IAG Ltd t/as NRMA Insurance v Abiad
[2018] NSWSC 1603
•24 October 2018
Supreme Court
New South Wales
Medium Neutral Citation: IAG Ltd t/as NRMA Insurance v Abiad [2018] NSWSC 1603 Hearing dates: On the papers Date of orders: 24 October 2018 Decision date: 24 October 2018 Jurisdiction: Common Law Before: Harrison J Decision: (1) Order that the first and second defendants pay the costs of the plaintiff of and incidental to the proceedings in this Court, limited to the greater of either costs assessed by reference to and calculated by analogy in accordance with Schedule 1 Table A of the Motor Accidents Compensation Regulation 2015 or the costs, if any, to which the first and second defendants may become separately entitled in accordance with a certificate issued pursuant to the Suitors’ Fund Act 1951.
(2) Order that the first and second defendants respectively be given a certificate in respect of the proceedings in this Court pursuant to s 6 of the Suitors’ Fund Act 1951 if so entitled.Catchwords: COSTS – party/party – costs of successful judicial review application – general rule that costs follow the event – where costs likely to be disproportionate to the amount claimed – where costs limited Legislation Cited: Civil Procedure Act 2005 (NSW), ss 60, 98
Motor Accidents Compensation Regulation 2015 (NSW), sch 1
Suitors’ Fund Act 1951 (NSW), s 6C
Uniform Civil Procedure Rules 2005 (NSW), r 42.1Cases Cited: Henderson v QBE Insurance (Australia) Ltd (2013) 66 MVR 69; [2013] NSWCA 480
IAG Ltd t/as NRMA Insurance v Abiad [2018] NSWSC 1422
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11Category: Costs Parties: IAG Ltd t/as NRMA Insurance (Plaintiff)
Karim Abiad (First Defendant)
Sakine Alameddine (Second Defendant)
State Insurance Regulatory Authority of New South Wales (SIRA) (Third Defendant)
Richard Buckley, in his capacity as a claims assessor of SIRA (Fourth Defendant)Representation: Counsel:
Solicitors:
M Robinson SC with B Wilson (Plaintiff)
N Chen SC with J de Greenlaw (First and Second Defendants)
Hall & Wilcox (Plaintiff)
Thomas Booler Lawyers (First and Second Defendants)
Crown Solicitor’s Office (Third and Fourth Defendants)
File Number(s): 2018/93277 Publication restriction: Nil
Judgment
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HIS HONOUR: I published my reasons for judgment in the principal proceedings on 21 September 2018: see IAG Ltd t/as NRMA Insurance v Abiad [2018] NSWSC 1422. At that time I directed the plaintiff and the first and second defendants within 21 days to provide my Associate with written submissions not exceeding three pages addressing the question of who should pay the costs of these proceedings. All parties complied with that direction. These reasons deal with the question of costs.
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It will be apparent from my earlier decision that the plaintiff was completely successful in both matters. Unsurprisingly, the plaintiff now contends that costs should follow that event with the result that the first and second defendants should pay the plaintiff’s costs of the proceedings.
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The applicable principles are not in dispute. Costs are discretionary: Civil Procedure Act 2005, s 98. UCPR r 42.1 provides as follows:
“42.1 General rule that costs follow the event
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.”
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The most important factor which courts have viewed as guiding the exercise of the costs discretion is the result in the litigation: see Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11. The plaintiff submitted that I must be positively satisfied of something if I am to order otherwise than that the costs follow the event in this case.
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Judicial review of administrative decisions is to some extent a rather blunt instrument when applied to cases such as the present. Considerable analogical assistance in determining where the burden of costs should fall in this case can in my opinion be derived from the Motor Accidents Compensation Regulation 2015. For example, if the resolution amount is more than $20,000 but not more than $50,000 and the insurer did not admit liability for the claim, the costs recoverable by the claimant’s legal representative is restricted to a base amount of $2,592 plus $0.12 for each dollar by which the resolution amount exceeds $20,000. The first defendant’s claim is for $24,746. The resolution amount in the second defendants claim would appear unlikely to exceed $150,000. The corresponding amounts that can be recovered for costs in such circumstances are a base amount of $13,392 and $0.02 for each dollar by which the resolution amount exceeds $100,000.
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I hasten to observe that these calculations of recoverable costs by practitioners in CARS proceedings have nothing directly to say about the calculation of costs recoverable by parties to litigation in this Court or about any decision concerning who should pay them. As the first and second defendants have pointed out, however, the CARS system embodies the “just, quick and cheap” approach to modern litigation and seeks to give practical effect to the concept of proportionality referred to in s 60 of the Civil Procedure Act 2005. That section is in these terms:
“60 Proportionality of costs
In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.”
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In my view, through nobody’s fault, the costs of the proceedings in this Court are likely, if not certain, to be disproportionate to the amounts involved. That is particularly so with respect to the case of the first defendant, even if somewhat less so with respect to the case of the second defendant. It is in that sense that the traditional procedures of judicial review of the decisions made by the assessor in this case are unfortunately ill-designed to accommodate a meaningful or consistent application of the overriding purpose. The practical consequence is that it is difficult to implement the practice and procedure of the Court in matters of this kind in a way that the cost to the parties remains proportionate to the importance and complexity of the subject matter in dispute.
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Without wishing unreasonably or improperly to diminish the perceived importance of this litigation to the parties, or to one of them at least, the subject matter of the dispute in this Court was neither particularly important nor complex. It would be an unfortunate result if the burden of the costs, which in my view must necessarily fall upon the first and second defendants, were to operate in a way that wholly or even substantially neutralised any benefit that they might otherwise become entitled to when the matters are returned to an assessor for determination in accordance with my earlier orders.
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Doing the best I can, and taking these things into account, I consider that the first and second defendants should pay the costs of the plaintiff of and incidental to the proceedings in this Court, limited to the greater of either costs assessed by reference to and calculated by analogy in accordance with Schedule 1 Table A of the Motor Accidents Compensation Regulation 2015 or the costs, if any, to which the first and second defendants may become separately entitled in accordance with a certificate issued pursuant to the Suitors’ Fund Act 1951. In this last respect I note what was said by Beazley P in Henderson v QBE Insurance (Australia) Ltd (2013) 66 MVR 69; [2013] NSWCA 480 at [57] concerning s 6C of the Suitors’ Fund Act. That section provides as follows:
“6C Payments not otherwise authorised by this Act
(1) If:
(a) a party to an appeal or other proceedings incurs or is liable to pay costs in the appeal or proceedings,
(b) the party is not otherwise entitled to a payment from the Fund in respect of the costs, and
(c) the Director-General is of the opinion that a payment from the Fund in respect of the costs, although not authorised by section 6, 6A or 6B, would be within the spirit and intent of those sections,
the Director-General may, with the concurrence of the Attorney General, pay from the Fund to the party such amount towards the costs as is assessed by the Director-General having regard to the circumstances of the case.
(2) A payment under this section shall not exceed $10,000.”
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Decision last updated: 24 October 2018
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