QBE Insurance (Australia) Limited v Meredith (No 2)

[2017] NSWSC 1215

Supreme Court

New South Wales

Medium Neutral Citation:	QBE Insurance (Australia) Limited v Meredith & Ors (No 2) [2017] NSWSC 1215
Hearing dates:	On the papers
Decision date:	15 September 2017
Jurisdiction:	Common Law
Before:	N Adams J
Decision:	(1) The first defendant is to pay 50% of the plaintiff’s costs. (2) The second defendant is to pay 50% of the plaintiff’s costs. (3) Decline to issue a certificate to the first defendant under s 6(1) of the Suitors’ Fund Act 1951 (NSW).
Catchwords:	COSTS – whether to make costs order against submitting party – where submitting party an administrative decision-maker COSTS – whether to issue certificate under s 6(1) of the Suitors’ Fund Act – whether proceedings “in the nature of an appeal” – whether review panel a “court”
Legislation Cited:	Motor Accidents Compensation Act 1999 (NSW), s 63 Suitors’ Fund Act 1951 (NSW), ss 6, 6C Supreme Court Act 1970 (NSW), s 69 Uniform Civil Procedure Rules 2005 (NSW), r 6.11
Cases Cited:	AAI Limited v Fitzpatrick (No 2) [2015] NSWSC 1272 Allianz Australia Insurance Limited v Habib (No 2) [2015] NSWSC 1870 Allianz Australia Insurance Ltd v MacKenzie & Ors (No. 2) [2014] NSWSC 254 Allianz Australia Insurance Ltd v Roger Ward v Ors [2010] NSWSC 720; (2010) 57 MVR 327 Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 Ex parte Parsons; Re Suitors’ Fund Act (1952) 69 WN (NSW) 380 Gennacker Pty Ltd v Bennett (No 2) [2015] NSWSC 1024 GIO General Ltd v Smith [2011] NSWSC 998 Henderson v QBE Insurance (Australia) Ltd [2013] NSWCA 480 IAG Limited v Riley [2013] NSWSC 684 Insurance Australia Limited t/as NRMA Insurance v Banos (No 2) [2013] NSWSC 1668 Jenkins v Ambulance Service of New South Wales [2015] NSWSC 633 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Madsen v Power (No 2) [2010] FCA 686 Mahenthirarasa v State Rail Authority of New South Wales (No 2) (2008) 72 NSWLR 273; [2008] NSWCA 201 Psychologist Registration Board of Victoria the Herald v Weekly Times Limited [2000] VSCA 118 QBE Insurance (Australia) Limited v Meredith & Ors [2017] NSWSC 466 QBE Insurance (Australia) Ltd v Henderson [2012] NSWSC 1607 R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 The Magistrates’ Court of Victoria at Heidelberg v Robinson (2000) 2 VR 233 Valorne Pty Ltd v Building Appeals Board [2013] VSC 641 Wentworth v Wentworth (1999) 46 NSWLR 300
Category:	Costs
Parties:	QBE Insurance (Australia) Limited (Plaintiff) Leza Pam Meredith (First Defendant) The State Insurance Regulatory Authority (Second Defendant) The Medical Assessors Review Panel (Third Defendant)
Representation:	Counsel: Mr K P Rewell SC (Plaintiff) Mr T Saunders (First Defendant) Solicitors: Moray & Agnew (Plaintiff) RMB Lawyers (First Defendant) NSW Crown Solicitor (Second and Third Defendants)
File Number(s):	2016/00291817
Publication restriction:	Nil

JudgmenT

1. This judgment concerns whether a costs order should be made against a statutory body that filed a submitting appearance in judicial review proceedings in this Court.

2. The plaintiff, QBE Insurance (Australia) Limited (“QBE”), is the compulsory third party insurer of the vehicle said to be at fault in the motor vehicle accident on 28 October 2010 in which the first defendant, Leza Meredith, sustained injuries to her neck and shoulder. QBE disputed that the first defendant suffered a Whole Person Impairment (“WPI”) of greater than 10% and applied to the Motor Accidents Medical Assessment Service within the State Insurance Regulatory Authority (“SIRA”) for determination of the dispute as to her WPI. SIRA is the second defendant in these proceedings.

3. The first defendant was dissatisfied with the initial assessment and applied to refer the dispute to a review panel of medical assessors (“the Review Panel”) pursuant to s 63(1) of the Motor Accidents Compensation Act 1999 (NSW). The Review Panel is the third defendant in these proceedings. It determined the review on 30 June 2016.

4. QBE invoked this Court’s supervisory jurisdiction, regulated by s 69 of the Supreme Court Act 1970 (NSW), in respect of the decision of the Review Panel made on 30 June 2016. Following a hearing before me on 21 March 2017, I made orders on 26 April 2017 quashing the decision of the third defendant and remitting the matter to the second defendant for allocation to a review panel for determination according to law: QBE Insurance (Australia) Limited v Meredith & Ors [2017] NSWSC 466.

