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

[2023] NSWSC 1056

Supreme Court

New South Wales

Medium Neutral Citation:

Insurance Australia Limited t/as NRMA v Richards (No 2) [2023] NSWSC 1056

Hearing dates:

2 August 2023

Date of orders:

1 September 2023

Decision date:

01 September 2023

Jurisdiction:

Common Law

Before:

Schmidt AJ

Decision:

1.   Ms Richards must bear 50% of the insurer’s costs, as agreed or assessed.

2.   The consent costs order made by the Personal Injury Commission in favour of Ms Richards not be disturbed.

3. Ms Richards is granted an indemnity certificate under s 6 of the Suitors’ Fund Act 1951 (NSW).

Catchwords:

COSTS — Party/Party — whether to depart from usual order under Uniform Civil Procedure Rules 2005 (NSW) that costs follow the event — whether to order that each party to bear their own costs — where statutory construction issue advanced for the first time in these proceedings failed — order that each party to bear their own costs but apportionment appropriate given the mixed outcome of the proceedings — defendant to bear half of the plaintiff’s costs

COSTS — whether defendant to retain benefit of previous consent costs order made by the Personal Injury Commission — claimant’s entitlement to costs in those proceedings not dependent on outcome — Motor Accident Injuries Act 2017 (NSW), s 8.10 — where insurer did not challenge retention of the benefit of the consent order — order made in favour of defendant

COSTS — Party/Party — Suitors’ Fund Act 1951 –– whether certificate under s 6 available to defendant –– where proceedings do not involve an appeal or a decision of a court –– proceedings “in the nature of an appeal” –– Personal Injury Commission a “court” for purposes of the Act –– s 6 requirements satisfied and certificate granted

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Motor Accident Injuries Act 2017 (NSW), s 8.10

Suitors’ Fund Act 1951 (NSW), ss 2, 6

Supreme Court Act 1970 (NSW), s 69

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

AAI Limited t/as GIO v Moon [2020] NSWSC 714

Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Ex parte Parsons; Re Suitors’ Fund Act (Supreme Court (NSW), 15 October 1952, unrep)

Hogan v Trustees of the Roman Catholic Church (No 2) [2006] NSWSC 74

Insurance Australia Limited t/as NRMA v Richards [2023] NSWSC 909

Krslovic Homes Pty Ltd v Sparkes [2004] NSWSC 374

Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59

Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361; [1970] HCA 8

Rosniak v Government Insurance Office (1997) 41 NSWLR 608

Sze Tu v Lowe (No 2) [2015] NSWCA 91

Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256

Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306

Category:

Costs

Parties:

Insurance Australia Limited t/as NRMA (Plaintiff)
Ms Wendy Richards (First Defendant)
Bridie Nolan in their capacity as a Member appointed by the Minister under s 9 of the Personal Injury Commission Act 2020 (NSW) (Second Defendant)
The President, Personal Injury Commission (Third Defendant)

Representation:

Counsel:
Mr M Robinson SC w Ms J Gumbert (Plaintiff)
Mr C Barry KC w Mr J Hallion (First Defendant)
Submitting appearance (Second and Third Defendants)

Solicitors:
Sparke Helmore (Plaintiff)
Owen Hodge Lawyers (First Defendant)
Crown Solicitor’s Office (Second and Third Defendants)

File Number(s):

2023/63430

JUDGMENT

1. In July 2023 I gave judgment in this matter ordering that the challenged decision of a member of the Personal Injury Commission be set aside and the matter remitted to the Commission for determination by a different member according to law: Insurance Australia Limited t/as NRMA v Richards [2023] NSWSC 909. The proceedings concerned a claim for benefits under the Motor Accident Injuries Act2017 (NSW) after Ms Richards was injured in a motor vehicle accident in July 2020.

2. The parties wished to be heard on costs, there being a dispute about whether there should be a departure from the usual order under the Uniform Civil Procedure Rules 2005 (NSW), that costs follow the event: r 42.1. Ms Richards sought orders that each party bear their own costs, which the insurer opposed, it seeking the usual order in its favour.

