Insurance Australia Limited t/as NRMA Insurance v Warren (No 2)

[2019] NSWSC 1373

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Insurance Australia Limited t/as NRMA Insurance v Warren (No 2) [2019] NSWSC 1373
Hearing dates:	On the papers
Date of orders:	11 October 2019
Decision date:	11 October 2019
Jurisdiction:	Common Law
Before:	Harrison AsJ
Decision:	The Court orders that: (1) The plaintiff is to pay the fourth defendant’s costs on an ordinary basis.
Catchwords:	COSTS – Whether the unsuccessful first defendant should be ordered to pay the costs of the fourth defendant
Legislation Cited:	Motor Accidents Compensation Act 1999 (NSW), ss 57, 58, 61 Uniform Civil Procedure Rules 2005 (NSW), r 36.16
Cases Cited:	AAI Ltd v Phillips [2018] NSWSC 1710 Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176 Gould v Vaggelas (1985) 157 CLR 215 Insurance Australia Limited t/as NRMA Insurance v Warren [2019] NSWSC 1126 Simmons v Rockdale City Council (No 2) [2014] NSWSC 1275
Category:	Costs
Parties:	Insurance Australia Limited t/as NRMA Insurance (Plaintiff) John William Warren (First Defendant) State Insurance Regulatory Authority (Second Defendant) Medical Assessor Mark Burns (Third Defendant) Allianz Australia Insurance Limited (Fourth Defendant)
Representation:	Counsel: M A Robinson SC with J Gumbert (Plaintiff) T J Boyle (First Defendant) Keith Rewell SC (Fourth Defendant)   Solicitors: Moray & Agnew (Plaintiff) Carroll & O’Dea (First Defendant) Submitting Appearances (Second & Third Defendants) Hall & Wilcox Lawyers (Fourth Defendant)
File Number(s):	2019/10856
Publication restriction:	Nil

Judgment

1. HER HONOUR: This is a judgment in relation to costs between the plaintiff and fourth defendant.

2. On 3 September 2019, I delivered judgment in Insurance Australia Limited t/as NRMA Insurance v Warren [2019] NSWSC 1126 (“Warren”). I ordered the first defendant to pay the plaintiff’s costs on an ordinary basis. The second and third defendants filed submitting appearances. On 17 September 2019, a timetable was made for submissions, the last of which were due on 4 October 2019. I have now received all written submissions.

3. The plaintiff is Insurance Australia Limited t/as NRMA Insurance. The first defendant is John William Warren. The second defendant is the State Insurance Regulatory Authority, and the third defendant is the medical assessor. The fourth defendant is Allianz Australia Insurance Limited.

4. In Warren, I explained that the first defendant suffered injuries as a result of two accidents. They were referred for assessment together. At [4], [5] and [6] I stated:

“[4] Mr Warren was involved in two motor vehicle accidents relevant to these proceedings. The first occurred on 13 April 2013, and the second, which was less serious, occurred on 28 November 2014. They were referred for assessment together.

[5] On 13 April 2013, Mr Warren was injured in a motor vehicle accident in NSW (“the first accident”). The insurer is the CTP insurer of the vehicle at fault in the accident. Liability has been admitted.

[6] On 28 November 2014, Mr Warren was injured in a second motor vehicle accident in NSW (“the second accident”). Mr Warren made a separate claim in respect of the injuries he sustained in the second accident. The CTP insurer for that claim is the fourth defendant in these proceedings, Allianz Australia Insurance Limited. There is no judicial review arising out of the assessment made in relation to the second claim. Hence, after Mr Rewell SC appeared for the fourth defendant and helpfully handed up a copy of the decision of the medical assessor and highlighted the parts of the decision that related to the second accident (Ex D4/1), he was excused and played no role in the judicial review. There is no need to refer to the fourth defendant’s role again in this judgment.”

The fourth defendant’s submissions

5. The fourth defendant seeks its costs against the plaintiff in this judicial review. The first defendant supports the fourth defendant’s application. The plaintiff opposes the costs order.

6. On 19 January 2019, the plaintiff filed an amended summons seeking to quash the decision of the proper officer and a certificate of the medical assessor with respect to both accidents.

7. The plaintiff acted for the insurer with respect to the first accident and the fourth defendant was the insurer of the vehicle alleged to be at fault in the second accident.

8. The argument articulated by the plaintiff, and accepted by the Court, was that the medical assessor had not given proper reasons for failing to take into account pre-existing impairment from the first defendant’s prior injuries.

9. At the hearing, the plaintiff agreed that there was no error in the medical assessor’s determination that the first defendant had only sustained a temporary aggravation in the second accident.

