceedings 2011/84996 Mr Smith is to pay the plaintiff's (NRMA) costs.
In proceedings 2010/426730 Mr Smith is to pay the third defendant's (NRMA) costs.
In each matter Mr Smith is to be granted a certificate, if he is eligible, under the Suitors Fund Act 1951.
Catchwords: COSTS - Application of UCPR 42.1 - costs to follow the event - no adequate reason advanced for why costs should not follow the event. Legislation Cited: Motor Accident Compensation Act 1999
Suitors Fund Act 1951Cases Cited: Allianz Australia Insurance Ltd v Roger Ward & Ors [2010] NSWSC 720
GIO GENERAL LIMITED v SMITH & Ors; INSURANCE AUSTRALIA LTD T/as NRMA INSURANCE v SMITH & Ors [2011] NSWSC 802
Oshlack v Richmond River Council (1998) 193 CLR 72
Rodger v De Gelder & Anor [2011] NSWCA 97Category: Costs Parties: GIO General Limited - Plaintiff
Insurance Australia Ltd t/as NRMA Insurance - Plaintiff
Graham Smith - First Defendant
The Motor Accidents Authority of NSW - Second Defendant
NRMA Insurance Limited - Third Defendant
Graham Smith - First Defendant
Motor Accidents Authority of NSW - Second Defendant
GIO General Limited - Third DefendantRepresentation: Mr M A Robinson for the Plaintiff in 2010/426730
Matter No: 2011/00084996
Mr C Jackson for the Plaintiff in 2011/84996
Ms B Nolan for the First Defendant
Ms H Stenning for the Second Defendant
Matter No: 2010/00426730
Curwoods Lawyers - Plaintiff
Napier Keen - First Defendant
IV Knight, Crown Solicitor - Second Defendant
Moray & Agnew - Third Defendant
Moray & Agnew - Plaintiff
Napier Keen - First Defendant
IV Knight, Crown Solicitor - Second Defendant
Curwoods Lawyers - Third Defendant
File Number(s): 2010/00426730 2011/00084996
Judgment
HIS HONOUR:
Nature of proceedings
On 5 August 2011 I handed down judgment in favour of GIO General Ltd (GIO) and Insurance Australia Ltd trading as NRMA (NRMA) [2011] NSWSC 802. The judgment related to challenges by the GIO and NRMA to certificates issued by a Medical Review Panel appointed by the Motor Accidents Authority under s63 of the Motor Accident Compensation Act 1999 (MAC Act). I found that in each case the certificate and reasons were affected by an error of law on the face of the record and made an order in the nature of certiorari quashing them and remitting them to the Motor Accident Authority.
The injured claimant in each case was Graham Smith, who had suffered injuries in two motor accidents, which occurred on 12 March 2007 and 27 November 2007. In each matter Mr Smith was the first defendant and had opposed the relief sought by the GIO and NRMA.
This judgment relates to the costs of those proceedings.
Submissions and consideration
Mr Smith submitted that costs should not follow the event since the error had been caused by the Review Panel and that no additional costs had been incurred by him opposing the relief sought by the GIO and NRMA. Mr Smith submitted that GIO and NRMA would have had to have persuaded the Court as to the existence of error even if he had not opposed their applications.
Mr Smith submitted that the filing of two summonses was unnecessary. The second summons sought no additional relief.
Mr Smith submitted that in acting as a contradictor to the claims by GIO and NRMA, he was assisting the Court. Mr Smith submitted that in the circumstances of this case, where declaratory relief was being sought, he fulfilled a valuable role as a contradictor.
The GIO and NRMA relied upon r42.1 of the Uniform Civil Procedure Rules 2005 (UCPR) which provides:
"42.1 Subject to this Part, if the Court makes any order as to costs, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs."
They submitted that there was nothing unusual about this case and that UCPR 42.1 should be given effect to.
In support of that submission, GIO and NRMA relied upon the remarks of McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 at [66] - [67] where his Honour said:
"66 By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. As Devlin J said in Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co [No 2]103, when setting aside an arbitrator's costs award:
"the arbitrator is not directing his mind to one of the most, if not the most, important of the elements which ought to affect his discretion, namely the result of the case. Prima facie, a successful party is entitled to his costs. To deprive him of his costs or to require him to pay a part of the costs of the other side is an exceptional measure."
The combined force of the sentiments recognised above by Mason CJ, regarding the need for consistency in order to avoid injustice, and by Devlin J, regarding the most significant factor affecting the costs discretion, provides the jurisprudential basis for the important principle commonly referred to as the "usual order as to costs".
The usual order as to costs
67 The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation."
In relation to the proposition that the costs were incurred through no fault of Mr Smith, GIO and NRMA submitted that hardship would be mitigated if the Court granted or recommended that Mr Smith be granted a certificate under s6 of the Suitors Fund Act 1951. They referred the Court to Allianz Australia Insurance Ltd v Roger Ward & Ors [2010] NSWSC 720 (Hidden J) where such an order had been made and to the Court of Appeal decision in Rodger v De Gelder & Anor [2011] NSWCA 97 where the same order had been made. Rodger v De Gelder was an appeal from a decision of a judge of this Court in relation to a medical assessment under the MAC Act.
GIO and NRMA submitted that it was not correct to say that the second summons was unnecessary. They submitted that a separate certificate had issued in relation to each accident and that the two accidents were the subject of separate claims. As a result, orders quashing both certificates were required. They submitted that they had acted reasonably by filing a summons in each matter but then having the matters heard together.
Consideration
The principles applicable to the payment of costs in an administrative law matter such as this are well settled. As GIO and NRMA pointed out, the effect of UCPR 42.1 is clear. Absent some disentitling conduct on the part of GIO or NRMA, the losing party is generally expected to compensate the successful party for the expense it has been put to in bringing the proceedings. The matters raised by Mr Smith do not justify a departure from that rule.
The statement of principle in Oshlack v Richmond River Council provides the rationale and legal basis for the rule.
Moreover, it is not an unusual circumstance for a party who is successful at first instance to have that judgment or decision set aside on appeal. In those circumstances, costs still follow the event unless there is some disentitling conduct on the part of the successful party or some other good reason for that not occurring. Such good reason has not been identified in this case. The courts seek to avoid hardship by granting a certificate under the Suitors' Fund if applicable. That is the course which I propose to follow in this case.
Conclusion
The orders which I make are as follows:
(1) In proceedings 2010/426730 Mr Smith is to pay the plaintiff's (GIO) costs.
(2) In proceedings 2011/84996 Mr Smith is to pay the third defendant's (GIO) costs.
(3) In proceedings 2011/84996 Mr Smith is to pay the plaintiff's (NRMA) costs.
(4) In proceedings 2010/426730 Mr Smith is to pay the third defendant's (NRMA) costs.
(5) In each matter Mr Smith is to be granted a certificate, if he is eligible, under the Suitors Fund Act 1951.
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Decision last updated: 19 September 2011
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