SUPREME COURT OF QUEENSLAND

Transcription

1 SUPREME COURT OF QUEENSLAND CITATION: King v Allianz Australia Insurance Limited [2015] QCA 101 PARTIES: DANIEL RAYMOND KING (appellant) v ALLIANZ AUSTRALIA INSURANCE LIMITED ACN (respondent) BRETT RODNEY HOLZ (not a party to the proceeding) FILE NO/S: Appeal No 9666 of 2014 SC No 406 of 2011 DIVISION: PROCEEDING: Court of Appeal General Civil Appeal ORIGINATING COURT: Supreme Court at Townsville Unreported, 20 August 2014 DELIVERED ON: 12 June 2015 DELIVERED AT: Brisbane HEARING DATE: 26 May 2015 JUDGES: ORDERS: Philippides JA, Mullins and Burns JJ Separate reasons for judgment of each member of the Court, each concurring as to the orders made 1. Appeal allowed with costs. 2. Set aside the orders at first instance. 3. Instead, the application for review is dismissed. 4. The respondent must refund to the appellant the amount paid by the appellant to the respondent consequential upon the orders at first instance. 5. The respondent must pay the appellant s costs of the application for review assessed on the District Court scale. CATCHWORDS: PROCEDURE COSTS TAXATION REVIEW PRINCIPLES APPLICABLE INTERFERENCE WITH EXERCISE OF DISCRETION GENERAL where appellant was injured in a motor vehicle accident where personal injuries proceeding was settled and insurer agreed to pay the appellant s costs and outlays to be assessed on the District Court scale where appellant had engaged a clinical anatomist to provide a medico-legal report for the trial where insurer objected to the costs of the report on the basis that it was not necessary or proper and overlapped with the reports obtained from the other medical specialists where the costs assessor allowed the costs for the report where insurer applied for

2 COUNSEL: SOLICITORS: 2 a review of the costs assessor s decision where the primary judge found no error in the costs assessor s exercise of discretion, but held the report was inadmissible and the appellant was not entitled to the costs of report whether the review of the costs assessor s decision should have succeeded PROCEDURE COSTS TAXATION REVIEW PRINCIPLES APPLICABLE INTERFERENCE WITH EXERCISE OF DISCRETION GENERAL where the appellant s solicitors claimed care and consideration at 30 per cent where insurer objected to the claim on the basis of heavy reliance on counsel and asserted care and consideration should be allowed at 25 per cent where the costs assessor allowed 30 per cent for care and consideration where insurer applied for a review of the costs assessor s decision where the primary judge considered the costs assessor s reasons were inadequate and reduced amount of care and consideration to 25 per cent on the basis that 30 per cent was excessive whether primary judge should have interfered with the exercise of discretion of costs assessor Uniform Civil Procedure Rules 1999 (Qld), r 423, r 702, r 722, r 742 Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621; [1953] HCA 25, considered W & A Gilbey Ltd v Continental Liqueurs Pty Ltd [1964] NSWR 527, considered T W Quinn for the appellant R B Dickson for the respondent Roati Legal for the appellant Moray & Agnew for the respondent [1] PHILIPPIDES JA: I agree with the orders proposed and the reasons for judgment of Mullins J. [2] MULLINS J: The appellant was the driver of a motor vehicle that was stationary in October 2004 when the driver of another motor vehicle who was insured by the respondent collided with the rear of the appellant s vehicle. The appellant suffered whiplash injuries. He ultimately commenced a claim in June 2011 in the Supreme Court for damages. The claim was settled in March 2013 on the basis of a payment by the respondent to the appellant of $275,000 inclusive of statutory refunds plus standards costs and outlays to be assessed on the District Court scale, but exclusive of moneys previously paid by the respondent by way of rehabilitation expenses. [3] The appellant prepared a fully itemised costs statement for 1,765 items to which the respondent filed a notice of objection making 314 separate objections to 764 items. The appellant filed a response to the objections.

