Hamcor Pty Ltd v Marsh Pty Ltd

[2013] QCA 395

SUPREME COURT OF QUEENSLAND

CITATION:

Hamcor Pty Ltd & Anor v Marsh Pty Ltd & Anor [2013] QCA 395

PARTIES:

HAMCOR PTY LTD
ACN 010 141 429
(first appellant)
TERRENCE ARTHUR ARMSTRONG
(second appellant)
v
MARSH PTY LTD
ABN 86 004 651 512
(first respondent)
OTAGO PTY LTD
ABN 90 010 161 501
(second respondent)
THE STATE OF QUEENSLAND
(not a party to the appeal)

FILE NO/S:

Appeal No 1887 of 2013
SC No 5764 of 2011

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal – Further Order

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

20 December 2013

DELIVERED AT:

Brisbane

HEARING DATE:

Heard on the papers

JUDGES:

Margaret McMurdo P, Muir JA and Atkinson J
Judgment of the Court

ORDER:

1.   The appellants are granted leave to make submissions as to costs.

2.   There be no order as to the costs of the appeal.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – PRACTICE AND PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where the Court allowed the appellants’ appeal, but only to the extent that the orders of the primary judge were varied by deleting references to the ISR policy – where, as the respondents were “substantially successful”, the appellants were ordered to pay the respondents’ costs of the appeal unless the appellants applied for leave to make submissions as to costs – where the appellants sought leave and submit that, as they enjoyed substantial success in the result, they ought to recover at least half of their costs of the appeal and of the application from the respondents – where, in the alternative, the appellants submit that each party should bear its own costs of the appeal and the application – where the respondents seek to uphold the costs order made on appeal – where, in the alternative, the respondents contend that they should have 80 per cent of their costs of the appeal or that each party should bear its own costs of the appeal – where the appellants submit that it was necessary to bring the appeal as the orders of the primary judge were, in a practical sense, finally determinative of their ultimate claim for relief – where the respondents assumed responsibility for the suitability of the questions posed for separate determination – where, on appeal, the appellants succeeded on grounds that were not advanced before the primary judge or on appeal – whether the general rule that costs follow the event should be departed from

Uniform Civil Procedure Rules 1999 (Qld), r 681, r 766(1)(d)

Alborn & Ors v Stephens & Ors [2010] QCA 58, considered
Hamcor Pty Ltd & Anor v Marsh Pty Ltd & Anor [2013] QCA 262, related
Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26; [2001] QCA 191, cited
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, cited

COUNSEL:

No appearance by the appellants, the appellants’ submissions were heard on the papers
No appearance by the respondents, the respondents’ submissions were heard on the papers

SOLICITORS:

Everingham Lawyers for the appellants
Thynne & Macartney for the respondents

1. THE COURT: On 13 September 2013, the Court allowed the appellants’ appeal, but only to the extent that the orders of the primary judge were varied by deleting references to the ISR policy.  As the respondents were “substantially successful”,[1] the appellants were ordered to pay the respondents’ costs of the appeal unless the appellants applied for leave to make submissions as to costs within two days.

   [1]Hamcor Pty Ltd & Anor v Marsh Pty Ltd & Anor [2013] QCA 262 at [40].

1. The appellants sought leave and filed submissions as to costs on 17 September 2013.  The appellants submit that, as they “enjoyed substantial success” in the result, they ought to recover at least half of their costs of the appeal, and of the application, from the respondents.  In the alternative, it is submitted that each party should bear its own costs of the appeal and the application.

1. The respondents seek to uphold the costs order made on appeal.  In the alternative, the respondents contend that they should have 80 per cent of their costs of the appeal, or that each party should bear its own costs of the appeal.

The appellants’ submissions

1. The appellants’ submissions were to the following effect.  It was necessary for the appellants to bring the appeal as the orders of the primary judge were, in a practical sense, finally determinative of the appellants’ claim for damages in negligence and/or breach of statutory duty against the respondents.

1. Although the respondents were “largely successful” in their construction argument regarding the primary and excess policies, the appellants’ contentions in respect of ground 3 were to an extent vindicated[2] and it remains to be determined whether the respondents can avoid the appellants’ ultimate claim for relief.

   [2]Hamcor Pty Ltd & Anor v Marsh Pty Ltd & Anor [2013] QCA 262 at [22].

