CGU Insurance Ltd v Katherine Electronic Services P/L & Anor [2004] NTCA 6

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CGU Insurance Ltd v Katherine Electronic Services P/L & Anor [2004] NTCA 6

PARTIES: CGU INSURANCE LIMITED T/AS COMMERCIAL UNION INSURANCE (ACN 004 478 371)

v

KATHERINE ELECTRONIC SERVICES PTY LTD (ACN 009 642 728)
and
GENERAL INSURANCE BROKERS & LIFE AGENTS NONPAREIL PTY LIMITED (ACN 009 611 358)

TITLE OF COURT: COURT OF APPEAL OF THE NORTHERN TERRITORY

JURISDICTION: CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION

FILE NO: AP11 of 2003 (20015230)

DELIVERED: 20 May 2004

HEARING DATES: 25 March 2004

JUDGMENT OF: MILDREN, THOMAS & BAILEY JJ

CATCHWORDS:

Practice - Costs - whether the respondents ought to have had separate representation - whether appellant partially successful on appeal - power of court to make Sanderson order - general principles
Supreme Court Act s 55(1)(a)
Besterman v British Motor Cab Company Ltd [1914] 3 KB 181; Gould v Vaggelas (1983-85) 157 CLR 215 at 247, 260; Richard Brady Franks Ltd v Price (1937) 58 CLR 112 at 136; Statham v Shepherd and Another (No 2) (1974) 23 FLR 244; South Sydney District Rugby League Football Club Ltd v News Ltd [2001] FCA 384, referred to

REPRESENTATION:

Counsel:
Appellant: S Ower
1st Respondent: M Cvjeticanin
2nd Respondent: J Lawrence

Solicitors:
Appellant: Hunt & Hunt
1st Respondent: Ward Keller
2nd Respondent: Cridlands


Judgment category classification: B
Judgment ID Number:
Number of pages: 5

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

CGU Insurance Ltd v Katherine Electronic Services P/L
& Anor [2004] NTCA 6
No. AP11 of 2003 (20015230)


BETWEEN:

CGU INSURANCE LIMITED T/AS COMMERCIAL UNION INSURANCE (ACN 004 478 371)
Appellant

AND:

KATHERINE ELECTRONIC SERVICES PTY LIMITED (ACN 009 642 728)
First Respondent

GENERAL INSURANCE BROKERS & LIFE AGENTS NONPAREIL PTY LIMITED (ACN 009 611 358)
Second Respondent

CORAM: MILDREN, THOMAS & BAILEY JJ

REASONS FOR JUDGMENT

(Delivered 20 May 2004)

THE COURT:
[1] On 5 February 2004, the appellant's appeal was unanimously dismissed for the reasons which we then published.
[2] Notwithstanding that the appeal was dismissed, counsel for the appellant contends that there should be no order as to costs, or alternatively, that there should be only one set of costs allowed as between the respondents on the appeal.
[3] The background of the appeal and to the application by the first respondents to file a cross appeal against the second respondent out of time is referred to in paragraphs [1] to [4] and [7] to [9] of the judgment of Mildren J. In essence, the claim of the first respondent plaintiff succeeded before the learned trial judge against the appellant for that part of the loss caused by storm water damage which preceded the flood damage caused by the flooding of the Katherine River, and the claim of the first respondent succeeded before the learned trial judge against the second respondent for negligence in failing to arrange flood cover for the first respondent. If the appellant's appeal to this Court had succeeded, the first respondent would have sought to recover the loss ordered to be met by the appellant from the second respondent. The application for leave to cross-appeal was filed in order to meet that eventuality.
[4] The submission of the appellant is that the appellant partially succeeded on appeal as a majority of the court found that the appellant had demonstrated that appealable error had occurred. However, the Court dismissed the appeal and refused the relief sought by the appellant. Even if it be the case that the appellant had established a ground of appeal that does not necessarily disentitle the successful respondents to an order for costs, particularly where it should have been plain that the court was unlikely to interfere. In any event, this was not a case where the appellant established appealable error by the learned trial judge. It is not suggested that the respondents conducted themselves at trial or on the running of the appeal in a manner which would warrant a departure from the general rule that costs should follow the event. There is no reason in our opinion to depart from the general rule.
[5] We also reject the alternative submission that only one set of costs should be allowed as against the respondents. We accept that, as a general rule, only one set of costs will be allowed where there is no actual or possible conflict of interest between the respondents to an appeal: see Richard Brady Franks Ltd v Price (1937) 58 CLR 112 at 136 per Latham CJ; Statham v Shepherd and Another (No 2) (1974) 23 FLR 244; South Sydney District Rugby League Football Club Ltd v News Ltd [2001] FCA 384. However, we reject the submission of the appellant that there was no actual or possible conflict of interest between the respondents and that both respondents could have been represented by the same solicitors and counsel. Clearly if the appeal had succeeded, although a retrial might have been ordered depending on which grounds of the appeal were successfully pursued, the first respondent might have needed to pursue the second respondents to recover that portion of its loss from it. It is difficult to see how the same solicitors and counsel could properly represent the respondents in those circumstances. If both respondents had been represented by the same solicitors and counsel at this appeal, even if all that happened was an order for a retrial, because the respondents would remain diametrically opposed at the retrial, it would then become likely that both solicitors and counsel for the respondents would have had to have retired from the litigation. This falls within a proviso to the general rule, referred to by Woodward J in Statham v Shepherd and Another (No 2), supra at 246-247, that the relationship between the parties concerned might be such that they would be acting reasonably in remaining at arm's length during the hearing of the appeal.
[6] The first respondent also seeks in effect, a Sanderson order against the appellant for the costs of the application for leave to cross-appeal. There is no doubt that this Court has the power to make such an order arising from its general discretion as to costs conferred by the Supreme Court Act: see s 55(1)(a). This Court has an unfettered discretion to make such an order. Sanderson orders are usually made where it was reasonable for a party to join another party to the proceedings in circumstances where, for example, the successful party was unsure of which of two defendants would be found liable: see for example Besterman v British Motor Cab Company Ltd [1914] 3 KB 181; Gould v Vaggelas (1983-85) 157 CLR 215 at 247; 260. We see no reason why a Sanderson order cannot be made by this court in a proper case. In our opinion, the first respondent acted reasonably and properly in seeking leave to cross-appeal against the second respondent. The application was necessary because of the appellant's appeal. The first respondent did not seek to pursue the application at the hearing of the appeal as it was not then necessary to do so, and the application was adjourned sine die. The first respondent no longer seeks to pursue the matter and the second respondent asks that the application be dismissed with costs.
[7] We think that the first respondent acted properly and reasonably, and that it had no choice in the circumstances but to seek to protect its position by applying for leave to cross-appeal, and that the appellant should pay both of the respondents' costs of the application notwithstanding that the application must now be dismissed.
[8] We make the following orders:
1. That the application of the first respondent for leave to cross appeal be dismissed.
2. That the appellant pay the respondents' costs of the appeal and the respondents' costs of the first respondent's application for leave to cross appeal, to be taxed.
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