Incomlend Pte Ltd v Insurance Australia Ltd

Overview of parties' positions

1. The plaintiffs seek their costs of the Motion, contending that they were successful and, as such, costs should follow the event pursuant to r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
2. In support of this, the plaintiffs contend, in substance, that: 1. in relation to form: 1. the plaintiffs were successful in the form of security for costs which was ordered, being the Deed; 2. Tokio Marine and BCC never accepted, and would never have consented to, a deed from AmTrust in any of the proposed forms, as they contended there was a real risk of not being able to recover against AmTrust, such that a debate about form was always inevitable; and 3. the changes made to the Deed during the hearing on 8 November were in response to Tokio Marine and BCC's complaints about the form of the Deed, which reflect a conciliatory approach by the plaintiffs. 1. the plaintiffs were successful in the amount of security which was ordered ($1.75 million), which was a lower amount than that which was sought by Tokio Marine and BCC in the Motion ($2.5 million). Despite the fact that the quantum was ordered for a longer period of time, the reduction in quantum is such that a far lower quantum of security was ordered than that which was sought in the Motion; 2. the cut off point for the first tranche of security, being "up to and including the completion of Tokio Marine and BCC's lay evidence in the proceedings", had never been agreed to in correspondence, and in fact, the solicitors for the plaintiffs had attempted to seek a firm definition of the term "Expanded First Phase"; and 3. the evidence put forward by Ms Cook estimating the amount of work and its cost did not assist the Court and also confounded the plaintiffs, despite the plaintiffs having sent several letters seeking clarification for how these amounts had been calculated.
3. Tokio Marine and BCC seek the following order in relation to costs: The Plaintiffs to pay Tokio Marine and BCCs' costs of the motion filed 25 July 2024 on the ordinary basis up to and including 7 November 2024, and costs of the motion otherwise be costs in the cause.
4. In support of this order, Tokio Marine and BCC submitted that: 1. the Motion was filed 25 July 2024 and the first substantive response from the plaintiffs as to form was on 16 August 2024, where the plaintiffs proposed a deed poll from LCM Funding Pty Ltd, which was ultimately abandoned; 2. the first proposed form of the Deed from AmTrust was provided on 28 October 2024 by the plaintiffs, and on 29 October 2024, the plaintiffs also proposed a payment of $20,000 into Court. On 31 October 2024, Tokio Marine and BCC set out various concerns about the proposed form of the Deed, and on 4 November 2024, a second version was provided. This second version was further amended prior to and during the hearing before me on 8 November 2024, such that the first time the Deed advanced by the plaintiffs was shown to Tokio Marine and BCC was on the morning of the hearing; 3. the plaintiffs, in their submissions in relation to the Motion, first proposed a sum of $500,000 on 4 November 2024, which largely agreed with Tokio Marine and BCC's estimate for past costs and only provided $50,000 for future costs. The plaintiffs contend that this demonstrates the necessity of the Motion; and 4. in relation to the "cut off line", Tokio Marine and BCC contend that it cannot be fairly said that there was any confusion about the "very considerable work that Ms Cook said needed to be carried out" to investigate the numerous separate trades.

Relevant legal principles

1. The legal principles relevant to the determination of costs were not in dispute. I recently summarised the relevant legal principles at Joudo v Joudo (No 2) [2024] NSWSC 469 at [12]. I do not propose to repeat what I there said.
2. The discretion of the Court when dealing with costs is broad: Civil Procedure Act 2005 (NSW) s 98; UCPR r 42.1.

Determination

1. The plaintiffs contended that this is not a case where there has been "mixed success", and as such, questions of apportionment should not arise. I do not accept this contention.
2. At [93] of the Principal Judgment, I indicated that my preliminary view is that the costs of the Motion should be costs in the cause. This was because the plaintiffs succeeded as to the form in which the security for costs should be ordered, being in the form of the Deed, but Tokio Marine and BCC had succeeded in obtaining substantially more security than was offered by the plaintiffs. I do not see any reason to depart from this preliminary view.
3. There were two substantive issues on the Motion. Each party had substantial success on one of the issues but not complete success. On the issue of the form of the Deed, this was proposed quite late and was being amended during the hearing of the Motion. On the issue of quantum, the evidence put forward by BCC and Tokio Marine was of little assistance, but the plaintiffs never offered any substantial quantum to cover the costs of what was not disputed as the significant investigative work to be carried out.
4. In all the circumstances, the appropriate order is that the costs of the Motion be costs in the cause.

Orders

1. The orders of the Court are: 1. The costs of the Second and Third Defendants' motion filed 25 July 2024 be costs in the cause.

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