1. Furthermore, the appellants enjoyed substantial success on their argument concerning the construction of the ISR policy.  The respondents assumed responsibility for and formulated the questions for separate determination and, as the reasons demonstrate, the arguments advanced by the respondents, both at first instance and on appeal, in respect of the ISR policy were inappropriate.

1. The proposed costs order is consistent with the principle propounded in Alborn & Ors v Stephens & Ors,[3] wherein Muir JA, with whom Holmes JA and Daubney J agreed, observed:

“[7]       The usual rule is that the costs of a proceeding follow the event.

[8]The ‘event’ is not to be determined merely by reference to the judgment or order obtained by the plaintiff or appellant, but is to be determined by reference to ‘the events or issues, if more than one, arising in the proceedings’.  However, a party which has not been entirely successful is not inevitably or even, perhaps, normally deprived of some of its costs.” (citations omitted)

[3][2010] QCA 58.

1. In that case, the appellants “failed on one of the two major issues on the appeal”[4] and an order that the respondents pay half of the appellants’ costs of the appeal was deemed to “appropriately recognise the extent of the appellants’ success”.[5]

   [4]Alborn & Ors v Stephens & Ors [2010] QCA 58 at [9].

   [5]Alborn & Ors v Stephens & Ors [2010] QCA 58 at [9].

1. The present appeal does not encompass the exceptional features that would be necessary to require a party which had achieved some success on appeal and which was blameless in terms of the primary judge’s error, to pay all the costs of the appeal and the hearing below.  As such, the Court should order the respondents to pay half of the appellants’ costs of the appeal and the application.

The respondents’ submissions

1. The appellants succeeded on only one ground out of the five grounds raised on appeal.  The Court accepted the appellants’ contention, in respect of ground 4, that the term “debris” in the ISR policy was not inconsistent with an indemnity for the costs of remediation of polluted property.[6]  However, this issue occupied only a small part of the appellants’ oral and written submissions.

   [6]Hamcor Pty Ltd & Anor v Marsh Pty Ltd & Anor [2013] QCA 262 at [28].

1. Although the Court “[did] not find it necessary or desirable to answer [the] question of construction”[7] raised by ground 5 due to the artificiality in attempting to construe part of an ISR policy which had not been entered into by the parties, this was not “on grounds … advanced [by the appellant] both before the [primary judge] and [on appeal]”.  The appellants did not appear to advance an argument as to the hypothetical nature of the issue and the futility in attempting to construe part of a policy of insurance which had not, in fact, been entered into.  Consequently, it cannot be said that the appellants “enjoyed substantial success on their argument concerning the ISR Policy”.

   [7]Hamcor Pty Ltd & Anor v Marsh Pty Ltd & Anor [2013] QCA 262 at [34].

Consideration

1. The Court has an unfettered discretion as to the award of costs of a proceeding.[8]  This discretion must be exercised without caprice, having regard to relevant considerations and established principles.[9]

   [8]Uniform Civil Procedure Rules 1999 (Qld), r 681, r 766(1)(d).

   [9]Oshlack v Richmond River Council (1998) 193 CLR 72 at 96.

1. In considering the general principle that costs follow the event, it is appropriate to have regard, not only to the order obtained by the appellants but, to the range of issues ventilated on appeal and the appellants’ success in respect of those issues.[10]

   [10]Alborn & Ors v Stephens & Ors [2010] QCA 58 at [8]; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 26 at 60-61.

1. It is correct, as the respondents argue, that the appellants succeeded on ground 5 for reasons not advanced by them.  However, it is not disputed that the appellants’ stance at first instance and on appeal was that the respondents assumed responsibility for the suitability of the questions posed for separate determination.  On appeal, the appellants did argue, inferentially, that the question of construction of the ISR policy was of limited utility, claiming “it is a pleading point”.

1. There is also merit in the appellants’ argument that the primary judge’s orders effectively determined the appellants’ claims against the respondents and that the measure of success obtained on appeal has enabled them to pursue parts of their claims.

1. Having regard to the fact that both parties have enjoyed substantial success on the appeal, it is appropriate that there be no order as to the costs of the appeal.  The costs order at first instance should remain undisturbed.  The respondents succeeded at first instance in having substantial issues in the litigation decided in their favour.

Orders

(a)The appellants are granted leave to make submissions as to costs.

(b)There is no order as to the costs of the appeal.