Adam Mortley trading as inspira nutritionals v National Disability Insurance Agency

District Court of NSW|2024-02-12

Introduction

On or about 10 October 2023 Mr Adam Mortley commenced this suit against the National Disability Insurance Agency (NDIA) and David Cunningham. Mr Cunningham is in receipt of funding from the NDIA. Neither of the defendants have yet filed a Defence.
On 16 November 2023, the NDIA filed a motion seeking summary dismissal or in the alternative, a strike out application. It returned to me today, in the first day of the February 2024 civil sittings list for Parramatta.
Unsolicited by me, Mr Cunningham, who has not filed a notice of appearance but nevertheless attended court, indicated his verbal support to the NDIA' application.
The statement of claim was prepared without legal assistance and, on this application, Mr Mortley represented himself.
The statement of claim has several vices in obscuring the underlying basis, or bases of the claim, but as is well-established, whether a pleading can survive a summary dismissal application depends upon whether the underlying action, however it appears in form, is reasonably arguable, or gives rise to or creates a triable issue. Put in the negative, the applicant for such an order must prove that there is a high degree of certainty that the action will fail.

Interpreting the statement of claim

The parties' arguments

In his oral argument, Mr Mortley explained that he provided the services of a carer to Mr Cunningham. He said that his understanding of the relevant processes whereby service providers, like him, to NDIA recipients, like Mr Cunningham get paid. This involved the following steps: 1. he would send an invoice to the plan manager on behalf of the NDIA; 2. the plan manager would send the invoice through to Mr Cunningham for the latter's approval; 3. once Mr Cunningham had given his approval, an invoice would be uplifted on to the NDIA's system. 4. the NDIA would then approve release of funds to be paid to him.
By this procedure, Mr Mortley said that he did not receive funds directly from Mr Cunningham itself, but nevertheless was dependent upon Mr Cunningham's approval.
He explained that in the circumstances that occurred here, Mr Cunningham withheld such approval; and that he, thereafter, had contact with NDIA personnel to try to get them, in effect, to encourage Mr Cunningham to facilitate the latter's approval.
He says that in March 2023 he had submitted an invoice to the NDIA and that it was not until July 2023 that Mr Cunningham granted his approval. Then it was rejected two days later. He says that on 23 July 2023, he resubmitted his invoices to the plan manager and that it was only in October 2023, when he issued a threat to the NDIA, that he received payment of his invoices.
Mr Mortley complains that the NDIA failed to investigate Mr Cunningham's concerns and, which might amount to the same thing, also failed to explain to him certain matters.
I might pause to interpolate that there was little in Mr Mortley's oral argument that was reflected in the content of the statement of claim.
There was a difficulty, at a factual level, with at least one aspect of this verbal argument. For example, within Exhibit 2, there was what appeared to be a service contract that Mr Mortley entered into on or about 17 January 2023. But as is patent from the contract, whether or not, for administrative purposes or otherwise, contracts were on a template prepared by the NDIA, the contract was still between Mr Mortley and Mr Cunningham. It was (by section 6) Mr Cunningham's responsibility to pay invoices that Mr Mortley had issued to him. In her affidavit referred to elsewhere in these reasons, Ms Rochelle Waterhouse also deposed to Mr Cunningham having the freedom to choose which provider he engages with and how to utilise his funding.
Nevertheless, it appeared to be common ground that Mr Cunningham had a 'Plan managed' option for receiving NDIA managing. Ms Waterhouse, the NSW State Manager for the NDIA, and who prepared an affidavit (17 January 2024), explained that by this option, a Plan Manager would pay the service providers and generally take care of financial reporting. This provided some support, at a factual level, for Mr Mortley's account.
The NDIA understands that the gravamen of his complaint is that the circumstances in which it delayed the provision of funds to Mr Cunningham to pay the invoices issued to him for a period of 7 months, caused him mental stress, and a loss of financial opportunities; and that this delay was the result of the NDIA' wrongful delay in processing invoices. What made it wrongful, the NDIA understands, is certain suggested breaches of provisions under the NDIA legislation (the National Disability Insurance Scheme Act 2013 (Cth)) (the 'NDIS Act').
The NDIA contends that the dispute is essentially a contractual one between Mr Mortley and Mr Cunningham and that his claim against the NDIA is doomed to fail.
First, to the extent that the action for compensation (quantified as $450,000) is brought under the ACL, the NDIA says that Mr Mortley must show a causal connection between the loss he says he sustained and the contravention of the ACL.
It also says that the provision of funding by the NDIA to Mr Cunningham under the NDIA scheme was not conduct in trade or commerce. But even if that was not so, it says that Mr Mortley cannot demonstrate the requisite causal connection and the matters he raises regarding some breach off s 46B of the NDIA scheme.
If the pleading is not dismissed summarily, the NDIA says it should be struck out for being discursive and its intermingling of allegations as between NDIA and Mr Cunningham.
The NDIA also says that the solution is not to allow Mr Mortley the opportunity to re-plead. The effect of summary dismissal is not to preclude him from bringing a fresh claim (Civil Procedure Act, s 91) and there would be doubt whether any deadline for the filing of an amended claim could be complied with.

