Vero Insurance Ltd v Australian Prestressing Services Pty Ltd (No 2)

[2014] NSWCA 8

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Vero Insurance Ltd v Australian Prestressing Services Pty Ltd (No 2) [2014] NSWCA 8

Hearing dates:

On the papers

Decision date:

07 February 2014

Before:

Beazley P;
Meagher JA;
Simpson J

Decision:

The appellant pay 75 per cent of the respondent's costs of the appeal, those costs not including the costs of the further submissions on the question of costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

COSTS - costs of the appeal - whether the costs order should overall reflect the respective successes of the parties

Cases Cited:

Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137
Leading Edge Events Australia Pty Ltd v Kiritte Kanawa (No 2) [2007] NSWSC 568

Category:

Costs

Parties:

Vero Insurance Ltd (Appellant)
Australian Prestressing Services Pty Ltd (First Respondent)
Bedi Enterprises Pty Ltd (Second Respondent)

Representation:

Counsel:
A S Martin SC, C A Botsman (Appellant)
M R Gracie, S Haddad (Respondents)
Solicitors:
McMahons Lawyers (Appellant)
Balmain Lawyers (Respondents)

File Number(s):

2012/102842

 Decision under appeal 

Date of Decision:

2012-03-09 00:00:00

Before:

Gibson DCJ

File Number(s):

2009/334000

Judgment

1. THE COURT: The Court delivered judgment in this appeal on 21 June 2013: Vero Insurance Ltd v Australian Prestressing Services Pty Ltd [2013] NSWCA 181. The judgment of the primary judge in favour of the respondents for $361,608.75 plus prejudgment interest was set aside and judgment was entered for the respondents for $250,000 plus prejudgment interest. The parties were directed to lodge written submissions as to the order which should be made in relation to the costs of the appeal. Those submissions have been received.

1. The respondents submit that the appellant insurer should pay their costs of the appeal except for the costs incurred in relation to the respondents' notice of contention. They accept that they should pay the appellant's costs "associated with the preparation of its submissions" concerning that notice. The circumstances in which leave was sought and given to file it are explained in this Court's earlier judgment in the reasons of Meagher JA at [20]-[22].

1. In support of that position, the respondents say that there were two substantial issues in the appeal; namely whether they were entitled to an indemnity from the appellant and whether the dewatering exclusion applied. They succeeded on each of those issues and accordingly contend that they should have their costs of the appeal.

1. The appellant submits that the appropriate costs order is that the respondents pay 50 per cent of its costs of the appeal. It maintains that it was the successful party in the appeal because it reduced the judgment at first instance, excluding prejudgment interest, from $361,608 to $250,000 - as a result of its successes in relation to the rejection of the claims to an indemnity either under the general insuring clause in Section 1 or an implied term in Section 2 and because the limit to the cover provided by the applicable temporary protection extension in Section 1 was $250,000.

1. The appellant accepts that some allowance should be made for the respondents' successes on the issues as to the application of the temporary protection extension and the non-application of the dewatering exclusion. It says, however, that it should have its costs in relation to the former issue up to the time when it was raised by the respondents' notice of contention, particularly in circumstances which involved, as this Court observed in its earlier judgment at [22], "unsatisfactory and unexplained delay" on the part of the respondents. Taking account of these matters the appellant submits that an order that the respondents pay 50% of its costs represents an assessment of what is fair in all the circumstances.

1. We agree that in the circumstances of this appeal it is preferable to make a costs order which is the result of an overall assessment reflecting the respective successes of the parties on appeal and the circumstances in which the notice of contention came to be filed and served, rather than separate orders directed to specific issues on which one or other of the parties was successful.

1. Notwithstanding that the respondents' reliance on the temporary protection extension was not formally raised by them as an issue in the appeal until the close of oral argument, it was dealt with by the primary judge and raised by ground 2 of the appellant's notice of appeal. Accordingly their doing so did not alter the case which the appellant had prepared and sought to meet in arguing the appeal: cf Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137 at 154 and Leading Edge Events Australia Pty Ltd v Kiritte Kanawa (No 2) [2007] NSWSC 568 at [13] (Bergin J). The general rule that a successful party should not recover costs incurred before the amendment by which that claim was first made has no application here.

1. The two main issues in the appeal were those identified by the respondents. The appellant argued that the respondents' claim was not within the general insuring clause in Section 1, or an implied term in Section 2 or within the cover provided by the temporary protection extension. It succeeded on the first and second of those arguments but failed on the third with the result that the respondents were indemnified, but could not recover more than $250,000 plus interest. The respondents succeeded on the other substantial issue which concerned the operation of the dewatering exclusion.

1. Taking account of the respondents' overall success in the appeal on the two main issues and the appellant's success on two aspects of the first of those issues and that it incurred some unnecessary expense in dealing with the respondents' late notice of contention, an allowance must be made to an overall costs order in favour of the respondents. In our view an allowance equivalent to 25 per cent of the respondents' costs of the appeal is appropriate to cover these circumstances.

1. Accordingly, the order of the Court is that the appellant pay 75 per cent of the respondents' costs of the appeal. Those costs do not include the costs of the further submissions on the question of costs, in relation to which no order is made.

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Decision last updated: 07 February 2014