Lou v IAG Limited t/as NRMA Insurance - [2019] NSWCA 319 - NSWCA 2019 case summary — Zoe

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Lou v IAG Limited t/as NRMA Insurance

[2019] NSWCA 319

Court of Appeal (NSW)|2019-11-05|Before: Gleeson JA, Payne JA, Brereton JA

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Source facts

Court

Court of Appeal (NSW)

Decision date

2019-11-05

Before

Gleeson JA, Payne JA, Brereton JA

Source

Original judgment source is linked above.

Judgment (19 paragraphs)

[1]

609 Platford v van Veenendaal and Shoalhaven City Council (No 2) [2018] NSWLEC 86 Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 Seller v Jones [2014] NSWCA 19 Spratt v Perilya Broken Hill Ltd; Spratt v Rowe [2016] NSWCA 192 Zurich Australian Insurance Ltd v Lewis [2019] NSWSC 1232 Texts Cited: K Lewison and D Hughes, The Interpretation of Contracts in Australia (Thomson Reuters, 2012) RF Norton, A Treatise on Deeds (Sweet and Maxwell, 1906) N Seddon, Seddon on Deeds (Federation Press, 2015) GP Stuckey, The Conveyancing Act, 1919-1969 (Law Book Co, 2nd ed, 1970) Halsbury's Laws of England (Butterworth & Co, 2nd ed, 1933) Category: Principal judgment Parties: Qianxia Lou (Appellant) IAG Limited t/as NRMA Insurance (First Respondent) State Insurance Regulatory Authority of New South Wales (Second Respondent) Helen Wall, in her capacity as a Claims Assessor of State Insurance Regulatory Authority of New South Wales (Third Respondent) Representation: Counsel: A Stone SC / J Gumbert (Appellant) M Robinson SC / J Lucy (First Respondent)

[2]

Solicitors: AJB Stevens (Appellant) Hall & Wilcox (First Respondent) File Number(s): 2019/00189102 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: [2019] NSWSC 599 Date of Decision: 22 May 2019 Before: Wilson J File Number(s): 2018/00331495

[4]

HEADNOTE [This headnote is not to be read as part of the judgment] The appellant was injured in a motor accident in 2014. She made a claim for compensation on the first respondent, IAG Limited t/as NRMA Insurance ("NRMA"), as the CTP insurer of the vehicle at fault in that accident. Liability was admitted. The appellant lodged an application with the Claims Assessment and Resolution Service ("CARS") for general assessment pursuant to s 94 of the Motor Accidents Compensation Act 1999 (NSW). The matter was allocated to a claims assessor at the State Insurance Regulatory Authority ("SIRA"). The NRMA made an application seeking to have the matter exempted pursuant to s 92(1)(b). The claims assessor determined that the matter was suitable for assessment by CARS and declined the application for exemption. On 23 October 2018, the NRMA filed a summons in the Supreme Court seeking judicial review of the claims assessor's decision. On 5 November 2018, the appellant (the first defendant below) filed a submitting appearance "save as to costs". On 4 April 2019, the matter was heard without the appellant and her legal representatives present. On 22 May 2019, the primary judge awarded costs against the appellant in favour of the NRMA. The appellant sought leave to appeal against her Honour's decision of 22 May 2019. The issues on the appeal were: (1) Whether the primary judge erred in the exercise of the discretion to award costs against the appellant in favour of the NRMA. (2) Whether the primary judge erred in the exercise of the discretion to award the appellant a certificate under the Suitors' Fund Act 1951 (NSW). As to issue (1), Payne JA (Gleeson JA agreeing), granting leave to appeal and allowing the appeal, held: Other than UCPR rr 6.11 and 42.1 and s 98 of the Civil Procedure Act 2005 (NSW), there is no rule of court or provision dealing with the costs consequences of the filing of a submitting appearance, whether or not expressed to be "save as to costs". There is no prima facie rule that a submitting party will never be ordered to pay costs. What is called for, in all cases, is the principled exercise of the s 98 costs discretion: [41]-[43]. Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11; Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59; Seller v Jones [2014] NSWCA 19 applied. The primary judge fell into House v The King error by failing to take into account relevant considerations: (a) that the appellant did not cause the errors the subject of the proceedings before the primary judge; and (b) that these proceedings could not be resolved by consent. In re-exercising the costs discretion, it would not be appropriate to order that the appellant bear the NRMA's costs of the judicial review proceedings: [44], [46]. Zurich Australian Insurance Ltd v Lewis [2019] NSWSC 1232; Kovalev v Minister for Immigration and Multicultural Affairs (1999) 100 FCR 323; [1999] FCA 557 applied. Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) (2014) 86 NSWLR 645; [2014] NSWCA 317; Mahenthirarasa v State Rail Authority of New South Wales (No 2) (2008) 72 NSWLR 273; [2008] NSWCA 201; IAG Limited t/a NRMA Insurance v Khaled [2019] NSWSC 320; Platford v van Veenendaal and Shoalhaven City Council (No 2) [2018] NSWLEC 86 distinguished. As to issue (1), Brereton JA (dissenting), refusing leave to appeal, held: No question of principle arises on the application for leave to appeal from the costs order. The decision turns on the particular circumstances of the case. The decision does not establish a precedent which would create an environment in which parties to motor accident claims are effectively forced into consenting to orders for judicial review for fear of costs awards regardless of the merits of the case: [83]-[84]. Because costs are compensatory, the proper approach is to regard the matter primarily from the perspective of the successful party. In ordering that the unsuccessful first defendant pay the successful plaintiff's costs, the primary judge was acting in accordance with that principle, in accordance with UCPR r 42.1, and in accordance with ordinary practice. No error of the kind referred to in House v The King was made in her Honour's discretionary decision: [71], [74]. As to issue (2), Payne JA (Gleeson and Brereton JJA agreeing): The decision of a claims assessor under the Motor Accidents Compensation Act is a decision of a "court or tribunal". The conclusive nature of the proceedings before the claims assessor helped characterise the nature of the claims assessor's decision as one that falls within the relevant definition of a "court or tribunal" for the purposes of the Suitors' Fund Act. A judicial review pursuant to s 69 of the Supreme Court Act 1970 (NSW) constitutes "an appeal" for the purposes of s 6 of the Suitors' Fund Act. The judicial review proceedings had the relevant characteristics of the losing party below seeking to have the decision overturned and the recontesting of the matter before a different body exercising a statutory power of review. The consequence of the exercise of jurisdiction was that the decision below was quashed and the matter remitted to be re-determined. The terms "court" and "an appeal" for the purposes of the Suitors' Fund Act should be given a broad and beneficial construction in keeping with the subject matter, scope and purpose of that Act: [63], [66]. Mahenthirarasa v State Rail Authority Of New South Wales [2008] NSWCA 101; Spratt v Perilya Broken Hill Ltd; Spratt v Rowe [2016] NSWCA 192; Insurance Australia Limited t/as NRMA Insurance v Banos (No 2) [2013] NSWSC 1668; Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 applied. Henderson v QBE Insurance [2013] NSWCA 480 distinguished. Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97; Meeuwissen v Boden (2010) 78 NSWLR 143; [2010] NSWCA 253 considered. Per Brereton JA: In circumstances where NRMA would inevitably incur costs in bringing proceedings to obtain correction of the error, where the appellant did nothing to exacerbate those costs, and where she was ordered to pay NRMA's costs, declining to grant the appellant a certificate was contrary to the purpose of the Suitors' Fund Act, and worked a substantial injustice, meriting a grant of leave to appeal: [88].

