Logic Group Tyres Pty Limited v Tokio Marine & Nichido Fire Insurance Co Limited

[2008] FCA 1341

FEDERAL COURT OF AUSTRALIA

Logic Group Tyres Pty Limited v Tokio Marine & Nichido Fire Insurance Co Limited [2008] FCA 1341

COSTS – indemnity costs sought by first respondent – offer of compromise rejected – whether offer reasonable and more favourable than final orders.

Held: it was – order for indemnity costs made.

Corporations Act 2001 (Cth) s 153
Federal Court of Australia Act 1976 (Cth) s 43

Federal Court Rules O 23 r 11

Logic Group Tyres Pty Limited v Tokio Marine & Nichido Fire Insurance Co Limited [2008] FCA 1297 related
Brother Industries, Ltd v Dynamic Supplies Pty Ltd [2008] FCA 126 cited
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 cited
Dukemaster Pty Ltd v Bluehive Pty Limited [2003] FCAFC 1 cited

LOGIC GROUP TYRES PTY LIMITED (ABN 80 105 995 542) v TOKIO MARINE & NICHIDO FIRE INSURANCE CO LTD (ABN 80 000 438 291) and MIRABELL POINT PTY LTD (ACN 106 064 546)

NSD 2173 OF 2007

TAMBERLIN J
1 SEPTEMBER 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2173 OF 2007

BETWEEN: LOGIC GROUP TYRES PTY LIMITED (ABN 80 105 995 542)
Applicant

AND:

TOKIO MARINE & NICHIDO FIRE INSURANCE CO LTD (ABN 80 000 438 291)
First Respondent

MIRABELL POINT PTY LTD (ACN 106 064 546)
Second Respondent

JUDGE:	TAMBERLIN J
DATE OF ORDER:	1 SEPTEMBER 2008
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The applicant pay the costs of the first respondent on a solicitor/client basis as taxed or agreed from and including the date of 29 April 2008.

2.The applicant pay the costs of the first respondent on a party/party basis as taxed or agreed up to and including the date of 28 April 2008.

3.The applicant pay the costs of the second respondent on a party/party basis as taxed or agreed.

4.The applicant pay the costs of the respondents of this costs application on a party/party basis as taxed or agreed

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2173 OF 2007

BETWEEN: LOGIC GROUP TYRES PTY LIMITED (ABN 80 105 995 542)
Applicant

AND:

TOKIO MARINE & NICHIDO FIRE INSURANCE CO LTD (ABN 80 000 438 291)
First Respondent

MIRABELL POINT PTY LTD (ACN 106 064 546)
Second Respondent

JUDGE:	TAMBERLIN J
DATE:	1 SEPTEMBER 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT ON COSTS

1. This is an application for costs in relation to a proceeding in which I have already given a judgment on 21 August 2008: Logic Group Tyres Pty Limited v Tokio Marine & Nichido Fire Insurance Co Limited [2008] FCA 1297. In that judgment, I dismissed the application by the applicant. Pursuant to the Court’s broad discretion as to costs, and following the general principle that costs follow the event, I ordered that the applicant pay the costs of the respondents.

2. Subsequent to delivery of that judgment, the first respondent made an application seeking costs from the applicant on an indemnity basis.  The second respondent did not seek such an order.  I granted the applicant and first respondent some time to file and serve submissions as to whether the applicant should pay indemnity costs to the first respondent.

3. The applicant submits that it should not have to pay the costs of the first respondent on an indemnity basis.  The applicant goes further and, without leave to file submissions on this point and despite the Court’s order on 21 August 2008, argues that it should not have to pay any costs. 

4. To support its position, the applicant makes several arguments. Most of these arguments relate to the conduct of the case and, in my view, to a large extent simply seek to canvass for a second time the merits of the dispute. By way of example, the applicant submits: that the respondents did not “come to the Court with clean hands”; that there was inadequate disclosure of certain information, and in particular information relating to Australian Business Numbers; that it has suffered and will continue to suffer considerable loss; that the second respondent has breached s 153 of the Corporations Act 2001 (Cth); that the respondents’ pleadings were inadequate; and that there was late filing of relevant documents and/or non-compliance with orders of the Court.

5. I have considered the arguments advanced on behalf of the applicant.  They are not sufficient to warrant variation of the order made on 21 August 2008.  It is also my view that the applicant’s arguments do not have sufficient force to displace the general principle which led me to the conclusion on the last occasion that discretion should be exercised to require the applicant to pay the costs of the respondents.

6. In relation to the first respondent’s application for indemnity costs, I note that the first respondent made an offer of compromise, which it filed and served on 28 April 2008. The content of that offer was that judgment would be entered for the first respondent and the first respondent would not seek its costs in the proceeding. In the present case, I am satisfied that such an offer was reasonable. As is evident from my earlier judgment, the case advanced by the applicant was ultimately unsuccessful, the arguments which they advanced as to agency and liability were clearly untenable, and the order of the Court was less favourable to the applicant than those offered to it by the first respondent on 28 April 2008. In the present circumstances – having regard to s 43 of the Federal Court of Australia Act 1976 (Cth), O 23 r 11 of the Federal Court Rules, and the relevant authorities on this point (see Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; Dukemaster Pty Ltd v Bluehive Pty Limited [2003] FCAFC 1; Brother Industries, Ltd v Dynamic Supplies Pty Ltd [2008] FCA 126) – I am of the view that making the orders sought by the first respondent is appropriate.

7. Accordingly, I order that: (i) the applicant pay the costs of the first respondent on a solicitor/client basis as taxed or agreed from and including the date of 29 April 2008; (ii) the applicant pay the costs of the first respondent on a party/party basis as taxed or agreed up to and including the date of 28 April 2008; (iii) the applicant pay the costs of the second respondent on a party/party basis as taxed or agreed; and (iv) the applicant pay the costs of the respondents of this costs application on a party/party basis as taxed or agreed.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated:        1 September 2008

Counsel for the Applicant:	Ms R. Winfield
Solicitor for the Applicant:	W Chan & Co
Counsel for the First Respondent:	Mr R. Cavanagh
Solicitor for the First Respondent:	James Tuite & Associates
Counsel for the Second Respondent:	Mr A. Renshaw
Solicitor for the Second Respondent:	AR Conolly & Company Lawyers

Date of Hearing:	Heard on the papers
Date of Judgment:	1 September 2008