5. Neither SIRA nor the Review Panel took any part in the proceedings, having both filed submitting appearances. This left the first defendant as the only contradictor. At the conclusion of the hearing, counsel for the first defendant indicated that, in the event that that QBE was successful, the first defendant would be seeking costs from the submitting parties. Accordingly, I reserved the issue of costs. The parties agreed upon a timetable for the filing of written submissions on this issue.

The proceedings for judicial review

6. The proceedings for judicial review turned on the absence of any reference in the reasons of the Review Panel to any of the five additional medical reports that QBE provided to SIRA following a request to file any further material. QBE conducted the proceedings on the basis that the Review Panel had either deliberately ignored the reports or at the very least overlooked them. The first defendant’s position was that it was open to this Court to find that the Review Panel did consider the reports. She submitted that the absence of any mention of them in the reasons does not necessarily mean that they were not considered. The resolution of these proceedings thus turned on a factual matter, the details of which only SIRA and the Review Panel could have been aware.

7. On 21 December 2016, QBE’s solicitor wrote to the NSW Crown Solicitor, who appears for both submitting parties, inquiring as to whether SIRA had forwarded the five medical reports in question to the Review Panel for consideration. A letter dated 1 February 2017 was subsequently sent from the Crown Solicitor’s Office (“CSO”) on behalf of SIRA in these terms: “I have now received instructions from the State Insurance Regulatory Authority confirming that these reports were provided to the Review Panel on 10 May 2016.” No other material throwing light on the issue the subject of the judicial review proceedings was forthcoming.

8. Given that there was an evidentiary vacuum on the issue, I was not able to make any finding as to whether the failure to consider any of QBE’s additional material was deliberate or the result of an oversight. It would have been a very serious matter to make a finding that the conduct was deliberate without further material. Accordingly, I concluded that, for whatever reason, the material was not considered by the Review Panel. There was thus a denial of procedural fairness and a need for the Review Panel to reconsider the matter.

9. At the conclusion of the hearing, senior counsel for QBE sought an order that, in the event that QBE was successful, the Court remit the matter to SIRA to be considered by a differently constituted review panel. This submission was premised on an assumption that the Review Panel had deliberately ignored the five new reports and rigidly adhered to its preliminary findings from 2014. It was conceded that there was insufficient material before the court for me to be satisfied that any apprehension of bias existed. In the circumstances, I did not remit the matter to be heard by a differently constituted review panel. My reasons for this (at [78] – [79]) were as follows:

“I have considered the competing arguments. One of the difficulties is the absence of any material as to why the Review Panel did not refer to the new reports at all in its reasons. I have concluded that QBE has established that the reports were not considered, but I have done so in the absence of any indication from the Review Panel as to the actual situation. It seems to me that, if it were established that the reports were in fact before the Review Panel and that they were intentionally disregarded, there would be some force to Mr Rewell’s submission. I have found, however, that the material before me establishes that the more likely situation is that the documents did not physically make their way to the three members of the Review Panel.

In the circumstances, I am not satisfied that any apprehended bias or pre-judging of the matter has been demonstrated such that it would be appropriate to remit the matter to SIRA for allocation to a differently constituted review panel.”

Material relied upon by the parties since the hearing

10. An affidavit of Margaret Curran sworn on 2 June 2017 was filed on the costs application. She is a solicitor employed by the firm of solicitors representing the first defendant. Annexed to her affidavit are four letters.

11. The first letter, dated 12 October 2016, is from the CSO to Ms Curran. That letter encloses the relevant submitting appearances and advises Ms Curran that, should the first defendant consider seeking costs against SIRA:

“The authorities indicate that costs orders should not be made against a tribunal or public body or official which has filed a submitting appearance, except in exceptional circumstances: Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No. 3) (1987) 77 ALR 609; Wentworth v Wentworth (1999) 46 NSWLR 300; Krslovic Homes Pty Ltd v Sparkes and Ors [2004] NSWSC 374.”

12. The letter also referred Ms Curran to Supreme Court Practice No SC CL 3 at paragraph [17].

13. The second letter is dated 13 October 2016 and is from Ms Curran to the CSO. In that letter, Ms Curran puts the CSO on notice on behalf of the first defendant that, if the first defendant is ultimately unsuccessful on the summons and unable to claim costs from QBE, she will claim costs from the SIRA and/or the Review Panel. The basis for such an application, as foreshadowed in the letter, is that the first defendant would have been put to the expense of defending the summons through no fault of her own.

