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Accident Compensation Cases

Taylor v Accident Compensation Corporation (DC, 24/09/07)

Judgment Text

Judge J. Cadenhead
I dismissed this appeal on 20 February 2006. The basis of my decision was that I was of the view that the appeal was untenable as the Court lacked jurisdiction to hear it and that there was no live issue to pursue. The successful third party to the appeal Dr T. Morris seeks costs, but the successful respondent does not. The appellant denies that costs should be issued against him. 
The appellant originally appealed against my decision, but this was withdrawn on 23 April 2006. The third party's application for costs was received by the Registry on 19 December 2006. A follow up letter dated 24 April 2007 enquired as to progress. On 1 June 2007 the Registry explained the reasons for the delay and the submissions of the appellant were received under cover of a letter dated 5 July 2007. 
Costs Jurisdiction and Discretion 
In The Accident Compensation Corporation v JCW Robinson (High Court Whangarei AP 38/02 O'Regan J, 6 December 2002) His Honour held that the approach to costs should be determined by Rule 45 of the District Court Rules under which costs are at the discretion of the Court. This followed from the then s 153 of the Accident Insurance Act 1998. 
I have considered the submissions of counsel in response to my memorandum as to costs. I might say that I have found this decision difficult. I accept at once the principle that costs usually follows the event and if that rule was simply applied the third party doctor would be entitled to costs. However in this jurisdiction that principle does not invariably apply. 
The accident compensation legislation is social legislation that has its purpose of enhancing the public good and reinforcing the social contract providing for a fair and sustainable scheme for managing personal injury. It has as its overriding goals the minimisation of injury in the community, and the impact of injury on the community (including economic, social and personal costs). One of the goals is to ensure claimants receive fair compensation for loss of injury. Pursuant to s 164 of the 2001 Act ACC pays the Department for Courts an amount for the “reasonable administrative costs of appeals”, and therefore, effectively funds the cost of statutory appeals under the legislation. There is no filing fee in respect of appeals either against decisions of reviewers or in respect of appeals from those appellate decisions. 
It is rare for the ACC to seek costs when an appellant is unsuccessful, or when it succeeds in an appeal where it is the appellant. The respondent has not sought costs in this case. 
To a certain extent there is an analogy in this jurisdiction with the Family Court. In that respect I observe the principles that were laid down by Morris J in B v G (1994) 12 FRNZ 515, 517-518: 
“I do not accept, as a matter of principle, in proceedings of this nature costs necessarily follow the event. No statutory provision so provides and indeed the discretion given under the statute is an indication to the contrary. That is understandable as in so many of these proceedings the paramount interest is that of the child and not of the parties. I suspect also in many cases this discretion is there so that essentially family proceedings and disputes can be settled on a much more amicable basis with the future in mind rather than the normal run of civil cases where parties are unlikely to meet again and know at the beginning costs will, without doubt, follow the result. ”
Again in Peebles v Young (Auckland, High Court, AP 404/150, 2.5.2001 - Potter J) the Court made the observations that costs orders in custody and access cases were rare because: 
“The Court understands, and expects, that after separation, there may often be recourse to litigation to obtain assistance in fixing appropriate care arrangements for the children. Parties ought not to be discouraged from testing genuinely held views. ”
I do not say that the situation is exactly the same in this jurisdiction, but I do not think as a matter of principle that in this type of proceeding costs necessarily follow the event. I do not think that the decision of Justice O'Regan impinges on any of these principles in considering the issue of costs in this jurisdiction, as the issue is one of discretion exercised against the statutory purposes. 
A further matter that has to be considered is that the substantial issue that the appellant sought to argue was that of medical error. For the reasons that I set out in my decision I held that this avenue was not open to debate or decision, as the issue was moot or academic. The appellant had already received all the benefits open to him by a finding of medical mishap. I note that the appellant had sought to create a live issue because of the substantial costs that he had incurred. In my discretion I held that issue was not sufficient to create a live issue for determination. 
I also, accepted that that there was an “ulterior purpose” by the appellant, that being the pursuit of breach of a duty of care by the doctor. However, as I noted “ulterior purpose” is not necessarily a prejorative term. 
An aspect of this appeal is that up until this appeal the right to pursue a finding of “medical error”, when the appellant had complete compensation rights under a finding “medical mishap” had been a vexed question. A clear decision on the issue was needed, hence the detailed reasoning of the present appeal. The appellant was seeking some form of vindication in the form of a finding of “medical error” against the third party doctor. 
The issue of costs arising where proceedings have been held to have been academic or moot has arisen on several occasions in the United Kingdom and the authorities are gathered in Judical Review Handbook (4th Ed) paras 18.5.4, 18.5.5 and 18.5.6. As Brown J said in R v Liverpool City Council, exp Newman [1998] JR 178, 179 the issue is one of balance and in many cases costs should lie where they fall. In Sengoz v Secretary of State for the Home Department (The Times 13 August 2001) it was held absent a good reason the fall back is no order as to costs. 
Similar sentiments were expressed in Maddever v Umawera School Board [1993] 2 NZLR 478 at pp 512 Williams J said as to the issue of costs: 
I propose to reserve the question of costs. The parties may file written submissions on this topic. If any party elects to do so its memorandum should be lodged within 21 days of the date of this judgment. To assist them in deciding whether to avail themselves of this opportunity I record my initial thoughts on the matter. Costs would normally follow the event and the board and the principal would be entitled to an award of costs in their favour. However it seems to me that the time has come for all parties to disengage from this conflict. In that spirit my preliminary view is that, in the special circumstances of this case, costs should lie where they fall. The parents have had to pay their own costs and have been obliged to make personal sacrifices to finance these proceedings. I have no doubt that they have been motivated by a sincere, although misplaced, belief that it was right to challenge what they believed had been unfair treatment. As every parent knows, the wellsprings of parental affection and loyalty run deep. While I have not been able to endorse their actions or support their case I can understand the motives and feelings that led them to initiate these proceedings. I would be reluctant to engender further bitterness by requiring them to pay costs. However, I should indicate that such a restrained approach to costs might not be favoured by the High Court in future cases if equally unmeritorious cases of this kind are launched. ”
The submission of the doctor is that he was an innocent party caught up in these proceedings and should not be made to bear the costs, particularly as he had pointed out the jurisdictional problems before the hearing.. Further, there is a policy issue of encouraging careful assessment of the matters before bringing appeals. The imposition of costs may provide a useful disincentive to bringing unmeritorious appeals. 
The contention of the doctor as to costs has considerable force. On the other hand, it appears from the financial situation of the appellant, along with his personal situation, is that his only source of income is the compensation that he receives from the respondent. Medical experts have advised that it is unlikely that he will return to any form of work, paid or otherwise. 
In the exercise of my discretion I have endeavoured to balance the competing interests relating to this appeal, and also to the principles concerning costs cited and the wider policy issues, including the fact that this appeal was decided essentially upon the point that the claims of the appellant were moot. At the end of the day with some hesitation I have come to the view that costs should lie where they fall. Very much I have decided this ruling as to costs as to the various factors arising from this case. This decision should in no way be seen as sanctioning the unmeritorious bringing of appeals. 

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