AAI Limited v Fitzpatrick [2015] NSWSC 1272 | Case summary

Supreme Court of NSW|2015-09-03|Before: Schmidt J

Judgment

On 1 July 2015, I gave judgment for AAI, giving the parties leave to approach in the event that any departure from the usual costs order was sought (see AAI Limited v Fitzpatrick [2015] NSWSC 1108).
There I observed that the usual order as to costs is that they follow the event, which would be an order that Mr Fitzpatrick bear AAI's costs as agreed or assessed. It was Mr Fitzpatrick who sought a departure from that order.

There can be no departure from the usual order

Mr Fitzpatrick submitted that he ought to be ordered only to pay 25% or such other proportion as the Court may determine, of AAI's costs as assessed or agreed. Attention was drawn to Ferguson v Singler (No 3) [2015] NSWSC 1154 where such orders were refused and to Allianz Australia Limited v Mackenzie (No 2) [2014] NSWSC 254, where they were made.
This was opposed by AAI, who submitted that given Mr Fitzpatrick's decision to participate in the proceedings as an active non-consenting party and its success, there should be no departure from the usual order.
Mr Fitzpatrick argued that AAI had succeeded on a materially different case to that advanced in the summons and that given that the proceedings were brought under s 69 of the Supreme Court Act 1970 (NSW), the relative positions of the parties was relevant. AAI was a stakeholder CTP insurer and he was a private person, who was not responsible for the errors of the decision makers concerned, but had acted to provide a contradicter to the case AAI had advanced.
In the circumstances, AAI should not be entitled to a full costs order in its favour, particularly given that in the long term, it has far more interest than Mr Fitzpatrick did, in the matters discussed at [104] - [109] of the judgment, where I suggested how the operation of this statutory scheme might be improved.
I am not able to accept these submissions. A successful party may be deprived of the usual order, where, for example, some type of misconduct has been established (see Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 per McHugh J at [69]). That was not the position here. Nor did AAI only succeed on some of the matters it pressed, as was the case in Allianz Australia Limited v Mackenzie. AAI's case, as disclosed by the summons, was clearly a strong one. The decision actively to oppose its application for judicial review carried with it the risk of a costs order being made against Mr Fitzpatrick, if he failed.
The recommendations which I made in the judgment reflected difficulties I identified as frequently arising from the legislative scheme and its implementation. That was not a matter agitated by either party, or having involved either of them in any additional costs. They provide no proper basis for any departure from the usual order.
The circumstances are such that the risk which Mr Fitzpatrick took having materialised as it has, in my view, justice does not permit any departure from the usual costs order.

