//
[2025] NSWSC 350
General information, not legal advice.
Supreme Court of NSW
2025-04-11
Schmidt AJ
Original judgment source is linked above.
Zoe will write a short plain-English summary of this judgment and email it to you for free: what it was about, what the court decided and why. It can take up to a minute.
General information, not legal advice.
Or create a free account to save it and ask Zoe follow-up questions.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Atwal v Insurance Australia Limited trading as NRMA Insurance (No 2) [2025] NSWSC 350
Hearing dates: 13 February 2025
Date of orders: 11 April 2025
Decision date: 11 April 2025
Jurisdiction: Common Law
Before: Schmidt AJ
Decision: Mr Atwal bear the insurer’s costs of the proceedings, as agreed or assessed.
Catchwords: COSTS – whether departure from usual costs order is warranted – where defendant is not an ordinary litigant – where it is claimed that defendant did not disclose reason for decision until the hearing – whether misconduct warranting an order that each party bear its own costs occurred– not satisfied that any departure from usual costs order is warranted given the plaintiff’s pursuit of a construction of the Motor Accident Injuries Act 2017 (NSW) which could not be accepted
Legislation Cited: Civil Procedure Act 2005 (NSW)
Motor Accident Injuries Act 2017 (NSW)
Motor Accident Guidelines
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Commonwealth of Australia v Gretton [2008] NSWCA 117
Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11
Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256
Category: Costs
Parties: Tajinder Atwal (Plaintiff)
Insurance Australia Limited t/as NRMA (First Defendant)
Brett Williams in his capacity as a Member appointed by the Minister under section 9 of the Personal Injury Commission Act 2020 (Second Defendant)
The President of the Personal Injury Commission of NSW (Third Defendant)
Representation: Counsel:
J Hallion (Plaintiff)
C Allan (First Defendant)
Solicitors:
Bond Legal (Plaintiff)
McCabes (First Defendant)
Crown Solicitors (Second and Third Defendant)
File Number(s): 2024/368378
Publication restriction: Nil
In February 2025 I dismissed the summons by which Mr Atwal sought judicial review of a decision of a Senior Member of the Personal Injuries Commission: Atwal v Insurance Australia Limited trading as NRMA Insurance [2025] NSWSC 143.
Mr Atwal’s unsuccessful claim was that he had the right to have the Commission assess the damages he pursues under the Motor Accident Injuries Act 2017 (NSW), for psychological injuries which he suffered as the result of a June 2020 motor vehicle accident. Despite his injuries not having been assessed by a medical assessor and the insurer never having conceded that he had suffered 10% whole person impairment, the statutory threshold for compensation.
As I explained in the February judgement, the usual costs order under r 42 of the Uniform Civil Procedure Rules 2005 (NSW) being that costs follow the event, that would require Mr Atwal to bear the insurer’s costs: at [138]-[139].
Mr Atwal, however, asks the Court to exercise its undisputed discretion under s 98 of the Civil Procedure Act 2005 (NSW) to depart from the usual order, by making an order that each party bear its own costs.
That was resisted by the insurer.
The Motor Accident Guidelines specify when an insurer “should” concede that impairment exceeds the statutory 10% impairment threshold, as well as when the insurer “must” refer a dispute to the President of the Commission for assessment: Guidelines cl 4.129 and 4.130.
The insurer informed Mr Atwal why it would not make the concession which Guideline cl 4.129 contemplated, having served the medico legal report it had obtained, which supported his case. But it did not disclose why it did not refer the resulting dispute to the President, as Guideline cl 4.130 contemplated: February judgment at [8]-[9].
The result was not that Mr Atwal sought to have the dispute about his impairment assessed, as he unquestionably could have. Instead, he unsuccessfully pursed his construction of the Act before the Commission and then in these proceedings.
While Mr Atwal abandoned some of his arguments at the hearing, he finally contended that under the statutory scheme, there could be no dispute about his impairment exceeding the statutory threshold, in the absence of any rebuttal medical evidence obtained by the insurer. That was rejected in the February judgment, for the reasons there explained.
