James Muscat v Rhys Thomas [5
March 2013] (NSWDC Unreported)
A March 2013 decision by the District Court held that the costs
regulation will continue to apply where an insurer has rejected a
CARS Assessor's determination in a late lodgement dispute, even
if the insurer loses its argument in Court about late
The claimant brought a claim in NSW for personal injuries
sustained in a motor vehicle accident on 26 October 2006. The claim
was lodged late, but at a Special Assessment an Assessor accepted
that the Claimant's explanation was full and satisfactory.
The insurer issued a section 81 notice admitting fault but
denying liability on the basis that it did not accept the
Assessor's decision in the late claim.
The matter proceeded to CARS General Assessment before an
Assessor, who awarded the claimant a very significant sum.
The insurer wrote to the claimant's solicitor and confirmed
that it did not accept the CARS Assessor's assessment and
required the claimant to commence court proceedings, indicating
that they required the claimant to seek leave to commence
proceedings out of time.
The claimant filed a summons in the District Court on 25 October
2011 seeking leave to file proceedings. Leave was ultimately
granted by Judge McLoughlin on 19 April 2012. The claimant then
filed a Statement of Claim in the District Court on 27 April 2012.
Judge McLoughlin indicated that the claimant's potential
damages were in excess of $200,000 in granting leave.
The claim proceeded to hearing in Taree District Court before
his Honour Judge Toner SC from 13 to 15 June 2012. His Honour
delivered judgment on 20 November 2012 and found in favour of the
claimant in the sum of $15,133.93.
The claimant submitted that the Motor Accidents Compensation
Costs Regulation did not apply as they had to seek leave and that
if they did there were "exceptional circumstances" that
warranted the discretion be applied pursuant to section 153(1) of
the Motor Accidents Compensation Act 1999 (NSW) for their
costs to be unregulated.
The claimant's costs were substantial if they were
unregulated, and minimal if the regulation applied.
On 5 March 2013, Judge Toner SC found that the costs regulations
did apply and that there were no "exceptional
He noted that the question of whether or not the claimant had
provided an explanation for late lodgement of his claim went to the
liability of the insurer and the Assessor's decision on this
issue was not binding on the insurer. Judge Toner emphasised that
the insurer was entitled to not accept the CARS Assessor's
assessment of the claimant as the insurer had not accepted his
decision as to the explanation for the delay in lodging the
Once the Assessor accepted the explanation for late lodgement,
the claim had to be assessed by CARS as there was no entitlement to
an exemption. Judge Toner concluded that once an assessment of the
claimant's entitlement to compensation had been assessed by a
CARS Assessor, regulated costs had to apply in Court and there was
nothing exceptional in the claim as it had followed the course
envisaged by the Motor Accidents Compensation Act. It did not
matter that the insurer had failed in its objections to the late
lodgement on two occasions.
Judge Toner found that the case was not exceptional. Although he
was not required to do so, he also found there was no injustice to
the claimant as the case had followed the course that was
consistent with the Motor Accidents Compensation Act.
The decision is helpful to insurers in claims where an insurer
chooses to not accept a CARS Assessor's determination of a late
lodgement dispute. It quite clearly confirms that even if the
insurer loses its argument in Court about late lodgement, then the
costs regulation will continue to apply.
If an insurer doesn't succeed in its argument about late
lodgement, then it doesn't mean that a case is exceptional.
In this claim, the regulated costs amounted to less than 10% of
the claim that the claimant was making on a party/party basis. If
the claim had been found to be exceptional, the insurer would have
had to pay a significant amount for costs
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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