CGU Insurance Limited v AAI Limited; CGU Insurance Limited v AAI Limited

CGU Insurance Limited v AAI Limited; CGU Insurance Limited v AAI Limited - [2017] NSWCA 58 - NSWCA 2017 case summary — Zoe

Judgment

THE COURT: On 12 December 2016, for reasons published on that day (the earlier reasons) the Court made orders allowing an appeal from orders of the Dust Diseases Tribunal (the Tribunal). [1] Two notices of motion have now been filed seeking additional orders in relation to costs both of the appeal and of the proceedings in the Tribunal. In these reasons, terms defined in the earlier reasons will be used in the way so defined.
The appeal raised a question as to the proper construction of s 151AB of the Compensation Act. That question arose in connection with a claim by Mr Kevin Hastings for damages by reason of his having contracted mesothelioma while employed by Westaway. His exposure resulted from his working with products manufactured by Amaca. Mr Hastings sued Amaca in the Tribunal. Amaca, in turn, cross-claimed against AAI and CGU for contribution towards any damages that it might be found liable to pay to Mr Hastings.
The claims for contribution against AAI and CGU were made by Amaca on the basis that Westaway had obtained policies of insurance from CGU and AAI insuring against liability of the nature claimed by Mr Hastings. The claims for contribution raised the question of which of AAI and CGU was liable to indemnify Westaway in respect of any liability that Westaway had to Mr Hastings.
The claim by Mr Hastings against Amaca was settled. Amaca, CGU and AAI agreed that whichever of AAI and CGU was held by the Tribunal to be liable to indemnify Westaway would contribute 40% of the damages and costs payable by Amaca to Mr Hastings under the consent judgment entered in the Tribunal to give effect to the settlement. The primary judge determined that CGU was liable to indemnify Westaway in respect of Amaca's claim and directed judgment for Amaca against CGU. His Honour ordered CGU to pay Amaca's costs of the cross-claim and ordered CGU to indemnify Amaca in respect of that order.
On 12 December 2016, this Court allowed CGU's appeal. The Court ordered that the orders made by the Tribunal be set aside and that, in lieu of those orders, there be orders for judgment in favour of Amaca against AAI for 40% of Mr Hastings' damages and 40% of Mr Westaway's costs and orders that AAI pay Amaca's costs of the cross-claim and Amaca pay CGU's costs of the cross-claim.
By notice of motion filed on 15 December 2016, Amaca seeks an order that the matter be remitted to the Tribunal to deal with an application by it for a Bullock order in the Tribunal in relation to the costs in the Tribunal that it has now been ordered to pay to CGU. Alternatively, Amaca seeks such an order from this Court.
Apparently as the result of an oversight, this Court made no orders as to the costs of the appeal. By notice of motion filed on 21 December 2016, CGU now seeks an additional order that Amaca and AAI pay CGU's costs of the appeal. That order is not opposed by either Amaca or AAI. However, Amaca now seeks a Bullock order in this Court, namely, that AAI indemnify Amaca in respect of costs that Amaca is so ordered to pay to CGU.
AAI contends that no basis has been established for the making of a Bullock order in the Tribunal. However, it says that, if that contention is rejected, the matter should be remitted to the Tribunal for the purposes of considering Amaca's application for a Bullock order in the light of the decision of this Court and in the light of any evidence as to the relevant conduct of the parties in the proceedings before the Tribunal. In the absence of evidence as to such relevant conduct, it would be inappropriate for this Court to determine whether a Bullock order in the Tribunal is appropriate. That question should therefore be remitted to the Tribunal for appropriate consideration.
That leaves the question of the costs in this Court. As indicated, an order for costs in favour of CGU against AAI and Amaca is not opposed. That order should therefore be made. The question remaining is whether AAI should be ordered to indemnify Amaca in respect of the costs that Amaca is so ordered to pay to CGU. There is also a further question as to whether CGU is entitled to its costs of its motion of 21 December 2016, in circumstances where Amaca and AAI consented to the orders sought by the motion. CGU asserts that it was necessary to file the notice of motion because Amaca wished to have the matter ventilated in Court in the context of its application for a Bullock order in this Court.
Amaca was a necessary party to the appeal, in so far as CGU sought to have set aside the orders made in the Tribunal against it in favour of Amaca. It was not suggested on behalf of AAI that, if CGU's appeal were upheld, there should not be an order against AAI in favour of Amaca. Further, on the hearing of the appeal, Amaca made no submissions on the principal question as to the application of s 151AB of the Compensation Act, on the basis that CGU and AAI both accepted that one of them had to be liable to pay the agreed contribution of 40% to Mr Hastings' damages and costs.
However, on the appeal, Amaca sought to maintain the Bullock order made against CGU in its favour by the primary judge. In the result, where the appeal by CGU was allowed and the Bullock order was set aside by this Court, it was not necessary for this Court to decide the question of costs, although, in the earlier reasons, this Court stated some of the relevant principles to be applied in determining whether a Bullock order should be made. [2] This Court also made observations concerning the circumstances in which the primary judge made a Bullock order in the Tribunal. [3]
Amaca accepts that it should be ordered to pay CGU's costs of the appeal, jointly with AAI. However, whether Amaca is entitled to a Bullock order in this Court very much depends upon its conduct of the proceedings in the Tribunal. That is to say, if it was reasonable for Amaca to have joined both CGU and AAI in its cross-claim, such that it was entitled to a Bullock order in the Tribunal, it would be appropriate to make a Bullock order in respect of its liability to CGU for costs in this Court. On the other hand, if it was not, it would not be appropriate to make a Bullock order in this Court. Accordingly, the appropriate order in this Court is that, if the Tribunal determines that a Bullock order should be made against AAI for the costs that Amaca is required to pay to CGU in the Tribunal, those costs should include the costs that Amaca will be ordered to pay to CGU in the appeal, as well as its costs of the appeal.
In the circumstances, the following additional orders should be made:
The respondents pay the appellant's costs of the appeal.
The matter be remitted to the Dust Diseases Tribunal for the purpose of dealing with any application by the cross-claimant in the Tribunal for a "Bullock" order in relation to the costs that the cross-claimant has been ordered to pay to the second cross-defendant pursuant to order 3(d).
Any costs that the first respondent is ordered to pay to the second respondent under such a "Bullock" order on remitter are to include the costs that the second respondent has been ordered to pay to the appellant pursuant to order 6 and the second respondent's costs of the appeal.
The parties' costs of the motion of 15 December 2016 are to be treated as part of their respective costs of any application made to the Tribunal on remitter.
The parties' costs of the motion filed on 21 December 2016 are to be treated as their respective costs of the appeal.
The motions of 15 December 2016 and 21 December 2016 are otherwise dismissed.

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Judgment (4 paragraphs)

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