Walpole v Insurance Australia Limited t/as NRMA Insurance

[2016] NSWSC 702

Supreme Court

New South Wales

Medium Neutral Citation:	Walpole v Insurance Australia Limited t/as NRMA Insurance [2016] NSWSC 702
Hearing dates:	1 June 2016
Date of orders:	01 June 2016
Decision date:	01 June 2016
Jurisdiction:	Common Law
Before:	Harrison AsJ
Decision:	The Court orders that:  (1) The first defendant is to pay the plaintiff’s costs of the proceedings, including the costs of today.
Catchwords:	COSTS – consent order – first defendant consented to orders after plaintiff had prepared for hearing – Court satisfied of jurisdictional error on basis of first ground in summons – amended summons did not substantially alter grounds of review – usual order as to costs
Legislation Cited:	Motor Accidents Compensation Act 1999 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Alvanja v NRMA Insurance Ltd (2010) 56 MVR 499 Henderson v QBE Insurance (Australia) Ltd (2013) 66 MVR 69 Oshlack v Richmond River Counsel (1998) 193 CLR 72 Singh v Motor Accidents Authority of NSW [2010] NSWSC 550
Category:	Costs
Parties:	Julie Walpole (Plaintiff) Insurance Australia Limited t/as NRMA Insurance (First Defendant) State Insurance Regulatory Authority (SIRA) (Second Defendant)
Representation:	Counsel: M Robinson SC with J Gumbert (Plaintiff) D Brozinski (First Defendant)   Solicitors: Littles Lawyers (Plaintiff) Holman Webb (First Defendant) Crown Solicitor Submitting Appearance (Second Defendant)
File Number(s):	2015/368984
Publication restriction:	Nil

Judgment

1. HER HONOUR: This is a judgment on costs.

2. This judicial review that had been listed for hearing came before me today. The parties had agreed that firstly, the decision of Proper Officer Dale Davis of the Medical Assessment Service of the second defendant, made on 28 September 2015 pursuant to s 62 of the Motor Accidents Compensation Act 1999 (NSW) (“the Act”), not to refer the plaintiff for further medical assessment be set aside; and secondly, the matter be remitted to the second defendant for reallocation of the matter to a different proper officer for determination according to law. For this Court to make the above consent order, I had to be satisfied that the proper officer had made a jurisdictional error or error of law that warranted remittal to the State Insurance Regulatory Authority.

3. The plaintiff is Julie Walpole. The first defendant is Insurance Australia Limited t/as NRMA Insurance. The second defendant is the State Insurance Regulatory Authority (SIRA) who has filed a submitting appearance.

4. On 26 May 2015, the plaintiff filed an application for Further Assessment of Permanent Impairment Dispute by the Medical Assessment Service in accordance with s 62(1)(a) of the Act and cl 14.1 of the Medical Assessment Guidelines of 1 October 2008, disputing the medical assessment of Assessor Assem on the grounds of the deterioration of the injuries and additional relevant information about the injuries.

5. After hearing oral submissions this morning, I am satisfied that the proper officer had wrongly applied Henderson v QBE Insurance (Australia) Ltd (2013) 66 MVR 69 (“Henderson”); Singh v Motor Accidents Authority of NSW [2010] NSWSC 550; and Alvanja v NRMA Insurance Ltd (2010) 56 MVR 499. It would have been enough that I was satisfied that Henderson had been misapplied to exercise my discretion to set aside the decision of the proper officer. The misapplication of what was decided in Henderson is set out in [29] of the proper officer’s decision and repeated throughout his decision.

6. Turning to the issue of costs, both parties seek their costs. Alternatively, the first defendant seeks that there be no order for the costs of today. The plaintiff relied on the affidavit of John Kwang-Sik Kim dated 31 May 2015. The first defendant relied on the affidavit of its solicitor, David Brozinski, dated 30 May 2016. Both parties filed written submission and made short oral submissions.

The law

7. Uniform Civil Procedure Rules 2005 (NSW) r 42.1 reads:

“42.1 General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.”

8. The applicable general law principles as to costs were stated by McHugh J in Oshlack v Richmond River Counsel (1998) 193 CLR 72 (in dissent but not on this point, see, eg, Kirby J at [134], point 4). McHugh J stated at [66]-[67]:

“By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. As Devlin J said in Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2), when setting aside an arbitrator’s costs award:

“the arbitrator is not directing his mind to one of the most, if not the most, important of the elements which ought to affect his discretion, namely the result of the case. Prima facie, a successful party is entitled to his costs. To deprive him of his costs or to require him to pay a part of the costs of the other side is an exceptional measure.”

The combined force of the sentiments recognised above by Mason CJ [in Latoudis v Casey], regarding the need for consistency in order to avoid injustice, and by Devlin J, regarding the most significant factor affecting the costs discretion, provides the jurisprudential basis for the important principle commonly referred to as the “usual order as to costs”.

The usual order as to costs

The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense, which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.” (Footnotes omitted.)