10. On 30 January 2019, the fourth defendant filed a response to the plaintiff’s summons explaining that the fourth defendant did not need to be a party to the proceedings, as the certificates issued by the medical assessor were severable and the argument as to the error in his certificates related only to pre-existing impairment prior to the first accident. There was no suggestion that there was an error in relation to the finding that the second accident only resulted in a temporary aggravation.

11. It was not until the day of the hearing that the plaintiff and the first defendant accepted that the position as articulated in the response filed by the fourth defendant on 30 January 2019 was correct, and the fourth defendant was excused from participating in the hearing.

12. The plaintiff has not obtained any order in relation to the fourth defendant, and the position adopted at the hearing was to accept the response lodged by the fourth defendant.

13. The first defendant has been ordered to pay the plaintiff’s costs, as the costs follow the event. The first defendant did nothing in these proceedings to agitate any issue against the fourth defendant, and ought not to be ordered to pay the fourth defendant’s costs.

14. The fourth defendant seeks its costs on the usual basis against the plaintiff, as the plaintiff did not quash the certificate relating to the second accident, and the plaintiff accepted on the morning of the hearing that the fourth defendant did not need to be involved in the summons.

The plaintiff’s submissions

15. The plaintiff's amended summons sought to quash the decision of the proper officer and the certificate of the medical assessor. The certificate assessed the first defendant’s alleged physical injuries, in respect of the accident of 13 April 2013 and the accident of 24 November 2014. The certificate subsequently provided a determination of impairment in relation to both motor vehicle accidents.

16. As the findings of the certificate applied to both motor vehicle accidents, the plaintiff submitted that it was appropriate that the fourth defendant be joined to the Supreme Court proceedings, as the outcome of the summons application would clearly have had a direct bearing upon the second motor vehicle accident and the previous findings of impairment. In circumstances where the plaintiff's application was successful, the matter would be referred back the State Insurance Regulatory Authority for the impairment in relation to both accidents to be reassessed.

17. It remains the plaintiff’s position, as outlined in the plaintiff’s written submissions dated 29 April 2019 at paras [85] to [97], that the plaintiff had no other option than to join the fourth defendant to the proceedings in light of the joint certificate issued. In matters of this nature, where the certificates have been issued with one set of reasons applying to multiple accidents, it is common practice that all relevant parties be joined to the action. The plaintiff noted the decision of AAI Ltd v Phillips [2018] NSWSC 1710 (“Phillips”) as an example of the practice.

18. Additionally, the plaintiff submitted that the first defendant ought to have filed a submitting appearance if it considered it should not have been joined to the proceedings. The fourth defendant however did not elect to take this course of action.

19. While ultimately the parties reached an agreement not to disturb those sections of the certificate, the suggestion to do so was first made by the fourth defendant on 27 June 2019, the day before the hearing of the matter. In the interim, costs had been incurred by all parties in the preparation for the hearing.

20. In any event, costs ordinarily follow the event, with the plaintiff ultimately successful on the summons application. The plaintiff incurred costs in responding to the fourth defendant’s reply, and in preparation for hearing in respect of those arguments it anticipated would be raised by the fourth defendant.

21. The plaintiff also submits that the fourth defendant had the opportunity of agitating the issue of costs when judgment was delivered on 3 September 2019. On this occasion, the issue was not raised, with further costs subsequently incurred by the plaintiff as a result.

22. In the circumstances, and if the Court is minded to reconsider the costs order previously made on 3 September 2019, the plaintiff submitted that the costs order ought to be amended, with the first defendant and the fourth defendant to be ordered to pay the plaintiff's costs, as agreed or assessed.

The first defendants’ submissions

23. The fourth defendant was joined to the proceeding by the plaintiff’s deliberate forensic decision. The first defendant submitted that the fourth defendant’s costs incurred in respect of the proceeding stems, ultimately, from the plaintiff’s decision to join it.

24. The first defendant played no role in joining the fourth defendant to the proceedings, and has already been ordered to bear the plaintiff’s costs in circumstances where the decision of the third defendant, the medical assessor, was set aside due to error that was in no way caused by any conduct of Mr Warren.

25. Where a plaintiff is successful against one or more defendants but not against one or another, the usual rule is for the plaintiff to pay the costs of the successful defendant(s), though the Court may make other orders: see Gould v Vaggelas (1985) 157 CLR 215. Such orders are commonly known as Bullock or Sanderson orders: see Simmons v Rockdale City Council (No 2) [2014] NSWSC 1275.

