King v Allianz Australia Insurance Limited

In the case of King v Allianz Australia Insurance Limited, the appellant was involved in a motor vehicle accident and subsequently settled a personal injuries proceeding with the insurer. The parties had agreed that the appellant’s costs and outlays would be assessed on the District Court scale. The appellant engaged a clinical anatomist to provide a medico-legal report for the trial, which the insurer objected to on the basis that it was not necessary or proper and overlapped with reports from other medical specialists. The costs assessor allowed the costs for the report, but the insurer applied for a review of this decision. The primary judge found no error in the costs assessor’s exercise of discretion but held that the report was inadmissible and the appellant was not entitled to the costs of the report. The insurer also objected to the amount of care and consideration claimed by the appellant’s solicitors, arguing that it should be reduced to 25 per cent due to the heavy reliance on counsel. The costs assessor allowed 30 per cent for care and consideration, and the insurer applied for a review of this decision. The primary judge considered the costs assessor’s reasons were inadequate and reduced the amount of care and consideration to 25 per cent on the basis that 30 per cent was excessive.

The primary legal issues the court was required to decide related to the appropriateness of the primary judge’s review of the costs assessor’s decision regarding the clinical anatomist’s report and the care and consideration allowance. The insurer argued that the primary judge should have interfered with the exercise of discretion of the costs assessor regarding the clinical anatomist’s report, as there was no error in the costs assessor’s exercise of discretion, and the relatively modest amount of costs associated with the objection did not warrant leave for reviewing this aspect of the costs assessor’s decision. The insurer further argued that the primary judge should have interfered with the exercise of discretion of the costs assessor regarding the care and consideration allowance, as the costs assessor’s reasons for allowing 30 per cent for care and consideration were inadequate, and the respondent submitted that there was not a corresponding reduction in the care and consideration item relative to the antecedent substantial allowance of the fees of counsel.

The court found that the ground on which the primary judge did base his decision was one for which he must have impliedly given leave under r 742(5). In view of the fact that it was not a ground raised by the respondent, the primary judge’s recognition that there was no error in the costs assessor’s exercise of discretion, and the relatively modest amount of costs associated with the objection, leave for reviewing this aspect of the costs assessor’s decision was not warranted. The application for reviewing this aspect of the decision should not have succeeded. Regarding the care and consideration allowance, the court found that the costs assessor had allowed or partially allowed the respondent’s objections to some items on the basis of excessive counsel’s fees or overuse of counsel, resulting in a small reduction in the overall fees allowed for counsel. The primary judge considered the costs assessor’s reasons were inadequate and reduced the amount of care and consideration to 25 per cent on the basis that 30 per cent was excessive. However, the court found that the primary judge should not have interfered with the exercise of discretion of the costs assessor regarding the care and consideration allowance, as the appellant submitted the competing arguments were before the costs assessor and resulted in a discretionary judgment in respect of which the respondent could show no error of principle.

ORDERS:
1. Appeal allowed with costs.
2. Set aside the orders at first instance.
3. Instead, the application for review is dismissed.
4. The respondent must refund to the appellant the amount paid by the appellant to the respondent consequential upon the orders at first instance.
5. The respondent must pay the appellant’s costs of the application for review assessed on the District Court scale.