[6]

Relevant facts

On 22 August 2014, the appellant was injured in a motor accident. She made a claim for compensation on the first respondent, IAG Ltd t/as NRMA Insurance ("NRMA"), as the compulsory third-party (CTP) insurer of the vehicle at fault in that accident. Liability was admitted. The second respondent is the State Insurance Regulatory Authority of New South Wales ("SIRA"). The third respondent is Ms Helen Wall in her capacity as a claims assessor for SIRA.
The appellant lodged an application with the Claims Assessment and Resolution Service ("CARS") for general assessment pursuant to s 94 of the Motor Accidents Compensation Act 1999 (NSW). The matter was allocated to SIRA claims assessor, Ms Wall.
On 24 May 2018, the NRMA made an application seeking to have the matter exempted pursuant to s 92(1)(b) of the Motor Accidents Compensation Act. If a claim is exempted from CARS assessment, the Principal Claims Assessor must, as soon as practicable, issue the insurer and claimant with a certificate to that effect, enabling court proceedings to be commenced in respect of the claim concerned.
The basis of the NRMA's application was that the appellant had allegedly made misleading statements relevant to damages issues. The NRMA alleged that there were numerous inconsistencies in the appellant's accounts of her injuries, in particular accounts contained in histories given to doctors. Accordingly, it was submitted that the matter was not suitable for CARS assessment.
On 31 May 2018, the appellant made written submissions opposing the NRMA's application for exemption. On 14 June 2018, the NRMA made further written submissions in support of its application for an exemption.
On 1 August 2018, Ms Wall determined that the matter was suitable for assessment by CARS and declined the application for exemption.
On 23 October 2018, the NRMA filed a summons in the Supreme Court seeking judicial review of Ms Wall's decision. There were three defendants to the application. The appellant, SIRA and Ms Wall in her capacity as a claims assessor for SIRA were the first, second and third defendants respectively.
On 5 November 2018, the appellant (the first defendant below) filed a submitting appearance in the following terms: "Qianxia Lou, First Defendant appears and submits to the making of all orders sought, and the giving or entry of judgment in respect of all claims made, save as to costs."
On 8 November 2018, SIRA (the second defendant below) and Ms Wall (the third defendant below) filed submitting appearances.
On 14 January 2019, the NRMA wrote to the appellant's solicitors, seeking the appellant's consent to the orders sought in the summons. On 13 March 2019, the appellant's solicitors wrote to the NRMA's solicitors informing them that the appellant did not consent to the orders sought, stating: "[The appellant] has filed a submitting appearance, save as to costs. Whilst [the NRMA] may be running the proceedings without a contradictor, [the NRMA] is still required to make out its case. We filed Submissions with CARS, which you have annexed to your Affidavit. Our position is that Assessor Helen Wall made the correct decision, however, [the appellant] does not wish to incur the cost of defending the decision of a Judicial Officer."
On 26 March 2019, the NRMA's solicitors informed the appellant's solicitors that the NRMA intended to seek costs of the summons and invited the appellant to reconsider whether she would consent to the orders sought, stating: "At the final hearing of the matter on 4 April 2019, [the NRMA] proposes to apply for an order for costs against [the appellant], should it be successful in the proceedings. We enclose a copy of the submissions and draft affidavit [the NRMA] proposes to file in support of its application for costs."
On 4 April 2019, the matter was heard before Wilson J. The appellant and her legal representatives did not attend the hearing. Her Honour announced, in an exchange lasting only a few minutes, that she was persuaded that the principal relief sought by the NRMA should be granted and the matter remitted. The overwhelming majority of the relatively short hearing was devoted to the NRMA's application for costs.
On 4 April 2019, Wilson J made the following orders: "(1) The decision of the third defendant of 1 August 2018, refusing the plaintiff's application for exemption made pursuant to section 92(1)(b) of the Motor Vehicle Accidents Compensation Act 1999 (NSW), is quashed. (2) The matter is remitted to the second defendant to be dealt with according to law by a different claims assessor. (3) Subject to order 4, costs against the first defendant in favour of the plaintiff. (4) If the first defendant seeks any different order to that announced as order 3, she is to file and serve written submissions in support of her application by close of business on 18 April 2019. (5) Any application referred to in order 4 will be dealt with by the Court on the papers."
On 8 April 2019, Wilson J delivered reasons for making the 4 April orders: IAG Limited t/as NRMA Insurance v Qianxia Lou [2019] NSWSC 382.
Written submissions on costs were made on 18 April 2019 by the appellant and in reply by the NRMA on 6 May 2019.
On 22 May 2019, Wilson J delivered her Honour's judgment on costs: IAG Limited t/a NRMA Insurance v Qianxia Lou (No 2) [2019] NSWSC 599. Her Honour made the following order: "(1) Order 3 of 4 April 2019 is varied to be, costs against the first defendant in favour of the plaintiff."