3 3 [4] The costs assessor assessed the costs payable by the respondent to the appellant in the amount of $146,577.22, comprising professional fees of $77, and disbursements of $69, The costs assessor s fees of $10,080 payable by the appellant were included as a disbursement and the appellant s costs of the assessment of $31, were included as disbursements or professional fees where appropriate. [5] The respondent applied for review of the costs assessment pursuant to r 742 of the Uniform Civil Procedure Rules 1999 (Qld). The grounds for the review specified six complaints about the costs assessment. [6] The review was successful before the learned primary judge in respect of two complaints for a total amount of $5,750. The first was referred to as the Giles objection and related to the costs of $3, associated with the engagement of and reporting by Dr Giles, a clinical anatomist, who had examined and provided a medicolegal report for the appellant and the second was the reduction of care and consideration from 30 per cent to 25 per cent (resulting in a reduction of $2,411.63). [7] The application for review was therefore allowed, the certificate of the costs assessor and the order made in respect of that certificate were set aside, and the appellant s costs of the proceedings were fixed at $140, The learned primary judge ordered there be no order as to costs of the review. [8] The appellant appeals against the decisions made by the primary judge on the basis the primary judge erred in finding grounds for interfering with the assessment made by the costs assessor. [9] In lieu of the orders made by the primary judge, the appellant seeks that the respondent s application for review be dismissed with costs, so that the position prior to the decision of the primary judge is restored. The Giles objection [10] Dr Giles was engaged by the appellant s solicitors in January 2008 to examine the appellant and provide a medico-legal report. The appellant s solicitors provided Dr Giles with other medico-legal reports obtained prior to his engagement. The objection by the respondent was in these terms: It is submitted the engagement of Dr L Giles is not recoverable against the Second Defendant as being necessary or proper, bearing in mind the other reports obtained from medical specialists by the Plaintiff s solicitors, in particular, the orthopaedic reports. It is further submitted Dr Giles is not qualified to give evidence which overlaps the reports obtained from the other medical specialists. It would appear that the obtaining of the report from Dr Giles is a luxurious or overcautious step in the proceedings. The Costs Assessor is requested to refer to the decision of McMeekin J in Simpson v Brett dated 8 December 2008 No 467 of [11] In his response, the appellant referred to authorities about expert witnesses and then stated: Further, Dr L Giles Dr Giles is a Clinical Anatomist who specialises in spinal pain and has an expert knowledge in the medico-legal field and is widely respected and accepted by the Courts. It is submitted

4 4 that the engagement of Dr Giles was both necessary and proper pursuant to UCPR 702(2). Reference is made to the Transcript of the Reasons for Judgment of Justice Jones in the Supreme Court Cairns delivered on in the matter of Claim No 144 of 2003 between Rosalina Di Mauro v Suncorp Metway Insurance Limited. Reports were obtained from Dr Giles who gave evidence at the trial of Di Mauro and his opinion/reports/evidence was preferred/accepted over the evidence of the Defendants witness Dr Fraser an Orthopaedic Surgeon. Dr Maguire (Orthopaedic Surgeon) also prepared medico-legal reports and gave evidence at the trial of Dr Mauro and his opinion/reports/evidence was preferred/accepted over the evidence of the Defendants witness the same Dr Fraser. [12] The costs assessor dealt with the Giles objection in these terms in his written reasons: After considering both the Defendant s objection and the Plaintiff s response I accept the Plaintiff s response in preference to the objection. In particular, I note the competing arguments regarding the issue of expert witnesses and that the evidence of Dr Giles has been previously accepted or preferred over the evidence of other medical specialists. The objections are disallowed as I consider the claims to be necessary, proper and reasonable in the circumstances. There is evidence of the claims on file and an appropriate expert has been engaged. [13] The respondent s specific grounds for objecting to the certificate in relation to the Giles objection were set out in the application for review as the engagement by the Plaintiff of specialist medical practitioners (and consequent effect of UCPR 423); the absence of relevant experience in qualifications of Dr Giles; and the findings in Simpson v Brett (unreported 8 December, 2008, McMeekin J). [14] The respondent s written submissions before the primary judge submitted the costs assessor s discretion miscarried because the assessor did not give sufficient weight to the purposes of r 423 of the UCPR relative to experts, in view of the appellant having obtained multiple reports from orthopaedic surgeons Dr Pentis and Dr Maguire, neurosurgeon Dr Campbell, occupational therapist Ms Purse, and consultant in rehabilitation medicine Dr Watson, so that it was a luxury to engage Dr Giles. The respondent also relied on the lack of qualifications and experience of Dr Giles and the findings in Simpson v Brett (unreported decision, Supreme Court of Queensland, McMeekin J, No 467 of 2008, 8 December 2008) on whether leave should be granted to a party in a personal injuries proceeding to rely upon further expert evidence from Dr Giles. In fact, the respondent s counsel s explanation to the primary judge in oral submissions of the point of the Giles objection was at the time Dr Giles was engaged the appellant had already obtained multiple medico-legal reports and that there was nothing in the material before the costs assessor to show that Dr Giles opinions fell outside the area of expertise of a competent orthopaedic surgeon or neurosurgeon, culminating in the submission that it was overkill for the appellant to seek an opinion from Dr Giles. The reference in the objection to Dr Giles not being qualified to give evidence was for the purpose of highlighting that Dr Giles expertise was not outside the expertise of those who had provided the existing medico-legal reports. In addition, the assertion was made in the respondent s written submissions that the reasons of the costs assessor on the Giles objection were insufficient.

5 5 [15] The appellant s written submissions before the primary judge listed five Supreme Court decisions between 1996 and 2009 in which Dr Giles evidence had been accepted and acted upon and submitted that Simpson v Brett was concerned with limiting the number of experts, one only of which was Dr Giles, but expressed the caveat in relation to that exercise: there might well be good reasons why in particular cases Dr Giles would be of assistance. It may be that he has a particular expertise on a particular problem, not within the normal expertise of an orthopaedic surgeon or a neurosurgeon, but that is not shown as the case here. [16] The focus of the Giles objection considered by the costs assessor was not that Dr Giles was not qualified to give the report he did, but that his qualifications and experience meant that his report did not add anything to the reports of the orthopaedic surgeons and the neurosurgeon. (It should be noted that Dr Maguire s report was not obtained until 2011.) That focus of the Giles objection was appreciated by the primary judge whose conclusion on the review in relation to the costs assessor s decision on the Giles objection was: So far, upon the issues that I have briefly referred to that were argued before him and were the subject of submissions before the assessor, I cannot detect an error on the part of the assessor in allowing the costs as reasonable costs. Matters might be finally balanced, as I have said, but it does not appear to me that the question was so obvious or so stark that a reasonable mind could not have come to the view that the assessor did. [17] The primary judge then went on to consider an issue he raised during submissions with the parties as to the admissibility of Dr Giles report. The primary judge perused the report and described it as an open question about the expertise of Dr Giles and whether Dr Giles could offer opinion evidence, noting that he was a qualified anatomist and not a doctor of medicine and that he was not qualified to diagnose illnesses, to offer prognoses, or to assess disability. After setting out passages from Dr Giles report, the primary judge concluded: The view I take, a very fundamental level, the report of Dr Giles was inadmissible. This issue was not canvassed before the cost assessor. He has proceeded upon the basis that the report was admissible and relevant, and considered whether it was a reasonable cost and expenditure in the circumstances. In the circumstance as I find it to be, the ruling by the cost assessor is flawed because it has proceeded upon a false premise of fact in law. Principles applicable to review of a costs assessment [18] The principles that apply to the review by the court of a costs assessment are well settled: Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621, They remain relevant to a review pursuant to r 742 of the UCPR. Generally, the discretion of the costs assessor will not be interfered with by a judge on review, unless the costs assessor has erred on a question of principle. Where the question on the review is the quantum allowed for the item, the court is generally unwilling to interfere with the judgment of the costs assessor whose expertise is to make judgments on the quantum of the costs and disbursements.

