Alstom Limited v Liberty Mutual Insurance Company (No 3)
[2013] FCA 399
•1 May 2013
FEDERAL COURT OF AUSTRALIA
Alstom Limited v Liberty Mutual Insurance Company (No 3) [2013] FCA 399
Citation: Alstom Limited v Liberty Mutual Insurance Company (No 3) [2013] FCA 399 Parties: ALSTOM LIMITED (ABN 15 000 038 237) v LIBERTY MUTUAL INSURANCE COMPANY (ARBN 086 083 605); ALLIANZ AUSTRALIA INSURANCE LIMITED (ABN 15 000 122 850), ACE INSURANCE LIMITED (ABN 23 001 642 020), CATLIN SYNDICATE LIMITED and TOKIO MARINE EUROPE File number: WAD 300 of 2008 Judge: SIOPIS J Date of judgment: 1 May 2013 Corrigendum: 3 May 2013 Date of hearing: 4 April 2013 Place: Perth Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 11 Counsel for the Applicant: Mr P Hopwood Solicitor for the Applicant: Cocks Macnish Counsel for the Respondents: Mr G Hancy
Solicitor for the Respondents: Blackstone Waterhouse Lawyers
FEDERAL COURT OF AUSTRALIA
Alstom Limited v Liberty Mutual Insurance Company (No 3) [2013] FCA 399
CORRIGENDUM
1.On page 2 of the orders of the Reasons for Judgment, Order 4 should read:
4.Pending final orders, the Court orders that the sum of $2,281,107.53 (being the total of the amount allowed $2,293,865.43 less the deductible applicable under the policy EUR10,000) together with interest thereon pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) of $975,266.00 (principal and interest together being “the sum” referred to below) be paid to the applicant by the respondents as follows:
a)the first respondent as to 35% of the sum, namely $1,139,730.71;
b)the second respondent as to 35% of the sum, namely $1,139,730.71;
c)the third respondent as to 10% of the sum, namely $325,637.37;
d)the fourth respondent as to 10% of the sum, namely $325,637.37; and
e)the fifth respondent as to 10% of the sum, namely $325,637.37.
2.In paragraph 4 of the Reasons for Judgment, the last sentence should read:
The respondents will, in the meanwhile, pay the sum of $2,281,107.53 and interest thereon, consequent upon the findings made in the reasons for judgment.
I certify that the preceding two (2) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Siopis. Associate:
Dated: 3 May 2013
IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 300 of 2008
BETWEEN: ALSTOM LIMITED (ABN 15 000 038 237)
ApplicantAND: LIBERTY MUTUAL INSURANCE COMPANY (ARBN 086 083 605)
First RespondentALLIANZ AUSTRALIA INSURANCE LIMITED (ABN 15 000 122 850)
Second RespondentACE INSURANCE LIMITED (ABN 23 001 642 020)
Third RespondentCATLIN SYNDICATE LIMITED
Fourth RespondentTOKIO MARINE EUROPE
Fifth Respondent
JUDGE:
SIOPIS J
DATE OF ORDER:
1 MAY 2013
WHERE MADE:
SYDNEY (HEARD IN PERTH)
THE COURT ORDERS THAT:
1.The Court declares that the applicant is entitled to be indemnified under the terms of a marine cargo policy of insurance No SY-MCG-06-300144 dated in or about January 2006 and subscribed to by the respondents each as to the extent of their respective proportion stated in the policy for damage caused to two generator step-up transformers during their transport from Mumbai to Fremantle on board the mv “Fairload” in June and July 2007 to the extent permitted by the Marine Insurance Act 1909 (Cth).
2.
The proceedings be adjourned to a date to be fixed for the making of final orders, such date to be not before the publication of the arbitral award in arbitration proceedings Case ZCC 600237-2010 commenced in the Zurich Chamber of Commerce.3.Each party is to have liberty to apply in relation to the matters the subject of Order 2.
4.Pending final orders, the Court orders that the sum of $2,281,107.33 (being the total of the claims allowed $2,293,865.43 together with interest thereon pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) $975,266.00 less the deductible applicable under the policy Eur10,000 and the interest applicable thereto) be paid to the applicant by the respondents as follows:
a)the first respondent as to 35% of the sum, namely $1,139,730.71;
b)the second respondent as to 35% of the sum, namely $1,139,730.71;
c)the third respondent as to 10% of the sum, namely $325,637.37;
d)the fourth respondent as to 10% of the sum, namely $325,637.37; and
e)the fifth respondent as to 10% of the sum, namely $325,637.37.
