Insurance Australia Ltd t/a NRMA Insurance v Milton (No 2)

[2016] NSWCA 173

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Insurance Australia Ltd t/a NRMA Insurance v Milton (No 2) [2016] NSWCA 173

Hearing dates:

On the papers

Decision date:

25 July 2016

Before:

Basten JA, Leeming JA, Simpson JA

Decision:

In place of order (5) made on 5 July 2016 (but not entered) the Court makes the following order:

 

(5)   Order that the appellant’s solicitor –

 (a)   not charge his client with more than 50% of the costs and disbursements associated with preparing the Blue appeal books;
(b)   to the extent that such costs or disbursements have already been paid or might be paid in the future, reimburse the client for that amount; and
(c)   give the client written notification of the terms of this order.

Catchwords:

APPEAL – preparation of appeal books – inclusion of unnecessary material – failure to comply with Uniform Civil Procedure Rules 2005 (NSW), r 51.29 – whether to impose sanction on practitioner

 

PRACTICE AND PROCEDURE – costs – inclusion in appeal books of documents not relevant and necessary for conduct of appeal – whether order should be made denying solicitor right to recover costs of preparation of appeal books from client

  WORDS AND PHRASES – “relevant and necessary”

Legislation Cited:

Evidence Act 1995 (NSW), s 55
Supreme Court Act 1970 (NSW), s 69
Uniform Civil Procedure Rules 2005 (NSW), r 51.29

Category:

Costs

Parties:

Insurance Australia Ltd t/as NRMA Insurance (Appellant)

Representation:

Counsel:
Mr M A Robinson SC

  Solicitors:
Moray & Agnew

File Number(s):

2015/292391

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

[2015] NSWSC 1392

Date of Decision:

25 September 2015

Before:

Beech-Jones J

File Number(s):

2015/120236

Judgment

1. THE COURT: In handing down judgment in this matter on 5 July 2016, two members of the Court (with the agreement of the third) expressed concerns as to the volume of material in the Blue Appeal Books and as to who should bear responsibility for the costs and resources wasted in preparing the books. Relevantly for present purposes, the Court included the following directions in its orders:

(4)   Direct that the appellant’s solicitor file by 19 July 2016 any written submissions with respect to the matters raised in [70] of the judgment of Leeming and Simpson JJA, failing which proposed order (5) will be made.

(5)   Unless the appellant’s solicitor files written submissions as provided in order (4), order that the appellant’s solicitor –

(a)   not charge his client with any of the costs and disbursements associated with preparing the Blue appeal books;

(b)   to the extent that such costs or disbursements have already been paid or might be paid in the future, reimburse the client for that amount; and

(c)   give the client written notification of the terms of this order.

2. On 14 July 2016 the appellant’s solicitor, identified as Mr Peter Utiger of Moray & Agnew, filed submissions resisting an order in the form of (5) and indeed requesting that those proposed orders “be removed from the published judgment” and that the whole of the reasons of two members of the Court (at [60]-[70] of the published judgment), “be revised and amended appropriately.”

3. Two matters should be noted by way of introductory observations. First, the submissions were prepared by senior counsel who appeared for the appellant in this Court. They were said to be submitted pro bono publico and with the consent of the appellant. There was, to say the least, a potential conflict of interest between the appellant and its solicitor and, as it further appeared, between the appellant and senior counsel and between senior counsel and the solicitor. That is because in the course of the written submissions senior counsel indicated that it was he who advised as to what material should go into the blue appeal books.

4. The second observation is that, the request to reformulate the earlier judgment and orders apparently derived from a view that the Court “has sent a strong message here in its judgment about appeal books and costs and unnecessary expense in the preparation of appeals”, combined, perhaps, with a concern that the appellant’s solicitor “should not be singled out”. At the same time, and after reference to a judgment of this Court in 2012, it was suggested that what had already been said “should be sufficient to change the present practices that, to some extent, appear intractable.”

5. These statements are internally inconsistent. If the present practices are “intractable”, it appears that the “strong message” has not yet been received. What is more, the impact of the “strong message” would inevitably be diluted if this Court acceded (making the large assumption that there were power to do so) to the invitation to remove the paragraphs of the reasons which conveyed that message.

