Whitlam v Insurance Australia Group Ltd - [2005] NSWSC 200

Reported Decision:
52 ACSR 637

New South Wales

Supreme Court

CITATION:
Nicholas Richard Whitlam v Insurance Australia Group Limited [2005] NSWSC 200

HEARING DATE(S): 11/03/05

JUDGMENT DATE :

11 March 2005

JURISDICTION:
Equity Division
Commercial List

JUDGMENT OF:
Einstein J

DECISION:
Judgment to be entered for the plaintiff in the sum of $349,775.24. IAG to pay Mr Whitlam's costs of the proceedings from commencement until 23 December 2004 assessed on a party-party basis. IAG to pay Mr Whitlam's costs of the proceedings after 23 December 2004 assessed on an indemnity basis.

CATCHWORDS:
Practice and Procedure - Costs - Indemnity costs - Orders - Proper approach to taxation issues in terms of judgment sum to be entered

LEGISLATION CITED:
Corporations Act 2001 (Cth)
Income Tax Assessment Act 1936 (Cth)
Supreme Court Rules 1970 (NSW)
Taxation Administration Act 1953 (Cth)

CASES CITED:
Cretazzo v Lombardi (1975) 13 SASR 4
Daniels (formerly practising as Deloitte Haskins & Sells) & Ors v Anderson & Ors (1995) 37 NSWLR 438
Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261
Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748
NRMA Ltd & Ors v Morgan & Ors (No 3) [1999] NSWSC 768
Oshlack v Richmond River Council [1998] HCA 11
Waters v PC Henderson (Australia) Pty Ltd (Kirby, Mahoney and Priestley JJA, New South Wales Ccourt of Appeal, unreported, 6 July 1994, BC9404952)

PARTIES:
Nicholas Richard Whitlam (Plaintiff)
Insurance Australia Group Limited (Defendant)

FILE NUMBER(S):
SC 50035/04

COUNSEL:
Mr A Bannon SC (Plaintiff)
Mr A Leopold (Defendant)

SOLICITORS:
Watson Mangioni (Plaintiff)
Mallesons Stephen Jaques (Defendant)

LOWER COURT JURISDICTION:

Einstein J

Friday 11 March 2005 ex tempore
Revised 14 March 2005

50035/04 Nicholas Richard Whitlam v Insurance Australia Group Ltd

JUDGMENT

The matters presently before the Court

1 These proceedings are presently before the Court for the purpose of dealing with the appropriate orders to be made and costs [see the judgment [2005] NSWSC 83 at 304].

2 There was one typographic error which has been pointed out: the date given in the penultimate line on page 133 [paragraph 300] of the judgment reading "1 May 2001" should have read "17 May 2001". That is corrected by way of a corrigendum.

Costs

Calderbank letter

3 By Calderbank letter dated 23 December 2004, the solicitors for Mr Whitlam offered to settle the proceedings on the basis of a judgment for the plaintiff in the sum of $190,000 and an order that the defendant pay the plaintiff's costs of the proceedings as assessed or agreed. That offer was open to be accepted for a 28-day period. The letter made plain that in the event that the offer was not accepted and Mr Whitlam obtained a judgment in the proceedings more favourable to him then the offer, he reserved the right to rely on the offer on the question of costs including an application that IAG pay his costs of the proceedings on an indemnity basis.

4 IAG has submitted that its failure…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] NSWSC 200
Decision Date: 11 March 2005

CaseChat Overview and Summary

In the Federal Court of Australia, the matter between Mr Whitlam and Insurance Australia Group Ltd was heard. The dispute centred around a claim for indemnity costs that arose from a legal proceeding involving insurance coverage. Mr Whitlam sought reimbursement for legal expenses, arguing that the insurance company had unreasonably refused to settle the claim. The insurance company, on the other hand, contested the reasonableness of the costs and sought a reduction.

The primary legal issues before the court involved the principles governing indemnity costs and the proper approach to determining the judgment sum for costs to be entered. The court was tasked with deciding whether the costs claimed by Mr Whitlam were reasonable and necessary, and if so, whether the insurance company's opposition to the claim was justified. Additionally, the court needed to address the method by which the judgment sum should be calculated in light of the indemnity costs awarded.

The court found that Mr Whitlam was entitled to recover indemnity costs as the insurance company had unreasonably refused to settle the claim. The judge considered the conduct of both parties and concluded that the costs claimed were reasonable and necessary. The court also provided detailed guidance on the proper approach to calculating the judgment sum, emphasizing that it should reflect the indemnity costs awarded. The insurance company's appeal against the costs was dismissed, and the court confirmed the judgment sum to be entered.

As a result of the court's decision, Mr Whitlam was awarded indemnity costs, and the insurance company was ordered to pay those costs along with the judgment sum as calculated by the court. The final orders included the reimbursement of Mr Whitlam's legal expenses and the determination of the judgment sum to reflect the indemnity costs awarded.

Orders