5.The respondents pay the applicant’s costs of the proceedings to date, including reserved costs, but excluding costs previously ordered to be paid by the applicant to the respondents and excluding the costs relating to those items of the applicant’s claim identified in paragraphs 183(a) to (e) inclusive, 184(b) and 204 (as to the costs claimed in respect of the supervision of Alstom India), and 184(c) and 205 of the reasons for decision delivered 22 February 2013, such costs to be taxed and paid to the applicant by the respondents in the following proportions:
f)the first respondent 35%;
g)the second respondent 35%;
h)the third respondent 10%;
i)the fourth respondent 10%;
j)the fifth respondent 10%.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 300 of 2008
BETWEEN: ALSTOM LIMITED (ABN 15 000 038 237)
ApplicantAND: LIBERTY MUTUAL INSURANCE COMPANY (ARBN 086 083 605)
First RespondentALLIANZ AUSTRALIA INSURANCE LIMITED (ABN 15 000 122 850)
Second RespondentACE INSURANCE LIMITED (ABN 23 001 642 020)
Third RespondentCATLIN SYNDICATE LIMITED
Fourth RespondentTOKIO MARINE EUROPE
Fifth Respondent
JUDGE:
SIOPIS J
DATE:
1 MAY 2013
PLACE:
SYDNEY (HEARD IN PERTH)
REASONS FOR JUDGMENT
On 22 February 2012, I delivered reasons for judgment in the application brought by Alstom Limited for a declaration that it was entitled to be indemnified under a marine insurance contract entered into with the respondents, and for damages. On that occasion, I asked the parties to file a minute of orders which gave effect to the reasons for decision and if possible costs; and that in the event that the parties were unable to agree on those matters, that they have liberty to relist the application.
The parties were unable to reach agreement in relation to the form of the orders or the question of costs. The matter was relisted. By the time that I heard argument, the differences between the parties had narrowed considerably, to the extent that they were, in essence, agreed on the form of the orders. They remained at issue on the question of costs.
During the trial of the main application, it emerged that the amount of approximately $1.1 million which Crompton Greaves Ltd had charged Alstom for the repairs which were made to the damaged transformers after they were returned to Mumbai, had not been paid by Alstom. The parties agreed during the trial, that this circumstance could be dealt with by way of the Court making a declaration. One of the reasons why there was an initial difference between the parties in relation to the form of the orders related to the fact that Alstom and Crompton Greaves are parties to an arbitration proceeding in the Zurich Chamber of Commerce, dealing with the question of the liability in relation to the costs of the repairs. The outcome of the arbitration proceeding which is expected to be known very soon, will, therefore, have an impact upon the final relief in relation to these costs. The consequence is that the Court is not able to make final orders which will deal with these costs until the outcome of the arbitration proceeding.
As to the form of the orders, the parties are agreed that the Court should adjourn the proceeding to a date to be fixed for the making of final orders after the publication of the arbitral award in the arbitration proceeding. The respondents will, in the meanwhile, pay the sum of $2,281,107.33, consequent upon the findings made in the reasons for judgment.
There was some discussion between the parties as to whether the orders should include a power in the applicant to apply to relist the matter for final orders after it becomes aware of the arbitral award. However, in my view, it is preferable to make an order that any party be at liberty to relist the matter for the making of final orders or for any other cause in relation to the question of the arbitration proceeding.
The main controversy between the parties related to the question of costs.
Alstom contended that it had been substantially successful in the proceeding and that the Court should order that the respondents pay its costs. Alstom contended that the part of the damages claim on which it was unsuccessful, was not the subject of any evidence and that the matter was dealt with by way of “short submissions” by counsel.
The respondents, however, contended that they had been successful on the aspect of the case relating to indirect loss and that this issue had been a sufficiently significant aspect of the claim, that their success in this regard should be reflected in the award of costs. Therefore, said the respondents, Alstom should not be entitled to recover all of its costs and its costs should be reduced by the portion of the costs incurred which are attributable to those damages issues upon which they failed. The respondents contended that the portion of Alstom’s costs which should be disallowed, should be assessed by the taxing officer.
It is true, as Alstom contended, that by the time the matter came to be dealt with in final submissions, the quantum of the losses and their classification as indirect losses or otherwise were no longer in dispute, and that those claims were not the subject of any evidence. However, as I observed in the judgment, this state of affairs was brought about by a commendable degree of cooperation between the legal representatives on both sides of the case. The actual evidence which lay behind the damages claim ran to a considerable number of lever arch files of documents. I accept the respondents’ submission that the final agreed document on damages which the parties handed up in Court was the product of a good deal of work between the parties. I might add that Alstom did not disagree with this submission.
Further, contrary to Alstom’s submission, the legal argument involved in relation to the question of whether s 61 of the Marine Insurance Act 1909 (Cth) was to be construed as including the heads of damages claimed by Alstom, was one of some complexity.
Accordingly, in my view, the respondents’ submissions should be accepted in relation to the question of costs. Alstom should be precluded from recovering its costs in respect of the damages issues on which it failed. Alstom accepted that if the Court came to the view that there should be a reduction in respect of these costs, then the proposal by the respondents that the amount of the reduction should be assessed by the taxing officer, was the appropriate way to proceed. Accordingly, I will make costs orders in terms of the orders proposed by the respondents in respect of costs.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate:
Dated: 1 May 2013
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