History of proceedings

9. The short history of these proceedings is as follows. On 16 December 2015, the summons was filed. It set out the three errors in paragraph 5. The first two errors were as follows:

“(a)   The First Error – In coming to his decision, the proper officer has relied upon the decision in Henderson v QBE Insurance (Australia) Ltd (2013) 66 MVR 69, noting that it is an onus borne by the claimant (the plaintiff) to specify how additional relevant material would have a material effect on the outcome of the certificate. The proper officer has erred in his failure to apply the correct statutory test.

(b)   The Second Error – The proper officer failed to take into account the plaintiff’s application in describing how the contended additional relevant information would have a material effect on the assessment of whole person impairment. This failure constitutes a failure to perform his statutory duty and/or a denial of procedural fairness.”

10. The third error is not relevant for the present purposes.

11. On 29 February 2016, the first defendant filed a reply. It reads:

“1. The first defendant denies that the plaintiff is entitled to the relief claimed because:

(a) The decision of the Proper Officer was not as stated in paragraph 1.

(b) The relief sought in paragraph 3 relates to a “differently constituted medical Review Panel” when the matter has not in fact ever been considered by a Review Panel: this application relates to a Further Assessment.

(c) The Proper Officer has not erred as alleged or at all.”

12. In other words, as at 29 February 2016, the first defendant was still contesting these proceedings.

13. The solicitor for the first defendant submitted his firm informed the plaintiff of these errors on or about 2 February 2016 but that the plaintiff only sought to rectify the second error on 23 May 2016. The first two paragraphs of the reply refer to obvious errors made by the plaintiff in her summons. According to the solicitor for the first defendant, in addition to rectifying the error in the orders sought the plaintiff added a wholly new error of the proper officer (“the third error”) that had not been pleaded by the plaintiff prior to 23 May 2016. Today the plaintiff filed the amended summons.

14. The amended summons included the third error which reads:

“(c) The Third Error – The proper officer wrongly found (reasons at [25] and [26]) that the additional evidence contained in the plaintiff’s section 62 application, namely, a CT scan of the plaintiff’s lumbar spine dated 26 February 2015 and a medical report based on that scan, the report of Dr Ohmsen dated 22 March 2015, were not additional relevant information about the injury (as to the lumbar spine) and so, he did not consider them any further.

(d) The proper officer fell into error here by:

(i) Wrongly applying a contended legal principle that did not apply to the said evidence, leading to a wrong conclusion in law. As to the CT scan, this was not before the previous medical assessor and it was entirely new. The proper officer wrongly determined that (at reasons at [26]) it did not contain an “opinion of a different kind” than those already considered, based on Singh v Motor Accidents Authority of NSW [2010] NSWSC 550 at [63]. However, it was not open for the proper officer to find the CT scan was merely an “opinion of a different kind” and to dismiss it. It was a radiological report where there had been none available before it. It was plainly additional relevant information.

(ii) The proper officer accordingly fell into error and the decision should be set aside.

(iii) He wrongly determined (reasons at [25]) that he was “prohibited” from considering the medical report of Dr Ohmsen dated 22 March 2015 as additional relevant information in the plaintiff’s application. In doing so, he wrongly applied a contended legal principle derived from Alavanja v NRMA Insurance Ltd (2010) 56 MVR 499 (at [35]) that the new report “appears to be saying the same thing” as a report from Dr Teychenne dated 20 March 2013 “but with different or greater emphasis”.

(iv) This finding was wrong in law and it was not open to the proper officer in that Dr Teychenne was an expert neurologist and Dr Ohmsen was an export (sic) sports physician. Further, the basis for the report from Dr Ohmsen was that the CT scan was entirely new and it was the foundation for the new report. There were no CT’s before Dr Teychenne. In the premises, it was not open in law for the new material to be dismissed on this basis.

(v) The proper officer also found (reasons at [26]) the conclusion of Dr Ohmsen’s report as to causation and the CT scan itself was “saying the same thing” as the report from Dr Teychenne dated 20 March 2013 “but with different or greater emphasis”. The proper officer wrongly applied the contended legal principle and this finding was not available and it is legally flawed.

(vi) The proper officer accordingly fell into error and the decision should be set aside.”

Consideration

15. I agree that the additional ground is an expansion of and more specific than the first two issues raised in the original summons. However, as previously stated, I would have set the proper officer’s decision aside on the basis of the incorrect application of Henderson alone. That issue was set out in the original summons. The plaintiff has been obliged to undertake preparation for the hearing listed for today, including two volumes of material and submissions that it need not have done so, had the offer to settle taken place at an earlier time.

16. It is my view in these circumstances that the appropriate order for costs is that the first defendant is to pay the plaintiff’s costs of the proceedings, including the costs of today.

The Court orders that:

(1)   The first defendant is to pay the plaintiff’s costs of the proceedings, including the costs of today.

**********

Decision last updated: 01 June 2016