Swiss Re Life & Health Australia Ltd v Public Trustee of Queensland

1. The applicant's costs of and incidental to this application in the amount of $15,000 be paid from the moneys paid into Court. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ALLSOP CJ: 1 On 18 August 2017, I made orders for the payment into Court under s 215 of the Life Insurance Act 1995 (Cth) of the sum of $57,881.00, representing the amount payable under a life insurance policy issued by the applicant to the late MP and in respect of which the beneficiaries were EP and the second respondent, AP. For the full background to the application, see Swiss Re Life & Health Australia Ltd v Public Trustee of Queensland [2017] FCA 963. It suffices to say that the second respondent is accused of the murder of MP and EP, who were, respectively, his mother and sister. 2 At that time, I granted liberty to the applicant to apply for a sum of costs in respect of its application and required it to file, and serve upon the second respondent, an itemised bill of costs. I indicated that I was prepared to make an order for a modest and appropriate sum of costs to be paid from the policy proceeds, but that whether I would provide the full amount of costs incurred would depend upon the relationship between that amount, the work involved and the modesty of the insurance proceeds. 3 I have on earlier occasions articulated my concerns about the costs incurred by insurers in bringing applications under s 215: see Westpac Life Insurance Services Limited v Mahony [2016] FCA 1071; MLC Limited v Crickitt (No 2) [2017] FCA 937. In both of those cases, I acknowledged that to a certain extent such an application can be considered an aspect of doing business as a life insurer and that one must appreciate that in many cases the sum of money paid into Court will be modest. However, it must also be recognised that an insurer is ultimately put in such a position through no fault of its own and so it is both fair and appropriate that an insurer have some indemnification for its reasonable costs: see Mahony at [34]-[35]. 4 In regards to the preferable approach for the formulation and conduct of an s 215 application, I refer to the comments I made in Mahony at [31] and in Crickitt (No 2) at [3]-[4] and [8]. I also again acknowledge that determining the appropriate quantum of costs to be paid out of the policy proceeds is not straightforward: see Crickitt (No 2) [2017] FCA 937 at [13]. This was recognised by the applicant in this case. 5 An affidavit annexing its bill of costs and supporting submissions was filed by the applicant on 8 September 2017. The bill of costs indicates that the applicant has incurred professional costs of $14,617.45 in support of this application and $5,912.59 in disbursements (including $1,840 in counsel fees) thus making for a total of $20,530.04 in costs and disbursements relating to this application. Recognising the tension between the costs incurred by an insurer in such an application, the modest amount of the insurance proceeds, and the related need to minimise such an insurer's costs, the applicant has applied for the sum of $15,000 from the moneys paid into Court to cover its costs. 6 The first respondent has indicated that it does not oppose the applicant's application and submissions as to costs. 7 The applicant has noted in its submissions as to costs that this was not a wholly straightforward application. This was due to the difficulties encountered in locating the second respondent and effecting service on him, as a result of his incarceration in a facility in Queensland as a consequence of the crimes he is alleged to have committed. These difficulties were particularly so due to the sensitive nature of the alleged offending, and the fact that the second respondent was a juvenile when alleged to have committed the crimes. I am also cognisant of the fact that the second respondent's detention ultimately made it necessary to seek interlocutory orders from this Court in order to serve these proceedings on him. The steps taken, over the course of several months, were outlined in the applicant's submissions and were reasonable. An appreciable proportion of the work itemised in the bill of costs relates to locating and eventually serving the second respondent. Consequently, I accept that this was not a wholly straightforward application. 8 Nevertheless, the proceeds of the policy paid into Court are clearly modest. The applicant recognised the competing concerns attending the award of an insurer's costs relating to an application such as the present and so seeks $15,000 out of the sum of over $20,000 actually expended. The two affidavits prepared by the applicant in respect of its application were short and efficiently drafted. I accept that the applicant endeavoured to make the conduct of this application as efficient as possible and note that the parties agreed to reduce costs by having the matter proceed on the papers. 9 In the circumstances, I am prepared to make an order that the applicant have its costs of and incidental to this application in the amount of $15,000 paid from the moneys paid into Court. Such is an appropriate order having regard to the modest insurance proceeds, the work required to bring this particular application and the costs actually incurred by the applicant. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop.