IAG Ltd t/as NRMA Insurance v Abiad

The matter involved IAG Ltd trading as NRMA Insurance (the insurer) and a policyholder, Mr Abiad. The dispute was about the insurer's refusal to pay out a claim for damage to Mr Abiad's vehicle, and the policyholder sought judicial review of that decision. The case was heard in the Federal Court of Australia. The primary issue before the court was whether the general rule that costs follow the event applied in this case, and if so, whether those costs were likely to be disproportionate to the amount claimed, warranting limitation.

The court considered whether the costs of the judicial review application, if awarded under the general rule, would be disproportionate to the amount claimed. The court acknowledged that the general rule of costs following the event was well established, but also recognised that in some circumstances, it might be appropriate to limit the costs awarded to a successful party. In this case, the court found that the costs of the judicial review application were likely to be disproportionate to the amount claimed. The court further held that the insurer's refusal to pay out the claim was unreasonable, and that the policyholder's application for judicial review was successful on all grounds.

In light of the findings, the court ordered that the insurer pay the policyholder's costs of the judicial review application, but limited those costs to a figure that was reasonable and proportionate to the amount claimed. The court held that the insurer's refusal to pay out the claim was unjustified, and that the policyholder was entitled to recover his costs up to the limited amount. The court also noted that the policyholder had acted reasonably and in good faith throughout the proceedings, and that the insurer's conduct had been unreasonable and oppressive.