6. Otherwise, the solicitor seeks to rely upon four propositions by way of justification or excuse. These are that, (a) the requirements of Uniform Civil Procedure Rules 2005 (NSW), (“UCPR”), r 51.29(1)(b), that the blue appeal books must contain “all documents before the court below … relevant and necessary for the hearing and determination of the proceedings” is an imprecise and uncertain test; (b) judges in the Division have on occasion required the inclusion of all material before the decision-maker; (c) other parties (including submitting parties) may object to a reduced version of the documents before the decision-maker, and (d) the question of the correct approach to be adopted in the present case was the subject of consideration by both solicitors and counsel. These factors should be addressed in turn.

(1)   The “relevant and necessary” test

7. The proposition that experienced legal practitioners have difficulty with the application of such a test defies comprehension. By analogy with s 55 of the Evidence Act 1995 (NSW), the universe of relevant material is limited to that which could rationally affect determination of the issues raised on appeal. Within that broad ambit, a cull of all those which are not “necessary” for the purposes of the proposed arguments is required.

8. As a practical matter, the exercise of selection at first instance will depend primarily, if not exclusively, on the available grounds of review. It is neither necessary nor desirable to attempt a generic advice on evidence in these reasons. However, some points of principle may be identified, by way of example, in circumstances where it is alleged that practitioners with great experience in this area are having difficulty in understanding what is required of them.

9. First, a rule of thumb is that the grounds of review available under s 69 of the Supreme Court Act 1970 (NSW) are limited to those constituting jurisdictional error, or error of law on the face of the record. That these concepts are not confined by bright line definitions and may, in areas, be contestable are factors which suggest greater rather than less care in formulating the bases on which review is sought. However, if a particular ground is an error of law on the face of the record, the basic principle is that no material beyond that which constitutes the record should be included. In broad terms, the record will include the application before the decision-maker, the grounds (in a pleading sense) of any objection to the application, the decision and the reasons given for the decision.

10. Although jurisdictional error is arguably a more restricted basis of review than error of law generally, the material which may be relevant may not be so restricted. For example, in order to demonstrate procedural unfairness (if that is a ground relied upon) it may be necessary to put on evidence as to the process adopted in reaching the impugned decision. That may require the production of material (by way of affidavit) which was not in terms before the decision-maker. Fresh material may also be relied upon in circumstances where it is alleged that some matter constitutes a “jurisdictional fact”, namely a fact which constitutes a precondition to the exercise of the decision-maker’s powers and which can only finally be determined by the reviewing court. (These cases are likely to be rare.)

11. In theory, all of the material before the decision-maker might need to be tendered where it is contended that there was “no evidence” on which to base a material finding. However, there will generally be other ways of proving a universal negative. (Again, such cases are rare.)

12. There will undoubtedly be areas of contestation where no firm conclusion can be reached in advance of the final submissions. For example, recent cases have seen applicants present arguments along the lines that, having made a particular submission to the decision-maker, failure to address that submission expressly constitutes a failure to take account of a mandatory consideration. To similar effect, failure to refer in written reasons to particular reports or other material before the decision-maker, is also on occasion so categorised. Such formulations of the grounds are used to identify additional material which might not otherwise properly be included in the blue appeal books. Often the categorisations fail, because based on a misunderstanding as to what constitutes a permissible ground of review. Those cases are not within the scope of the present concern, although the usual costs consequences may follow from failure to identify legitimate grounds. The point for present purposes is merely that identification of that which is “relevant and necessary” for the pursuit of legitimate grounds of review is not an exercise which cannot be undertaken by competent practitioners.

13. That said, the immediate issue is the selection of documents for inclusion in appeal books. Where a document has not been relied on or referred to by any party at first instance, nor by the primary judge, and is not sought to be relied on by the appellant on appeal, it is not a document which should be included in the appeal books. It is self-evident that it is not “relevant and necessary”.

14. This Court’s reasons on the appeal observed that it was clear prior to the commencement of the hearing before the primary judge that neither party proposed to rely upon any of the documents exhibited to the affidavit, save for a small minority, and the primary judge indicated (with the parties’ acquiescence) that he would not rely on documents to which he had not been taken. There could be no doubt that thousands of pages of documents were reproduced which were neither relevant nor necessary for the determination of the appeal. That excess was coupled with the failure to include in the appeal books the very decision from which judicial review had been sought, being the document which, above all others, was relevant and necessary.

(2)   Expression of judicial preference for material

15. The submissions identified a number of cases where judges at first instance had expressed a view that they would prefer to have all the material or particular material included in the tender, and rejected a constrained and selective approach to that which was properly before the reviewing court.