[10]

Appellant's submissions

The appellant submitted that the primary judge erred in exercising the discretion set out in s 98 of the Civil Procedure Act. The appellant was not responsible for the erroneous decision the subject of the litigation. It was unjust and an erroneous exercise of discretion to award costs against the appellant.
The appellant submitted that the costs discretion should be judiciously exercised on the facts of each case. Even if all three defendants had consented, the case would still had to have been made by the NRMA to move the Court to exercise its discretion. In Zurich Australian Insurance Ltd v Lewis [2019] NSWSC 1232, McCallum J dismissed a summons for judicial review even though all defendants had entered submitting appearances. The appellant submitted that the decision of this Court in Mahenthirarasa v State Rail Authority of New South Wales (No 2) (2008) 72 NSWLR 273; [2008] NSWCA 201 was also distinguishable.
The appellant accepted that as her Honour's decision was discretionary, error of the kind in House v The King needed to be demonstrated: (1936) 55 CLR 499; [1936] HCA 40.
Essentially, three matters were identified as affected by House v The King error. First, it was submitted that her Honour failed to take a relevant matter into consideration, being that the appellant had not caused the error the subject of the proceedings.
Secondly, it was submitted that the primary judge took into account an irrelevant consideration or mistook the facts in that her Honour assumed or found that there would have been costs savings for the NRMA if the appellant had consented to the relief sought. The same finding, that there would have been costs savings for the NRMA if the appellant had consented to the relief sought was said to be affected by error of law in that there was no evidence to support the finding.
Thirdly, it was submitted that the primary judge failed to take into account a material consideration, being that judicial review proceedings cannot be resolved by consent. In acting on the basis that judicial review proceedings could be resolved by consent, her Honour had acted on a wrong principle.

[11]

The NRMA's submissions

The NRMA submitted that the appellant has not identified any relevant error in the primary judge's decision to award costs. Her Honour exercised her discretion lawfully and in accordance with established authority. The NRMA relied on its submissions below in support of the decision to award costs, summarising its position as follows: 1. The issue of costs was to be approached according to an appraisal of the circumstances of the case (Kisimul); 2. As costs are compensatory, the proper approach was to look at the matter primarily from the perspective of the successful party (Mahenthirarasa); 3. The appellant significantly increased the NRMA's costs by not consenting to the orders sought despite being twice asked to do so, and did not identify a persuasive reason why the Court should depart from the ordinary rule that costs follow the event; 4. Accordingly, both discretionary factors and authority favoured an award of costs in favour of the NRMA. None of the reasons put forward by the appellant as to why the primary judge's discretion miscarried identify or evidence any error of legal principle.
The NRMA submitted that the principle that costs may be awarded against a submitting party is not limited to a situation where the parties are in "truly" adversarial positions. Even if it were, in any event, the appellant and the NRMA are in fact parties to an adversarial dispute. The proceedings in CARS, which gave rise to the judicial review proceedings, are about the amount of compensation which the NRMA should be required to pay to the appellant. It was submitted that this is analogous to adversarial proceedings in a court about the quantum of damages to which a plaintiff is entitled. It was submitted that the discretion as to whether to grant relief in judicial review proceedings does not preclude the award of costs to a submitting party.
The NRMA submitted that the primary judge did not err in applying Mahenthirarasa. The primary judge's only discussion of Mahenthirarasa appears at paragraphs [21] and [22] of her judgment, when discussing N Adams J's treatment of that case in Midson v Workers Compensation Commission (No 2) [2017] NSWSC 147. Basten JA in Mahenthirarasa did not endorse an unqualified proposition that the submitting party should only pay costs attributable to it.
The NRMA submitted that the appellant misguidedly seeks to distinguish Mahenthirarasa. It was submitted that in Mahenthirarasa, Basten JA found that, because the State Rail Authority had opposed an appeal from the relevant decision in the Workers Compensation Commission, it could not disclaim all responsibility for the appellant's situation. It was submitted that is analogous to the present proceedings, where the appellant opposed the insurer's discretionary exemption application in CARS and filed substantial submissions in opposition. The NRMA submitted that the circumstance that the submitting defendant in Mahenthirarasa was a public authority does not diminish the relevance of Basten JA's remarks about the consequences of submitting to the Court's orders rather than consenting to the orders sought, nor his Honour's remarks about the compensation principle.
The NRMA submitted that costs would have been saved had the appellant consented at an early point; in part, because the detailed submissions filed by the NRMA would not have been necessary. It submitted that, if the appellant had consented, short submissions could have been prepared on one ground only and orders setting aside the claims assessor's decision could have been made in chambers. It was submitted that in Mahenthirarasa, Basten JA disposed of a similar argument to that made by the appellant, being that costs should not be awarded against the State Rail Authority because the appellant would have been required to satisfy the Court in any event that orders should be made, even if not opposed.
The NRMA submitted that the decision in Lewis does not stand for the proposition that a submitting appearance in judicial review proceedings is not materially different from consenting. Lewis was not a decision about costs, and McCallum J did not consider in that case whether a defendant who files a submitting appearance should be treated in the same way as a defendant who consents to the orders sought in a plaintiff's summons.
It was submitted that the question of whether costs should be awarded against a submitting party in judicial review proceedings, where all defendants or respondents submit, was the subject of consideration in Platford v van Veenendaal and Shoalhaven City Council (No 2) [2018] NSWLEC 86 at [21]. It was submitted that the approach favouring costs awards against submitting parties in the Land and Environment Court is consistent with the rationale for the costs power, as endorsed by this Court, and is therefore persuasive.