Consideration

When I asked him what obligation the NDIA had for the delay in administering his claim for invoices in respect to his services to Mr Cunningham, Mr Mortley was unable to point to any other provision, other than ss 46A, 47B and 47 of the NDIS Act. He did, however, refer the Court to a representation apparently made on the NDIA website (which was not in evidence that he relied upon - be that Exhibits 1 or 2) to the effect that not only was he (or his business) a supplier of services bound by s 12BEA of the Australian Securities & Investments Commission Act 2001 (Cth) ('ASIC Act'), but so too was the NDIA.
In my view, there is inarguably nothing in any of these provisions in the NDIA Act which conferred any right of private action in a service provider such as Mr Mortley to sue the NDIA in respect of a delay in payment, in breach of Mr Cunningham's contractual obligation to him. Section 46A provides support for the submission (in the absence of authority) that some other party, such as a third party creditor to the beneficiary of the payment on the beneficiary's bankruptcy, cannot obtain access to the payment. Section 47, by its title, refers to two situations: being a participant's request for a variation of a plan or the CEO (of the disability scheme) moving of his or her own initiative to vary it. Inarguably, neither of those situations pertain here. Section 46B appears to be a statutory exception to a creditor's capacity to enforce a judgment against a participant in the scheme, like Mr Cunningham. That is inapplicable where no judgment has been obtained against Mr Cunningham.
I also agree with the submission of counsel for the NDIA that s 12BEA of the ASIC Act plainly does not assist Mr Mortley in any claim against the NDIA. That provision falls within the Division of the ASIC Act generally described as unconscionable conduct and consumer protection in relation to financial services. But if there be any financial service here (which strikes me as implausible - it appears that the better view is that a welfare benefit is given under statutory force), it is between the NDIA and Mr Cunningham. It does not confer rights upon a third party (ie. Mr Mortley) that is not supplying a financial service to a consumer in Mr Cunningham's position.
It also appeared through the course of verbal argument, that Mr Mortley was aggrieved about delay in the payment of his invoices occasioned by being told one thing, by an official within the agency and another thing by another within the agency. In this respect, (but also in respect to general assertions of NDIA mismanagement) I asked him if he had raised complaint with the Ombudsman. He said he had but I understood that he was not satisfied with the response. But if there was anything that was said by one official that differed from another, Mr Mortley did not point to anything to suggest that he detrimentally altered (or refrained from altering) his course of conduct towards Mr Cunningham because of it; including, most obviously, his continued willingness to supply services to him.
The same point (which is one of causation) goes to other complaints which Mr Mortley also verbally articulated, such as the NDIA not involving itself in his dispute with Mr Cunningham, or conflicting indications it allegedly gave as to the timing for payment.
There being inarguably no contractual right that Mr Mortley has against NDIA, it is also inarguable that he has no statutory right against it for compensation for the consequences to Mr Mortley of delay in his receipt of payments.
This makes it unnecessary for me to explore other questions which would likely have presented other difficulties for Mr Mortley. This included the question whether, under the ACL, and its dealings towards either Mr Cunningham or Mr Mortley himself, the NDIA was acting "in trade or commerce"; and how the liquidated sum claimed for damages ($450,000) was calculated. Another question is that, if damages for any breach of contract were to be assessed in accordance with common law, how Mr Mortley could recover damages for distress when it is not clear at all whether the dealings between him and Mr Cunningham, or him and NDIA, had the object of providing enjoyment to someone (Baltic Shipping Co v Dillon (The Mikhail Lermontov) (1993) 176 CLR 344; also Young v CEO (Housing) [2023] HCA 31 at [36], [73]).
Conscious as I am of the high bar that exists to accede to an application for summary dismissal, I am satisfied of the high degree of likelihood, bordering on near certainty, that Mr Mortley's action against the NDIA is bound to fail.

