Australia, Nov. 30 -- New South Wales Land and Environment Court issued text of the following judgement on Nov. 29:
1. THE COURT: This Court handed down judgment and made orders in these appeals and cross-appeals (together, the "appeal proceedings") on 18 September 2024: Zurich Australian Insurance Limited v CIMIC Group Limited & Ors [2024] NSWCA 229 (the "Appeal Judgment"). In the Appeal Judgment, we expressed (at [630]-[638]) some broad conclusions of principle as to where costs of the appeal proceedings should lie. However, having regard to the multiplicity of issues raised, we directed that the parties should confer and endeavour to reach agreement as to the costs of the appeal proceedings, failing which submissions should be filed with any disputed issues to be dealt with on the papers. Consistent with these orders, and subsequent orders extending time for compliance and permitting short reply submissions to be filed, submissions were filed by all parties to the appeal on 13 November 2024 and by some parties on 22 November 2024. These submissions reflect some measure of agreement between some parties, but no unanimous agreement as to whether this Court should make "issues based" costs orders, nor as to what orders should be made as to costs. It is thus necessary for this Court to resolve all issues as to the costs of the appeal proceedings within the parameters of our conclusions of principle in the Appeal Judgment at [630]-[633].
2. In the interest of efficiency, we will not repeat any of our analysis or conclusions in the Appeal Judgment. This judgment assumes knowledge of, and should be read together with, the Appeal Judgment.
3. The only evidence relied upon on the costs issues was an affidavit of Louise Cantrill affirmed on 13 November 2024 relied upon by Berkley Insurance Company ("Berkley") and which contained various correspondence, and a letter of 21 July 2020 to Ms Cantrill from Allens Linklaters, solicitors for CIMIC Group Limited ("CIMIC"), relied upon by CIMIC.
The ambit of the costs issues the subject of this judgment
4. The orders of 18 September 2024 finally resolved any questions arising on appeal as to the costs of the proceedings at first instance. The only matter upon which agreement and, if necessary, further submissions were sought was as to the costs of the appeal proceedings albeit within the confines of [630]-[633] of the Appeal Judgment. Thus, the submissions of Berkley as to orders that should be made in respect of the costs at first instance fall beyond the ambit of our orders and for that reason must be rejected. Further, contrary to Berkley's submission, within the parameters of our conclusions as set out at [630]-[633] of the Appeal Judgment, agreement and, if necessary, submissions were sought as regards questions as to the costs orders that should be made in the appeal proceedings, not merely whether any special costs orders should be made.
Should issues based costs orders be made?
5. AIG Australia Limited ("AIG"), CIMIC, Chubb Insurance Australia Limited ("Chubb"), Catlin Syndicate Limited and Catlin Australia Pty Limited (together, "Catlin") and Liberty Mutual Insurance Company ("Liberty") all submitted that issues based costs orders should be made and that these should reflect the issues as set out in the Agreed List of Issues (as defined and set out in the Appeal Judgment at [16] and [25] and, for convenience, annexed to this judgment) and also the issue of procedural fairness raised by Berkley. In support of that approach, it was submitted that this reflects the way the hearing of the appeal proceedings was conducted and the Appeal Judgment was structured and avoids the undue complexity necessarily involved in making orders by reference to particular proceedings or notices of contention. CIMIC submitted that issues based costs orders would produce a "fairer result" in circumstances where parties chose to engage to varying extents on different issues such that events based costs orders would not adequately reflect this complexity.
6. Both Zurich Australian Insurance Limited ("Zurich") and Arch Underwriting at Lloyd's Limited on behalf of Syndicate 2012 and Dual Australia Pty Ltd ("Arch/Dual") submitted that their costs as a whole should be paid by CIMIC. Zurich submits that its involvement in the proceedings arose by reason of the declaratory relief sought by CIMIC against the 2010 Insurers (as defined in the Appeal Judgment at [1]). As the declaration made in Order 13 of the orders made by the primary judge on 12 October 2022, following judgment in CIMIC Group Limited v AIG Group Limited [2022] NSWSC 999 (the "2010 Declaration"), was set aside on appeal, Zurich says that they should be paid the whole of their costs on appeal notwithstanding that they also (unsuccessfully) sought relief on appeal relating to the liability of the 2011 Insurers (as defined in the Appeal Judgment at [1]). Arch/Dual contend that they were wholly successful on appeal and that an issues based costs order may result in them not recovering all of their costs. Berkley seeks orders (including special costs orders) that the whole of its costs be paid by CIMIC on the basis that both the 2010 Declaration and the primary judge's order that Berkley pay equitable contribution to AIG were set aside on appeal and its appeal was thus wholly successful. Berkley says that in these circumstances no separate order for costs should be made for the procedural fairness issue unsuccessfully raised by Berkley on appeal. Swiss Re International SE ("Swiss Re") is agnostic as to whether or not an issues based costs order is made, given that its costs go solely to the issue of equitable contribution as between the 2011 and 2010 Insurers, on which it was successful.
7. As this Court explained in Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 (Beazley P, as her Excellency then was, Payne JA and Barrett AJA):
"[6] Section 98 of the Civil Procedure Act 2005 (NSW) confers on the Court a wide discretion with respect to costs. Under rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) the general rule is that the Court is to order that costs follow the event. The "event" may be characterised in more than one way. Generally the "event" refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] per Ward, Emmett and Gleeson JJA. Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22.
[7] The relevant principles for the determination of costs on an issue-by-issue basis were stated in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] per Beazley, Ipp and Basten JJA:
"Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).
*Rest of the document and Footnotes can be viewed at: (https://www.caselaw.nsw.gov.au/decision/193746c5754f6835771b1ca2)
Disclaimer: Curated by HT Syndication.