[12]

Consideration of ground 1

The UCPR provide, relevantly: 6.11 Defendant may submit to judgment by notice of appearance (1) A defendant who intends to take no active part in proceedings may include in the defendant's notice of appearance a statement to the effect that the defendant submits to the making of all orders sought and the giving or entry of judgment in respect of all claims made, to which may be added the words ", save as to costs". (2) Except by leave of the court, a defendant who has filed a notice of appearance containing a statement referred to in subrule (1) may not file a defence or affidavit or take any other step in the proceedings. Note. See rule 20.34 which allows the defendant in proceedings on a liquidated claim to file a statement acknowledging the whole of the amount of the claim. … 42.1 General rule that costs follow the event 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.
The power to award costs is found in s 98 of the Civil Procedure Act 2005 (NSW) which provides, relevantly: 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. ….
There is no other rule of court or other provision dealing with the costs consequences of the filing of a submitting appearance, whether or not expressed to be "save as to costs".
What is called for, in all cases, is the principled exercise of the s 98 costs discretion. The discretion that s 98 confers is subject to the qualification that it must be exercised judicially "in accordance with established principle and factors directly connected with the litigation": Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [65] per McHugh J (in dissent but not relevantly for present purposes). Among the fetters on the discretion to award costs are the rules of the Court contained in Part 42 of the UCPR. The usual rule is that costs follow the event, unless it appears to the Court that some other order should be made: UCPR, r 42.1. The rationale for the principle that costs follow the event is that the successful party to proceedings should be compensated: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59.
There is no prima facie rule that a submitting party will never be ordered to pay costs. In Seller v Jones [2014] NSWCA 19 at [55] and [59] McColl JA (with whom Basten and Ward JJA agreed) noted that r 6.11 of the UCPR does not provide for the costs consequences of a submitting appearance.
I have concluded, nevertheless, that in the present case the primary judge fell into House v The King error. First, her Honour failed to take into account a relevant consideration, namely that, as Mr Robinson SC conceded, the appellant did not in this case cause the errors the subject of the proceedings before the primary judge. Her Honour did not take that matter into account and I reject the NRMA's submission that her Honour implicitly took that matter into account by the general statement in [23] of her judgment that she had considered the arguments of the parties. The fact that the appellant did not cause any error the subject of the proceedings was a material consideration in the exercise of the costs discretion. Secondly, there was no basis in the evidence to conclude that any step taken by the NRMA in these proceedings would have been in any way different if the appellant had consented to the relief sought. I do not accept that it was sufficiently likely, as the NRMA submitted on this appeal, that if consent had been forthcoming it would have chosen only to propound one of the grounds it identified. Thirdly, it was material to the exercise of the costs discretion in this case to recognise that these proceedings could not be resolved by consent: see Lewis per McCallum J; Kovalev v Minister for Immigration and Multicultural Affairs (1999) 100 FCR 323; [1999] FCA 557 per French J. The exercise of the supervisory jurisdiction under s 69 of the Supreme Court Act 1970 (NSW) is always within the discretion of the Court. Her Honour failed to take into account this matter as a consideration relevant to the costs discretion.
As to the possibility of orders being made in chambers by consent, I reject the NRMA's suggestion that a Registrar of the Court had power in this case to make orders in chambers. The delegation to the Registrar, pursuant to s 13 of the Civil Procedure Act, to make any judgment by consent or order by consent, [1] does not apply to a case such as the present where, even assuming the appellant had consented, there remained two parties to the proceedings who had entered submitting appearances but had not consented.
In re-exercising the costs discretion and having regard to all the circumstances of the case as explained in Kisimul, I am satisfied that it would not be appropriate to order that the appellant bear the NRMA's costs of the judicial review proceedings. This is for the following reasons.
First, the appellant filed a submitting appearance shortly after her first appearance on 5 November 2018. Her prompt filing of a submitting appearance enabled the matter to be set down for hearing as soon as the Court became available. The appellant's conduct was consistent with her obligation to further the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute contained in s 56(3) of the Civil Procedure Act. This was not a case in which the filing of a submitting appearance came at a late stage of the proceedings: cf IAG Limited t/a NRMA Insurance v Khaled [2019] NSWSC 320 per Bellew J.
Secondly, consistent with her position as a submitting party, the appellant played no role in the proceedings before the primary judge. She did not contest the relief sought by the NRMA and did nothing to increase the costs incurred by the NRMA in making out its claim for relief. On the contrary, the prompt filing of a submitting appearance by the appellant enabled this matter to be determined in less than two pages of transcript, which I infer took less than five minutes of hearing time. The correspondence relied upon by the NRMA does not put this case into any different category. These proceedings could not have been resolved by consent: Lewis; Kovalev. Nothing the appellant did, including in the correspondence relied upon by the NRMA caused or contributed to the NRMA's costs here.
Thirdly, this was not a case in which the appellant caused the error by the decision-maker below. As Mr Robinson SC conceded, "They didn't cause the error, as my friend correctly said, but the error was made by the Authority." It was the error made by the second defendant that brought about the need for the NRMA to commence proceedings in this Court. Moreover, given the relief sought by the NRMA was discretionary in nature, there was nothing that the appellant could have done to obviate the need for the NRMA to bring its summons. Even if the appellant had consented to the NRMA's proposed orders, a hearing would still have been required in order to satisfy the Court that it was appropriate to exercise its supervisory jurisdiction.
No previous decision of this Court compels a different answer in the present case. Whilst the principle in Kisimul is not restricted to commercial cases, Kisimul is distinguishable. In Kisimul, the appellant and the respondent were the only parties to commercial litigation in the Equity Division. The respondent, by defending the Equity Division proceedings, "strove to obtain the commercial benefit of a presumption of insolvency against the appellant and successfully resisted the appellant's attempt to deny it that benefit": Kisimul at [15]. That is a case far removed from the present.
The decision in Mahenthirarasa v State Rail Authority of New South Wales (No 2) (2008) 72 NSWLR 273; [2008] NSWCA 201 is also distinguishable. In that case at [10] Basten JA made clear that, even where the discretion is subject to the principle that costs follow the event, as required by r 42.1, it does not follow that costs will inevitably be awarded in favour of the successful party. A matter of importance in that case was that this Court had expressly invited the State Rail Authority to reconsider its passive position and provide assistance to the Court but the Authority had declined. The Court regarded it as critically important that the Authority had failed in its obligations as a model litigant (at [22]). That case is also far removed from the present.
This case is also quite different from Land and Environment Court cases relied upon in this Court by the NRMA. [2] In Platford Preston CJ of the LEC awarded costs against both the applicant for development consent and the consent authority in circumstances where each had filed a submitting appearance. His Honour described as "the ordinary rule" that no order for costs should be made against a submitting party. His Honour found that this "rule" had less applicability in judicial review proceedings in the Land and Environment Court where the consent authority which granted the development consent and the beneficiary of the development consent had made submitting appearances. His Honour concluded that Platford was a case where the beneficiary of the consent played a role in causing or contributing to the error that led to the invalidity of the consent. The case is quite different to the present. Upon analysis, each of the Land and Environment Court cases turn on their own facts and do not support an award of costs in favour of the NRMA in this case. The analogy sought to be drawn by the NRMA between the appellant, a victim of a motor vehicle accident who it concedes did not cause the error the subject of the judicial review, and an applicant for development consent in the Land and Environment Court is completely inapposite.
The appeal should be allowed and the primary judge's order as to costs set aside.
The remaining question is whether the NRMA should be ordered to pay the costs incurred by the appellant of the application seeking leave to appeal and the appeal. The NRMA fully participated in the appeal, but only in relation to ground 1. It has been unsuccessful in that respect. Accordingly, I propose to order that the NRMA pay the appellant's costs of the application for leave to appeal and ground 1 of the appeal.

