SAIFEE by her next friend WASIMAH SAIFEE v The Owners of King George Place Strata Plan No 2867

[2003] WADC 20

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   SAIFEE by her next friend WASIMAH SAIFEE & ANOR -v- THE OWNERS OF KING GEORGE PLACE STRATA PLAN NO 2867 & ANOR [2003] WADC 20

CORAM:   DEPUTY REGISTRAR HARMAN

HEARD:   30 OCTOBER 2002

DELIVERED          :   31 JANUARY 2003

FILE NO/S:   CIV 1923 of 2000

BETWEEN:   MARYAM SAIFEE by her next friend WASIMAH SAIFEE

First Plaintiff

AND

WASIMAH SAIFEE
Second Plaintiff

AND

THE OWNERS OF KING GEORGE PLACE STRATA PLAN NO 2867
First Defendant

AND

DAVID ALEXANDER
Second Defendant

AND

QBE HOLDINGS (AUSTRALIA) PTY LTD
Applicant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Order 18 r 6 - Application of the insurer of the first defendant to be joined as a defendant to the action

Legislation:

Nil

Result:

Dismissed

Representation:

Counsel:

First Plaintiff                :     Ms R A van Heerwaarden

Second Plaintiff            :     Ms R A van Heerwaarden

First Defendant             :     Mr M J Walton

Second Defendant         :     Ms X T Mathis

Applicant:     Ms L G Rafferty

Solicitors:

First Plaintiff                :     Bradford & Co

Second Plaintiff            :     Bradford & Co

First Defendant             :     Marks & Sands

Second Defendant         :     Phillips Fox

Applicant:     Greenland Brooksby

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Byrne and Another v Brown (1889) 22 QBD 657

Dorrough & Anor v Bank of Melbourne Ltd (1995) 8 ANZ Insurance Cases 61-290

FAI General Insurance Company Ltd v Interchase Corporation Ltd & Ors (1999) 10 ANZ Insurance Cases 61-428

Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421

Gurtner v Circuit and Another [1968] 2 QB 587

Homestyle Pty Ltd v City of Belmont and Anor [1999] WASCA 59

In Re IG Farbenindustrie AG Agreement [1944] 1 Ch 41

JN Taylor Holdings Ltd v Bond (1993) 59 SASR 432

Morrell v Mercantile Mutual Insurance (Australia) Ltd and Ors [1999] WASCA 250

News Limited and Others v Australian Rugby Football League Limited and Others (1996) 64 FCR 410

Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52

Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34

Robinson v The Western Australian Museum (1977-1978) 138 CLR 283

Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317

Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987-1988) 165 CLR 107

DEPUTY REGISTRAR HARMAN: 

1. The applicant is the insurer of the first defendant.  It seeks to be joined in the action as a defendant.  The application is opposed by the plaintiffs.

2. The applicant has conceded to the first defendant that its policy would respond in the event of the plaintiffs' success.  It contends that it is precluded from representing the first defendant's interests in the action as it considers that the policy excludes cover for contractual claims and the second defendant has sought to rely upon such a claim in contribution proceedings.

3. The applicant is motivated to make the application on the basis that it would be directly affected by any judgment against its insured in favour of the plaintiffs.  Although I accept that may be the case on the basis of the concession accorded by the applicant to the first defendant, in my opinion of itself that does not constitute the applicant as a person directly affected by such a judgment in the sense that any interest of the applicant would be justiciable in the action.

4. During the course of the applicant's submissions I enquired as to whether the applicant was prepared to make any commitment that it would not seek to recover costs against the plaintiffs.  It was not prepared to make that concession.  In my opinion that issue is of some significance.  The plaintiffs have not issued proceedings against the applicant, indeed they have no cause of action against the applicant yet potentially would be exposed to what conceivably would be significant additional costs.

5. In my opinion it is appropriate to consider that the process of litigation provides a significant opportunity for parties to generate costs of such significance as would create some anxiety or uncertainty.  If the application was successful and the action proceeded to trial, the Court would have the opportunity to evaluate the extent to which the plaintiffs would be exposed to costs in the event of failure.  However, there is a real prospect that at some point the quantum of the applicant's costs together with the prospect of an adverse order would create sufficient uncertainty as to motivate the plaintiffs to be drawn into the terms of a settlement which otherwise would not be entertained.

1. I appreciate that I have the jurisdiction to make an order in favour of the applicant however on the basis of the evidence and the submissions presently made, in my opinion it would be inappropriate to even countenance the prospect of recovery of costs by the applicant against the plaintiffs.

2. It follows that I am not persuaded that there is any proper basis for the exercise of discretion in favour of the applicant.

3. The only point at which I see there is any potential to recognise the applicant's anxiety as sufficient to justify the Court taking action is at trial.  I accept that in that event there would be a real risk that the applicant would not be able to recover the costs of its preparation for trial.  It would appear to me that may be a fair result at least vis-à-vis the plaintiffs and it may be, vis-à-vis its insured.  In that event it would be for the trial Judge to determine the extent of the applicant's involvement and reflect upon costs considerations.

4. On the date upon which the application was listed for determination, I indicated that such was the conclusion I had reached and I adjourned the application for hearing by the trial Judge.  I indicated to the applicant that if my determination presented it with any difficulty in the context of it wishing to appeal then at its request I would dismiss the application.  The applicant has recently made that request and I have now accordingly dismissed the application.