Fogarty v CGU Insurance Ltd (No. 2)
[2015] ACTSC 91
•24 April 2015
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Fogarty v CGU Insurance Ltd (No. 2) |
Citation: | [2015] ACTSC 91 |
Written Submissions: | 13 March 2015 |
DecisionDate: | 24 April 2015 |
Before: | Murrell CJ |
Decision: | The appellant/ cross-respondent is to pay the costs of the respondent/ cross-appellant, including the costs of the proceedings in the Magistrates Court |
Category: | Costs |
Catchwords: | COSTS – General rule – costs follow the event – costs of whole action |
Legislation Cited: | Court Procedure Rules 2006 (ACT) rr 1721, 5052(1) Insurance Contracts Act 1984 (Cth) s 46(2) |
Cases Cited: | Fogarty v CGU Insurance Ltd [2015] ACTSC 44 |
Parties: | Karen Narelle Fogarty (Appellant) CGU Insurance Ltd (Respondent) |
Representation: | Counsel Ms J Cai (Appellant) Mr R Cavanagh SC (Respondent) |
| Solicitors Colquhoun Murphy Lawyers (Appellant) Holman Webb Lawyers (Respondent) | |
File Number: | SCA 75 of 2014 |
Decision under appeal: | Court/Tribunal: ACT Magistrates Court Before: Magistrate Cook Date of Decision: 8 August 2014 Case Title: Karen Narelle Fogarty v CGU Insurance Ltd Court File Number: No. MC 12/114 of 2012 |
Murrell CJ:
Principal Judgment
In Fogarty v CGU Insurance Ltd [2015] ACTSC 44, I dealt with an appeal by an insured homeowner and a cross-appeal by her insurer from orders of the Magistrates Court. The Magistrates Court proceedings concerned the extent of the insured’s entitlement to recover damages relating to three burnt kitchen floorboards.
At the hearing of the appeal, the parties agreed that the Magistrate should not have made orders in the nature of specific performance and that, insofar as the appeal and cross-appeal related to such orders, both should be allowed.
In relation to the more contentious issues, I found that:
(a)The insurer’s argument that the Magistrate had misapplied s 46(2) of the Insurance Contracts Act 1984 (Cth) was not made out.
(b)The Magistrate erred in finding that the insurer had breached its contractual obligation to repair.
(c)The insured’s claim was misguided insofar as it asserted that damages for the cost of repairing the floor should include an allowance for the possibility that, when it was re-sanded, the floor would fail and require replacement.
(d)The Magistrate erred in finding that the insurer had breached its duty of utmost good faith.
(e)Because there was no breach of the duty of utmost good faith, the insurer was not entitled to damages for inconvenience.
I concluded that the insured had failed to establish her principal contentions on the appeal and her claim should have failed in the Magistrates Court. I ordered that the orders of the Magistrates Court be set aside and there be a verdict for the insurer. I indicated that it was my preliminary view that, subject to submissions, the insured should bear the costs of the insurer, including the costs of the proceedings in the Magistrates Court.
The insured filed written submissions, arguing that, up to the point of the hearing, her appeal had focused on the Magistrate’s error in ordering specific performance. The summary of argument filed by the respondent did not concede that the Magistrate had erred in ordering specific performance. Consequently, the insured should be paid her costs of the appeal.
The gravamen of the decision on appeal was that, as the insurer had breached neither the insurance policy nor the duty of utmost good faith, the insured’s claim should have failed in the Magistrates Court. The insured succeeded on no significant matter that was contested at the hearing of the appeal.
General Rule as to Costs
The general rule is that the costs of a proceeding are in the discretion of the Court: r 1721 of the Court Procedures Rules 2006 (ACT) (the CPR). Ordinarily, an unsuccessful party is ordered to pay the costs of the successful party. On an appeal to the Supreme Court, the Court has all the powers of the Magistrates Court and may make any appropriate order, including any appropriate costs order: rr 5052(1)(a), (d), (e) of the CPR.
In this case, there is no reason to depart from the ordinary course. At the hearing, the insured’s point about specific performance was conceded by the insurer. Further, it was, strictly speaking, unnecessary to decide whether it was open to the Magistrate to order specific performance. I decided that the insured’s case should have failed at an earlier point and that there should be no relief of any nature.
The appellant/ cross-respondent is to pay the costs of the respondent/ cross-appellant, including the costs of the proceedings in the Magistrates Court.
| I certify that the preceding nine [9] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice Murrell. Associate: Date: 24 April 2015 |
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