Joseph Nati (by his tutor Suzanna Nati) v Nominal Defendant

[2018] NSWDC 171

District Court

New South Wales

Medium Neutral Citation:	Joseph Nati (by his tutor Suzanna Nati) v Nominal Defendant [2018] NSWDC 171
Hearing dates:	On the papers
Date of orders:	26 June 2018
Decision date:	26 June 2018
Jurisdiction:	Civil
Before:	Wilson SC DCJ
Decision:	Confirm cost orders from 3 May 2018: 1. Grant the plaintiff leave to discontinue these proceedings conditional upon the following: (a) that the costs incurred by the first defendant be paid by the tutor, Suzanna Nati, on an indemnity basis from 7 January 2015 to date; and (b) that the costs incurred by the third defendant be paid by the tutor, Suzanna Nati, on an indemnity basis from 4 November 2014 to date.
Legislation Cited:	Motor Accidents Compensation Act 1999 Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005
Category:	Costs
Parties:	Joseph Nati (by his tutor Suzanna Nati) (Plaintiff) Nominal Defendant (1st Defendant) CIC Allianz Insurance Ltd (3rd Defendant)
Representation:	Counsel: Mr A Kernaghan (Plaintiff) Ms A Kyprianos (1st Defendant) Ms I Ryan (3rd Defendant)   Solicitors: Matthews Folbigg (Plaintiff) Moray & Agnew (1st Defendant) Hall & Wilcox (3rd Defendant)
File Number(s):	2016/254686
Publication restriction:	None

Judgment

1. This matter came before me on 3 May 2018 at which time the plaintiff sought leave to discontinue the proceedings against the defendants.

2. The plaintiff’s action was brought by a tutor, Suzanna Nati, his mother and related to a motor vehicle accident which was said to have occurred on 2 August 2014.

3. On 3 May 2018, I granted the plaintiff leave to discontinue the proceedings conditional upon the following:

1. that the costs incurred by the 1st defendant (the Nominal Defendant) be paid by the tutor, Suzanna Nati, on an indemnity basis from 7 January 2015 to date; and

2. that the costs incurred by the 3rd defendant (CIC Allianz) be paid by the tutor, Suzanna Nazi, on an indemnity basis from 4 November 2014 to date.

4. Other orders were made in relation to the defendants’ application for a gross sum costs order and also the referral of this matter to the Office of the Director of Public Prosecutions.

5. My reasons for ordering costs on an indemnity basis were, at that time, reserved and are now provided.

6. I should first observe that the dates referred to in the orders for costs were the dates upon which the respective insurers commenced managing the claims brought against them.

7. On the application to discontinue the proceedings, the plaintiff relied upon the following evidence:

1. the affidavit of Joseph Nazi Jr sworn April 2018 (Exhibit 1); and

2. the affidavit of Suzanna Nati sworn 3 May 2018 (Exhibit 2).

8. The 1st and 3rd defendant is relied upon the following material:

1. the affidavit of Leslie Moon sworn 30 April 2018 (Exhibit A);

2. the affidavit of Grant Galvin affirmed 21 March 2017 (Exhibit B); and

3. the affidavit of Grant Galvin affirmed 21 May 2017 (Exhibit C).

9. The background to the plaintiff’s claim is that on 2 August 2014 at approximately 3:30am he alleged to have been a passenger in a van being driven by his father Joseph Nati (formerly the 2nd defendant). It is said that the vehicle was being driven in a southerly direction when near the intersection of Old Northern Road and Cranstons Road, Middle Dural, the 2nd defendant allegedly swerved to avoid an unidentified vehicle (the 1st defendant) which had allegedly come onto the correct side of the road. The van in which the plaintiff was travelling left the roadway and collided with a tree.

10. The 3rd defendant was joined to the proceedings on its application pursuant to section 119 of the Motor Accidents Compensation Act 1999 on the basis that the claim brought by the plaintiff was fraudulent.

11. The proceedings brought against the 2nd defendant were separately and earlier discontinued.

12. The remaining defendants (the 1st and 3rd) denied liability. They also denied that the vehicle was being driven by the 2nd defendant at the time of the incident and asserted that the vehicle was being driven by the plaintiff in a northerly direction on Old Northern Road, Middle Dural. Further, it was denied that the incident was caused (and, therefore, the plaintiffs injuries suffered) as a result of negligence of the driver of an unidentified vehicle.