14. The third letter is dated 3 November 2016 and is from the CSO to Ms Curran. This letter confirms the CSO’s position regarding the question of costs. It states that, “The authorities indicate that, in order for a costs order to be made against a tribunal, public body or official, an application for costs must point to an alleged mistake or error on the part of the relevant authority which reaches a very high level of severity.” The letter then refers again to the decisions cited in the previous correspondence, as well as the decision of Spender J in Madsen v Power (No 2) [2010] FCA 686.

15. The fourth letter is dated 9 May 2017 and is a letter from SIRA to the first defendant’s solicitors. After making reference to my decision of 26 April 2017, the letter is in these terms:

“I have noted Justice Adams’ orders in respect of the constitution of the new Panel. Following a further review of internal records, I am satisfied that the additional reports referred to in the Decision were before the Review Panel at the time of their assessment, and they were disregarded without explanation.

I therefore will refer the matter to a differently constituted Review Panel as soon as possible to avoid further delays in resolving the dispute. You will be advised of those details shortly. The new Panel will be provided with all of the documentation that was available to the first Panel, plus a copy of Justice Adams [sic] decision.”

[emphasis added]

16. No evidence was filed on behalf of the SIRA, the Review Panel or QBE on the question of costs.

The submissions of the first defendant

17. On behalf of the first defendant it was submitted that the circumstances of this matter constitute an example of the “exceptional circumstances” described in the cases to which the CSO referred in its letter of 12 October 2016. Reliance was placed on the affidavit of Ms Curran. It was submitted that, following Ms Curran’s letter to the CSO on 13 October 2016, SIRA and the Review Panel chose not to provide any further assistance to the first defendant to defend the summons. The only “evidence” that they provided was the letter from the CSO dated 1 February 2017 advising that the additional medical reports were furnished to the Review Panel on 10 May 2017. It was submitted that this letter “left more questions than answers” and meant that the first defendant was unable to answer questions from the bench that arose during the hearing.

18. It was further submitted that, by sending the letter of 1 February 2017, SIRA and the Review Panel did take an active part in the proceedings, albeit that their participation was of no assistance to the first defendant. Reliance was also placed upon the observations that I made at [58] and [59] of my earlier judgment.

19. The first defendant’s position was that SIRA and the Review Panel were put on notice prior to the hearing of her difficulties in relation to this matter and that they chose not to assist in the proceedings following that notification. In that context, SIRA has now confirmed that the Review Panel disregarded the additional five reports without any explanation.

20. In reliance upon the observations of Wilcox J in Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No. 3) (1987) 77 ALR 609 (at 612) (“Our Town”), it was submitted that the present case is an “unusual case” such as would enable this Court to make an order for costs against SIRA. The basis for the case being unusual was said to be the inexplicable disregard by the Review Panel of five medical opinions that were before it and the concomitant denial of procedural fairness to QBE. It was submitted that the cumulative effect of the failure to assist the first defendant, the late admission by SIRA as to what had occurred to the five additional reports, and the further delay that this will cause for the first defendant, to whom no fault is attributable, warrants a costs order in favour of the first defendant.

Submissions on behalf of the submitting parties

21. The starting point for the submissions filed by the CSO was the decision in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 (“Hardiman”) (at 35-38). It was submitted that, having filed submitting appearances, SIRA and the Review Panel were excused from attending further hearings of the Court in this matter as per paragraph [12] of Practice Note SC CL 3 – Supreme Court Common Law Division – Administrative and Industrial Law List (from 8 December 2016) and paragraph [17] of Practice Note SC CL 3 – Supreme Court Common Law Division – Administrative and Industrial Law List (until 7 December 2016).

22. Reliance was placed on the decisions in Our Town and Wentworth v Wentworth (1999) 46 NSWLR 300 to the effect that a costs order will only be made against a statutory decision-maker where exceptional or special circumstances are demonstrated. Mere error on the decision-maker’s part will not, on its own, constitute special circumstances. This is so notwithstanding that the error has given rise to the proceedings. It must generally be shown that the decision-maker has been “guilty of serious misconduct or corruption or has acted perversely”: Psychologist Registration Board of Victoria v The Herald and Weekly Times Limited [2000] VSCA 118 at [11]; Valorne Pty Ltd v Building Appeals Board [2013] VSC 641 at [22] (“Valorne”); Madsen v Power; R v Liverpool Justices; ex parte Roberts [1960] 1 WLR 585 (at 586-7).

23. It was accepted on behalf of SIRA and the Review Panel that the Court has a wide discretion in relation to the question of the appropriate costs order. They submitted that such discretion must be exercised judicially and that the circumstances identified by the first defendant were not such as to satisfy the relevant test.

24. No evidence was filed by the submitting parties in support of their position that they should not be required to pay costs in this matter. In relation to the letter sent by SIRA to the first defendant referred to above at [15], it was submitted that the reference to the five reports being “disregarded without explanation” could not be understood as an admission on the part of the Review Panel members.

