IAG Limited t/a NRMA Insurance v Qianxia Lou (No 2)

1. [1]

   HER HONOUR: On 4 April 2019 the Court made the following orders as to costs in IAG Limited t/as NRMA Insurance v Qianxia Lou [2019] NSWSC 382 (“the primary judgment”):

   1. (1)

      […]

   2. (2)

      […]

   3. (3)

      Subject to order 4, costs against the first defendant in favour of the plaintiff.

   4. (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. (5)

      Any application referred to in order 4 will be dealt with by the Court on the papers.

2. [2]

   These orders followed the plaintiff’s application and submissions seeking costs against the first defendant.

3. [3]

   As per order (4), the first defendant filed written submissions within the specified timetable in which she argued that there should be a different order as to costs than that ordered by the Court on 4 April 2019.

4. [4]

   The plaintiff’s application for costs rests in part on the general rule that costs follow the event. It is argued that there should be no exception to that rule simply because the first defendant filed a submitting appearance, in the terms of that filed by her on 5 November 2018.

5. [5]

   (The first defendant’s submitting appearance filed on that date read as follows:

6. [6]

   Referring to s 98 of the Civil Procedure Act 2005 (NSW), and to authority such as Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) (2014) 86 NSWLR 645; [2014] NSWCA 317 at [12] and [14];Commissioner of Taxation v Warner (No 2) (2015) 244 FCR 498 at [21]; and IAG Limited t/as NRMA Insurance v Mohammed Khaled [2019] NSWSC 320 at [40]-[44], the plaintiff submitted that, whilst there may be an arguable issue as to whether it should be deprived of its costs where a submitting appearance had been filed by the first defendant, in the circumstances of this case, that should not be the effect of the order made.

7. [7]

   The plaintiff argues that it was necessary for it to engage legal personnel to present its case to the Court because the first defendant failed to consent to the making of the orders sought, despite having been advised of the plaintiff’s arguments in advance, and warned of the prospect of an application for costs should the plaintiff be successful. The plaintiff also submitted that the Court should not refrain from ordering costs against the first defendant simply because of her “desire” not to incur costs, this not being a relevant consideration. The plaintiff asserted that there is nothing in its conduct that should cause it to be refused an award of costs in its favour.

8. [8]

   In her submissions the first defendant sought costs against the plaintiff, or, in the alternative, an order for a certificate under s 6 of the Suitors Fund Act 1951.

9. [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.

10. [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.

11. [11]

    The first defendant highlighted her prompt filing of a submitting appearance and proper conduct of her case, submitting that, as she was not at fault in the making of the first instance ruling, it would be a miscarriage of justice if costs were ordered against her. Additionally, the first defendant submitted that a costs order against her, as a motor accident “victim”, would not be affordable. She warned that an order for costs against her would establish precedent for parties to feel forced into “consenting to orders for judicial review, for fear of costs awards”, or disputing orders in an attempt to avoid a costs order.

12. [12]

    In reply, the plaintiff contended that unlike in Midson, the errors should have been obvious to the first defendant from the outset, and that a concession to the orders sought in the summons sent to the first defendant earlier in the year could have limited costs and time spent on the hearing. It submitted that a hearing would not have been required if the defendant had consented to the orders, or otherwise conceded their appropriateness, as the matter could likely have been dealt with in chambers.

13. [13]

    The plaintiff contended that the first defendant’s impecuniosity is not a relevant consideration, and to have regard to it would be contrary to the principle that costs are intended to be compensatory: Mahenthirarasa v State Rail Authority of New South Wales (No 2) (2008) 72 NSWLR 273 at [9]. The plaintiff also asserted that the first defendant has not provided any evidence as to her financial resources and relevantly, “the extent to which she is a “motor accident victim” is in dispute”.

Consideration

1. [14]

   The Court has a broad discretionary power to order costs in a matter. Specifically, section 98 of the Civil Procedure Act 2005 (NSW) provides,

2. [15]

   Regulation 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) provides that

3. [16]

   Regulation 6.11 of the UCPR is also relevant. It provides that a party can file a submitting appearance in circumstances where they do not intend to play an active role in proceedings:

4. [17]

   Whilst there is no current operative provision relating to costs orders for parties submitting appearances, regulation 42.1 of the UCPR directs the Court to follow the general rule unless another order would be more appropriate in the circumstances.

5. [18]

   As the plaintiff pointed out, in the matter of Kisimul, the Court of Appeal (at [14]) held that a costs order for a submitting party should be made according to “an appraisal of the circumstances of the case”, focusing on the context of the litigation, and the context of the filing of the submitting appearance.

6. [19]

   The Court considered the capability of the submitting party to have consented to a grant of relief to obviate the need for the appellant to prove the case. In those circumstances, it ordered costs against the submitting party for perpetuating the litigation. It concluded that parties are not protected from a costs order simply by filing a submitting appearance but rather that, at [19],

7. [20]

   Although the first defendant distinguished the present case from Kisimul, pointing to the distinct circumstances of Kisimul as an “ongoing commercial dispute” on appeal, as distinct from the present circumstances where judicial review has been sought with respect to the decision of a Tribunal, the principle is not restricted to commercial cases.

8. [21]

   N Adams J referred in Midson to observations made in Seller v Jones [2014] NSWCA 19 at [59], that regulation 6.11 remains silent on the cost consequences of submitting appearance. Specifically, her Honour noted that “it is not the case that a submitting party will never be ordered to pay costs”. Her Honour suggested that rather, the court must consider all relevant contextual considerations in relation to the circumstances of the litigation, and the conduct and the role of the parties (citing Basten JA in Mahenthirarasa at [7]).

9. [22]

   Her Honour referred at [22] to Mahenthirarasa, in which Basten JA held that the respondent, despite a submitting appearance, was wrong in “stand[ing] by” and allowing the matter to proceed. Costs were ordered against the respondent as a submitting party.

10. [23]

    Having 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. As is clear from the principal judgment of 8 April 2019, at [13]-[18], one of the two errors complained of by the plaintiff was clearly made out, and could not be sensibly gainsaid. That was particularly the case for the first defendant, who would have been well aware of the authorities for records that she had given to the plaintiff, and those that she had not.

11. [24]

    The error having been an obvious one, 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.

12. [25]

    In these particular circumstances, I do not accept the first defendant’s “floodgates” argument. Like many costs decisions at first instance, this decision turns on the particular circumstances of the case; it cannot and does not provide authority for a general principle that submitting parties will always have costs orders made against them, regardless of the merits of the individual case.

13. [26]

    Having so concluded, it remains to consider the first defendant’s application for a certificate under s 6 of the Suitors Fund Act. For the reasons set out at [23]-[24], I do not consider this an appropriate case in which to grant an indemnity certificate to her.

14. [27]

    Accordingly, the order of the Court is:

    1. (1)

       Order 3 of 4 April 2019 is varied to be, costs against the first defendant in favour of the plaintiff.