Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd (No 2)

Case [2010] QSC 365

SUPREME COURT OF QUEENSLAND

CITATION:

Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd (No 2) [2010] QSC 365

PARTIES:

CAPE YORK AIRLINES PTY LTD
ACN 000 627 010
(plaintiff)
v
QBE INSURANCE (AUSTRALIA) LIMITED
ACN 003 191 035
(defendant)

FILE NO/S:

BS 1762 of 2005

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

24 September 2010

DELIVERED AT:

Brisbane

HEARING DATE:

Written submissions as to costs

JUDGE:

Daubney J

ORDER:

There will be an order pursuant to UCPR r 360(1) that the defendant pay the plaintiff’s costs of and incidental to this proceeding (including any reserved costs) calculated on the indemnity basis.

CATCHWORDS:

PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON THE INDEMNITY BASIS – where judgment has been for the plaintiff – where the plaintiff made a formal offer to settle – where the plaintiff seeks its costs of the proceeding on the indemnity basis pursuant to UCPR r 360 – whether the offer to settle was an offer of a genuine compromise – whether the defendant should be ordered to pay the plaintiff’s costs on the indemnity basis

Uniform Civil Procedure Rules 1999 (Qld), r 360

Arian v Nguyen (2001) 33 MVR 37, cited
Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd [2010] QSC 313, cited
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, cited
Hobartville Stud Pty Ltd  v Union Insurance Co Ltd (1991) 25 NSWLR 358, cited
Jones v Millward [2005] 1 Qd R 498, distinguished
Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721, cited
Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353, cited

COUNSEL:

DR Cooper SC, with C Francis for the plaintiff
SSW Couper QC for the defendant

SOLICITORS:

Kilmurray Solicitors for the plaintiff
Cooper Grace Ward for the defendant

  1. On 27 August 2010, I gave judgment[1] for the plaintiff in the sum of $1,942,367.88 plus interest to the date of judgment of $1,229,519, being a total judgment of $3,171,886.88 and invited submissions as to costs.  Those written submissions have now been received.

  1. On 10 May 2007, the plaintiff made a formal offer to settle the proceeding pursuant to Chapter 9 Part 5 of the Uniform Civil Procedure Rules 1999 Qld (“UCPR”).  The offer to settle was, relevantly, in the following terms:

    “1.The defendant pay to the plaintiff, within 28 days of acceptance of this offer, the amount of $1,757,367.88 in full and final satisfaction of the plaintiff’s claim for damages.

    2.The defendant pay to the plaintiff, within 28 days of acceptance of this offer, interest on the amount of $1,757,367.88, calculated at the rate of 10 per cent per annum, commencing from 26 February 2004; and up to the day upon which payment is made.”

  2. That offer was delivered under cover of a letter from the plaintiff’s solicitors to the defendant’s solicitors, which was expressed to be “Without prejudice, save as to…

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Details
AGLC
Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd (No 2) [2010] QSC 365
Case
[2010] QSC 365
Decision Date

CaseChat Overview and Summary

Cape York Airlines Pty Ltd, the plaintiff, brought an action against QBE Insurance (Australia) Ltd, the defendant, for the recovery of insurance premiums paid under a policy of insurance. The matter was heard by the Supreme Court of Queensland. The plaintiff had made a formal offer to settle the matter, which the defendant had refused. The plaintiff subsequently sought an order for costs on the indemnity basis, pursuant to UCPR rule 360. The court was required to determine whether the plaintiff’s offer to settle was a genuine offer of compromise, and if so, whether it should order the defendant to pay the plaintiff’s costs on the indemnity basis.

The court considered the principles surrounding genuine offers of compromise, including that the offer must be made in good faith and must be a realistic assessment of the plaintiff’s prospects of success. It found that the plaintiff’s offer to settle was genuine, and that the defendant’s refusal to accept the offer was unreasonable. The court held that, in these circumstances, it was appropriate to order the defendant to pay the plaintiff’s costs on the indemnity basis, departing from the general rule that costs follow the event. The court found that the plaintiff’s offer to settle was a genuine offer of compromise, and that the defendant’s refusal to accept the offer was unreasonable. Accordingly, the court ordered the defendant to pay the plaintiff’s costs of and incidental to this proceeding, including any reserved costs, calculated on the indemnity basis.

The final orders of the court were that the defendant pay the plaintiff’s costs of and incidental to this proceeding, including any reserved costs, calculated on the indemnity basis. This order was made pursuant to UCPR rule 360(1), and represented a departure from the general rule that costs follow the event. The court found that the plaintiff’s offer to settle was a genuine offer of compromise, and that the defendant’s refusal to accept the offer was unreasonable. Accordingly, the court held that it was appropriate to order the defendant to pay the plaintiff’s costs on the indemnity basis.

Orders

Orders of the court

There will be an order pursuant to UCPR r 360(1) that the defendant pay the plaintiff’s costs of and incidental to this proceeding (including any reserved costs) calculated on the indemnity basis.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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