25. It was accepted that there are cases in which costs have been ordered against tribunals that had engaged in a “blatant, flagrant or gross denial of procedural fairness” and that Merkel v Superannuation Complaints Tribunal [201] FCA 564 (“Merkel”) was one such case. It was submitted that that case can be distinguished on its facts. Similarly, in Valorne, a statutory tribunal was ordered to pay costs on the basis that it had engaged in a flagrant breach of natural justice. In Ripper v Kotzman (2008) 30 VAR 99; [2008] VSC 488, the court declined to grant costs against a medical panel that had effectively disregarded statements made to by the plaintiff. It was submitted that the present case is far removed from cases such as Merkel and Valorne. In this regard, reliance was placed upon [61] – [62] of my earlier decision.

26. The position of the submitting parties was that it was proper that SIRA and the Review Panel not resist the orders sought by QBE and that any suggestion by the first defendant that they should have provided assistance to her is misconceived. It was submitted that it would have been improper to have done so, having regard to the High Court’s comments in Hardiman. It was submitted that the letter forwarded to QBE’s solicitor dated 1 February 2017 cannot be construed as an attempt to defend the proceedings in a manner inconsistent with the submitting appearance and that the first defendant’s characterisation of it as “obscure” is unfair.

27. It was accepted on behalf of SIRA and the Review Panel that criticism could possibly be made of the Review Panel’s failure to put on evidence explaining what occurred on its own initiative. However, it was submitted that the Review Panel’s non-intervention was reasonable in the circumstances. It was submitted that intervention may have been considered an active step in the proceedings, leading to the risk that the Review Panel would have been perceived as attempting to defend its conduct.

28. It was submitted that the observation, at [59] of my earlier decision, that it was “regrettable” that the Review Panel did not provide the Court with assistance would be accepted, but that the refusal to do so was not unreasonable in the circumstances.

29. Finally, reliance was placed upon the model litigant obligations applying to government agencies. Those obligations do not require a statutory body to intervene in judicial review proceedings where it is unclear whether to do so could be perceived as constituting an active defence of its own decision.

30. The ultimate position on behalf of SIRA and the Review Panel was that it was regrettable that the Court was not offered further assistance in this matter, but that there was nothing in their conduct justifying the making of a cost order against either of them.

31. As to the question of whether a certificate should be issued to the first defendant under the Suitors Fund Act 1951 (NSW), it was noted that s 6(1)(a) of that Act only operates where there has been an “appeal” against the decision of a “court”. It was submitted that real questions arise as to whether judicial review proceedings are “in the nature of an appeal” and whether the Review Panel could be considered to be a “court”. Despite this, it was noted that this Court has issued certificates in other proceedings for judicial review of decisions made under motor accidents compensation legislation, including Allianz Australia Insurance Ltd v MacKenzie & Ors(No. 2) [2014] NSWSC 254 at [12]; Allianz Australia Insurance Ltd v Roger Ward v Ors [2010] NSWSC 720; (2010) 57 MVR 327; IAG Limited v Riley [2013] NSWSC 684; GIO General Ltd v Smith [2011] NSWSC 998.

QBE’s submissions

32. QBE’s position was that, given that it was wholly successful in the proceedings, there is no reason why it should not have its costs paid. It was noted that the first defendant made no concession in this matter in circumstances where it was plain on the face of the Review Panel’s certificate that it did not consider the five additional medical reports. QBE noted the submission made at the hearing that the first defendant chose to defend the summons notwithstanding that the certificate of the Review Panel was indefensible. It was submitted that the first defendant should have conceded that the certificate was obviously affected by jurisdictional and legal error. It was open to the Court to conclude that, by choosing to defend the summons, the first defendant exposed herself to a risk of an adverse costs order if unsuccessful.

32. The position of QBE was that the first defendant should be ordered to pay its costs of the proceedings unless the Court considers that the circumstances are sufficiently unusual or exceptional that justice demands that its costs be paid by the submitting parties. QBE submitted that it is entirely a matter for the Court to determine whether the conduct of SIRA and the Review Panel is such as to justify the making of an order for costs against them.

Consideration

34. QBE has been successful. The appropriate order is that costs follow the event and, in the ordinary course, QBE would have its costs paid by the first defendant. In the unusual circumstances of this matter, the issue is whether SIRA and/or the Review Panel should pay part or all of QBE’s costs notwithstanding that they both filed submitting appearances and played no part in these proceedings. In addition, the first defendant submits that she should not be ordered to pay QBE’s costs and that the submitting parties should pay her costs as well.