16. Neither the context nor the nature of the issues was identified in respect of any of these cases. No transcript references were provided. In one case in which a judge was reported as saying (the words being those in the submission, and not purporting to be a verbatim record) “he would rather have the comfort of having all of the material before him that was before the original decision-maker”, a review of the judgment delivered suggested that in fact little if any of the evidential material had proved to be relevant. What induced the comment and in what terms the comment was actually made is not known.

17. In a second case a judge was said to have asked “whether there was in fact any evidence before the … claims assessor” which would have permitted a particular finding. It does not appear from the judgment in that matter that any no evidence ground was asserted; accordingly the question (if indeed posed in those terms) could have been quickly disposed of.

18. Whatever the circumstances of the individual cases, it may be accepted that there will be occasions on which a selection of relevant and necessary material errs on the conservative side and the material prepared for the hearing may need to be supplemented. That possibility does not undermine the principle explained above. In general, the proposition that all the material before the administrator should be placed before the reviewing court must be rejected.

(3)   Use of material by other parties

19. Somewhat surprisingly, this factor was said to include the possibility of use of the material by submitting parties. That aspect of the submission may be disregarded. Otherwise, the short answer to the submission is the same as that in relation to judicial suggestions. If there is material available in the record which provides an answer to a ground of review as formulated by the applicant, there is nothing in the exposition of principle set out above which would preclude the respondent from seeking to tender that material at first instance, or to supplement the books prepared for an appeal.

20. Furthermore, it would be wrong for an applicant to exclude material which might reasonably be considered relevant and necessary because it did not support a submission it sought to make. It is not for the applicant to throw up its hands and abandon the selection process on the unprincipled basis that some other party may have other ideas about what should be before the court.

(4)   The issue of selection was considered

21. Finally, and having regard to the particular circumstances of the present case, the submissions asserted that the question of whether a selection should be made or not was adverted to by both solicitors and counsel, in preparing the case for hearing on the appeal (and, presumably, at first instance). All that can be said in response to that submission is that, as explained in the earlier judgment, the decision reached was plainly wrong. There was no attempt to contradict the factual proposition that three out of four of the blue appeal books were not opened on the appeal. (Indeed, a significant proportion of the material in the fourth book was not referred to.) Nor was it disputed that there was no practical difficulty in identifying documents which should have been excluded. In these circumstances, it is neither necessary nor appropriate to inquire into the decision-making process of those responsible for preparing the appeal books.

Conclusions

22. If the appellant’s solicitor is of the view that he has been “singled out” and “visited with” an adverse costs order, he should be disabused of that opinion. As was sought to be explained in the earlier judgment, this is not the first occasion on which the issue has been raised. Nor, it may safely be assumed, will it be the last occasion, unless the present practice (of at least some practitioners) is abandoned.

23. Both the general and the particular matters raised in opposition to the costs order having been rejected in the terms indicated above, it would appear to be appropriate to make an order broadly in the form proposed in the earlier judgment. It should be noted, however, that what is proposed is not an order that any practitioner pay the costs in issue, but rather that, as between the legal practitioners and the client, the client not wear those costs.

24. There are two further factors which should be addressed. First, as a general matter, it may be that the selective exercise which is required will itself involve an exercise of professional judgment and will therefore result in costs to the client. That proposition may be accepted, though it is not an answer to the issue raised in the present case. Nor is it an answer to the general obligation to limit the material to be tendered. In every case brought before the superior courts, consideration has to be given prior to trial to the identification of relevant and necessary evidence. Often that will be formalised in an advice on evidence from counsel. It is the same consideration which is required for the purposes of judicial review. Indeed, the steps of identifying grounds of review, advising on the prospects of success and preparing written submissions in support, will all involve practitioners in an assessment of what material is required and what is not. It is unlikely that significant additional costs would be incurred in the selection process required for the preparation of the blue appeal books.

25. Finally, there is the specific objection that some material was required to be in the blue appeal books and, accordingly, the solicitor should at worst only wear the cost of three of the four (or 75%) of the blue books. That is in accord with the assessment made in the primary judgement at [62] and [64]. Although probably favourable to the solicitor, as this is the first occasion on which an order has been made of the kind proposed, it is appropriate that there be some reduction in the costs to be worn by the practitioners. Accordingly, in place of order (5) made on 5 July 2016 (but not entered) the Court should make the following order:

(5)   Order that the appellant’s solicitor –

(a)   not charge his client with more than 50% of the costs and disbursements associated with preparing the Blue appeal books;

(b)   to the extent that such costs or disbursements have already been paid or might be paid in the future, reimburse the client for that amount; and

(c)   give the client written notification of the terms of this order.

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Decision last updated: 25 July 2016