Anderson v LD Contractors Pty Ltd
[2020] NSWSC 49
•10 February 2020
Supreme Court
New South Wales
Medium Neutral Citation: Anderson v LD Contractors Pty Ltd [2020] NSWSC 49 Hearing dates: 3 & 10 February 2020 Date of orders: 10 February 2020 Decision date: 10 February 2020 Jurisdiction: Common Law Before: Davies J Decision: 1. Judgment for the cross-claimant on the cross-claim in the sum of $1,110,000.
2. The cross-defendant is to pay the cross-claimant's costs assessed at $4,173.Catchwords: JUDGMENTS AND ORDERS – default judgment – two defendants – cross-claim by second defendant against first defendant – contractual claim for indemnity - where no defence filed to a cross-claim – where proceedings settled with plaintiff obliging each defendant to pay a share of the agreed damages – judgment on the cross-claim for sum quantified in the settlement – whether a liquidated sum Legislation Cited: Legal Profession Uniform Law
Uniform Civil Procedure Rules 2005 (NSW)Cases Cited: Arnold v Forsythe [2012] NSWCA 18 Texts Cited: Nil Category: Principal judgment Parties: Shane Adam Anderson (Plaintiff)
LD Contractors Pty Ltd (First Defendant/Cross-Defendant)
Resource Pacific Pty Ltd (Second Defendant/Cross-Claimant)Representation: Counsel:
Solicitors:
No appearance (First Defendant/Cross-Defendant)
S Sykes (Second Defendant/Cross-Claimant)
Self-represented (First Defendant/Cross-Defendant)
Barry Nilsson (Second Defendant/Cross-Claimant)
File Number(s): 2016/375869 Publication restriction: Nil
Judgment
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The plaintiff was injured on 6 November 2014 when working in an underground coalmine at Ravensworth. The plaintiff was employed by the first defendant LD Contractors. The second defendant was the owner and operator of the coalmine.
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The proceedings were listed for hearing on 3 February 2020. On 9 January 2020 the proceedings settled on terms that there would be judgment in favour of the plaintiff against the first defendant in the sum of $250,000 inclusive of costs and workers compensation payments, and judgment for the plaintiff for $1,110,000 inclusive of costs against the second defendant.
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On 29 August 2018 the second defendant filed and served a cross-claim against the first defendant, and on 20 December 2019 an amended cross-claim was filed. The amended cross-claim sought damages for breach of contract. The basis of the claim was that pursuant to the contract entered into between the defendants the first defendant would indemnify the second defendant against all damage or liability of any nature incurred by the second defendant arising from a breach of contract by the first defendant or from any negligent act or omission of the first defendant. The contract also provided that the first defendant was to effect and maintain throughout the term of the contract policies of insurance including public and third party liability insurance with an overall limit of $20 million for any one occurrence covering legal liability for injury to any person arising out of the provision by the first defendant of work under the contract or obligations under the contract.
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The cross-claim further alleged that although the first defendant effected a combined general liability policy with QBE Insurance (Australia) Ltd and AAI Ltd t/as Vero Insurance, the second defendant’s claim for coverage under the policy was denied because it was not named on the placing schedule of the policy as an insured, and an exclusion operated to deny coverage to the second defendant in the circumstances of the accident.
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The settlement entered into on 9 January 2020 did not involve the dispute on the cross-claim. That cross-claim came before me for hearing on 3 February 2020. On that occasion the second defendant/cross-claimant by an amended notice of motion dated 31 January 2020 sought judgment for a liquidated sum being the amount payable by the second defendant pursuant to the terms of settlement, and the total of the legal costs incurred by the second defendant. The total amount sought was $1,266,089.66. The second defendant sought, in the alternative, that there be a judgment for damages to be assessed.
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No defence to the cross-claim has ever been filed. The solicitors who had acted for the first defendant in the substantive proceedings ceased to act for the first defendant after the settlement, and lawyers who had previously acted for the first defendant also indicated that they were no longer instructed. The explanation for this appears to be that those acting for the first defendant in the substantive proceedings were instructed by the workers compensation insurer. The denial of indemnity by QBE and Vero appears to have left the first defendant with no representation.
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I am satisfied that the amended notice of motion and affidavit in support was served on the first defendant.
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On 30 January 2020 the first defendant through its director Peter Ross wrote to my Associate, with copies sent to the solicitors for the second defendant. The letter noted that the first defendant had been notified that the second defendant intended to seek default judgment against it.
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The letter went on to say that the first defendant ceased all trading activities by March 2016 and had no assets and no income. It was not able to pay for ongoing legal representation and would not be able to any judgment awarded against it. The first defendant would not be appearing at the hearing.
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When the cross-claim and the cross-claimant’s amended notice of motion came before me on 3 February 2020 I informed counsel for the cross-claimant that whilst there was no difficulty about a default judgment for the amount the second defendant had been required to pay in settlement of the claim, there appeared to be a difficulty in relation to the costs because of the provisions of the Legal Profession Uniform Law requiring service of a bill of costs because the first defendant was likely to be a non-associated third party payer. That service would trigger any right on the part of the first defendant to have the costs assessed. The matter was adjourned so that instructions could be given for the further conduct of the cross-claim and the notice of motion.
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When the matter came before me this morning the cross-claimant sought to amend again its notice of motion to claim the amount it was obliged to pay pursuant to the settlement, that is $1,110,000, together with two discrete amounts in relation to costs totalling $4,173. Those two amounts are $3,074 being the filing fee in respect of the cross-claim and $1,099 being professional costs incurred in respect of the application for default judgment.
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I am satisfied that the further amended notice of motion and the affidavit in support were served on the firstdefendant/cross-defendant.
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The first defendant is in default for not filing a defence to the cross-claim within the time stipulated in the Rules: r 16.2(1)(a) Uniform Civil Procedure Rules 2005 (NSW).
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Whether or not the amount of $1,110,000 is a liquidated claim, about which I have some doubt (see Arnold v Forsythe [2012] NSWCA 18 at [44]-[47]) I am satisfied that that amount should, in the first instance, constitute the proper quantification of damages for which a default judgment is properly given under r 16.7 UCPR.
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The claim for costs includes two components. What the cross-claimant is effectively a lump sum costs order in relation to the costs. I am satisfied that the amount of $3,074 is a disbursement to which the cross-claimant is entitled. The other amount of $1099 is the amount allowable under part 1 of Sch 1 to the Legal Profession Uniform Law Application Regulation 2015 (NSW) for costs on the recovery of a lump sum debt.
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Although I have doubts that the amount of $1,110,000 is a debt in the sense of a liquidated sum, the amount represents the damages to which the second defendant is here entitled on default of a defence to the cross-claim. In those circumstances, at least by analogy, the first defendant is entitled to the costs of $1,099 as prescribed in the schedule.
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Accordingly, I make the following orders:
1. Judgment for the cross-claimant on the cross-claim in the sum of $1,110,000.
2. I order that the cross-defendant pay the cross-claimant's costs assessed at $4,173.
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Decision last updated: 11 February 2020
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