35. SIRA is the statutory body that administers the Motor Accidents Medical Assessment Service of which the Review Panel formed part. The Review Panel, which was the actual decision-maker, comprised three medical practitioners. In the event that a costs order were to be made against a submitting party in this matter, I see no reason why such an order should be made against both the Review Panel and SIRA, rather than against SIRA alone.

36. I turn first to address the argument that the submitting parties would have breached the principles in Hardiman had they provided the Court with assistance in this matter. I do not accept that this is so on the facts of this case. Hardiman is authority for the proposition that a decision-maker should not actively seek to defend its own decision. It is not authority for the proposition that the statutory bodies that are parties to such proceedings should not assist the Court at all. What the High Court said in Hardiman is (at 35):

“There is one final matter. Mr. Hughes was instructed by the Tribunal to take the unusual course of contesting the prosecutors’ case for relief and this he did by presenting a substantive argument. In cases of this kind, the usual course is for a tribunal to submit to such order as a court may make. The course which was adopted by the Tribunal is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is the risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in this Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal.”

37. I have had regard to the finely balanced position of SIRA and the Review Panel. On the one hand, it is not appropriate for administrative decision-makers to be seen to be defending their decisions in proceedings for judicial review. There may well be matters in which there is a strong desire on the part of the decision-maker to do so, but, as observed by the High Court in Hardiman, that is not appropriate. On the other hand, as model litigants, there was nonetheless an obligation on SIRA and the Review Panel to assist the Court. This is particularly so in circumstances where they were the only parties who had the requisite knowledge.

38. It could not be said that SIRA was unaware that its assistance was sought. The correspondence between the CSO and the first defendant’s solicitor before me on this application shows that the issue was made abundantly clear to them. The first defendant has made persuasive submissions as to the difficult position in which she was placed by reason of the refusal by SIRA to throw any light on what occurred.

39. In being satisfied that, had SIRA assisted the Court by providing it with the relevant information in order properly to consider the issue before it, they would not have thereby placed themselves in breach of the Hardiman principle, the submission by the first defendant that SIRA ceased to be a submitting party when it sent its letter of 1 February 2017 cannot be accepted.

40. I turn next to consider the relevant principles derived from the authorities pertinent to this application.

41. Costs orders are not intended to punish the unsuccessful party. As McHugh J observed in Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 at 566 (citations omitted):

“An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connexion with the litigation: Kelly v Noumenon Pty Ltd. The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory.”

42. Despite this, the conduct of parties to litigation bears upon the question of costs, including as to whether it is appropriate that an adverse costs order be made against a submitting party. It is not the case that a submitting party will never be ordered to pay costs. The words of r 6.11(1) of the Uniform Civil Procedure Rules 2005 (NSW) plainly contemplate such an order, in that a submitting appearance may be qualified by the words “save as to costs”. It is necessary to have regard to the relevant contextual considerations, including the circumstances of the litigation and the conduct and role of the parties: Seller v Jones [2014] NSWCA 19 at [59]; Mahenthirarasa v State Rail Authority of New South Wales (No 2) (2008) 72 NSWLR 273; [2008] NSWCA 201 at [7].

43. In Our Town, Wilcox J stated (at 612), with reference to the Australian Broadcasting Tribunal, that it was only in an “unusual case” that the court would order the Tribunal to pay costs, given the incongruity of telling it not to intervene actively in proceedings to defend its decision (in conformity with the decision of the High Court in Hardiman) and then making an adverse costs order against it.

44. In Madsen v Power, Spender J (at [11]) declined to order costs against the Superannuation Complaints Tribunal. His Honour had granted relief sought by the plaintiff in judicial review proceedings. His Honour was unable to find that, in the circumstances of that case, the Tribunal had acted “perversely, or with disregard for the elementary principles which a court or tribunal ought to obey” (at [20]). He made the obiter observation (at [21]) that, “In a sense, a submitting Tribunal should not be ordered to pay costs, unless the circumstances are such as would, in an ordinary case, justify the ordering of costs on an indemnity basis.”

45. In Psychologists Registration Board of Victoria v The Herald and Weekly Times Ltd, the appellant had at first instance been ordered to pay the respondent’s costs in bringing judicial proceedings to quash a suppression order. Citing Our Town (at 612) and R v Liverpool Justices ex parte Roberts (at 586-7), Charles JA (Winneke P and Phillips JA agreeing) stated at [11]:

“…there is a very-well [sic] established line of authority which holds that costs ought not be awarded against a statutory tribunal which makes an order in excess of its powers unless it can be demonstrated that the tribunal has been guilty of serious misconduct or corruption or has acted perversely.”

46. In Valorne, Daly AsJ found that the Building Appeals Board had breached its obligations of procedural fairness. Her Honour noted at [20] that:

“It is settled authority that while the Court’s wide discretion as to costs cannot be fettered, an order for costs will not ordinarily be made against an inferior court which has made an error of law save in extreme circumstances.”

