Insurance Australia Limited v Muhammad - [2021] ACTSC 220

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Insurance Australia Limited v Muhammad
Citation:	[2021] ACTSC 220
Hearing Date(s):	30 August 2021
DecisionDate:	10 September 2021
Before:	Crowe AJ
Decision:	See [105]
Catchwords:	APPEAL – PERSONAL INJURY CLAIM – plaintiff recovers amounts of $50,000 or less – Magistrate orders increase in maximum costs recoverable under s 181 of Civil Law (Wrongs) Act 2002 (ACT) –appeal allowed in part.
COSTS – OPERATION OF S 184 OF CIVIL LAW (WRONGS) ACT 2002 (ACT) – distinction between solicitor and client and party and party costs – need for court or taxing officer to identify by reference to principle or amount ‘stated additional costs’
Legislation Cited:	Civil Law (Wrongs) Act 2002 (ACT) ss 180, 181, 184 Civil Law (Wrongs) Bill 2002 (ACT) Court Procedures Rules 2006 (ACT) rr 1751, 1752, 5052 Legal Practitioners Act 1970 (ACT) s 180 Legal Profession Act 2006 (ACT) Legislation Act 2001 (ACT) ss 141, 142 Magistrates Court ACT 1930 (ACT) s 274 Road Transport (Third-Party Insurance) Act 2008 (ACT) Supreme Court Rules 1937 (ACT) O 65 r 7A
Cases Cited:	Cleary v Rinaudo [2013] ACTCA 32; 278 FLR 231 Eggins v Knaus [2007] ACTSC 17 House v King (1936) 55 CLR 499 Malek v Remondis Australia Pty Limited [2015] ACTSC 135 Norbis v Norbis (1986) CLR 513 Theodorelos v Nexus Projects Pty Ltd [2009] ACTSC 149 Yogini v Eveille [2006] ACTSC 23
Texts Cited:	Gino Dal Pont, Law of Costs (LexisNexis, 4^th ed, 2018) Explanatory Memorandum, Civil Laws (Wrongs) Bill 2002 Jon Stanhope MLA, Debate, Hansard, 26 September 2002
Parties:	Insurance Australia Limited t/as NRMA Insurance ACN: 000 016 722 (First Appellant) Mohammad Maroof (Second Appellant) Muhammad Adeel (Third Appellant) Hazrat Muhammad (Respondent)
Representation:	Counsel W Fitzsimmons SC (Appellants) A Muller (Respondent)
Solicitors Sparke Helmore Lawyers (Appellants) United Legal (Respondent)
File Number(s):	SCA 14 of 2021
Decision under appeal:	Court/Tribunal: Magistrates Court Before: Magistrate Stewart Date of Decision: 24 March 2021 Case Title: Muhammad v Maroof Court File Number(s): CS 67 of 2020

Crowe AJ

Background

The respondent in the appeal had the misfortune to be involved in three motor vehicle accidents in the ACT. The first occurred on 2 November 2017 when he was struck by a reversing vehicle (which was driven by the second appellant) while standing in a carpark in Charnwood. The second occurred on 6 November 2018. On that occasion the respondent was the driver of a vehicle which had stopped behind another vehicle. The motor car driven by the third appellant collided with the rear of the plaintiff’s vehicle. It appears that the impact was at a relatively low speed. The third accident was on 6 March 2019. The driver of a vehicle who was attempting to park in front of the respondent’s parked vehicle reversed into the front of that vehicle. Again, it was a low impact collision.

The respondent claimed that he had injured his low back in the first accident, and that that injury had been aggravated…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] ACTSC 220
Decision Date