26. In Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176, the Court of Appeal stated at [15]:

“[15] In determining whether it is fair to make such an order, two matters are usually considered to be relevant. First, it must have been reasonable for the plaintiff to have brought the proceedings against the successful defendant: see Gould v Vaggelas [1985] HCA 85; (1985) 157 CLR 215 per Gibbs CJ (at 230); Wilson J (Murphy J agreeing) (at 247); Brennan J (at 260); Lackersteen v Jones (No 2) (1988) 93 FLR 442 (at 449); Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179; (2000) NSWCCR 417 (at [128]) per Mason P (Stein and Heyden JJA agreeing). Secondly, there must be some conduct on the part of the unsuccessful defendant which would make it fair to impose liability on it for the costs of the successful defendant: Gould v Vaggelas (at 230; 247 and 260).”

27. As to the first matter, the first defendant submitted that it was not reasonable for the plaintiff to have commenced proceedings against the fourth defendant, and Phillips does not support that contention.

28. The first defendant further submitted that the Motor Accidents Compensation Act 1999 (NSW) (“the MAC Act”) indicates that joining the fourth defendant was inappropriate. Section 61 of the MAC Act makes clear that the certificate is to be made in respect “a medical dispute” and, in circumstances (where by force of ss 57 and 58) that dispute is between a claimant and an insurer, it follows that an error affecting one certificate would not touch another. There was therefore no need to join Allianz to the proceeding, and the plaintiff’s decision to do so was not reasonable, such that the first precondition to a Bullock or Sanderson order is not satisfied.

29. As to the second matter, the first defendant submitted that neither the plaintiff nor the fourth defendant has articulated any reason in principle why the first defendant should bear the fourth defendant’s costs. That is because there is no authority for the proposition that in a case like the present, the first defendant (an unsuccessful defendant by reason of the Court’s orders of 3 September 2019) should pay the costs of another unsuccessful defendant.

30. The first defendant argued he has done nothing which would make it fair to impose liability on him for the fourth defendant’s costs, or the plaintiff’s costs with respect to the claim it failed in against the fourth defendant. This is not a case where Mr Warren told the plaintiff that it should look to the successful defendant for its remedy. Rather, the first defendant was agnostic about the status of the medical assessor’s decision in respect of his WPI. He did not challenge that assessment, and the written and oral submissions he advanced did not address it at all.

31. There is simply nothing in the conduct of the first defendant which makes it a proper exercise of discretion to order him to pay the fourth defendant’s costs. He was not in any position to release the fourth defendant from having been joined to the proceeding, and he did not in any way contribute to the costs the fourth defendant has incurred in the proceeding. Similarly, he did not contribute to or cause any costs to be incurred by the plaintiff in its prosecution of the claim against the fourth defendant.

32. In those circumstances, the first defendant submitted that the Court should not make any order which would cause him to bear the costs of either the plaintiff or the fourth defendant, insofar as the claim between those parties is concerned. If the Court is minded to make an order with respect to these costs, the first defendant submitted the appropriate order would be for the plaintiff to pay the fourth defendant’s costs.

The fourth defendant’s submissions in reply

33. The fourth defendant submitted that the plaintiff’s submissions do not deal with its failure to act after the fourth defendant lodged its response. There was nothing that prevented the plaintiff from amending its summons, and the same outcome would have been achieved without the fourth defendant incurring significant costs.

34. The fourth defendant argued that the plaintiff is mistaken in assuming that the fourth defendant could have simply lodged a submitting appearance as the other second and third defendants did. This submission misapprehends that those defendants were not liable to pay damages to the first defendant, and the fourth defendant had to appear to defend the favourable certificate issued with respect to the second accident, as the summons sought to quash the certificate completely. The fourth defendant was directly impacted by the orders sought in the summons in a way that the second and third defendants were not.

35. The argument articulated by the plaintiff in its summons did not suggest that there was any error in the assessment of impairment in the second accident, but still sought to quash the certificate issued with respect to impairment from the second accident (which involved the fourth defendant).

36. The plaintiff says that it is common place for all parties to be joined, but only pointed to Phillips for authority. The fourth defendant argued that Court will see that the circumstances of the claim in Phillips were very different, and in that case, the certificate was quashed against all the parties in the summons.

37. Although the fourth defendant conceded that costs generally follow the event, in this case, no event in favour of the plaintiff has been found against the fourth defendant. The plaintiff has failed completely with regard to its summons against the fourth defendant.