47. Relying upon Psychologists Registration Board v The Herald and Weekly Times, Daly AsJ considered at [22] that principles governing the award of costs against inferior courts apply equally to statutory tribunals. Her Honour stated at [25]:

“…it can be seen from the authorities that a failure of a court or tribunal to observe fundamental principles of procedural fairness, whether in ignorance or otherwise, may amount to conduct which is of a “perverse” character, in the legal sense, notwithstanding that the conduct of itself may not amount to misconduct or impropriety.”

48. Her Honour referred at [21] to the decision of the Victorian Court of Appeal in The Magistrates’ Court of Victoria at Heidelberg v Robinson (2000) 2 VR 233, in which Brooking JA (at [10]) drew a distinction between errors in substantive law and failures to abide by the fundamental principles of procedural fairness in considering costs orders against magistrates.

49. In Merkel, Gray J found that a decision of the Superannuation Complaints Tribunal was affected by an “obvious” denial of procedural fairness by reason of the Tribunal’s failure to provide certain documents to the plaintiff on her request. His Honour noted at [66] that, in the ordinary course of judicial review proceedings, costs would be awarded against an unsuccessful contradictor. In an “appropriate case”, however, there is a power to award costs against a decision-maker. His Honour referred to the principle enunciated in Psychologists Registration Board of Victoria v The Herald and Weekly Times Ltd, extracted above at [45], noting that it could be considered “unduly restrictive”. He found that the conduct of the Tribunal satisfied even that high test.

50. Having had regard to the relevant authorities, I express some doubt as to whether the rule to be applied to inferior courts (as expressed in, among other decisions, The Magistrates’ Court of Victoria at Heidelberg v Robinson) is the same as that to be applied other administrative decision-makers, such as the Review Panel, whose members are not legally qualified. In any event, it is unnecessary for me to consider the difference for the purposes of this costs application given that the conduct complained of here is a denial of procedural fairness.

51. Based on the authorities referred to above, I am satisfied that a serious denial of procedural fairness can be an appropriate basis for taking the unusual course of making an adverse costs order against an administrative decision-maker.

52. I turn next to assess how serious the denial of procedural fairness was in this matter. That is, was the conduct of the third defendant such that this case falls within the category of rare cases in which a statutory body who has filed a submitting appearance should be subject to a costs order?

53. The resolution of the judicial review proceedings before me depended upon the factual question of whether the Review Panel had the five additional reports before it and, if they did, why there was no mention of them in the reasons. It was unclear to me at the time of considering this matter whether the reports were inadvertently overlooked or simply disregarded. The only parties to the proceedings in a position to answer these questions were the two submitting parties. Beyond the letter of 1 February 2017 to which I refer above at [7], neither party assisted the Court by providing material that could have shortened the proceedings considerably.

54. The Court now has evidence before it that, after making the necessary inquiries, SIRA was satisfied that the five reports had, as had been contended by senior counsel for QBE at the hearing, been “disregarded without explanation” such that SIRA decided that it was appropriate to refer the matter to a differently constituted review panel. I do not accept the submission made on behalf of SIRA and the Review Panel that I am not entitled to take this evidence into account by way of an admission. It seems to me that this is highly relevant to the exercise of my discretion in respect of costs. There was nothing to prevent SIRA and the Review Panel from putting on evidence on the costs application to rebut or clarify that material if they saw fit. They chose not to do so. The only material before me is thus that letter on SIRA letterhead. I propose to take that letter into account on this application in the absence of any contrary evidence.

55. Based on the admission by SIRA that the material was “disregarded without explanation” rather than simply overlooked, I am satisfied that the conduct of the Review Panel was not an oversight but rather a deliberate decision not to consider the additional material. I have had regard to the fact that the behaviour of the Review Panel was such that SIRA formed the view that the same Review Panel should not consider the matter further. I have also had regard to the fact that the decision by the Review Panel to disregard the relevant reports was made in the context of the Review Panel having formed a preliminary view of the matter in 2014, despite not being required at that time to do so, and adhering to that opinion despite the contrary evidence contained in the five reports: see [17] and [72] of my earlier decision.

56. In addition to being satisfied that the reports were disregarded by the Review Panel rather than inadvertently overlooked, I am also satisfied that had SIRA assisted the Court, when requested to do so by the first defendant, it may have been that the first defendant would not have opposed the orders sought. That course would have shortened the proceedings considerably. Although this conduct alone would have been insufficient to justify the making of a costs order against SIRA, I have taken it into account along with the conduct of the Review Panel in reaching the conclusion, in the exercise of my broad discretion as to costs, that it is appropriate that SIRA pay a proportion of QBE’s costs.

