Bodycorp Repairers Pty Ltd v Australian Associated Motor Insurers Ltd (No 3)

[2018] VSCA 192

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2017 0076

BODYCORP REPAIRERS PTY LTD (ACN 068 589 408)	First Applicant
and
ANTONIO MURDACA	Second Applicant
v
AUSTRALIAN ASSOCIATED MOTOR INSURERS LTD (ACN 004 791 744) & ORS (NO 3)	Respondents

---

JUDGES:	WHELAN, NIALL and HARGRAVE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	7 August 2018
MEDIUM NEUTRAL CITATION:	[2018] VSCA 192

---

COSTS – Whether separate groups of respondents could have been jointly represented – Overlapping issues common to all respondents – Separate issues concerning each respondent group – Individual representation of each respondent group justified.

COSTS – Indemnity costs – Judge at first instance found proposed claims had no prospect of success and gave summary judgment – Application for leave to appeal dismissed on the basis that no prospect of success – Fraud claims not open as a matter of law, even if factual basis established – Indemnity costs awarded.

COSTS – Respondent group with benefit of security for costs order – Evidence that respondents’ costs on a standard basis exceeded the amount of the security paid into Court – Respondent group sought an order that its costs of the application for leave to appeal be fixed at the amount of that security – Abandonment of any claim to costs exceeding amount of security – Costs fixed in the amount of the security.

---

APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr J Levine	Maciel Pizzorno & Co
For the First, Second, Third and Fourth Respondents	Mr C Madder	Moray & Agnew
For the Fifth Respondent	Mr D Aghion	Clyde & Co
For the Sixth, Seventh and Eighth Respondents	Mr N De Young	Minter Ellison

WHELAN JA
NIALL JA
HARGRAVE JA:

1. On 20 July 2018, we published our reasons for refusing leave to appeal.[1]  We adopt the same terminology in these reasons.

   [1]Bodycorp Repairers Pty Ltd v Australian Associated Motor Insurers Ltd [2018] VSCA 174.

1. Following publication of our reasons and the refusal of leave to appeal, the respondents indicated that they wanted time to read our reasons before determining whether to make applications for orders other than standard costs — including flagging the possibility of seeking special costs orders against one or more of the applicants’ lawyers.  In these circumstances, we directed written submissions be filed on costs issues, and indicated that we would decide those issues ‘on the papers’ unless a special order against lawyers was sought.  No such order having been sought by any respondent group, we therefore deal with costs issues on the papers. 

1. In summary:

(1)       AAMI and the AAMI witnesses (the AAMI respondents) seek their costs in the fixed sum of $24,000, being the sum fixed as security for their costs and paid into Court by the applicants.  If such an order is made, they abandon any claim to costs exceeding the amount of the security;

(2)       The Oakley Thompson respondents seek indemnity costs; and

(3)       Adams also seeks indemnity costs.

1. The applicants contend that the Court should not make any of the costs orders sought but, rather, should simply make one order for costs against it, in the fixed sum of $24,000.  The applicants’ written submissions do not say how that sum should be divided between the three respondent groups.

1. In summary, the applicants contend that, as there was considerable overlap between the issues involving the separately represented respondent groups, there was ‘no impediment’ to them being jointly represented in circumstances where: (1) the proposed appeal raised no issues of fact, because the facts pleaded in the proposed amended statement of claim were taken to be established for the purposes of the application for leave to appeal; and (2) both the Oakley Thompson respondents and Adams, as legal practitioners, are likely to be ‘represented’ by the same professional liability insurer.[2] 

   [2]We note that the applicants’ written submissions also sought to question the Court’s reasons for refusing them leave to appeal.  Those submissions were both irrelevant to the costs issues and improper, and we take no account of them.

1. The applicants seek to support their contentions by relying on comments made in Bodycorp Repairers Pty Ltd v Maisano.[3]  That case involved an application for leave to appeal from a single judge of this Court in an entirely separate proceeding to the present.  Two respondent groups in that case sought security for their costs.  Having accepted that there was an arguable case on the application for leave to appeal, the Court estimated the amount to be ordered for security on the basis that the two respondent groups were jointly represented, and ordered security in favour of each respondent group for half that amount.  On the facts of that case, the Court said that separate representation may involve an unacceptable duplication of costs in circumstances where their arguments on appeal would ‘in large part overlap’, and the two respondents ‘could even be represented jointly for much (if not all) of the argument in this Court’.[4]

   [3][2017] VSCA 39.

   [4]Ibid [25].

1. On the basis of the course undertaken in fixing security for costs in that case, the applicants contend that all respondents in this case should be limited to a single costs order in the amount of $24,000.

1. For the reasons which follow, the applicants’ contentions should be rejected.

1. As to the contention that the respondents could have been jointly represented, each case depends on its own facts.  In any event, this case is distinguishable from the decision relied upon, because that decision concerned the exercise of a discretion to order security for costs in circumstances where the proposed appeal was accepted to be arguable.  That is not this case.  The application for leave to appeal has been heard and determined, and leave to appeal has been refused on the express ground that the proposed appeal has no real prospect of success.  Moreover, the proposed claims against the various respondent groups here were separate and, significantly, each claim alleged fraud.  In our view, each respondent group was entitled to be separately represented in the circumstances of this case.

1. As to the argument based on an inference that the same insurer stands behind the Oakley Thompson respondents and Adams, and accepting that inference for the purpose of argument, Adams was in our view entitled to be separately represented.  His position was distinguishable from the Oakley Thompson respondents because the proposed amended statement of claim contained no factual allegation which could have supported the proposed fraud case against him.  On the other hand, the Oakley Thompson respondents had to rely upon legal defences only as there were allegations made (without particulars or with inadequate particulars) which could have supported the proposed fraud case against them.

1. We turn to consider the specific costs applications.

1. The AAMI respondents have provided affidavit evidence which satisfies us that their costs on a standard basis would, if taxed, be more than $24,000.  That sum has been paid into Court by the applicants as security for their costs.  On this basis, we will order that the applicants pay the costs of the AAMI respondents in the fixed sum of $24,000.

1. The Oakley Thompson respondents succeeded on their summary judgment application before the primary judge, and successfully argued that leave to appeal should be refused by this Court, on the basis that the claims made against them in the proposed amended statement of claim had no real prospect of success.  In our view, these circumstances do not constitute a special reason that justifies departure from the usual practice of a standard order for costs.

1. As to Adams, the circumstances justify the making of an indemnity costs order in his favour because the fraud claims against him lacked any factual basis in the proposed amended statement of claim.

1. It was contended on behalf of Adams that this Court should, in addition to ordering indemnity costs in his favour, order that those costs be calculated in accordance with the written retainer of his solicitors and the daily and hourly rates of his counsel.  We are not prepared to make such an order.  In the absence of agreement, the costs should be taxed in the usual course.

1. We will make the following costs orders:

(1)       The applicants pay the costs of the AAMI respondents, fixed in the sum of $24,000.  Pursuant to r 79.02(2), we order that the money paid into Court by the applicants as security for the costs of the AAMI respondents be paid out to them in satisfaction of this costs liability.

(2)       The applicants pay the costs of the Oakley Thompson respondents on a standard basis.

(3)       The applicants pay the costs of Adams on an indemnity basis.

- - - - -