The Suitors' Fund Act

Mr Fitzpatrick sought a certificate under the Suitors' Fund Act 1951 (NSW), which AAI did not oppose.
The claim under the Suitors' Fund Act, rests on s 6(1), which provides: "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."
There appears to be two difficulties in the way of the grant of the certificate. The first that these are not appeal proceedings and the second that the proceedings do not concern the decision of a court.
"Appeal" is defined in s 2, however, to include "any motion for a new trial and any proceeding in the nature of an appeal" and "court" is defined to include "such tribunals or other bodies as are prescribed".
What here arose for review was firstly, an assessment in relation to a medical dispute, by a medical assessor made under s 61 of the Motor Accidents Compensation Act 1999 (NSW), after a medical examination and in accordance with applicable guidelines and secondly, a review of such an assessment by a proper officer under s 63, to determine whether there is reasonable cause to suspect that the medical assessment was incorrect in a material respect, in which event the assessment is referred to a review panel. Neither are defined to be courts by the Motor Accidents Compensation Act, nor have they been prescribed to be a court under the Suitors' Fund Act.
In Henderson v QBE Insurance (Australia) Ltd [2013] NSWCA 480, Beazley P considered that the trial judge, Rein J, was correct in concluding that a determination by a proper officer did not constitute a decision of a court (at [55] - [56]). Her Honour considered it to be relevant that the proceedings came to the Court by way of judicial review under s 69 of the Supreme Court Act, not by way of an appeal. Her Honour also observed that judicial review proceedings would, however, fall within the meaning of "other proceedings" within s 6C of the Suitors' Fund Act.
In his decision (QBE Insurance (Australia) Ltd v Henderson [2012] NSWSC 1607), Rein J had observed at [42]: "In Allianz v Ward [2010] NSWSC 720 at [82] Hidden J held that a claims assessor exercising jurisdiction under the Motor Accidents Compensation Act constitutes a "court" for the purposes of s 6(1) of the Suitors'' Fund Act, citing Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497, per Kirby P at 511 - 14 and McHugh JA at 515 - 6, and this approach was followed by Hoeben J in GIO General Ltd v Smith; Insurance Australia Ltd t/as NRMA Insurance v Smith (No 2) [2011] NSWSC 998. Justice Hoeben noted that Rodger v De Gelder [2011] NSWCA 97 had been relied on but, as his Honour pointed out, that was an appeal from a judge of this court. I must say, with respect, that I have some doubt that a medical assessor or panel could qualify as a court, even on a liberal interpretation of the kind adopted in Australian Postal Commission v Dao (No 2), but even accepting that the medical assessment panel or even a single assessor is treated as a court, I do not think the approach can be extended to a person exercising power under s 62 of the Motor Accidents Compensation Act and I decline to make an order of the kind suggested by the plaintiff."
Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 was concerned with the costs of an appeal to the Court of Appeal from a decision of the Equal Opportunity Tribunal. The conclusion that this Tribunal was a "court", Kirby P, with whom Samuels JA agreed, observed, rested on its nature. Six relevant features were identified by reference to Shell Oil Co of Australia Ltd v Federal Commissioner of Taxation [1931] AC 275 at 297. Kirby P observed at 512 that: "The Tribunal applies established law to existing facts, found by it. It makes binding and final determinations between the disputing parties to the complaint. There is an appeal to the Supreme Court on a question of law. The Tribunal has power to make declarations of right, orders in the nature of injunctive relief and to award monetary compensation. True it is, there is no collection machinery. Under s 115 any amount ordered by the Tribunal to be paid may be registered as a judgment debt in a court of competent jurisdiction. However this is but one consideration: cf Trevor Boiler Engineering Co Pty Ltd v Morley [1983] 1 VR 716."
Medical assessors and proper officers have quite different functions. The role of a medical assessor is to determine the nature of an applicant's medical conditions, including by medical examination, their causes and the impairments they have resulted in and then to issue a binding certificate, on which an applicant's rights to compensation under the legislative scheme depends. The role of a proper officer is to determine whether there is reasonable cause to suspect that the medical assessment is incorrect and if there is, to refer the dispute to a review panel.
Kirby P also considered it to be relevant, given the history and purpose of the Suitors' Fund Act, that an appeal lay on a question of law to the Supreme Court from the Tribunal. There is no such right either in the case of a medical assessor or proper officer. His Honour concluded that while the matter was not free from doubt, the better view was that the Tribunal was a court for the purposes of that Act, observing at 513 - 514 that: "It would seem unlikely, given the history and purpose of the Suitors' Fund Act 1951, the increase since its enactment in the number and kind of statutory tribunals and the relationship established between the Tribunal and the Supreme Court, that appeals should lie on questions of law but not attract the protection of the Suitors' Fund Act because the Tribunal is not a court."
McHugh JA came to the same conclusion, considering that the Suitors' Fund Act was remedial legislation which should be given a beneficial construction, as should the words "appeal" and "court" (at p 515 - 516).
It follows that whether either an assessor or a proper officer under the Motor Accidents Compensation Act is a "court" for the purposes of the Suitors' Fund Act depends on their nature.
