Allianz Australia Insurance Limited v Mackenzie & Ors

Judgment 1HIS HONOUR: Factual Background The first defendant made a claim under the Motor Accident Compensation Act 1999 (MAC Act) in respect of a motor vehicle accident which occurred on 27 October 2005. A medical dispute arose and the first defendant's claim was referred for medical assessment by the Medical Assessment Service (MAS) pursuant to Pt 3.4 of the MAC Act. 2In due course a Medical Review Panel made a determination dated 22 July 2013. The plaintiff challenged that determination pursuant to s69 of the Supreme Court Act 1970. That matter came on for hearing on 18 December 2013 and judgment was handed down on 14 February 2014 (Allianz Australia Insurance Limited v Mackenzie & Ors [2014] NSWSC 67). Further factual information and the way in which the matter was argued are set out in that decision. 3The parties have not been able to agree on costs. In that eventuality, they were directed to provide written submissions, not exceeding three pages, on that issue. This judgment is in respect of that costs dispute. Submissions and consideration 4There was some argument in submissions as to the extent of the plaintiff's success in the proceedings. Lest there be any misunderstanding, the plaintiff was entirely successful in the sense that it obtained the order which it sought, i.e. the quashing of the Review Panel's certificate. No question of "pyrrhic" victory or estoppel arises. As the decision in Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43 made clear, a new Review Panel will deal with the remitted matter afresh. 5That having been said, it is not without significance that eight discrete matters were raised by the plaintiff in its summons. It succeeded on one of those matters and failed on the rest. In the judgment I was able to group those matters into three sets of issues, but that does not obscure the fact that they were raised separately in the summons and dealt with separately in submissions. 6The start point for any costs argument must be rule 42.1 of the Uniform Civil Procedure Rules 2005 (UCPR) which provides: "42.1 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." 7I agree with the plaintiff that considerable assistance is provided in the application of that rule by the observations of McHugh J in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72: "66 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)[95], 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, 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 67 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." 8Rule 42.1, however, does allow for a departure from the ordinary rule as to costs in certain circumstances. This case provides a good example of when the ordinary rule as to costs should not be followed. 9In the hearing and preparation of the matter, comparatively little time and space was occupied by argument and submissions on the issue on which the plaintiff succeeded. A considerable amount of time and preparation was, however, devoted to the matters on which the plaintiff failed. This was particularly so in relation to pars 5(f), 5(g) and 5(h) of the Amended Summons. While the submissions in relation to these pars were couched in terms of a failure on the part of the Review Panel to consider all the arguments put forward on behalf of the plaintiff, they were in reality an invitation to the Court to canvas the merits of the plaintiff's overall position in relation to the medical dispute. 10As a matter of general principle, the Court should expect parties to focus on the real issues to be argued in proceedings and to not follow, in effect, a shotgun approach in the hope that one of a plethora of arguments might succeed. This is not to say that this is what the plaintiff did on this occasion but in relation to the pars to which reference has been made, it went perilously close. 11I have concluded that this is one of those cases where a departure from the ordinary rule as to costs is justified. On the facts of this case, the most appropriate approach is to award to the plaintiff only part of its costs. This approach has appropriate regard to the important principle that costs should follow the event, but also takes into account the large number of matters raised by the plaintiff on which it failed. 12This leaves two matters to be decided. The first is whether the first defendant is entitled to a certificate under the Suitors Fund. In accordance with the reasoning in Allianz Australia Insurance Ltd v Roger Ward & Ors [2010] NSWSC 720; 57 MVR 327; IAG Limited v Riley [2013] NSWSC 684 and GIO General Ltd v Smith; Insurance Australia Ltd trading as NRMA Insurance v Smith (No 2) [2011] NSWSC 998 I am of the opinion that having succeeded before the Review Panel, the first defendant should be entitled to a certificate. 13The final matter concerns the costs of this application. The order of the Court was quite explicit. The parties were to restrict their submissions to three pages. While the plaintiff initially did so, it felt obliged to provide a further three pages by way of "reply". Such a reply was not requested or required. The first defendant, despite the Court's order, provided written submissions of six pages in length. In those circumstances, each party should pay its own costs of this application. 14Accordingly, the orders which I make are as follows: (1) The first defendant is to pay 50 percent of the plaintiff's costs of these proceedings. (2) The first defendant is to have a certificate under the Suitors Fund Act 1951 (NSW) if otherwise qualified. (3) Each party is to pay his or its own costs in respect of this costs application.