[13]

Grounds 2 and 3

Despite my conclusion in relation to ground 1, it is appropriate that I address grounds 2 and 3 on a contingent basis: Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 at [12].
The Suitors' Fund Act 1951 (NSW) provides, relevantly: 2 Definitions (1) In this Act, unless the context or subject matter otherwise indicates or requires: Appeal includes any motion for a new trial and any proceeding in the nature of an appeal. … Court includes such tribunals or other bodies as are prescribed. [3] … 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. … 6C Payments not otherwise authorised by this Act (1) If: (a) a party to an appeal or other proceedings incurs or is liable to pay costs in the appeal or proceedings, (b) the party is not otherwise entitled to a payment from the Fund in respect of the costs, and (c) the Director-General is of the opinion that a payment from the Fund in respect of the costs, although not authorised by section 6, 6A or 6B, would be within the spirit and intent of those sections, the Director-General may, with the concurrence of the Attorney General, pay from the Fund to the party such amount towards the costs as is assessed by the Director-General having regard to the circumstances of the case. (2) A payment under this section shall not exceed $10,000.
The appellant submitted that her Honour relied on [23] and [24] of her judgment, which contained her conclusion that the appellant should have consented by reason of the obvious errors made by a third party, to refuse relief under the Suitors' Fund Act.
There are two relevant questions: 1. whether the decision of a claims assessor under the Motor Accidents Compensation Act is a decision of a "court or tribunal" for the purposes of the Suitors' Fund Act; and 2. whether a judicial review pursuant to s 69 of the Supreme Court Act constitutes "an appeal" for the purposes of s 6 of the Suitors' Fund Act.
As to the first question, in Mahenthirarasa v State Rail Authority Of New South Wales [2008] NSWCA 101 Basten JA said: "[68] If there were an appeal, the next question is whether the Workers Compensation Commission constitutes "a court" for the purposes of the Suitors' Fund Act. To the extent that the Commission exercises judicial functions, it may be appropriate so to treat it. Thus, the Equal Opportunity Tribunal has been found to be a court for the purposes of the Act: Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497; similarly, the Medical Tribunal may also be a court: see Qidwai v Brown [1984] 1 NSWLR 100 at 102. On the other hand, the Board of Subdivision Appeals under the Local Government Act 1919 (NSW) was held not to be a court in Gosford Shire Council v Anthony George Pty Ltd (1969) 89 WN(Pt 1)(NSW) 350. If the function of the Registrar under s 327(4) were incidental to an exercise of judicial power, the Registrar's decision may be capable of being classified as a decision of a court provided the Appeal Panel to which the appeal was to be taken was a court. That would not necessarily depend only on the characterisation of the function as administrative or judicial. However, if the exercise of the function by the delegate were properly characterised as administrative, it might render unlikely the proper classification of the proceeding as an appeal or a proceeding in the nature of an appeal."
In Spratt v Perilya Broken Hill Ltd; Spratt v Rowe [2016] NSWCA 192 Leeming JA (with whom McColl and Gleeson JJA agreed) said: "[27] Of course, the fact that a body is styled a "commission" or a "tribunal" does not prevent it being a court. The Dust Diseases Tribunal (which is a court of record) and the Upper Tribunal in the United Kingdom (which is a superior court of record) are examples. Moreover, a body may be a "court" for one purpose (Suitors' Fund Act 1951 (NSW)) and not a court for another (s 77(iii) of the Constitution): see, for example, Mahenthirarasa v State Rail Authority of New South Wales [2008] NSWCA 101 at [68]."
Campbell J in a 2013 first instance decision has held that the decision of a claims assessor under the Motor Accidents Compensation Act is a decision of a "court" or "tribunal" for the purposes of the Suitors' Fund Act: Insurance Australia Limited t/as NRMA Insurance v Banos (No 2) [2013] NSWSC 1668 at [3]-[7].
On the other hand, in Henderson v QBE Insurance (Australia) Ltd [2013] NSWCA 480 Beazley P (with whom Tobias AJA agreed) said: "[56] In my opinion, his Honour was correct in finding that a determination by a Proper Officer under s 62 did not constitute a decision of "a court".
In my view Campbell J was correct in Banos to conclude that the conclusive nature of the proceedings before the claims assessor helped characterise the nature of the claims assessor's decision as one that falls within the relevant definition of a "court or tribunal" for the purposes of the Suitors' Fund Act. The decision of the Proper Officer under s 62 of the Motor Accidents Compensation Act the subject of Henderson is distinguishable. Although CARS does not have a judicial head, all CARS assessors are legally qualified and exercise power by determining substantive legal rights. A claims assessor has a quasi-judicial role which is quite different to the limited "gatekeeper" function of a Proper Officer of the Medical Assessment Service, the subject of the Court's decision in Henderson.
As to the second question, Henderson is also authority, albeit obiter, that: "[57] There is a further problem with the application of s 6 in the circumstances of this case, in that the proceedings before the primary judge were not by way of an appeal, but were by way of judicial review pursuant to the Supreme Court Act, s 69. Judicial review proceedings would, however, fall within the meaning of "other proceedings" within the meaning of s 6C."
The correct approach to construction of the Suitors' Fund Act was explained by McHugh JA (as his Honour then was) in Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 at 515-516 as follows: "Remedial legislation should be given a beneficial construction. In accord with that philosophy, the Supreme Court has given a liberal construction to the word "appeal" in the Suitors' Fund Act. Thus an application for a writ of prohibition to correct an error of law in a court of petty sessions is an "appeal" for the purpose of the Act: Ex parte Parsons; Re Suitors' Fund Act (1952) 69 WN (NSW) 380. So is a case stated by a court of Quarter Sessions to the Court of Criminal Appeal on a question of law arising out of a conviction in a court of petty sessions (Ex parte Neville; Re Suitors' Fund Act 1951-1960 (1966) 85 WN (Pt 1) (NSW) 372) or a case stated by an arbitrator to the Supreme Court: Mir Bros Developments Pty Ltd v Atlantic Constructions Pty Ltd (1985) 1 NSWLR 491. Even a reference from the Prothonotary, exercising delegated jurisdiction, to a judge in chambers is an "appeal" for the purpose of the Suitors' Fund Act: Onions v Government Insurance Office of New South Wales (1956) 73 WN (NSW) 270. The word "court" should likewise be given a liberal and beneficial construction to accord with the purpose and policy of the Act. The correct approach is for the Court to ask itself whether, bearing in mind the general purpose of the Suitors' Fund Act, Parliament must be taken to have intended that the Tribunal should qualify as a court? I think that that question should be answered in the affirmative. Whether the Tribunal is a "court" for purposes other than the Act is beside the point. What matters for the purpose of the Suitors' Fund Act is that a body which determines rights and is presided over by a judge of the District Court has made an error of law which has been corrected on appeal to the Supreme Court of New South Wales. To grant a certificate, at the request of the respondents, is to promote the purpose of the Act. To hold that the Tribunal is a "court" for the purpose of the Act contradicts no express or implied provision of the Act. The Court should, therefore, declare that the respondents are entitled to a certificate under the Act."
Like McHugh JA, I would give the terms "court" and "an appeal" for the purposes of the Suitors' Fund Act a broad and beneficial construction in keeping with the subject matter, scope and purpose of that Act. The judicial review proceedings here had the relevant characteristics of the losing party below seeking to have the decision overturned and the recontesting of the matter before a different body exercising a statutory power of review. The consequence of the exercise of jurisdiction was that the decision below was quashed and the matter remitted to be re-determined. As Campbell J concluded in Banos: "[11] By parity of reasoning, I consider that a beneficial construction of the Act favours the interpretation that the present proceedings are an appeal, as contended by the claimant. It is notable, as his Honour pointed out, that an application for a writ of prohibition to correct an error of law was regarded as an appeal in Ex parte Parsons; Re Suitors' Fund Act (1952) 69 WN (NSW) 380. To my mind there is no reason to distinguish prohibition from an order in the nature of certiorari. Both may be concerned relevantly with the correction of legal error. There is authority supporting the proposition that an application for an order in the nature of a writ of mandamus to correct an error of law of a lower court is an appeal for the purposes of the Act: Director General of Fair Trading v O'Shane (unreported, NSWSC, Graham AJ, 22 August 1997)."
The conclusion I prefer, that s 6 of the Suitors' Fund Act on its correct construction applied to the present proceedings, was the result in proceedings of the same kind in Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 per Beazley, McColl and Macfarlan JJA, although apparently not the subject of argument and in Meeuwissen v Boden (2010) 78 NSWLR 143; [2010] NSWCA 253 at [38] per Beazley and Basten JJA and Sackville AJA, again apparently without being the subject of argument.
If I had concluded that the appeal failed on ground 1, I would have ordered the grant of a certificate under the Suitors' Fund Act to the appellant.