13. The 1st and 3rd defendants’ case was that the plaintiff was driving the subject vehicle in a northerly direction when he lost control of the vehicle on a corner causing it to cross onto the correct side of the road and collided with a tree.

14. The 1st and 3rd defendants relied upon 3 categories of evidence in support of their position.

15. First, they obtained the Telstra mobile phone records in respect of the 2nd defendant. Those records indicate that, around the time the accident was said to have occurred, the 2nd defendant was situated close to Flemington Markets, a considerable distance from where the accident is said to have occurred.

16. Secondly, reliance is placed upon the evidence of an expert accident reconstructionist who expressed the opinion that the accident was consistent with a loss of control due to error of the driver, said to be the plaintiff.

17. Thirdly, the 1st and 3rd defendants relied upon a statutory declaration which was marked ‘Confidential’ and placed into a sealed envelope. The contents of that document, accepting its truth, completely undermined the plaintiffs claim and justified the position adopted by the insurers.

18. The affidavit sworn by the plaintiff was brief and contain the following statement:

“I have no independent recollection as to what occurred in the most recent accident. I rely on what my father told me. That is, that he was the driver and lost control due to the presence of an oncoming vehicle.”

19. The only other evidence offered by the plaintiff on the question of discontinuance and costs was from Suzanna Nati, his tutor. It contains the following statement

“My husband is the 2nd defendant and he told me that he was the driver of the vehicle at the time of the collision, and that the vehicle left the carriageway due to the presence of an oncoming vehicle.”

20. The tutor also referred to the fact that the plaintiff had told her on numerous occasions that he did not wish the case to go on. She stated “both my son and I wish to discontinue the case and get on with our lives”. In the affidavit, she referred to the fact that she was aware that she may be liable for costs and sought an order that each party bear his/its own costs.

21. The evidence clearly established that the claim was fraudulent and that the plaintiff and the 2nd defendant had made statements to the 1st and 3rd defendants as well as the police which were false and misleading, knowing such statements to be false and misleading. Plainly, the intention of the plaintiff and 2nd defendant was to obtain a financial advantage being damages in respect of the catastrophic injuries said to have been suffered by the plaintiff in the subject accident. It may also be readily inferred from the evidence relied upon by the 1st and 3rd defendants (most notably exhibit C) that the tutor was aware of the fact that the claim was fraudulent. In making that observation, I make no specific finding against the tutor in that respect.

22. It accordingly fell to be determined who is to pay the costs of the 1st and 3rd defendants in respect of these proceedings and the claim generally.

23. On behalf of the insurers, it was forcefully argued by Mr Stitt QC that, having regard to all the circumstances, the costs should be paid by the tutor on an indemnity basis. I agreed with that submission and made appropriate orders.

24. It is uncontroversial that, in the circumstances which exist here, a person who consents to act as tutor on behalf of a disabled person, may be personally liable for any costs order made against the plaintiff. It is equally uncontroversial that an order for costs may also be made directly against the tutor. In the present case, the issue became on what basis the costs order should be made.

25. Section 98 of the Civil Procedure Act 2005 provides the court with a wide discretion when it comes to the question of costs both as to by whom they should be paid and whether they ought to be awarded on an ordinary basis or an indemnity basis. Whilst it is often said that there must be some relevant misconduct on behalf of the party by whom costs are to be paid, section 98 provides no such limitation.

26. Some of the examples provided in the notes to rule 42.5 of the Uniform Civil Procedure Rules 2005 are apposite in the present case. They include:

1. where a party has misled the court including conducting proceedings on a false basis and giving untruthful evidence;

2. where a claim is made which is fraudulent;

3. where a party has maintained proceedings that they should have known had no real prospect of success;

4. where a party has abandoned a claim; and

5. where proceedings have been maintained for an ulterior purpose, in the present case for the fraudulent purpose of obtaining a financial advantage.

27. In my opinion, all of those circumstances arise in the present case. Representations have been made by the plaintiff, on behalf of the plaintiff and by the 2nd defendant which were false and misleading, directed to obtaining financial advantage. Such delinquent conduct, in my view, permits the exercise of the court’s discretion to order costs to be paid on an indemnity basis.

28. Accordingly, I confirm the orders for costs made on 3 May 2018.

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Decision last updated: 26 June 2018