6 6 [19] Under r 702(2) the costs assessor was required when assessing costs on the standard basis to allow all costs necessary or proper for the attainment of justice for enforcing the rights of the appellant. The distinction between what costs are necessary and what costs are proper was explained by Asprey J in W & A Gilbey Ltd v Continental Liqueurs Pty Ltd [1964] NSWR 527, [20] Under r 722 of the UCPR, if a notice of objection relates only to a particular issue or a particular item, a costs assessor must limit the assessment to the resolution of the matters raised in the notice of objection in relation to the issue or item. [21] Under r 742(3) the application for review must be accompanied by the written reasons for the decision given by the costs assessor. Under subrules (5) and (6) of r 742: (5) On a review, unless the court directs otherwise (a) (b) the court may not receive further evidence; and a party may not raise any ground of objection not stated in the application for assessment or a notice of objection or raised before the costs assessor. (6) Subject to subrule (5), on the review, the court may do any of the following (a) (b) exercise all the powers of the costs assessor in relation to the assessment; set aside or vary the decision of the costs assessor; (c) set aside or vary an order made under rule 740(1); (d) (e) refer any item to the costs assessor for reconsideration, with or without directions; make any other order or give any other direction the court considers appropriate. Should the primary judge have allowed the review in respect of the Giles objection? [22] On the hearing of the appeal, Mr Dickson of counsel on behalf of the respondent sought to persuade the court that the basis on which the primary judge excluded the costs associated with Dr Giles report was anticipated by the respondent s objection before the costs assessor. It is clear the scope of the objection was, in fact, confined to concern that Dr Giles evidence did not add further to the existing medico-legal reports. [23] As the primary judge recognised, it was a classic exercise of the costs assessor s discretion to determine whether or not the costs associated with obtaining the report from Dr Giles were necessary or proper pursuant to r 702 and there was no error in the exercise of the discretion. [24] The ground on which the primary judge did base his decision was one for which he must have impliedly given leave under r 742(5). In view of the fact that it was not a ground raised by the respondent, the primary judge s recognition that there was no error in the costs assessor s exercise of discretion, and the relatively modest amount of costs associated with the Giles objection, leave for reviewing this aspect of the

7 7 costs assessor s decision was not warranted. The application for reviewing this aspect of the decision should not have succeeded. Care and consideration [25] In the course of the assessment the costs assessor had allowed or partially allowed the respondent s objections to some items on the basis of excessive counsel s fees or overuse of counsel which resulted in a small reduction in the overall fees allowed for counsel. The respondent s objection to the amount included in the costs statement in item 1694 for the solicitor s care and conduct of the proceeding was relevantly in these terms: It is submitted this item is excessive and should be reduced on the assessment of costs bearing in mind the heavy reliance upon Counsel and the items which have been reduced by the costs assessor on the assessment. This item should be reduced to 25% of allowable items. [26] The appellant s response submitted that an allowance of 30 per cent for care and consideration was not excessive and was a proper cost, in reliance on Amos v Monsour Pty Ltd & Ors [2009] QCA 123 and ChongHerr Investments Ltd v Titan Sandstone Pty Ltd [2007] QCA 278. [27] The costs assessor s reasons for allowing care and consideration to be calculated at 30 per cent were: After considering both the Defendant s objection and the Plaintiff s response I accept the Plaintiff s response in preference to the objection. Taking into account all aspects of the matter, including the stage reached and overall work conducted by the Plaintiff s solicitors, I consider the claim to be necessary, proper and reasonable in the circumstances. I also consider an allowance of 30% for care and conduct to be appropriate and a proper cost. The fee claimed was reduced in proportion to the deductions made to professional fees. 30% care and conduct allowed. [28] The respondent s specific ground for objecting to the assessment in respect of care and consideration was set out in the application for review in terms that, notwithstanding the allowance of substantial additional items of costs occasioned by overuse of counsel, there was not a corresponding reduction in the care and consideration allowance which reduction would have offset the additional costs through overuse of counsel. [29] The respondent submitted to the primary judge the discretion of the costs assessor miscarried in not making a significant reduction in the care and consideration item relative to his antecedent substantial allowance of the fees of counsel. It was also submitted the basis upon which an allowance of 30 per cent was considered appropriate and proper had not been stated. The appellant submitted the competing arguments were before the costs assessor and resulted in a discretionary judgment in respect of which the respondent could show no error of principle. [30] Care and consideration is assessed under item 1 of Schedule 2 to the UCPR and the costs assessor may allow for an amount for a solicitor s care and conduct of a