[14]

Conclusion and orders

For the foregoing reasons I propose the following orders: 1. Application for leave to appeal granted. 2. Appeal allowed. 3. Set aside order 1 of the orders made by the primary judge on 22 May 2019 and in lieu thereof order that: 1. Order 3 made on 4 April 2019 is set aside; 2. No order as to costs between the first defendant and the plaintiff. 1. The first respondent to pay the costs of the appellant limited to the application for leave to appeal and the appeal in relation to ground 1.
BRERETON JA: On 24 May 2018, the first respondent NRMA made an application to the claims assessor, to whom the applicant Ms Lou's application for general assessment [4] had been allocated, to have the matter exempted from assessment. [5] Ms Lou successfully opposed that application, albeit that she succeeded for a reason which she had not advanced. That reason was erroneous, and NRMA brought judicial review proceedings to quash the decision. While Ms Lou filed a submitting appearance, she twice rejected offers which would have seen her relieved of any costs liability, maintaining in correspondence that the decision of the assessor was correct. In the judicial review proceedings, before Wilson J, NRMA succeeded in obtaining the relief it had sought to rectify the error which had been made in favour of Ms Lou. It incurred costs in doing so, albeit that they were minimised by her having filed a submitting appearance. On 22 May 2019, the judge ordered that Ms Lou pay NRMA's costs of the proceedings, and declined to grant her a certificate under Suitors' Fund Act 1951 (NSW). [6]
Two main issues arise on this application for leave to appeal from the orders of 22 May 2019: the first is whether the order made by her Honour that Ms Lou pay NRMA's costs was affected by appellable error, and the second is whether her Honour erred in declining to grant Ms Lou a certificate under Suitors' Fund Act 1951 (NSW). I have had the benefit of reading, in draft, the judgment to be delivered by Payne JA. As will appear, I agree with his Honour in respect of the second question, and am of the opinion that Ms Lou should have received a Suitors' Fund certificate. However, as to the first issue, I have the misfortune to disagree with his Honour. For the reasons that follow, I see no error of the kind referred to in House v The King [7] in her Honour's discretionary decision, and even if there were, I would have made the same costs order.

[15]

The costs order

The starting point, of course, is that while costs are in the discretion of the court, in inter partes litigation the proper exercise of that discretion ordinarily involves that costs follow the event. That principle is enshrined in the rules of court; Uniform Civil Procedure Rules 2005 (NSW), r 42.1 provides: 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.
Next, this is unaffected by the circumstance that the defendant files a submitting appearance - as is reflected in the provision contained in UCPR r 6.11, that in filing a submitting appearance a defendant may, but need not, add the words "save as to costs". If those words are added, there remains an issue to be decided as to costs. The statement in Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2), [8] that a costs order for a submitting party should be made according to an appraisal of the circumstances of the case, focussing on the context of the litigation and the context of the filing of the submitting appearance, and that parties are not protected from a costs order simply by filing a submitting appearance, is not confined to commercial cases. [9] While there is an established practice of not making orders for costs against a submitting inferior court or tribunal in judicial review proceedings, [10] there is no such practice in respect of the true contradictor in such proceedings, whether it be active or passive. [11]
The purpose of a costs order is to compensate a party who is required to come to court, either to obtain vindication or to defend itself, for the costs of successfully doing so. Because costs are compensatory, the proper approach is to regard the matter primarily from the perspective of the successful party. [12] In ordering that the unsuccessful first defendant pay the successful plaintiff's costs, her Honour was acting in accordance with that principle, in accordance with UCPR r 42.1, and in accordance with ordinary practice.
Ultimately, three matters were advanced on behalf of Ms Lou as amounting to discretionary error, namely: 1. failing to take into account as a relevant consideration that the appellant did not cause the errors the subject of the proceedings before the primary judge; 2. erroneously concluding that no step taken by the NRMA would have been different had the appellant consented to the relief sought; and 3. failing to take into account as a relevant consideration that the proceedings could not be resolved by consent.
Before addressing each of these matters in turn, it should be firmly borne in mind that this was a judgment on a question of costs. As it did not involve departing from the ordinary rule that costs follow the event, it is not to be expected that a primary judge will give elaborate reasons referring to every relevant consideration.
As to the first matter, the judge said (at [23]) that "[h]aving considered the competing arguments of the parties I have concluded that there is no compelling reason to depart from the usual costs orders, in favour of the successful party." Those arguments had been presented to her Honour in written submissions, the costs argument having been conducted "on the papers". The first defendant's written submissions to her Honour included: 18. In this matter, the dispute related to a deficiency in a decision that the first defendant did not make and was not responsible for. The decision was made by a separate defendant. There is no evidence that there was anything unreasonable in the first defendant's conduct in the proceedings below. As her Honour stated in Midson, "it was the error made by the [decision maker] that brought about the need for the plaintiff to commence proceedings in this Court." 19. The present proceedings are very similar to the circumstances found in Midson. As in Midson, (at [29]) the submitting defendant here was a party to the proceedings below, not the decision maker. The first defendant here did not ask to be a party to these proceedings. It took no part in the proceedings.
