7This provision makes little sense in respect of ancillary proceedings, since it would make the costs order in an application dependant upon when the application was heard, and the outcome of the primary proceedings. The outcome of the application itself would have nor bearing on the costs.
8In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] (see also Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander [2012] HCA 56 at [24] and Deputy Commissioner of Taxation v Zammitt [2014] NSWCA 104 at [67]), the plurality said:
"the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed".
9In my view, it is both inconsistent and unfair to have these sch 7 provisions apply to an ancillary application, because to do so would be to ignore the substance and outcome of the application, and would require the Court to act on the ordinarily irrelevant consideration of the stage at which the application was brought. In particular, if a justified and successful application is brought by a claimant in proceedings that are ultimately unsuccessful, nil costs are payable to the claimant. In the present case, this appears to mean that the plaintiff is not entitled to any costs of applications including unsuccessful or even misconceived applications made by the defendant. This problem is overcome if sch 7 applies only to the primary proceedings and not ancillary applications. Such a construction is open on the terms of cl 108. Costs in ancillary proceedings are awarded "in accordance with the rules of the court". This quoted phrase must properly be read as meaning, for the reasons I have indicated bearing in mind the contents of sch 7, that such costs are "unaffected by sch 7".
10Was this oversight or misapprehension of the proper meaning of cl 108 and the application of sch 7 attributable solely to the neglect or default of the defendant? The defendant in its submissions in respect of costs did not call in aid the nature of the provision in sch 7, but neither did the plaintiff, and I cannot overlook that cl 108, if not sch 7, was referred to and could have been considered by the Court. In these circumstances, I do not think I should attribute this oversight and misapprehension solely to the defendant, and so the jurisdiction to correct the judgment remains available to be exercised.
11Rule 36.16(3A) to (3C) of the Uniform Civil Procedure Rules 2005 provides:
"(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.
(3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.
(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B)."
12This matter is complicated because I am exercising (within time) the jurisdiction under subrule (3B) to amend orders made on the motion. But the motion was an application under subrule (3A) to amend orders. I note that these subrules are not subject to the limitations imposed in subrule (3): see Rockcote at [10]. Although the consequence of my orders will be to amend orders made more than 14 days earlier, those orders remain open to be amended by reason of the effect of subrule (3A), the motion filed by the defendant, and subrule (3B). Because the motion was filed within the time specified in subrule (3A), the court's jurisdiction to amend the orders remained until it was no longer possible to make orders in respect of that motion.
13For reasons I have given, the order for costs made on 17 April 2014 in respect of the plaintiff's notice of motion should not be subject to sch 7 and reg 102, and thus order 2 made on 21 May 2014 should be set aside.
14In respect of the proceedings generally, the contents of sch 7 inform the meaning of cl 105(2) of the regulation. As quoted above, stage 8 of sch 7 applies "[i]f the matter is finalised after the commencement of court proceedings other than by settlement or an award of damages". This, in my view, applies to the circumstances of this case. Informed by these provisions of sch 7, cl 105(2) properly read does not require a determination of the factual merits of the claim when it says, "the court finds the insurer has no liability", or "[i]f a claimant does not obtain an order or judgment on a claim".
15In this light, cl 105(2) does apply to the present dispute and requires the claimant to pay the insurer's costs on the primary claim on a party/party basis, up to the maximum specified in sch 7, in accordance with cl 102.
16Thus, order 4 made on 21 May 2014 should be set aside or varied by being deleted and replaced with an order that the plaintiff pay the defendant's costs of the proceedings pursuant to clause 105(2) of the regulation on a party/party basis to the maximum allowed under sch 7 of the regulation.
17That leaves the costs of the application made by the defendant on 27 May 2014 to amend the orders. Although the defendant has ultimately been successful on that application, as I indicated in the previous judgment given, the defendant gave no explanation as to why it did not initially make submissions in respect of the mandatory rule in cl 105 of the regulation. On the contrary, the defendant referred to the court's discretion in respect of costs. In large measure, the defendant appeared to accept the proposition that it bore responsibility for the additional costs incurred in having to bring a further application to raise matters that it did not previously properly ventilate. Whilst I have concluded that that failure of the defendant should not preclude the proper orders being made, the further application was only necessary because of the failure of the defendant to refer earlier to cl 105 and to refer at any stage to the terms of sch 7.
18For these reasons, I am not disposed to alter the order that the defendant pay the cost of that motion. The result would be that the defendant would pay the costs of its notice of motion to amend the orders. But such an order is only available if the application is ancillary proceedings under cl 108 of the regulation, otherwise cl 105(2) or cl 106 provides the appropriate order for costs.
