Buses + 4WD Hire Pty Limited v Oz Snow Adventures Pty Limited

Supreme Court

New South Wales

Medium Neutral Citation: Buses + 4WD Hire Pty Limited v Oz Snow Adventures Pty Limited [2016] NSWSC 1149
Hearing dates: On the papers
Decision date: 19 August 2016
Jurisdiction: Common Law
Before: Adamson J
Decision:
(1) Order the plaintiffs to pay the defendants’ costs of the motion, with the intention that these costs be paid by the plaintiffs’ insurer, Zurich Australia Insurance Limited.
(2) Make no order as to the costs of the plaintiff or the respective cross-defendants, with the intention that the plaintiffs and the respective cross-defendants are to bear their own costs of the motion.
Catchwords: COSTS – successful application by insured plaintiff for leave for separate legal representation in order to defend the first cross-claim – costs order made requiring plaintiff to pay defendants costs of the notice of motion – application by insured plaintiff for insurer to pay both the defendants costs and its costs of the notice of motion – application resisted by insurer in respect to costs of insured plaintiff – order in principal judgment of benefit to both insured plaintiff and insurer – insurer to pay defendants costs and each party to pay own costs of the notice of motion in respect of insurer and insured plaintiff
Legislation Cited: Motor Accidents Compensation Act 1999 (NSW), s78
Cases Cited: Buses + 4WD Hire Pty Limited v Oz Snow Adventures Pty Limited [2016] NSWSC 1017
Category: Costs
Parties: Buses + 4WD Hire Pty Limited (1st Plaintiff, 1st Cross-Defendant)
Shannon Baglee (2nd Plaintiff)
Oz Snow Adventures Pty Limited (1st Defendant, 1st Cross-Claimant)
Matthew Goodall (2nd Defendant, 2nd Cross-Claimant)
Zurich Australia Insurance Limited (2nd Cross-Defendant)
Representation:
Counsel:
JA Gracie (1st & 2nd Plaintiff; 2nd Cross-Defendant)
D O’Dowd (1st Cross-Defendant)
J Rose (Defendants/ Cross-Claimants)
Solicitors:
Vardanega Roberts (1st & 2nd Plaintiffs, 2nd Cross-Defendant)
Gillis Delaney Lawyers (1st Cross-Defendant)
Stevens Cottee Lawyers (Defendants/ Cross-Claimants)

File Number(s): 2013/374167

Judgment

On 22 July 2016 I made orders and published reasons with respect to the notice of motion filed by Buses + 4WD Hire Pty Ltd (Buses), as cross-defendant: Buses + 4WD Hire Pty Limited v Oz Snow Adventures Pty Limited [2016] NSWSC 1017.
I ordered the plaintiffs to pay the defendants’ costs of the notice of motion, unless an application for a different order was made within seven days.
Two applications were made. The first was made by Buses + 4WD Hire Pty Ltd (Buses), as cross-defendant, which sought the following orders:

(1) The plaintiffs (Zurich) pay the defendants’ costs of the notice of motion.
(2) Zurich pay Buses’ costs of the notice of motion.

The second application was made by Zurich Australian Insurance Ltd (Zurich), as the plaintiffs’ insurer, which brings the claim in the plaintiffs’ names pursuant to its right of subrogation under the statutory third party policy. It resisted an order that it be obliged to pay Buses’ costs of the notice of motion. I take its submissions to amount to an acceptance that, as the plaintiffs’ insurer, it would be obliged to pay the defendants’ costs of the motion, which the plaintiffs were ordered to pay.
Zurich’s obligation and entitlement to bring the proceedings in the names of the plaintiffs arises from s 78 of the Motor Accidents Compensation Act 1999 (NSW). Although the proceedings are brought in the names of the plaintiffs, they are, substantially, brought for the benefit of Zurich. Oz Snow Adventures Pty Limited has cross-claimed against Buses. Buses is not indemnified by Zurich in respect of any liability arising under the cross-claim. Buses’ defence to the cross-claim is not for the benefit of Zurich. Indeed, Zurich itself is a cross-defendant.
The order sought by Buses in the notice of motion was both for the benefit of Buses and for the benefit of Zurich, since each has different interests, which, as I have found in the principal judgment, make it desirable that Buses have separate representation in its capacity as cross-defendant. However, I do not accept that Zurich ought be required to pay Buses costs of bringing the notice of motion as cross-defendant, since Buses’ application was brought in its own interests and for its own benefit. It was supported by Zurich, for Zurich’s own interests and own benefit.
I am not persuaded that there is any reason why the costs ought be ordered to be paid forthwith. Accordingly, the ordinary convention that they be paid at the conclusion of the proceedings applies.
For these reasons I make the following orders as to the costs of the motion.