A fair reading of paragraph 23 of her Honour's judgment is that her Honour considered, and took into account, that argument. However, that her Honour did so is made even more clear by the express reference to it in her Honour's judgment: [9] The first defendant argued that she did not play an "active role" in the matter and was not the cause of, or responsible for, the "deficiency" in the Assessor's decision. She relied on Midson v Workers Compensation Commission & Ors (No 2) [2017] NSWSC 147, drawing parallels to the facts, to demonstrate that she was merely party to the proceedings but not the decision maker.
In the light of that, the argument that her Honour failed to have regard to the fact that the first defendant was not the cause of or responsible for the assessor's error is, in my view, untenable. Rather, her Honour had regard to it, but did not regard it as sufficient to displace the ordinary rule - a conclusion which in my mind her Honour was amply entitled to reach. One reason for that is that the circumstance that the applicant did not cause the specific error the subject of the judicial review proceedings is in itself of limited significance. Many appeals are brought from decisions in favour of a respondent, where the specific error complained of cannot be said to have been caused by the respondent, but which is nonetheless the beneficiary of the error. Here, NRMA sought, and Ms Lou opposed, before the assessor, an exemption pursuant to Motor Accidents Compensation Act, s 92(1)(b). The assessor, erroneously as it transpires, made a decision that accorded with the position advanced on behalf of Ms Lou, even if for a reason she did not advance. But she was the beneficiary of the error. Had Ms Lou not opposed the application for exemption, there would have been no necessity for the judicial review proceedings. That was the point made by Basten JA in Mahenthirarasa, when his Honour observed: [13] That position is understandable, the court proceedings being, in a practical sense, necessary because of the stance taken by the State Rail Authority before the Registrar, opposing the appeal within the Commission. It is therefore appropriate that the appellant have the whole of his costs in this Court and in the Court below, assessed on the usual basis.
As to the second matter, it is undoubtedly the case that her Honour observed [14] that "much time and money could have been saved to all concerned if the first defendant had conceded that error had occurred, and that the plaintiff was entitled to the relief it sought". I agree with Payne JA that there is no sound basis for concluding that NRMA would have adopted a materially different course, or incurred materially less costs, had consent been forthcoming; the proceedings were not of a nature which permitted the matter to proceed merely by consent. Insofar as her Honour acted on the basis that much could have been saved, that was misconceived. However, it is, again, a matter of slight significance. As it seems to me, even assuming that there would have been no saving in costs to NRMA had Ms Lou consented, the dominant consideration is that the proceedings were necessitated by the erroneous decision of the assessor in favour of Ms Lou. In any event, her Honour was not wrong in having regard to the circumstance that Ms Lou was repeatedly offered the opportunity to consent and escape any liability for costs, yet stubbornly refused to do so.
As to the third matter, which is not unrelated to the second, I do not accept that her Honour failed to take into account that the nature of the proceedings were such that they could not be resolved by consent. Her Honour said: [10] The first defendant pointed out that this type of dispute could not be resolved by agreement and, even if the first defendant consented or submitted to orders, "a hearing would still have been required to satisfy the Court that it was appropriate to exercise its supervisory jurisdiction": Midson. That is, the plaintiff would have incurred the same costs whether or not the first defendant consented or submitted.
Again, the argument that her Honour failed to have regard to something to which the judgment explicitly referred is, in my view, untenable. And again, this is a matter of marginal significance. It is not so much that the matter could not be disposed of by consent, as that the proceedings were necessary to rectify a decision erroneously made adverse to NRMA and in favour of Ms Lou by the assessor, that is the matter of greatest significance.
In my view, on the application for leave to appeal from the costs order, no question of principle arises. No discretionary error of the type referred to in House v The King is identified. In any event, the order made was the appropriate one. Nothing is involved other than an attempt to obtain a different exercise of discretion from this court. The only true contention of principle involved is the suggestion, inherent in the applicant's argument, that costs orders should not be made against respondents to judicial review proceedings who are injured victims of motor vehicle accidents and file submitting appearances, and there is no basis for any such principle. The applicant's submissions in this court were replete with references to "injured victims of motor vehicle accidents" as if they were a special class of litigant entitled to special consideration. For many years, most common law litigation in this State were proceedings brought by plaintiffs who had been injured in motor vehicle accidents, and I am not aware of any suggestion that, in respect of costs, they were a special class of litigant. In that respect they had - and have - the same entitlements, and are exposed to the same liabilities, as other litigants.
I do not accept that her Honour's decision establishes a precedent which would create an environment in which parties to motor accident claims are effectively forced into consenting to orders for judicial review for fear of costs awards regardless of the merits of the case. As her Honour made clear, the decision turns on the particular circumstances of the case. [15] The prospect of a costs order always operates to impose discipline on parties in determining what claims to prosecute and defend. The present context is, and should be, no different.