19There can be little doubt that the application to amend the order for costs in respect of the plaintiff's notice of motion is an ancillary proceeding, since the plaintiff's notice of motion, as the defendant argued and as I found (see Ortlipp v Employers Mutual NSW Limited as agent for the Workers Compensation Nominal Insurer [2014] NSWDC 157) was itself an ancillary proceeding. But the present notice of motion deals not only with the costs for that application, but also with the amendment of the orders regarding the costs of the primary proceedings.
20In Chubs Constructions Pty Ltd v Sam Chamma (No 2) [2010] NSWCA 225 at [34], an appeal against costs was held not to be an ancillary proceeding. It was also not costs "on the claim", see Chubs Constructions at [40]. This lead the Court, in Chubs Constructions, to reject the application of both cl 108 and cl 105, and order that each party bear their own costs under cl 106 of the regulation. The Court at [41] noted that the costs order would have been the same had the Uniform Civil Procedure Rules 2005 (presumably under cl 108) applied. In Chubs Constructions, the Court of Appeal stated at [33]:
"In any event, we cannot see that an appeal could ever be described as an ancillary proceeding. An appeal against the costs awarded in court proceedings for work injury damages is itself a proceeding in which one of the substantive orders made by the lower court are challenged. It is not incidental, or subsidiary or auxiliary to the proceedings at first instance, either in the ordinary meaning of the term 'ancillary' or in the same sense as the applications to which we have referred."
21It may be noted that an application to amend an order is not the same as an appeal. Whether it is analogous to an appeal and thus not ancillary under cl 108 seems arguable. On the other hand, there seemed to me to be four reasons why the defendant's motion to amend should be regarded as ancillary, or at least subject to the provisions in cl 108.
22First, one of the two orders sought in respect of the costs of the motion is plainly ancillary to the primary proceedings, as decided above. It may be that if part of the notice of motion proceeding is ancillary then no additional costs are incurred in respect of matters that were not costs of the ancillary proceeding.
23Secondly, the application to amend a costs order is "incidental, or subsidiary or auxiliary to the proceedings", (see Chubs Constructions at [33] and compare [41]).
24Thirdly and perhaps most importantly, cl 108 applies to "costs payable in or in relation to proceedings that are ancillary". "[I]n relation to" are words of wide import. Costs in respect of the order to amend the costs order in the primary proceedings are costs related to ancillary proceedings (the costs of the plaintiff's notice of motion) because they are costs arising out of the same application.
25Finally, the relevance of whether a proceeding is or is not ancillary is in respect of the matter of costs. It seems to me that the question of whether the costs of the ancillary proceedings should be determined separately from the costs of the primary proceedings is a matter not irrelevant to the question of whether the proceedings are ancillary. As I have earlier determined, the costs ought not follow the costs of the primary proceedings (nor could they, given that the application concerns in part the ancillary application). I think this is a matter that informs whether those proceedings are ancillary.
26It might be thought that it is inconsistent to order the defendant to pay the costs of the application to vary the orders, even though I have found that it was not "solely responsible" for the error as part of my reasoning for determining that the Court should correct its orders. I do not think that this creates an inconsistency. The defendant is ordered to pay the costs of the application because, leaving aside the statutory provisions, it is the primary cause of those additional costs. The briefest examination of its initial submissions on costs reveals that it did not make the points it now makes. It appears to accept some responsibility for its failure to raise these points, and certainly gave no satisfactory explanation for this failure. But it is a different matter to hold it solely responsible for the Court's misapprehension of the law.
27In the circumstances, in my view the costs of the defendant's application are costs within the ambit of cl 108, for the reasons given in my decision of 20 July 2014, and should be payable by the defendant. For the reasons given earlier in this decision, they are also not subject to the limitations of sch 7, but are to be assessed on a party/party basis in accordance with the rules of the court.
28The orders of the Court are:
(1)Amend the orders made on 20 June 2014 in the following respects:
(a)Delete order 1 made on 20 June 2014.
(b)Make the order sought in paragraph 1 of the notice of motion filed 27 May 2014.
(c)In respect of the order sought in paragraph 2 of the notice of motion filed 27 May 2014, order that order 4 made on 21 May 2014 be set aside and replaced with an order that the plaintiff pay the defendant's costs of the proceedings pursuant to clause 105(2) of the Workers Compensation Regulation 2010 save that the maximum costs are those costs set out in schedule 7 of the Regulation, in accordance with clause 102 of the Regulation.
(d)In respect of order 2 made on 20 June 2014, delete the word "noting" and all words following thereafter so that the order is varied to read "Order that the defendant pay the plaintiff's costs of the motion filed 27/5/14".