3. A question also arose in relation to the consent costs order which had been made in Ms Richards’ favour by the member, which had not earlier been addressed by the parties and which she sought to maintain, which the insurer did not oppose.

4. Ms Richards also sought an order under s 6 of the Suitors’ Fund Act 1951 (NSW).

5. There was no issue between the parties about the Court’s powers to make the costs orders sought, given its broad discretion under s 98 of the Civil Procedure Act 2005 (NSW) and the Rules. Or as to its powers to make the other orders sought.

Should there be a departure from the usual order?

6. Ms Richards contended that each party having had a measure of success on what was in issue in the proceedings, an order that each side bear its own costs was just in all the circumstances of this case.

7. The insurer’s position was that Ms Richards having unsuccessfully resisted its case that the member’s disputed decision should be set aside, it always having been open to her to cease being an active contradictor, there should be no departure from the usual order, despite the Court’s undisputed discretion to make the order which she sought.

8. This was argued not to be a case where the exercise of the discretion was warranted, the insurer having succeeded in having the Commission’s order set aside and there having been no particular issue which was in this case clearly dominant or separable: Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 at [107].

There must be a departure from the usual order

9. I am satisfied that justice requires that there be a departure from the usual order in this case.

10. In Tomanovic it was explained at [107] that “[t]here is an undoubted principle whereby, unless a particular issue or group of issues is clearly dominant or separable, it would ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate those particular issues on which it was successful and those on which it failed”.

11. In that case the Tomavic interests had sought an order for their costs of the appeal: at [55]. The Sayer interests resisted this, proposing that the Tomavic interests should receive only 75% of their costs, because while overall they had been the successful parties, the default position should be altered because not all of the 15 grounds of appeal they had raised had succeeded: at [56]. What was ordered, however, was that “the Sayer Interests pay 40% of the overall costs of the Tomanovic Interests”: at [115].

12. As to the applicable principles it was explained at [96]-[100] that:

1. the principle that a successful party may be deprived of costs and ordered to pay the other party's costs in respect of issues lost by the successful party where that issue was clearly dominant or severable, “operates more strongly against a successful plaintiff”: Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171 at [9];

2. whether there has been misconduct in the proceedings is relevant, that including where a party “succeeds on a point not argued before a lower court”: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 as stated by McHugh J at [69]; and

3. whether it was unreasonable to raise the issue is relevant in determining whether the overall successful party should pay the costs of a particular issue, as opposed to leaving the overall successful party to bear its own costs concerning that issue: Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 615.

13. It is thus relevant to the exercise of the Court’s cost discretion that the insurer had not advanced the construction issue on which it failed in this Court, before the Commission and instead had acquiesced to the Commission’s usual practice in relation to onus. Its reasons for those forensic decisions were not explained.

14. Here, it was not Ms Richards’ case that the construction issue had been unreasonably raised by the insurer. But a departure from the usual order is not limited to cases where it was unreasonable for the successful party to raise the issue on which it failed: Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [40].

15. The construction issue was concerned with whether under the statutory scheme, an onus fell upon the insurer to establish before the Commission, that Ms Richards did not have the right to the statutory benefit it had earlier denied she had, it having earlier rejected her claim, both when it was initially considered and after its internal review of that decision.

16. It must be accepted that this satisfies the precondition discussed in Tomanovic. The construction issue was clearly separable from what was otherwise in issue between the parties on the case the insurer advanced in this Court about the errors into which it was claimed the member had fallen. It is also relevant that this issue occupied a substantial part of the hearing in this Court: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]. That was in part because it turned on questions of statutory construction which had not previously been raised or addressed in the Commission.

17. Costs orders are intended to be compensatory, not punitive: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 at 543; Oshlack at [67]. In my view it would be punitive to now require Ms Richards to bear the costs of the construction issue on which the insurer failed, she having succeeded in resisting a case which the insurer advanced only for the first time in this Court, that being another relevant consideration: Oshlack at [69].