[16]

Suitors' Fund certificate

As to the second question, the availability of a Suitors' Fund certificate was assumed at first instance; a certificate was declined on discretionary grounds. Despite some initial misgivings, [16] I agree that, for the reasons given by Payne JA, a claims assessor is a "court or tribunal" for the purposes of the Suitors' Fund Act 1951 (NSW). I also agree, for the reasons given by his Honour, that a proceeding for judicial review pursuant to Supreme Court Act 1970 (NSW) s 69, is "an appeal" for the purposes of Suitors' Fund Act, s 6. So much was established by the decision of the Full Court in Ex Parte Parsons; Re Suitors' Fund Act, [17] in which Street CJ, with whom Owen and Herron JJ concurred, applied in the context of the Act the definition of an "appeal" contained in the judgment of Westbury LC in Attorney-General v Sillem: [18] An appeal is a right of entering a superior court and invoking its aid and interposition to redress the error of the court below.
The primary judge declined to grant a certificate on the ground that at least one of the errors complained of by the plaintiff was clearly made out and could not sensibly be gainsaid, and the error having been an obvious one, much time and money could have been saved had the first defendant conceded the error.
The purpose of the Suitors' Fund is to mitigate the consequences of judicial error to litigants. The fact - if it be so - that the error was an obvious one does not deprive a party who is required to bear the costs of rectifying the error of the benefit of the Act. Although Ms Lou did not consent to the relief sought, she filed a submitting appearance, and in that way, the costs occasioned were minimised. She did not participate in the proceedings in a manner which unnecessarily increased the costs.
In my judgment, in circumstances where NRMA would inevitably incur costs in bringing proceedings to obtain correction of the error, where Ms Lou did nothing to exacerbate those costs, and where she was ordered to pay NRMA's costs, declining to grant Ms Lou a certificate was contrary to the purpose of the Suitors' Fund Act, and worked a substantial injustice, meriting a grant of leave to appeal.

Lou v IAG Limited t/as NRMA Insurance

At a glance

Court

Decision date

Before

Source

Judgment (19 paragraphs)

Parties

Legislation Cited (10)

Cases Cited (39)

Cited By (21)