NSWNSWCA

Deveigne & Anor v Askar

[2007] NSWCA 45

Court of Appeal (NSW)|2006-05-23|Before: Hodgson JA, Giles JA, McColl JA

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Source facts

Court

Court of Appeal (NSW)

Decision date

2006-05-23

Before

Hodgson JA, Giles JA, McColl JA

Source

Original judgment source is linked above.

Judgment (41 paragraphs)

[1]

Background 36 The proceedings have a long and sorry history. On 16 June 1998 a Personal Injury Claim form was sent to NRMA on behalf of the respondent by his solicitors. The respondent asserted, in that form, that on 16 February 1998 he suffered injury when a truck reversed onto him while he had his back to it. Although the claim form identified the driver of the vehicle as "Laurence Deveigne", and the owner of the vehicle as "Martin Deveigne", it is common ground that the driver was, in fact, Terrence John Deveigne, apparently usually known as "Terry Deveigne". 37 Laurence Deveigne was Terry Deveigne's father and also the owner of the truck said to have struck the respondent. He held a Comprehensive Third Party Policy of Insurance (the "CTP Policy") issued by NRMA Insurance Ltd, as the NRMA then was. On 24 March 1999 the respondent's solicitors advised the NRMA that Terrence Deveigne had died on 1 December 1998. 38 On 9 February 2000 the respondent commenced the proceedings against Terry Deveigne in the District Court of New South Wales at Parramatta. The proceedings were first numbered "134 of 2000" in the Parramatta Registry, but at some stage were apparently transferred to the Sydney Registry of the District Court and re-numbered "6817 of 2000". The papers do not disclose why the respondent named the deceased as the defendant.

[2]