18. But I am not satisfied that the order which Ms Richards sought can be made. That is because the insurer is otherwise entitled to a costs order under the Rules, even though it did not succeed on all of the other issues it pursued, there being no suggestion that the other issue on which the insurer failed took up a significant part of the trial, either by way of evidence or argument: Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24].

19. It follows that Ms Richards’ case that each party should bear their own costs may not be accepted. Reliance was placed on Hogan v Trustees of the Roman Catholic Church (No 2) [2006] NSWSC 74, where at [40] Bell J concluded that there should be no order as to costs in relation to motions brought by both the plaintiff and the defendant which proceeded in tandem, given the parties’ respective success. I am not satisfied, however, that what here arises for determination is at all analogous.

20. Nor do I accept that claimed difficulties of assessment of costs can provide a proper basis for the order Ms Richards sought.

21. In the result, there must be apportionment. It is settled that where there is a mixed outcome in proceedings, the question of such apportionment is very much a matter of discretion and mathematical precision is illusory: Bostik at [38].

22. In this case, having weighed the various matters which arise for consideration I am satisfied that Ms Richards must bear 50% of the insurer’s costs.

The Commission’s costs order

23. In the July judgment I ordered that:

“1.   The member’s decision is set aside; and

2.   The matter is remitted to the Personal Injury Commission for determination by a different member according to law.”

24. Afterwards Ms Richards’ solicitors wrote to the insurer proposing that the costs order which had been made in her favour by the Commission by consent, for $11,610, would not be interfered with as a result of the Court’s July orders, because that order followed regardless of her success or otherwise. The Member’s determination included at para 103:

“Legal Costs: The amount of the claimant’s costs assessed in accordance with the Motor Accident Injuries Regulation 2017, Personal Injury Commission Regulation 2020 is $11,610 inclusive of GST.”

25. The insurer did not respond to this proposal. But it later did not take issue with Ms Richards’ contention that her entitlement to costs in the Commission did not depend on the outcome of those proceedings, given the provisions of s 8.10 of the Motor Accident Injuries Act, relying on AAI Limited t/as GIO v Moon [2020] NSWSC 714 at [82]. Nor did it take issue with the result for which she contended, that she remained entitled to the benefit of that order.

26. In Moon Wright J discussed the statutory scheme and the circumstances in which costs orders may be made in favour of a claimant for such statutory benefits. His Honour observed that the general nature of the entitlement conferred by s 8.10 is not similar to the awarding of costs in court proceedings, there being nothing in it or any other provision of the Act that suggests that a claimant’s entitlement to recover legal costs depends on whether or not he or she is successful: at [82]. The section provides:

8.10 Recovery of costs and expenses in relation to claims for statutory benefits

(1) A claimant for statutory benefits is (subject to this section) entitled to recover from the insurer against whom the claim is made the reasonable and necessary legal costs, and other costs and expenses, incurred by the claimant in connection with the claim. Other costs and expenses include the cost of medical and other tests and reports.

(2) The regulations may make provision for or with respect to fixing the maximum costs and expenses recoverable by a claimant under this section (including any matters for which no costs and expenses are recoverable from the insurer).

(3) A claimant for statutory benefits is only entitled to recover from the insurer against whom the claim is made reasonable and necessary legal costs incurred by the claimant if payment of those costs is permitted by the regulations or the Commission.

(4) The Commission can permit payment of legal costs incurred by a claimant but only if satisfied that—

(a) the claimant is a person under legal incapacity, or

(b) exceptional circumstances exist that justify payment of legal costs incurred by the claimant.

(5) An insurer is not entitled to recover from a claimant for statutory benefits any legal costs, or other costs and expenses, of the insurer in relation to the claim.