It was the case which Mr Atwal advanced in oral argument which shed light on the requirements of Guidelines cls 4.129 and 4.130 and their practical operation in his case. They were thus also dealt with in the judgment. But still that did not permit the case Mr Atwal advanced about the proper construction of the Act to succeed.
Mr Atwal contends that despite the outcome of his unsuccessful challenge to the Senior Members’ construction of the Act, the Court should exercise its discretion to depart from the usual costs order because:
The insurer is not an ordinary litigant, given the statutory obligations and duties imposed on it by the Motor Accident Injuries Act and the applicable Motor Accident Guidelines, with the result that its conduct must be assessed in the context of those duties*;*
The event on which the exercise of the costs discretion turns is the practical result of the proceedings, which requires regard to be paid to the insurer’s conduct: Windsurfing International Inc v Petit (1987) AIPC 90-441 at 37,861–37,862;
In this case the practical result of the proceedings was not what the insurer had represented to him or the Commission, it not having disclosed the real impediment to its referral of the medical dispute for assessment, which relied on cl 4.130(d) of the Guidelines. That is, it not being able to refer the medical dispute because Mr Atwal had not sufficiently recovered for his psychological impairment to be quantified;
Time had to be taken at the hearing to examine the requirements of cls 4.129 and 4.130 of the Guidelines, that resulting in the insurer’s belated disclosure of its view that Mr Atwal had not sufficiently recovered to enable his claim to be quantified;
That view had not earlier been disclosed to Mr Atwal or to the Senior Member, with the result that the insurer’s lax conduct had invited the litigation, which had been unnecessarily protracted because of its failure to disclose the true nature of the dispute, even in the Commission;
This established that the insurer had not disclosed its decision as the Act required, even though there was no expert evidence which addressed this possibility;
This did not accord with the insurer’s duties of candour, timeliness in decision making and disclosure, its position having been the reason why the parties’ dispute had remained unresolved for nearly 5 years;
The result was that the insurer had engaged in relevant misconduct in the proceedings, that warranting a departure from the usual costs order: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [69] considered in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256;
Such misconduct comprehending misconduct relating to the litigation or leading up to it: Oshlack at [69];
The relevant misconduct was established by the obligation imposed on insurers by the Act to deal with claims in a manner consistent with the objects of the Act and the principles specified in s 4.6. The latter including making decisions justly and expeditiously and communicating with claimants and keeping them informed of the progress of their claims;
I have concluded that justice does not require that there be a departure from the usual costs order, in all of the circumstances which arise to be considered.
It was Mr Atwal’s view about the proper construction of the Act which drove his pursuit of his claims in both the Commission and this Court, his view being that compensation could be determined by the Commission, without a medical assessment of the degree of his impairment having been undertaken. That resting on the notion that there could be no medical dispute under the Act about impairment, when both a claimant and an insurer’s medical experts have concluded that more than 10% whole person impairment has been suffered as the result of an accident.
That construction was again successfully resisted by the insurer in this Court.
It does not necessarily follow that the result would have been any different, had the written advice which the insurer earlier gave Mr Atwal that it would not concede that he had met the impairment threshold, also explained that it had not referred the medical dispute it considered existed as a result. This was because it then had the view that he had not sufficiently recovered to enable his claim to be quantified.
That was certainly the basis on which the insurer later proceeded, with the result that for a time the claim was not actively pursued.
But on Mr Atwal’s approach to the construction of the Act, there could be no medical dispute between the parties, given the views which both his and the insurer’s medical experts had arrived at about the level of his impairment, after examining him. He eventually pursued that construction before the Commission, which rejected it because it was incorrect. The construction which he again advanced in these proceedings was thus also successfully resisted by the insurer.
It was the cases which the parties pressed in their oral submissions in this Court, which required cls 4.129 and 4.130 of the Guidelines and their practical operation to be considered, Mr Atwal not having raised them before the Commission. But those Guidelines could have no impact on the proper construction of the Act, which the Court had to resolve, given the case Mr Awal brought.
It is thus difficult to see that Mr Atwal would have altered his views about the proper construction of the Act, had the insurer advised him that despite the opinions of the medical experts it had not accepted, it did not consider that he had sufficiently recovered to enable his claim to be quantified.
