Makari v TAL Life Ltd (No 3)

[2020] NSWSC 1071

Supreme Court

New South Wales

Medium Neutral Citation:

Makari v TAL Life Ltd (No 3) [2020] NSWSC 1071

Hearing dates:

On the papers

Date of orders:

14 August 2020

Decision date:

14 August 2020

Jurisdiction:

Equity

Before:

Robb J

Decision:

(1) Order the defendant to pay the plaintiff’s costs of the defendant’s notice of motion filed on 16 September 2019 seeking leave to amend its defence.

(2) Order the defendant to pay the plaintiff’s costs of and occasioned by the amendment of the defendant’s defence

Catchwords:

COSTS — Party/Party — Costs orders in interlocutory proceedings — where the applicant is to pay the respondent’s costs of the notice of motion

Legislation Cited:

Insurance Contracts Act 1984 (Cth)

Cases Cited:

Makari v TAL Life Ltd [2020] NSWSC 455

Makari v TAL Life Ltd (No 2) [2020] NSWSC 775

Category:

Costs

Parties:

Bakous Makari (plaintiff / respondent)
TAL Life Ltd (defendant / applicant)

Representation:

Counsel: L King SC / J Callaway (plaintiff / respondent)
N Matkovich (sol) (defendant / applicant)

Solicitors: C and M Lawyers (plaintiff / respondent)
HWL Ebsworth (defendant / applicant)

File Number(s):

2018 / 39324

Judgment

1. On 16 September 2019, the defendant, TAL Life Ltd (TAL), filed a notice of motion by which it sought leave to amend its defence.

2. The Court has dealt with TAL’s application in two judgments: Makari v TAL Life Ltd [2020] NSWSC 455 and Makari v TAL Life Ltd (No 2) [2020] NSWSC 775.

3. On 7 July 2020, the Court made the following orders on TAL’s notice of motion granting leave to amend TAL’s defence:

1. Grant leave to the defendant to amend its defence by filing an amended defence in the terms of the revised draft amended defence attached to the defendant’s solicitor’s email to the Associate to Robb J dated 12 May 2020.

2. The grant of leave in order 1 is made on the basis that the defendant has advised the Court that it accepts that the cyst suffered by the plaintiff and diagnosed as being cancerous on 23 December 2010 was the same, or substantially the same, medical condition from which the plaintiff suffered at all material times up to and including 30 July 2010, and the defendant will not contend to the contrary in these proceedings.

3. The grant of leave in order 1 is made on the basis that after the defence is amended the defendant will not serve any further medical expert evidence except such evidence as is responsive to any further medical evidence served by the plaintiff on the defendant.

   4. The practical effect of these orders was that, of the two substantial contested amendments that TAL sought leave to make, TAL abandoned one of those amendments following the delivery of the first of the Court’s judgments. TAL was given leave to make the second of the amendments, but only on the terms stated in orders 2 and 3. The effect of those terms was that, while TAL was permitted to plead a defence based upon the legal effect of s 47 of the Insurance Contracts Act 1984 (Cth), TAL was required to concede that Mr Makari’s underlying medical condition did not change over the relevant period, and it was precluded from relying upon further medical expert evidence unless Mr Makari chose to serve additional evidence of that nature.

   5. Thus, TAL’s notice of motion seeking leave to amend its defence failed in part, and as to the part in respect of which it succeeded, leave was given to make the amendment on a basis that significantly constrained the forensic consequences of the amendment for the purpose of the completion of the proceedings. To that extent, even though TAL was given leave to amend its defence, Mr Makari succeeded in substantially limiting the forensic consequences of the amendment. It was entirely reasonable for Mr Makari to take that course, and to that extent he succeeded.

   6. The Court has now received submissions from the parties as to the costs order that should be made in respect of TAL’s notice of motion.

   7. In Mr Makari’s 25 May 2020 submissions at par 20, he submitted, in effect, that if the amendment to its defence then sought to be made by TAL was allowed:

(a)   Mr Makari should still have the costs of the motion since the defendant, without explanation, has belatedly altered the shape of the proceedings and taken two bites of the cherry.

(b)   If the Court is against Mr Makari on that, Mr Makari should have the cost of the motion of and incidental to the agitation of the first proposed amendment which was abandoned (par 5 of the draft amended defence), and if the second proposed amendment goes forward, TAL should be ordered to pay the costs of the determination of the issues raised by the amendment in any event.

8. By its submissions received on 22 July 2020, TAL submitted that, as both parties have achieved a measure of success on the notice of motion, the Court should make no order as to costs, with the intent that each party bear his or its own costs.

9. In the alternative, TAL submitted that, if the Court was minded to make a costs order in the terms proposed by Mr Makari, there should be some adjustment on the basis that Mr Makari briefed both senior and senior junior counsel, which TAL submitted was not necessary, so that the costs order should be proportionate to the significance of the issues raised by the notice of motion.

10. In my view, the appropriate costs order to be made is that TAL pay (a) Mr Makari’s costs of the notice of motion and (b) his costs of and occasioned by the amendment to TAL’s defence.

11. As to part (a) of this order, although TAL’s notice of motion succeeded in part, it did so only on a limited basis, and it was reasonable for Mr Makari to seek that limitation. TAL has been given an indulgence by the Court in permitting it to amend its defence at this stage of the proceedings. Part (b) of the proposed costs order is the conventional order that the Court makes when permitting a party to amend its pleadings.

12. It would not be appropriate for the Court to order that TAL pay the costs of the determination of the issues raised by the permitted amendment in any event.

13. On the issue of whether Mr Makari should be allowed the costs of senior counsel, I consider that it was warranted for Mr Makari to brief on the notice of motion both of the counsel that that he has retained in these proceedings. The proposed amendments raised significant questions that could have had serious consequences for the conduct of Mr Makari’s case. Counsel for Mr Makari dealt with the amendment application in an efficient and apparently economical way. Ultimately, this is a question that should be determined in any assessment of costs that takes place.

14. The final orders that the Court makes on TAL’s notice of motion are:

1. Order the defendant to pay the plaintiff’s costs of the defendant’s notice of motion filed on 16 September 2019 seeking leave to amend its defence.

2. Order the defendant to pay the plaintiff’s costs of and occasioned by the amendment of the defendant’s defence.

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Decision last updated: 14 August 2020