39 It appears liability was in issue, as well as the extent of the respondent's injuries. According to the Costs Assessor to whom I shall shortly refer, "a large number of medical reports and investigation reports [were] obtained" by the "defendant". Senior Counsel was also briefed on behalf of the "defendant" early in the piece. However on 30 April 2001 the "defendant" filed a Notice of Motion seeking to have the proceedings dismissed. The Motion came before Garling DCJ on 30 May 2001. There is no indication that his Honour was advised the "defendant" had pre-deceased the commencement of the proceedings. He gave the respondent's solicitors leave to withdraw from the proceedings because of their inability to obtain instructions, ordered them to file a Notice of Ceasing to Act within seven days and, on the "defendant's" application dismissed the proceedings pursuant to then District Court Rules 1973, Pt 18 r 3 which conferred power on the Court to dismiss proceedings for want of prosecution. Significantly, for present purposes, his Honour ordered: "5. The plaintiff pay the defendant's costs of the proceedings." 40 The costs order was entered on 20 June 2001. Consequent upon that order the NRMA prepared a Bill of Costs and served it on the respondent by letter dated 2 November 2001. He instructed his present solicitor, Paul Marsh, who wrote to Abbott Tout on 15 November 2001 advising that their letter was the first time the respondent had become aware of Garling DCJ's order. The letter suggested various steps the respondent might take, depending upon instructions, including seeking to vacate Garling DCJ's order. That step was not taken. 41 Abbott Tout's response to the letter, if any, is not in evidence. The next step appears to be that on 28 November 2001 the firm filed an application for assessment of party/party costs pursuant to s 202 of the Legal Profession Act 1987 in the Common Law Division of the Supreme Court of New South Wales. The application was said to be "Re: District Court No 6817 of 2000". The applicant was identified as "Terry Deveigne". Mr Marsh's letter was annexed to the application. On 22 May 2002 a Supreme Court Costs Assessor, Mr O'Brien, issued a Certificate as to Determination of Costs in which he assessed the costs to be paid by the respondent to the applicant, Terry Deveigne, as $105,736.12. 42 Thereafter, it appears, the NRMA procured the issue of the Certificate of Judgment in the District Court presumably by filing the Certificate of Determination in the District Court Registry: s 208J (3), Legal Profession Act 1987; DCR Pt 31 r 16. On filing the Certificate of Determination it was taken to be a judgment of the District Court for the amount of unpaid costs: s 208FJ (3). The Certificate identified "Terry Deveigne" as the "judgment creditor" and the respondent as the "judgment debtor". It was entered in the District Court on 21 June 2002 in file number 5387 of 2002. The papers do not record why it was given a number that differed from that of the substantive proceedings. No party suggested it made any difference to the outcome, and I have proceeded on that basis. 43 At some time after the Certificate of Judgment was issued, as I have said, Abbott Tout became aware of Merkel J's decision in Budimir v McMahon that a bankruptcy notice filed on behalf of a deceased person is a nullity. The firm formed the opinion that in order to take any further proceedings to recover the costs of the defence paid by the NRMA exercising its right of subrogation pursuant to the CTP Policy, it would be necessary for the NRMA to be named as the defendant in the proceedings. 44 On 24 March 2004 Abbott Tout filed a notice of motion naming "Terry Deveigne" as the applicant in the District Court in proceedings numbered 5387 of 2002. It sought orders first, that "proceedings No 5387 of 2002 be relisted". Next it sought, in the alternative, either that Garling DCJ's costs order be amended by substituting "defendant's insurer's costs" for "defendant's costs" or that Garling DCJ's costs order be set aside and replaced with one ordering the plaintiff to pay NRMA's costs. Although the affidavit in support of the motion sworn by Ms Hornsby on 14 April 2004, referred to the fact that NRMA sought to be substituted as the defendant in order to recover the costs of the defence, the Notice of Motion did not seek that relief. 45 Gibson DCJ heard the Motion on 15 April 2004. Her Honour apparently said that the number of the proceedings was incorrect and amended it to "6817 of 2000", the plaint number of the Statement of Claim. The evidence before Gibson DCJ explained the history, including the fact that Terry Deveigne had died before the Statement of Claim was filed. It was common ground before her Honour that the decision in Budimir v McMahon meant the bankruptcy notice the NRMA was contemplating filing would be "hopelessly flawed" because of Mr Deveigne's death. After referring to s 47 of the MA Act and s 159 of the District Court Act 1973, her Honour said: "In practical terms, Mr Morris [Counsel for NRMA] wears two hats: he is the defendant and he is the insurer. The insurer conducted this case for the defendant and, if the plaintiff