Coshott v Schmierer - [2002] NSWSC 1098

Reported Decision:
(2003) 12 ANZ Insurance Cases 61-552

New South Wales

Supreme Court

CITATION: Coshott v Schmierer [2002] NSWSC 1098

CURRENT JURISDICTION: Common Law Division

FILE NUMBER(S): SC 11241 of 2002

HEARING DATE(S): 6 November 2002

JUDGMENT DATE: 20 November 2002

PARTIES :

Robert Gilbert Coshott (Plaintiff)
John Trevor Schmierer (Defendant)

JUDGMENT OF: Windeyer J at 1

COUNSEL : Mr G Laughton (Plaintiff)
Mr P Bolster (Defendant)

SOLICITORS: Hill Ryner & Company (Plaintiff)
Henry Davis York (Defendant)

CATCHWORDS: COSTS - SOLICITORS RETAINER - INSURANCE - solicitors instructed by insurer to act in defence of District Court proceedings in which judgment given for defendant with costs - defendant company wound up - solicitors file bill of costs for assessment - plaintiff in District Court liable for costs obtains copy of insurance policy - successful defendant not insured under the policy - basis of insurer taking over conduct of proceedings could only be pursuant to insurance contract - defendant company itself had incurred no costs so indemnity of costs order not required - insurer a volunteer - assessment stayed

LEGISLATION CITED: Insurance Contracts Act 1984 s48

DECISION: See paragraph 14

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

WINDEYER J

WEDNESDAY 20 NOVEMBER 2002

11241/02 ROBERT GILBERT COSHOTT V JOHN TREVOR SCHMIERER

JUDGMENT

Outline

1 This is a claim by summons to stay proceedings on an assessment of costs.

Facts

2 Baramul Stud Pty Limited (Baramul) was the successful defendant in District Court proceedings No 6912 of 1994, brought by the plaintiff in these proceedings and two other persons as plaintiffs. Orders were made on 5 December 1996 that the plaintiffs pay the defendant’s costs to the defendants forthwith after assessment. Baramul Stud Pty Limited is now in liquidation but was not when judgment was entered in its favour.

3 The proceedings were conducted for the defendant company by Messrs Henry Davis York, solicitors. Those solicitors acted on instructions from CGU Insurance, a company apparently formed by merger of the operations of Commercial Union Insurance Company of Australia Limited and General Accident Fire and Life Assurance Corporation Limited. For the purposes of this decision the details do not matter. Notice of Appeal to the Court of Appeal was filed but it seems the appeal was withdrawn in about April 1999.

4 An application for assessment of costs was then filed in this Court on 26 October 2000 by Messrs Henry Davis York, Baramul being shown as the applicant and the plaintiffs in the District Court proceedings being shown as the respondents. The bill in question appears to be addressed to Tregoyd Holdings Pty Limited. It is an admitted fact that Baramul is or was a wholly owned subsidiary of Tregoyd.

5 There seems to have been great delay in proceedings before Mr Conti, the costs assessor appointed. The liquidator of Baramul has changed its name to ACN 002 797 640 Pty Limited, a common method of unnecessarily confusing the public. By letter dated 19 November 2001,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Coshott v Schmierer

Details

AGLC: Coshott v Schmierer [2002] NSWSC 1098
Case: [2002] NSWSC 1098
Decision Date: 20 November 2002

CaseChat Overview and Summary

In the case of Coshott v Schmierer, the plaintiff sought to recover costs from the defendant following a judgment in the District Court. The defendant, who had been successful in the District Court, had been defended by solicitors acting on behalf of an insurer. After the defendant’s company was wound up, the solicitors filed a bill of costs for assessment. The plaintiff obtained a copy of the insurance policy and discovered that the successful defendant was not insured under the policy. The basis for the insurer taking over the conduct of the proceedings could only be pursuant to the insurance contract, and since the defendant company itself had incurred no costs, an indemnity of costs order was not required. The insurer was considered a volunteer.

The court was required to decide whether the insurer, having taken over the defence of the defendant, was entitled to recover costs from the plaintiff. The central issue was whether the insurer, having not insured the defendant, could claim the costs as a volunteer. The court held that the insurer, by defending the proceedings without an insurance contract in place, was acting as a volunteer. Consequently, the insurer could not claim costs from the plaintiff.

The court reasoned that the insurer's basis for taking over the conduct of the proceedings was through an insurance contract which did not cover the defendant. Since the defendant company had not incurred any costs, an indemnity of costs order was unnecessary. The court concluded that the insurer, having acted as a volunteer, was not entitled to recover costs from the plaintiff. Therefore, the assessment of the solicitors' bill of costs was stayed.

The court ordered that the assessment of the solicitors' bill of costs be stayed. The insurer, having acted as a volunteer without an insurance contract covering the defendant, was not entitled to recover costs from the plaintiff. This decision highlighted the importance of the insurer's contractual obligations and the consequences of acting without proper coverage.

Orders