57. The next question for determination is the apportionment of costs as between the defendants. It was quite apparent from the face of the record that the Review Panel had not considered the additional reports. At the same time the first defendant defended these proceedings on a somewhat tenuous basis, even taking into account the conduct of SIRA in not assisting the Court regarding the issue on which the proceedings turned. It is to be accepted that, in proceedings for judicial review, the parties cannot consent to the making of orders in the nature of the prerogative writs. In order to make such orders, the Supreme Court exercising its supervisory jurisdiction must be satisfied that a decision-maker fell into jurisdictional error and/or erred in law on the face of the record. Despite this, it was open to the first defendant not to have vigorously defended the matter and to have instead acknowledged that the reasons of the Review Panel did not disclose that it had had regard to the five additional reports.

58. Having considered questions of apportionment, I am satisfied that it is appropriate that SIRA pay half of QBE’s costs and that the first defendant pay the other half. As previously stated, although SIRA and the Review Panel were separate parties to the proceedings, for the purposes of a costs application, I am satisfied that the appropriate party to pay costs is SIRA.

59. As for the claim by the first defendant that the submitting parties should not only pay QBE’s costs but also her costs, I am unpersuaded that such an order would be appropriate. Costs follow the event. The first defendant was unsuccessful. Although it is to be accepted that the failure by SIRA and the Review Panel to assist the Court by way of evidence placed the first defendant in a difficult position, I am not satisfied that the manner in which these proceedings were defended can be entirely sheeted home to the position taken by the submitting parties.

60. Although I am not satisfied that it is appropriate that SIRA and/or the Review Panel pay the first defendant’s costs, I would have been prepared to accede to the first defendant’s application that she receive a certificate under s 6 of the Suitors’ Fund Act 1951 (NSW) to cover that part of the costs that she is obliged to pay. Unfortunately, I am not satisfied that I have the power to do so.

61. Section 6(1) of the Suitors’ Fund Act provides that:

“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.”

62. An “appeal” is defined in s 2 of the Suitors Fund Act as including “any motion for a new trial and any proceeding in the nature of an appeal”. “Court” is defined in the same section as including “such tribunals or other bodies as are prescribed”. No tribunals or bodies have been so prescribed.

63. In its helpful written submissions, the CSO has queried whether a certificate may be issued in judicial review proceedings given the language of s 6. Despite this, it was acknowledged that this Court has awarded certificates in several cases where the relevant proceedings were for judicial review.

64. There are two issues of construction that bear upon whether the first defendant qualifies for a certificate under the Suitors’ Fund Act; namely, whether judicial review proceedings are proceedings “in the nature of an appeal” and whether the Review Panel is a “court” for the purposes of s 6(1): Allianz Australia Insurance Limited v Habib (No 2) [2015] NSWSC 1870 at [15] – [16] per Beech-Jones J.

65. In Henderson v QBE Insurance (Australia) Ltd [2013] NSWCA 480, Beazley P (with whom Tobias AJA agreed) stated at [58]:

“There is a further problem with the application of s 6 in the circumstances of this case, in that the proceedings before the primary judge were not by way of an appeal, but were by way of judicial review pursuant to the Supreme Court Act, s 69. Judicial review proceedings would, however, fall within the meaning of "other proceedings" within the meaning of s 6C.”

[emphasis added]

66. Section 6C of the Suitors’ Fund Act, as referred to in the above passage, is in these terms:

“6C Payments not otherwise authorised by this Act

(1)  If:

(a)  a party to an appeal or other proceedings incurs or is liable to pay costs in the appeal or proceedings,

(b)  the party is not otherwise entitled to a payment from the Fund in respect of the costs, and

(c) the Director-General is of the opinion that a payment from the Fund in respect of the costs, although not authorised by section 6, 6A or 6B, would be within the spirit and intent of those sections,

the Director-General may, with the concurrence of the Attorney General, pay from the Fund to the party such amount towards the costs as is assessed by the Director-General having regard to the circumstances of the case.

(2)  A payment under this section shall not exceed $10,000”

[emphasis added]

67. By virtue of s 6C, it would be open to the first defendant to seek payment directly from the Director-General, but only if she is “not otherwise entitled to a payment from the fund” and the Director-General is of the opinion such payment would be “within the spirit and intent of these sections.” In addition, the Attorney General would have to concur with such payment. The question is whether she is otherwise entitled to be paid under the Act.

68. Although Beazley P took the view in Henderson v QBE Insurance (Australia) that proceedings for judicial review were not proceedings “in the nature of an appeal”, Schmidt J took a contrary position in AAI Limited v Fitzpatrick (No 2) [2015] NSWSC 1272 at [28], where her Honour observed:

“…it seems to me that notwithstanding the views expressed by Beazley P in Henderson v QBE Insurance (Australia) Ltd, given what was decided in Ex parte Parsons; Re Suitors’ Fund Act, it must be concluded that the Court’s judicial review powers, now under s 69, involves proceedings “in the nature of an appeal.””