Costs

At the conclusion of argument on the hearing of the application, Counsel for the NDIA indicated that, if her client succeeded, the NDIA seeks a gross sum costs order. This had not previously been sought and had not been the subject of evidence at the hearing. But in the circumstances, I gave both parties the opportunity to serve further evidence on that issue upon the assumed premise that the NDIA succeeded with its application. That premise has now been established.
The NDIA relied upon an affidavit of its solicitor, Gilbert Olzomer, (prepared on information and belief) sworn 12 February 2024. He itemised NDIA's costs in the sum of $19,267.96 (excl GST), representing the aggregate of fees and disbursements, WIP and Counsel's fees. On an indemnity basis, his estimate was that costs would be $17,341.16.
The NDIA submitted that a gross sum costs order would be appropriate to avoid the NDIA incurring the further costs of an assessment for a straightforward matter. Mr Olzomer intimated the NDIA's apprehension that agreement with Mr Mortley may not be forthcoming.
Mr Mortley supplied an affidavit on 13 February 2024. I have read that affidavit. It did not respond to Mr Olzomer's affidavit of 12 February 2024. Instead, it amounted to a continuation of Mr Mortley's argument on the motion. Mr Mortley misunderstood the limited dispensation I gave to the parties at the conclusion of argument on 12 February 2024. At any rate, there is nothing in that affidavit that provides a reasoned basis for why the Court should not: (a) order that costs should follow the event; or (b) accede to the NDIA's application for a special costs order.

Consideration

Orders under s 98(4)(c) of the Civil Procedure Act serve the purpose of avoiding the expense, delay and aggravation arising from the assessment process: Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119. I have regard to the principles in Bechara (t/as Bechara) v Bates [2016] NSWCA 294 at [12]-[15], including that the power to award a lump sum order should be exercised when it can be done so fairly to the parties, on the basis of a sufficiency of information and that a 'broad brush approach' is appropriate. One additional matter is that ordinarily, a discount is awarded, in effect as the price for foregoing a protracted costs assessment.
I accept that the dispute, as between Mr Mortley and the NDIA, has been of short compass. I also discern, through the course of his argument (and also the content of his affidavit of 13 February 2024), that Mr Mortley has very strong views as to misconduct of varying kinds against NDIA; in respect to which not only has he been unable to construct a reasonably arguable cause of action against the NDIA; but which, I apprehend, may indicate that he is unlikely to readily agree or even compromise, any dispute with the NDIA about costs. In other words, this is the sort of case for which an order of this kind is appropriate.
I would however, extend further the discount for the estimate which the NDIA supplied. The NDIA has not sought an order for indemnity costs against Mr Mortley. I consider that a more appropriate discount is 25% on the estimate.

Orders

The Court orders: 1. Pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR'), the plaintiff's proceeding against the first defendant is summarily dismissed. 2. Pursuant to 98(4)(c) of the Civil Procedure Act 2005 (NSW), the plaintiff is to pay the first defendant's costs in the gross sum of $14,450.
The Court also notes that no notice of appearance has been filed by Mr Cunningham; without which the latter is precluded from taking any step in the proceeding (UCPR, r 6.1); notwithstanding his obvious awareness of the claim against him. In the circumstances it is inappropriate for the Court to make any further order.

Amendments 15 February 2024 - 15 February 2024 - Corrected incorrect spelling of catchwords 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: 15 February 2024

Australian Consumer Law Civil Procedure Act 2005(NSW)

Investments Commission Act 2001(Cth)

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