CaseChat Overview and Summary

This case involves an appeal against an order made by the Magistrate of the ACT under s 184 of the Civil Law (Wrongs) Act 2002 (ACT) (CL(W)A) which increased the maximum costs allowable for legal services provided to the respondent in relation to a personal injury claim. The appeal was brought by three appellants who were the insurers of the drivers of three vehicles which were involved in three separate motor vehicle accidents with the respondent. The respondent claimed that he had injured his low back in the first accident, and that that injury had been aggravated by the subsequent accidents. He commenced proceedings in the Magistrates Court of the ACT. The first appellant was the compulsory third-party insurer of each of the drivers alleged to have been at fault in the first two accidents. I gather that the driver said to be at fault in the third accident was insured by a different insurer. The pre-court procedures required under the Road Transport (Third-Party Insurance) Act 2008 (RTTPI Act) resulted in the resolution of the respondent’s claim in relation to the third accident on 28 January 2020. However, the claims in relation to the first and second accidents were not resolved at the compulsory conference and on 9 April 2020 the respondent commenced proceedings in the Magistrates Court of the ACT. The respondent sued the three appellants in relation to both accidents in the one proceeding. In June 2018, in correspondence with the respondent’s solicitor, the first appellant denied liability in relation to the first accident. However, in the defence filed on 1 July 2020, the first appellant admitted a breach of the second appellant’s duty of care in the circumstances of that accident. A hearing date was allocated in early 2021 and the parties were required to attend mediation before the hearing. That mediation occurred on 14 October 2020. In the course of the mediation the first appellant, which had management of the claims on behalf of the second and third appellants, made a final offer to settle the claims for $44,000 plus costs in relation to the first accident and $18,000 plus costs in relation to the second. The respondent, through his legal representatives, accepted the offer. A dispute subsequently arose as to whether the parties had agreed on a lump sum settlement figure of $62,000, or on the settlement of the two claims for the amounts stated in the offer referred to in paragraph [4] above. On 15 December 2020 the respondent filed an application in proceeding in the Magistrates Court proceeding. In that application he sought the following orders: 1. Judgment in the proceeding is given for the plaintiff in the amount of $62,000.00 plus costs. 2. The relevant amount for the purpose of Rule 1722 is not less than $50,000.00. 3. In the alternative, that the maximum costs allowable for legal services provided to the plaintiff be increased pursuant to s 184(1) of the Civil Law (Wrongs) Act 2002. 4. Any other orders that the Court considers appropriate. The application came before the Magistrate for hearing on 24 March 2021. At the hearing the respondent relied on affidavits sworn by his solicitor Mr N Farooq on 14 December 2020 and 22 February 2021. The appellants did not tender any evidence. The respondent did not press the application for Orders 1 and 2. The issue for decision by the Magistrate was thus whether an order should be made under s 184 of the CL(W)A to increase the costs which might be recovered by the respondent’s solicitor in relation to the claims made consequent upon the first and second accidents. After hearing the submissions of the parties, the Magistrate indicated that he would deliver his decision later that day. A little over an hour later his Honour delivered brief oral reasons and ordered: 1. Pursuant to S184 of the Civil Law (Wrongs) Act the maximum costs for services allowed under Part 14.1 be increased because of the complexity of the matters. 2. The ceiling for the maximum for legal services will be $77,000.00 plus costs of today. 3. Costs are to be agreed or taxed. The Magistrate’s Reasons for Decision After referring briefly to the circumstances of the first two accidents, and the terms of the settlement reached at the October 2020 mediation, his Honour said (at pages 22-24 of the transcript): The plaintiff applicant says that the court should use its discretion pursuant to section 184 of the Civil Law (Wrongs) Act to allow additional costs. Both limbs of such action were relied upon. That is, the complexity of the claim and the behaviour of the defendant in the matter. In my view the application would fail on limb 1(b) of section 184 because in my view the behaviour of the defendant was not such that by itself it should allow additional costs. That doesn’t mean though that the behaviour is not relevant to the complexity of the claim. The plaintiff applicant says that this matter was an unusually complex one because of the fact of two claims both with personal injury, late admission of liability on the party of the defendant. Notably, in relation to the claim where the plaintiff was struck as a pedestrian by a reversing motor vehicle, causing significant extra preparation. Also, the unusual diversity of medical expert opinions including two reports served on the plaintiff just prior to mediation. The parties provided one case which was said to be peripheral use, that being Bethany Eggins v Alexander Knaus [2007] ACTSC 17. I’ve read that case and formed the view that it really doesn’t assist me on this application. The plaintiff has provided, by affidavit, a schedule of what it says reasonably incurred costs. That’s in the form of an affidavit filed 22 February 2021. The total of the sums that are set out in some detail are total professional fees of $44,284.56 and total disbursement of $32,698.57. I hasten to add that counsel fees are about 20 per cent of disbursements. If section 181 would operate as intended there would be a significant cost shortfall in the tens of thousands of dollars but that’s not the test. The respondent says that this was an unusual complex matter and costs of any complexity cannot be identified in amongst the morass of all of the individual fee items in the affidavit filed 22 February 2021. They also query the individual components of the professional fees pointing out what they say are not matters that would survive the test of taxation. They also say that a number of reports were ordered after the compulsory conference and the finger should not be pointed solely at the defendant in essence because of late provision of expert reports. I have been able to find a different decision of the Supreme Court, that is, the matter

Orders