In Allianz Australia Insurance Ltd v Roger Ward [2010] NSWSC 720 Hidden J observed that assessment of damages under the Motor Accidents Compensation Act is an administrative, not a judicial, exercise (at [2]) and that it did not provide an insurer with any avenue of appeal or review in respect of an assessment of damages (at [59]). His Honour concluded, nevertheless, that a claims assessor exercising jurisdiction under the Motor Accidents Compensation Act constitutes a "court" for the purposes of s 6(1).
Hoeben J came to a similar view in GIO General Limited v Smith; Insurance Australia Ltd t/as NRMA Insurance v Smith (No 2) [2011] NSWSC 998, in relation to a medical review panel (at [9]). His Honour there referred to Rodger v De Gelder [2011] NSWCA 97, where a certificate was issued in proceedings involving an appeal from a judge of this Court, to which s 6 of the Suitors' Fund Act unarguably applied.
In Allianz Australia Insurance Limited v Mackenzie (No 2) [2014] NSWSC 254 and IAG Ltd v Riley [2013] NSWSC 684 it was also decisions of a medical review panel which arose to be reviewed. Certificates under s 6 were issued in both cases.
It was submitted for Mr Fitzpatrick that if s 6(1) of the Suitors' Fund Act does not apply to these proceedings, then s 6C applies, as Beazley P observed in Henderson v QBE Insurance (Australia) Ltd at [56] - [58]. In that event, the Court has no power to make any order in favour of Mr Fitzpatrick, his application must be made to the Director-General.
Section 69 of the Supreme Court Act does not provide a right of appeal from the decision of either a medical assessor or a proper officer, nor does the Motor Accidents Compensation Act, although in the case of a medical assessor, an application for review by a Review Panel, can be made to a proper officer. Section 69 gives the Court jurisdiction to exercise in its supervisory jurisdiction over such decisions, by granting a relief or remedy, where formerly it could have granted relief by way of, amongst other things, prohibition or certiorari.
The s 2 definition of "appeal" was considered in Ex parte Parsons; Re Suitors' Fund Act (1952) 69 WN (NSW) 380, in proceedings where prohibition and certiorari had been sought. There, it was held by Street CJ, with whom Owen and Herron JJ agreed, at 381 that there was jurisdiction to issue a certificate under s 6, because: "These proceedings were proceedings which were instituted for the purpose of correcting an error which had been made in the court below. It was a court which was adjudicating upon a matter property brought before it, and it was to a court the writ was directed. In the result, this Court came to the conclusion that the proceedings below needed correction to the extent of quashing the same, and, the application succeeded, therefore, in having an erroneous decision set aside. On every view of the language of the Act, I think it is clear that this is a "proceeding in the nature of an appeal," and therefore is included in the word "appeal" as it is used in the Act."
Here, it was not a review of a decision of a court which arose for consideration. Nevertheless, 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".
Also necessary to be considered is that the power to grant a certificate under s 6 is still limited to such appeals from a "court". Notwithstanding Hidden J's conclusions in Allianz v Ward, it does not seem to me open to conclude that the decision of a medical assessor is a decision of a "court", even giving that term the beneficial approach discussed by McHugh JA in Australian Postal Commission v Dao (No 2). Further, like Rein J and later Beazley JA in Henderson v QBE Insurance (Australia) Ltd, I also consider that it is not open to conclude that a proper officer's decision is that of a "court".
In light of the criteria discussed by Kirby J, given the nature of their respective functions and processes, and the absence of even a right of appeal on a question of law, it cannot be concluded that either an assessor or a proper officer is a "court" for the purpose of the Suitors' Fund Act. Notwithstanding that AAI had no objection to the issue of a certificate, there is a doubt as to the Court's power to issue such a certificate in both cases which must, I consider, be resolved by concluding that neither is a "court" for the purposes of that Act.
It should be observed, however, as Kirby P discussed in 1986 in Australian Postal Commission v Dao (No 2) at 514, that it would be preferable for the Suitors' Fund Act to be amended by expressly cataloguing the class of Tribunals and other bodies intended to attract the beneficial provisions of s 6(1) of the Act, or providing some mechanism by which they could be identified as being courts for the purpose of the Act.
That would also be consistent with the overriding purpose now specified in s 56 of the Civil Procedure Act 2005 (NSW), the just, quick and cheap resolution of the real issues in the proceedings. That is because such clarification would be of assistance to people like Mr Fitzpatrick, who have to consider whether to take an active role in proceedings such as this, given the costs risk which they accept. In their absence, some other contradicter may have to participate in review proceedings such as this

Orders

For the reasons given, I order that:
Time for the commencement of these proceedings be extended to the date of filing the summons.
The decisions of both the assessor and the proper officer be set aside and the matter be remitted to the second defendant for reallocation of the matter to a different medical assessor for determination of the matters raised by Mr Fitzpatrick's application according to law.
Mr Fitzpatrick is to bear AAI's costs as agreed or assessed.
All exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 September 2015

Suitors' Fund Act 1951(NSW)

AAI Limited v Fitzpatrick

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