Lowe v Certain Underwriters at Lloyd's of London Subscribing to Policy No ATCSI00100

1. The applicant pay 50% of the Insurers' costs on the ordinary basis. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

JACKMAN J: 1 I gave judgment in these proceedings on 2 August 2024: Lowe v Certain Underwriters at Lloyds of London Subscribing to Policy No ATSCI00100 [2024] FCA 858. In that judgment, I reached the conclusion that Mr Lowe's claim for a declaration and order for indemnity pursuant to the Policy should be dismissed, and I set a timetable for the preparation of written submissions and affidavits on the question of costs. 2 The Insurers seek an order that Mr Lowe should pay their costs on the ordinary basis without apportionment between the two issues in the proceedings, namely (i) the question whether Mr Lowe's "Bodily Injury" was "Permanent Hemiplegia", on which the Insurers succeeded; and (ii) whether Mr Lowe's injury satisfied the definition of Bodily Injury as being "caused by an Accident and solely and independently of any other cause", on which Mr Lowe succeeded. The Insurers rely on the general principle that a successful party is entitled to an award of costs in its favour. The Insurers also rely on the frequently cited statement of Goldberg J in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) [2002] FCA 1294 at [55], to the effect that a court should be less ready to apportion costs where a respondent in a proceeding has been successful in the outcome, but has been unsuccessful on some issues, than where a successful applicant has raised some issues on which it has failed, in that a respondent has been compelled to come to court and defend itself on a ground not of its own choosing in contrast to an applicant who chooses to raise issues on a ground of its choosing. The Insurers also rely on the statement of the Full Court in State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [8] (Emmett, Kenny and Middleton JJ) to the effect that the mere fact that a court does not accept all of a successful party's arguments does not make it appropriate to deal with costs on an issue by issue basis. The Insurers submit that they were wholly successful on the single cause of action brought by Mr Lowe, the two issues both being elements of that single claim which Mr Lowe was required to establish. Further, the Insurers submit that the causation issue arose only if Mr Lowe had hemiplegia. 3 Mr Lowe submits that the claim by Mr Lowe was first sought to be raised with the Australian Financial Complaints Authority (AFCA), and the response by the Insurers to that complaint involved reliance on the hemiplegia issue but not on the causation issue, despite the causation issue having been raised previously in the declinature letter by the Insurers. Accordingly, Mr Lowe submits that the causation issue was re-activated by the Insurers in the proceedings in this Court, leading to prolongation of the evidence required, the hearing itself and the argument. Accordingly, Mr Lowe submits that the causation issue was one which was raised by the Insurers, such that the reasoning of Goldberg J in Safeway is not directly applicable. Mr Lowe submits that it is widely accepted that the Court may have regard to the issues in respect of which each of the parties has been successful, and to apportion costs accordingly. Mr Lowe submits that there is no difficulty here in assessing the amount of apportionment which is appropriate, and submits that the appropriate order is that Mr Lowe pay 50% of the Insurers' costs of the proceedings on the ordinary basis. 4 In my view, it is appropriate in the circumstances of this case to apportion costs as between the two issues. Those issues were substantially separate and are readily apportionable. A substantial portion of the lay evidence of Mr Lowe concerned the causation issue, and a substantial portion of the documentary evidence by way of reports and correspondence from medical practitioners, and importantly the argument concerning that evidence, was directed to the causation issue. Although Dr Mobbs did not directly address the causation issue, the expert evidence of Dr Coyne did so. A substantial portion of the submissions was also directed to the authorities concerning the causation issue. I do not place any significant weight on the manner in which the AFCA proceedings were conducted, and I note that, although the Insurers' response to the AFCA complaint did not refer to the causation issue, it did rely on the report of Dr Coyne of 10 January 2023 in which Dr Coyne addressed the causation issue (at Question 8). 5 My broad impression is that about half of the costs which were incurred by the Insurers related to the hemiplegia issue, and half related to the causation issue. Accordingly, the appropriate order as to costs is that Mr Lowe should pay 50% of the costs of the Insurers on the ordinary basis. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman J.