8 8 proceeding that the costs assessor considers reasonable having regard to the circumstances of the proceeding, including the matters that are set out by way of example in paragraphs (a) to (h). The primary judge in his reasons set out those matters and stated: Nowhere in the reasons given by the assessor do I see those considerations addressed. His reasons are terse. He says that after considering the objections and the response, his preference is to the objection and then taking into account all aspects of the matter and so forth. He went on to allow care and consideration at 30 per cent. The allowance of care and consideration is quintessentially a discretionary matter, but has to be exercised in light of the principles attendant to the consideration of such an issue, including the issues identified in the schedule to the scale of costs under the District Court. In my view, the failure of the assessor to address those issues and give reasons that address them constitutes an error of law on his part. It enables me to exercise my discretion afresh. [31] As the primary judge considered the case was not particularly complex and there was heavy reliance on counsel, the primary judge was of the view that care and consideration at 30 per cent was excessive and reduced the amount to 25 per cent. [32] The primary judge then stated: Even if I were wrong in my view that the assessor s reasons were inadequate, in the sense that he didn t properly address the relevant features attendant to an allowance of care and consideration, the allowance of care and consideration at 30 per cent in the circumstances of this relatively straightforward case and the heavy reliance on counsel, would have been, in my view, excessive. Indeed, but for rule 722, it would be open to at least actively consider whether an allowance of less than 25 per cent might have been appropriate. Should the primary judge have reduced the amount for care and consideration? [33] The costs assessor s reasons were short, but made after determining numerous objections and in the context of having access to the appellant s solicitors file for the purpose of making the assessment. The matters set out in paragraphs (a) to (h) of item 1 of schedule 2 are examples of the circumstances of the proceeding to which the costs assessor must have regard in assessing care and consideration. Although the costs assessor did not address these matters individually in his reasons, the costs assessor s reasons show that he did assess the care and consideration, taking into account all aspects of the matter which is the overarching consideration. The circumstances in which the costs assessor dealt with the objection to the item for care and consideration does not support a conclusion that his reasons were inadequate. [34] In any case, there was no specific ground before the primary judge that the costs assessor s reasons for not reducing care and consideration from 30 per cent to 25 per cent were inadequate. Again, the ground on which the primary judge based his decision was one for which he must have impliedly given leave under r 742(5) where such leave was not warranted.

9 9 [35] The modest reduction in the amount for care and consideration made by the primary judge was an adjustment to quantum only. Without any error of principle on the costs assessor s part, it is not the type of adjustment that should have been made on the application for review, and the primary judge s decision on this aspect of the review in favour of the respondent cannot be upheld. Orders [36] As the appellant has succeeded on the appeal, he is entitled to the relief that he seeks. The effect of setting aside the orders at first instance is to reinstate the costs assessor s certificate and the Registrar s order for costs in the appellant s favour made pursuant to that certificate. As the appellant has now succeeded wholly on the application for review, he should have his costs of that application, but those should be assessed on the District Court scale, consistent with the scale that applied to the original judgment in the appellant s favour for costs of the proceeding. [37] The following orders should be made: 1. Appeal allowed with costs. 2. Set aside the orders at first instance. 3. Instead, the application for review is dismissed. 4. The respondent must refund to the appellant the amount paid by the appellant to the respondent consequential upon the orders at first instance. 5. The respondent must pay the appellant s costs of the application for review assessed on the District Court scale. [38] BURNS J: I agree with the reasons of, and the orders proposed by, Mullins J.