had won, the fact that the defendant was deceased would not have prevented or been any excuse for the plaintiff, [sic, it seems this should be 'the insurers'] not to 'shell out', so to speak. What the unsuccessful plaintiff in the Motor Accidents Act proceeding says is that there is no power under the rules to make any costs order unless the defendant's insurer is a party. In my view, this begs the question. The defendant is a party. What Mr Morris's client's orders seeks is the insertion of the words 'the defendant's insurer's costs' or, in the alternative, the setting aside of the order in favour of the defendant and the insertion of the name of the defendant's insurer in his place, the insurer being the person who footed the bill in accordance with s 47. … I am of the view that it is not necessary to join the insurance company as a party but that, if it were necessary, s 159 and Part 1, rule 5 would permit me either to do so or to waive requirement [sic, this should be 'compliance'] with that rule by reason of the fact that, although Mr Morris wears two hats, in a sense, bearing in mind that the insurance company has conducted this entire litigation, he is wearing two hats that he can basically turn into one. In circumstances where the insurance company has paid the costs and has conducted the whole of this litigation on behalf of the defendant, it seems to me appropriate that what I should do is make the orders sought." 46 Her Honour ordered that the costs order made by Garling DCJ of 30 May 2001 be set aside and replaced with an order that: "In place of the order of 30 May 2001 the plaintiff is to pay the costs of the defendant's insurer of the defence of these proceedings being Insurance Australia Ltd (trading as NRMA Insurance)." The respondent was also ordered to pay the costs of the defendant's insurer of the Notice of Motion. The orders as entered bore the proceedings number "6817 of 2000". 47 The respondent did not seek leave to appeal, or appeal, from Gibson DCJ's orders. 48 On 4 August 2004 Abbott Tout wrote to the Costs Assessment Section of the Supreme Court enclosing a copy of the costs order amended in accordance with Gibson DCJ's orders. The letter drew attention to the fact that Mr Deveigne was deceased (but not when he had died) and to Gibson DCJ's orders and asked that the Costs Determination issued on 25 May 2002 be amended to add "Insurance Australia Ltd t/as NRMA Insurance Ltd" as one of the applicants. 49 On 2 September 2004 the Manager of the Costs Assessment Section wrote to Abbott Tout advising that the amendment sought did not fall within s 208JB of the Legal Profession Act 1987 "as there was no inadvertent error" and that, therefore, "the Scheme cannot assist you in relation to this particular request." The Manager suggested that the most appropriate way to resolve the problem was to apply for a new assessment. She also pointed out that as there was an extant judgment based on the Certificate of Determination which had been issued and, as Abbott Tout was asking that a new Certificate of Determination be issued in relation to the same matter, it would have to provide evidence to the Manager that "the initial judgment has been set aside before the new assessment is commenced." 50 On 25 November 2004 Abbott Tout filed a Notice of Motion in the District Court, again in proceedings numbered 5387 of 2002, on this occasion said to be between "Terry Deveigne" as "the plaintiff" and Michael Askar as "the defendant", seeking an order pursuant to DCR Pt 31 r 12A that the "judgment in these proceedings be set aside" and that there be no order as to costs. The motion was supported by an affidavit which attached the correspondence with the Manager of the Costs Assessment Section. It came before Judicial Registrar McDonald on 6 December 2004. She concluded there was no evidence before her that the Certificate of Judgment was entered irregularly. She dismissed the Notice of Motion and ordered Mr Deveigne to pay the respondent's costs. 51 On 30 December 2004 Abbott Tout filed a "Long Notice of Motion" again in proceedings numbered 5387 of 2002, on this occasion naming "Terry Deveigne" as the "judgment creditor" and Michael Askar as the "judgment debtor", seeking orders that the whole of the judgment and orders of Judicial Registrar McDonald made on 6 December 2004 be set aside and that the judgment entered in proceedings No 5387 of 2002 in favour of the judgment creditor in the sum of $105,736.12 be set aside upon the grounds that the Judicial Registrar failed to exercise her power under DCR Pt 1 rr 5 and 5A. 52 The Long Notice of Motion first came before Bishop DCJ on 8 April 2005. On that day IAG Pty Ltd t/as NRMA Insurance was added as the second applicant to the Notice of Motion and the following orders were made: "1. Leave be granted to the applicant to amend the name of the applicant to the motion to IAG Limited t/as NRMA Insurance in the alternative. 2. Costs of today be reserved. 3. Leave be granted to either party so advised to file further order consolidating the two orders referred to above. 4. The Notice of Motion be adjourned part heard before Bishop DCJ on 24 June 2002 [sic, this should be 2005].