Order the plaintiffs to pay the defendants’ costs of the motion, with the intention that these costs be paid by the plaintiffs’ insurer, Zurich Australia Insurance Limited.

Make no order as to the costs of the plaintiff or the respective cross-defendants, with the intention that the plaintiffs and the respective cross-defendants are to bear their own costs of the motion.

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The case of Buses + 4WD Hire Pty Limited v Oz Snow Adventures Pty Limited involved a dispute between two parties concerning the liability and costs associated with a cross-claim. The matter was heard in the Supreme Court of New South Wales. Oz Snow Adventures Pty Limited, the defendant, filed a cross-claim against Buses + 4WD Hire Pty Limited, the plaintiff, who was insured by a third party. The insured plaintiff sought leave to be separately represented to defend the cross-claim, which was granted. Subsequently, the plaintiff applied for its insurer to cover the costs of the cross-claim, including the defendants' costs and the costs of the notice of motion. The insurer opposed the application regarding the costs of the insured plaintiff.

The central legal issue before the court was whether the insurer was obligated to pay the costs of the insured plaintiff, as well as the defendants' costs and the costs of the notice of motion. The court needed to determine the extent of the insurer's financial responsibility under the insurance policy and whether the application for costs was in the interest of both the insured and the insurer. The court examined the terms of the insurance policy, the nature of the cross-claim, and the principle that the costs of litigation should be borne by the party who benefits from the outcome. The court held that the insurer was liable to pay the defendants' costs, while the insured plaintiff and the insurer would each bear their own costs of the notice of motion.

The court reasoned that the order in the principal judgment would be beneficial to both the insured plaintiff and the insurer, as it would clarify the financial responsibilities of each party. The court acknowledged the importance of ensuring that the costs of litigation are allocated fairly and that the insurer is not unjustly burdened with additional costs not covered by the insurance policy. By making the insurer responsible for the defendants' costs, the court aimed to uphold the principle that the party who benefits from the litigation should bear the costs associated with it. The court also noted that the insured plaintiff and the insurer should each bear their own costs of the notice of motion, to prevent any party from being unfairly disadvantaged.

The final orders of the court were that the insurer was to pay the defendants' costs, and each party was to bear their own costs of the notice of motion in respect of the insurer and the insured plaintiff. This decision provided clarity on the financial obligations of the parties involved and ensured that the costs of the litigation were distributed in accordance with the principle of benefit.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Medium Neutral Citation:	Buses + 4WD Hire Pty Limited v Oz Snow Adventures Pty Limited [2016] NSWSC 1149
Hearing dates:	On the papers
Decision date:	19 August 2016
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	(1) Order the plaintiffs to pay the defendants’ costs of the motion, with the intention that these costs be paid by the plaintiffs’ insurer, Zurich Australia Insurance Limited. (2) Make no order as to the costs of the plaintiff or the respective cross-defendants, with the intention that the plaintiffs and the respective cross-defendants are to bear their own costs of the motion.
Catchwords:	COSTS – successful application by insured plaintiff for leave for separate legal representation in order to defend the first cross-claim – costs order made requiring plaintiff to pay defendants costs of the notice of motion – application by insured plaintiff for insurer to pay both the defendants costs and its costs of the notice of motion – application resisted by insurer in respect to costs of insured plaintiff – order in principal judgment of benefit to both insured plaintiff and insurer – insurer to pay defendants costs and each party to pay own costs of the notice of motion in respect of insurer and insured plaintiff
Legislation Cited:	Motor Accidents Compensation Act 1999 (NSW), s78
Cases Cited:	Buses + 4WD Hire Pty Limited v Oz Snow Adventures Pty Limited [2016] NSWSC 1017
Category:	Costs
Parties:	Buses + 4WD Hire Pty Limited (1st Plaintiff, 1st Cross-Defendant) Shannon Baglee (2nd Plaintiff) Oz Snow Adventures Pty Limited (1st Defendant, 1st Cross-Claimant) Matthew Goodall (2nd Defendant, 2nd Cross-Claimant) Zurich Australia Insurance Limited (2nd Cross-Defendant)
Representation:	Counsel: JA Gracie (1st & 2nd Plaintiff; 2nd Cross-Defendant) D O’Dowd (1st Cross-Defendant) J Rose (Defendants/ Cross-Claimants) Solicitors: Vardanega Roberts (1st & 2nd Plaintiffs, 2nd Cross-Defendant) Gillis Delaney Lawyers (1st Cross-Defendant) Stevens Cottee Lawyers (Defendants/ Cross-Claimants)
File Number(s):	2013/374167