69. In Ex parte Parsons; Re Suitors’ Fund Act (1952) 69 WN (NSW) 380 (“Parsons”), Street CJ (with whom Owen and Herron JJ agreed) considered that proceedings seeking writs of certiorari and prohibition were “in the nature of an appeal” for the purposes of the Suitors’ Fund Act. That case was cited by McHugh JA (as his Honour then was) in Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 (at 515-6) when referring to the beneficial construction to be given to the construction of the word “court” in s 6(1) of Suitors’ Fund Act.

70. There is thus a conflict in the relevant authorities as to whether or not proceedings for judicial review fall within the definition of “proceedings in the nature of an appeal”.

71. In Allianz Australia Insurance Limited v Habib (No 2), Beech-Jones J considered these decisions and ultimately concluded that he was bound by what was said by Beazley P in Henderson v QBE Insurance (Australia) Ltd at [58]. His Honour stated at [20] – [21]:

“However, with respect to her Honour, I do not consider that the statements by Beazley P in Henderson v QBE can be merely described as “views”. As I have stated, Tobias AJA agreed with Beazley P. It is true that Henderson did not consider the above passage from Ex parte Parsons, but that criticism, if it is a valid one, is not one for judges at first instance to act upon.

It seems to me that the statements in Henderson and Parsons are difficult to reconcile. Nevertheless, there having been a recent statement by the majority of the Court of Appeal on a question which is much closer to the circumstances of this case than that considered in Parsons, I feel that I am obliged to give effect to the decision in Henderson. It seems to me that I must act on the position stated in Henderson and find that proceedings under s 69 of the Supreme Court Act are not proceedings that answer the description of an “appeal” for the purposes of s 6(1) of the Suitors’ Fund Act.”

72. For my part, I have reservations as to whether litigants in the position of the first defendant in this matter should be precluded from the scope of s 6(1) of the Suitors’ Fund Act. I note that the definition in s 2 does not define an appeal as a statutory appeal. Rather, the words used are “in the nature of an appeal”. I further note the purpose of the Suitors’ Fund Act is a beneficial one; namely, to compensate the unsuccessful respondents to appeals that are upheld by reason of error on the part of the court below. As a matter of policy, it seems to me that parties that are forced into the position of contradictor in judicial review proceedings should be in no worse position. The matter is further compounded by the fact that it is not uncommon to have proceedings in this Court that are both a statutory appeal and proceedings for judicial review.

73. Despite my reservations in this regard, I too feel bound by the decision of Beazley P in Henderson v QBE. Tobias AJA was in agreement with her Honour on this point. It is more recent Court of Appeal authority with respect to s 6(1) than Parsons. Following that authority, I am not satisfied that the first defendant qualifies for a certificate under s 6(1) of the Suitors’ Fund Act. In so determining, I note that certificates have been issued by single judges of this Court in judicial review proceedings, including Hidden J in Gennacker Pty Ltd v Bennett (No 2) [2015] NSWSC 1024 and Campbell J in Insurance Australia Limited t/as NRMA Insurance v Banos (No 2) [2013] NSWSC 1668. There seems to have developed divergent practice on this point.

74. Another vexed question is whether a medical assessors review panel can properly be characterised as a “court” for the purposes of s 6(1). Although tribunals have consistently been held to be “courts”, single judges of this Court have taken different approaches in relation to other administrative decision-makers. In Jenkins v Ambulance Service of New South Wales [2015] NSWSC 633, Garling J considered that a medical appeal panel of the Workers Compensation Commission was not relevantly a “court”. In QBE Insurance (Australia) Ltd v Henderson [2012] NSWSC 1607, Rein J expressed doubt at [42], obiter, that a medical assessor or panel could qualify as a “court”.

75. It seems to me that the Review Panel in this case could not be said to be a “court”, even on a beneficial construction. Each member of the Review Panel was a medical professional. It applied medical standards to the condition of the first defendant in order to determine her degree of impairment. Thus, even if I were satisfied that judicial review proceedings were proceedings “in the nature of an appeal”, I am not satisfied that these proceedings were “an appeal against the decision of a court” and thus do not fall within the terms of s 6(1) of the Suitors Fund Act in any event.

76. In finding that the first defendant does not qualify for a certificate, it seems to me that it would be open for her to make an application to the Director General under s 6C of the Suitors’ Fund Act.

Orders

77. I make the following orders:

1. The first defendant is to pay 50% of the plaintiff’s costs.

2. The second defendant is to pay 50% of the plaintiff’s costs.

3. I decline to issue a certificate to the first defendant under s 6(1) of the Suitors’ Fund Act 1951 (NSW).

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Decision last updated: 15 September 2017