What the parties advanced by their oral submissions did result in my view that the Guidelines did not sit comfortably with each other, or with identified provisions of the Act. The result was that the judgment was referred to the State Insurance Regulatory Authority, which is given the power to issue those Guidelines, for it to consider them. But I am not satisfied that this established misconduct in the proceedings of the kind with which and are concerned.
**********
Atwal
Insurance Australia Limited trading as NRMA Insurance
(1998) 193 CLR 72
The insurer’s view that Mr Atwal had not sufficiently recovered to enable his claim to be quantified, despite his required surgery having been undertaken in 2022, not being disclosed until the hearing of these proceedings in 2025, did not accord with these obligations;
The insurer’s conduct had resulted in unnecessary costs being incurred in the pursuit of these proceedings, with the result that considerations of fairness also required a departure from the usual order. That being underpinned by “the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs.”: Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121] cited in Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [98]; and
It was also relevant that the case which the insurer had advanced had brought to light an apparent deficiency in the Guidelines, which did not appear to entirely accord with the statutory scheme: February judgment at [28] and [126]. This raising a public interest consideration which also supported a departure from the usual order, even though Mr Atwal was a private litigant.
The insurer’s position was that it had in fact informed the plaintiff about its decision that the plaintiff’s medical condition had not reached maximum medical improvement. The plaintiff’s case was thus based upon an inaccuracy.
It sought leave to rely upon a newly produced 28 March 2025 affidavit of its solicitor Mr Zhou, to address what it claimed to be Mr Atwall’s inaccuracy. He referred to his claim having been initially placed in the stood over list in 2020 at his request, on the basis that his injuries had not stabilised. In January 2024 the insurer’s solicitors advised Mr Atwal that whole person impairment in excess of 10% was not conceded, despite the assessment of its medico legal expert to the contrary.
Without opposition from Mr Atwal, the matter then remained in the not ready list until he sought an urgent referral to the Commission, after the insurer sought in May 202, that it remain longer in the not ready list.
The insurer contended that Mr Atwal was accordingly well aware of its position that his medical condition had not sufficiently stabilised for assessment.
Before the Commission Mr Atwal contended that there was no medical dispute, because the insurer’s own expert had assessed his impairment at greater than 10%. The insurer contending that there was a dispute which required the degree of his impairment to be assessed by a medical assessor, given that it had not conceded that the threshold had been met. Despite the Commission’s acceptance of the insurer’s case, Mr Atwal had still not sought such an assessment, or asked the Commission to make such a referral, but instead pursued these proceedings, which also failed.
It followed, Mr Atwal’s case having failed as it did, that there should be no departure from the usual costs order.
Furthermore, it was also relevant that in Mr Atwal’s written submissions and submissions in reply, no mention had been made of the Guidelines, nor the insurer’s apparent non-compliance with cl 4.130.
Much of the case there advanced, which was withdrawn at the hearing, concerned s 1.7 of the Act, which was characterised as a “deeming provision” that shifted the evidentiary onus onto the insurer to respond to the plaintiff’s case.
It was only at the hearing that Mr Atwal raised the insurer’s alleged non-compliance with cl 4.130 of the Guidelines, in support of the submission that there was no bona fide dispute between the parties. That argument also failed: February judgment at [57]. The merits of the insurer’s position about the state of Mr Atwal’s injury also did not arise to be considered: at [110].
As a result the insurer had not engaged in any misconduct warranting a departure from the usual costs order.
Further, it may not be overlooked that in Tomanovic it was explained at [107], that “[t]here is an undoubted principle whereby, unless a particular issue or group of issues is clearly dominant or separable, it would ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate those particular issues on which it was successful and those on which it failed”.
In this case, even though Mr Atwal succeeded in the case he advanced about cl 4.130 of the Guideline, which he had not relied on in the Commission and that did take some time at the hearing, what he so pursued had no impact on the proper construction of the Act over which the parties had joined issue both in the Commission and this Court. Nor did it impact the orders which were made as a result.
In all of those circumstances I am not satisfied that justice dictates any departure from the usual costs order.