153 Section 66A of the MA Act enables the insurer to apply to the court to be joined as a party to proceedings where the defendant's insurer has given the plaintiff particulars alleging the claim has not been made in good faith. If joined, the insurer may call witnesses and examine and cross-examine them. 154 At the time the Statement of Claim was filed, DCR Pt 5 r 2 required a statement of claim to contain, where there was a defendant, the full name of the defendant. "Defendant" was defined in DCR Pt 1 r 4 to include "any person against whom a claim for relief is made". 155 DCR Pt 24C, "Motor Accidents List", made provision for actions commenced under the MA Act. Part 24C r 3 provided: " Service of statement of claim (by post or otherwise) (1) The statement of claim in an action under the Act shall be served on the defendant and the defendant's insurer. … (3) The requirement in subrule (1) for service on the defendant's insurer is satisfied by service: … (b) where the defendant is an insured person for the purpose of the Act - on the defendant's third party insurer." 156 DCR Pt 24C r 8 provided that a defendant could not move the Court to strike out or dismiss an action under the MA Act on the ground of non-compliance with s 42 (the requirement to report an accident to the police within 28 days) or s 52 (which prevented court proceedings being commenced until six months after notice of the claim was given to the other person and his or her insurer) unless that motion was filed within two months after service of the statement of claim on the defendant's insurer. 157 These provisions lend support to the proposition that the legislature has recognised the importance of the insurer's role in motor vehicle accident proceedings. There is, moreover, considerable authority for the proposition that a motor vehicle insurer in the NRMA's position as a result of legislation in substantially the same terms as the MA Act is the "real defendant" in the proceedings, and the insured, the named defendant, is but a nominal party. 158 In McCann v Parsons [1954] HCA 70; (1954) 93 CLR 418 the High Court considered an application for a new trial on the basis of the discovery of fresh evidence. The application was made in the name of the insured by the Government Insurance Office, which had issued a third-party policy in respect of McCann's motor car pursuant to the Motor Vehicle (Third Party Insurance) Act 1942 (NSW) (the "1942 Act"), the legislative precursor of the MA Act. The application was based on the premise that the insured had lied when he said that he was driving the vehicle which crashed, leading to the plaintiff's injuries. At a jury trial the plaintiff recovered a verdict of £20,000. After the trial a boy came forward to say it had been the plaintiff, not the insured, who had been driving the vehicle at the time of the accident. The defendant on the factual premise underlying the application, which was established to the Court's satisfaction, at all times knew the true position. In considering the application Dixon CJ, Fullagar, Kitto and Taylor JJ (at 428) said the "most difficult question" was that it was "the Government Insurance Office, not the defendant, that was misled, if the plaintiff was the driver of the car; and it was Office, not the defendant who discovered the fresh evidence". Their Honours referred to s 10 (7) of the 1942 Act (in like terms to s 17 of the MA Act) which they described as "an overriding provision that an authorized insurer issuing such a third party policy shall, in respect of any liability which it thus purports to cover for the death or bodily injury of third parties, be liable to indemnify the owner or such other person as may drive the car". They also referred to s 15 (1), which, like s 25 of the MA Act, enabled judgment to be entered against the licensed insurer of a vehicle if the judgment was not satisfied within 30 days. They concluded (at 430) that the effect of these provisions was that the insured "[was] not and has never been under any risk of any personal liability falling upon him as a result of the plaintiff recovering a judgment in these proceedings for damages … unless the authorised insurer were able to obtain relief in equity against the judgment on the ground of fraud. Their Honours continued: "Recognising the unreality of the position of the defendant sued for damages for bodily injuries caused to a plaintiff by the management of a motor vehicle the legislature placed the authorised insurer in such a case in the position of dominus litis. The authorised insurer who has issued a third party policy may take over during such period as he considers proper the conduct on behalf of such person of any proceeding taken or had to enforce a claim against any person in respect of a liability against which he is insured under the third party policy and he may defend such proceedings in a name and on behalf of such person: s 18(1)(b) and (c)". *Subsections 18(1)(b) and (c) were in substantially the same terms as s 47 of the MA Act. 159 Their Honours then said (at 430-431): "In the present case it is unnecessary to say that from the beginning the defence to the action was entirely conducted by the Government Insurance Office. It will be seen that McCann occupies a position of a mere nominal defendant. But for most purposes a party on the record is the only person whom the courts will regard as a responsible party in an action … [having referred to the fact that the jurisdiction to grant a new trial was 'governed by the overriding purpose of reconciling the demands of justice with the policy in the public interest of bringing suites to a final end', their Honours continued] In principle it is not easy to see why the Court, in getting at the justice of the case on the question whether the verdict should stand, may not look to the true legal effect of the verdict and of the judgment which would ensue therefrom and to the reality of the proceedings, more especially when they are the intended consequences of statute. Once the Court takes into account the legal truth that the verdict results in an enforceable liability upon the authorised insured and that, as of statutory right, he defends in the name of the party on the record who is reduced to the situation of the nominal defendant, then for the purpose of considering whether the trial has miscarried or the verdict should be set aside and the action retried, logic and justice alike seem to require that the question should be whether the insurer, not the nominal defendant, discovered fresh evidence … the power of the Court to order a new trial is based on the substantial requirements of justice and no court would exercise the power in favour of an insurer unless it were satisfied that notwithstanding due diligence on its part a situation had arisen in which, weighing the interests of the plaintiff against those of the real defendant, justice demanded that there be a retrial or a further investigation." (emphasis added) 160 Other cases reflect the proposition that in cases involving compulsory third party motor vehicle insurance, the insurer is the "real defendant". In King v Wilkinson (1957) SR (NSW) 444 (at 448), the Full Court (Street CJ, Owen J and Roper CJ in Eq) held that it was the right of a motor vehicle insurer having conduct of the defence of proceedings arising out of a motor vehicle accident, to draw to the court's attention the fact that the defendant (the insured) had "no real interest in the proceedings" and to call evidence to contradict his admissions. The Court observed (at 445), applying McCann v Parsons, that: "Counsel who appeared for the defendant, although of necessity appearing for the defendant on the record, was in fact briefed by the solicitor for the insurer who was in the position of dominus litis ." 161 In Treiguts v Tweedley [1959] VR 544, the plaintiff brought an action for damages for injuries he sustained in a collision between himself and a motor car driven by the defendant. The plaintiff had no recollection of the circumstances of the accident, nor did he know of anyone, other than the defendant, who had any knowledge thereof. By the time of the application with which the judgment was concerned the whereabouts of the defendant were unknown, although it appears that the originating process had been served upon him. The insurance company that had issued the third party policy in respect of the vehicle the defendant had been driving undertook the defence of the action. It had unsigned statements relating to the accident obtained from the defendant by a loss assessor. The plaintiff delivered interrogatories which the defendant failed to answer. The plaintiff sought an order that the defence be struck out and interlocutory judgment be entered for damages to be assessed. After noting that the discretion to dismiss an action or strike out a defence for non-compliance with an order for discovery was to be exercised in such manner as seemed to the court best calculated to do justice in the particular case, Smith J said (at 546): "…it does not appear to me to be possible to maintain that in a case such as the present the court must disregard the real status and interests of the persons concerned. The facts that the party on the record has no real interest in the proceedings and that his insurer is conducting the case under statutory authority and is bound by statute to bear the financial burden of failure must, as it seems to me, be material circumstances to be taken into account, along with others, in determining how justice may best be attained: compare McCann v Parsons (1954) 93 CLR 419, at pp. 430-431; Willis and Co v Baddeley , [1892] 2 QB 324; Windsor v Chalcraft, [1939] 1 KB 279;[1938] 2 All ER 751. 162 In Bourke v Kecskes [1967] VR 894 (at 900) Lush J treated the motor vehicle insurer as "the persons really interested" in whether an action should be dismissed for want of prosecution.