38. There appears to be confusion with respect to the fourth defendant’s costs, but it is apparent that the question of those costs remains reserved by the Court and not determined. The fourth defendant does not seek to disturb the previous costs orders made, as it is appropriate that the first defendant pay the plaintiff’s costs in circumstances where they opposed the summons. In any event, the previous order does not appear to be able to be vacated due to r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW).

39. If the order can be varied, the first defendant argued that it is telling that no reason is offered in para 8 as to why the fourth defendant ought to be ordered to pay the plaintiff’s costs. The fourth defendant does not know what else it could have done to avoid incurring costs in this summons, given it made its position (which was ultimately accepted by the plaintiff at the hearing) plain at its earliest opportunity.

40. In all the circumstances, the first defendant argued that the plaintiff ought to be ordered to pay the fourth defendant’s costs, as the fourth defendant was an unnecessary party. Even if the fourth defendant is wrong about that, the plaintiff has failed to quash the certificate issued with respect to the impairment arising from the second accident.

Conclusion

41. The plaintiff, Insurance Australia Limited t/as NRMA Insurance, made a forensic decision to join Allianz Australia Insurance Limited, who is the insurer in the second accident, as the fourth defendant to these proceedings. In the amended summons filed 14 January 2019, the plaintiff sought to quash the decisions of the proper officer and the certificate of the medical assessor with respect to the injuries that the plaintiff suffered in both accidents.

42. On 6 February 2019, the fourth defendant filed a response to the amended summons. In that response, the fourth defendant stated firstly, that it should not have been joined as a party to these proceedings; secondly, that the decisions to which the plaintiff refers in the relief claimed in its amended summons concern only one of two certificates issued by a medical assessor under s 61 of the MAC Act; thirdly, that while the two certificates issued by the medical assessor on 20 July 2018 were accompanied by one set of reasons, only the first certificate, issued in respect of a motor accident on 13 April 2013, concerns the plaintiff; fourthly, that the second certificate, issued in respect of a motor accident on 28 November 2014, does not concern the plaintiff; and finally, that there is no necessary relationship between the medical assessor’s two separate assessments of impairment, and there is no basis for the plaintiff to challenge the second certificate.

43. On the same day, the fourth defendant also filed its written submissions. Once again, it submitted firstly, that that it should not have been joined as a party to these proceedings; secondly, that if the plaintiff is entitled to any relief, the relief should be confined to setting aside the first certificate of the medical assessor only; thirdly, that there is no basis pleaded in the amended summons on which the second certificate of the medical assessor, concerning the motor accident on 28 November 2014, could be set aside; and finally, that the second certificate, which is conclusive evidence of the matters certified, must stand regardless of any relief to which the plaintiff may (or may not) be entitled.

44. Under the heading “Background” at [18]-[20] in its submissions, the fourth defendant stated that the medical assessor determined that the only physical injury caused by the second accident was a temporary aggravation of pre-existing right shoulder pain. In his second certificate, the medical assessor certified that the effects of the aggravation caused by the second accident had ceased, giving rise to no impairment of the right shoulder attributable to that accident. The medical assessor’s second certificate has the conclusive effect that the first defendant is not entitled to damages for non-economic loss in his claim relating to the second accident.

41. Despite the fourth defendant making its position clear in its response and submissions, the plaintiff did not take any action to change its position as against the fourth defendant.

42. Mr Rewell SC appeared for the fourth defendant at the hearing. He handed up a copy of the decision of the medical assessor and highlighted in yellow the parts of the decision that related to the second accident (Ex D4/1) and explained the fourth defendant’s position to this Court. Mr Rewell SC also submitted that costs should follow the event. If the plaintiff is unsuccessful, it should pay the fourth defendant’s costs. If the first defendant is unsuccessful, then he should pay the fourth defendant’s costs (T 3.29-35). The first defendant agreed with these propositions. Mr Rewell SC was then excused and played no role in the judicial review.

43. Costs are discretionary. The fourth defendant acted reasonably. So did the first defendant. The fourth defendant was joined as a defendant by the plaintiff. It would not have been prudent for the fourth defendant to file a submitting appearance in circumstances where the plaintiff sought that both decisions and certificates should be set aside. At the hearing, it became clear that the plaintiff did not seek to make any case that the medical assessor’s certificate involving the fourth defendant should be set aside. In these circumstances, it was necessary for the fourth defendant to appear in the proceedings until it was excused by the Court. In the exercise of my discretion, it is my view that the plaintiff should pay the fourth defendant’s costs on an ordinary basis.

The Court orders that:

(1)   The plaintiff is to pay the fourth defendant’s costs on an ordinary basis.

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Amendments

22 October 2019 - Para [2] - Typographical error

Decision last updated: 22 October 2019