27. In the result, given this provision; the insurer not challenging Ms Richards’ entitlement to retain the benefit of the consent costs order which the member made in her favour; nor putting in issue the conclusions which Wright J reached in Moon about the proper construction of the statutory scheme, I am satisfied that justice requires that a further order should be made to confirm that she remains entitled to retain the benefit of the Commission’s costs order, notwithstanding that the member’s decision has been set aside.

Suitors’ Fund Act certificate

28. The insurer also did not oppose an order under s 6 of the Suitors’ Fund Act being made in favour of Ms Richards. That section empowers the Court to grant a certificate in specified circumstances. It relevantly provides:

6   Costs of certain appeals

(1) If an appeal against the decision of a court:

(a) to the Supreme Court on a question of law or fact, or

(b) to the High Court from a decision of the Supreme Court on a question of law,

succeeds, the Supreme Court may, on application, grant to the respondent to the appeal or to any one or more of several respondents to the appeal an indemnity certificate in respect of the appeal.

29. These proceedings did not involve an appeal or the decision of a Court, but were brought under s 69 of the Supreme Court Act1970 (NSW). It gives the Court jurisdiction to exercise its supervisory jurisdiction over decisions of the Commission, by granting relief of the kind which the insurer sought. But an appeal is defined in s 2 of the Suitors’ Fund Act to include “any proceeding in the nature of an appeal”.

30. In Ex parte Parsons; Re Suitors’ Fund Act (Supreme Court (NSW), 15 October 1952, unrep) an appeal had also not been pursued. It was orders of prohibition and certiorari which had been sought, they providing similar relief to orders which can now be made under s 69. There it was held that there was jurisdiction to issue a certificate under s 6 of the Suitors’ Fund Act, because the proceedings were instituted for the purpose of correcting an error properly brought before the Court, which had concluded that the proceedings needed correction to the extent of quashing the decision, in order to set aside an erroneous decision.

31. It was thus concluded that what was there before the Court was “a ‘proceeding in the nature of an appeal’, and therefore included in the word ‘appeal’, as it is used in the Act”: at 848.

32. In Parsons it was the decision of another court, not an administrative tribunal such as the Commission, which was in issue. But it is also settled that such tribunals may be a ‘court’ for the purposes of the Suitors’ Fund Act, given their nature and the remedial purpose of a beneficial legislative scheme: Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 at 512. There it was a decision of the Equal Opportunity Tribunal which arose for consideration.

33. It is thus the Commission’s nature and whether it exercises judicial power on which the grant of a s6 certificate turns. That power is concerned with settling for the future a dispute between defined parties, by inquiring into the law and the facts and applying the law to those facts: R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361; [1970] HCA 8 at 374-375 considered in Krslovic Homes Pty Ltd v Sparkes [2004] NSWSC 374 at [45].

34. The Personal Injury Commission appears to be in a similar situation to that of the Equal Opportunity Commission which arose for consideration in Dao and the cases which have followed it, given its nature and the judicial powers it is given to exercise, which are discussed in the July judgment. In the result I am satisfied that it, too, is a court for the purpose of this legislative scheme, exercising as it does judicial powers and that these proceedings are also an appeal for the purposes of this Act.

35. It follows that the Court does have the power to issue the s 6 certificate which Ms Richards seeks, if the requirements of the section are satisfied.

36. This was not addressed in the submissions advanced for Ms Richards, but it may be accepted that they are satisfied. That follows from the insurer’s case having otherwise succeeded as it did, despite its failure on the construction issue, with the result that the member’s decision was set aside and the matter returned to the Commission to be decided afresh.

37. In all those circumstances I am well satisfied that the Court’s discretion to grant Ms Richards a s 6 certificate should be exercised.

Orders

38. For these reasons I order that:

1. Ms Richards bear 50% of the insurer’s costs, as agreed or assessed.

2. The consent costs order made by the Personal Injury Commission in favour of Ms Richards not be disturbed.

3. Ms Richards is granted an indemnity certificate under s 6 of the Suitors’ Fund Act 1951 (NSW).

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Decision last updated: 03 September 2023