Allianz Australia Insurance Ltd v Swainson [2011] QCA 179

Court of Appeal (Qld)|2011-07-29|Before: Fraser JA, Ann Lyons and Martin JJSeparate reasons, for judgment of each member of the Court, each concurring as to the orders, made

The application of the general principle may lead to costs orders which reflect different results on separate events or issues, unless the Court considers that some other order is more appropriate: see Interchase Corporation Limited (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No. 3) [2003] 1 Qd R 26 at [84], per McPherson JA."

**[6] None of the cases I have mentioned are sufficiently analogous to this case to provide direct assistance in deciding the appropriate costs order here, but Daly v D A Manufacturing Co P/L & Anor[8] may be seen as a relevant example of a case in which the results on issues were taken into account in deciding the appropriate order as to costs of an appeal. In that case the costs which a respondent/plaintiff was ordered to pay to an appellant/defendant were limited to the costs of the successful appeal on quantum where the defendant had also unsuccessfully appealed on liability and contributory negligence. If a similar approach were adopted here, the insurer might be given its costs of the issue of contributory negligence but otherwise deprived of costs.

[7] There is, however, no sufficient ground for ordering the insurer to pay any part of the plaintiff's costs. The insurer was required to appeal to vindicate its entitlement to a more generous apportionment and its success in that respect was not insignificant. The Court's reasons for judgment in the appeal also demonstrate that the insurer had reasonable grounds for challenging the finding of negligence, even though it lost on that issue.

[8] On the other hand, the insurer's success on contributory negligence was not complete. It sought a more generous apportionment in its favour than it obtained, presumably with a view to revision of the indemnity costs order made by the trial judge. Furthermore, the plaintiff did not act unreasonably in opposing the insurer's appeal on contributory negligence, as is demonstrated by the fact that the insurer did not obtain an apportionment as generous as that which it sought. Those considerations may not of themselves justify a limitation upon the costs order in favour of the insurer, but to them must be added the consideration that the plaintiff was the successful party in the insurer's appeal on the negligence issue. That was the more substantial issue. A relatively small proportion of the parties' written submissions and oral arguments were devoted to the issue of contributory negligence. Whilst there is some merit in the insurer's argument that it is artificial to divorce the issue of contributory negligence from the issue of the first defendant's negligence, and although the issue of contributory negligence could not be resolved without a full appreciation of the facts underlying the finding of negligence, the appeal on the issue of contributory negligence could have been resolved satisfactorily with reference only to the trial judge's very extensive discussion of the evidence and detailed findings of fact. Some additional reference to the evidence would not have been inappropriate, but the insurer's unsuccessful appeal on the negligence issue required a full record of the trial and it required the parties to embark upon a substantially more extensive examination of the evidence in preparing for and arguing the appeal than otherwise would have been required. Compared to many other appeals, this appeal was not complex and the hearing was conducted with commendable efficiency. Even so, the importance of the appeal for the parties and its complexity was substantially increased by the insurer's challenge to the finding of negligence. The plaintiff's success on that issue should be taken into account in its favour in determining the appropriate costs order.

[9] In these circumstances, and adopting a necessarily broad approach, I would allow the insurer one quarter of its costs of the appeal.

[10] I consider that the appropriate orders are:**

1. Vary paragraph 1 of the judgment below by substituting the amount of $106,541.85 for the amount of $160,103.34;

2. The respondent is to pay one quarter of the appellant's costs of the appeal to be assessed on the standard basis.

**[11] ANN LYONS J: I agree with the orders proposed by Fraser JA for the reasons given by his Honour.

[12] MARTIN J: I agree with the reasons given by Fraser JA, and with the orders he proposes.**

[3] The insurer referred to Uniform Civil Procedure Rules 1999 (Qld), r 681(1).

[4] Pertzel v Qld Paulownia Forests Ltd & Anor [2008] QCA 344; Willett & Anor v Futcher [2004] QCA 64; Daly v D A Manufacturing Co P/L & Anor [2003] QCA 331; Ballesteros v Chidlow & Anor [2006] QCA 368.

[5] [2010] QSC 329 at [3]. See also the decisions by McMurdo J to similar effect referred to in Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [2010] QCA 164 at [8].

"The usual rule is that the costs of a proceeding follow the event. [Uniform Civil Procedure Rules 1999 (Qld), r 681 and Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67] to [70].] The 'event' is not to be determined merely by reference to the judgment or order obtained by the plaintiff or appellant, but is to be determined by reference to 'the events or issues, if more than one, arising in the proceedings'. [Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No. 3) [2003] 1 Qd R 26 at 60; Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 615; and Byrns v Davie [1991] VicRp 93; [1991] 2 VR 568 at 570, 571.] However, a party which has not been entirely successful is not inevitably or even, perhaps, normally deprived of some of its costs. [Waterman v Gerling (Costs) [2005] NSWSC 1111; Todrell Pty Ltd v Finch (No 2) [2007] QSC 386.]"

'[67] The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is granted in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party [Latoudis [1990] HCA 59; (1990) 170 CLR 534 at 543, per Mason CJ: at 562-563, per Toohey J; at 566-567, per McHugh J; Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 at 410, per Mason CJ, Brennan, Deane, Dawson and McHugh JJ]. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (18 paragraphs)

Parties

Cases Cited (6)