Makari v TAL Life Ltd (No 3)

On 16 September 2019, the defendant, TAL Life Ltd (TAL), filed a notice of motion by which it sought leave to amend its defence.

The Court has dealt with TAL’s application in two judgments: Makari v TAL Life Ltd [2020] NSWSC 455 and Makari v TAL Life Ltd (No 2) [2020] NSWSC 775.

On 7 July 2020, the Court made the following orders on TAL’s notice of motion granting leave to amend TAL’s defence:

The practical effect of these orders was that, of the two substantial contested amendments that TAL sought leave to make, TAL abandoned one of those amendments following the delivery of the first of the Court’s judgments. TAL was given leave to make the second of the amendments, but only on the terms stated in orders 2 and 3. The effect of those terms was that, while TAL was permitted to plead a defence based upon the legal effect of s 47 of the Insurance Contracts Act 1984 (Cth), TAL was required to concede that Mr Makari’s underlying medical condition did not change over the relevant period, and it was precluded from relying upon further medical expert evidence unless Mr Makari chose to serve additional evidence of that nature.

Thus, TAL’s notice of motion seeking leave to amend its defence failed in part, and as to the part in respect of which it succeeded, leave was given to make the amendment on a basis that significantly constrained the forensic consequences of the amendment for the purpose of the completion of the proceedings. To that extent, even though TAL was given leave to amend its defence, Mr Makari succeeded in substantially limiting the forensic consequences of the amendment. It was entirely reasonable for Mr Makari to take that course, and to that extent he succeeded.

The Court has now received submissions from the parties as to the costs order that should be made in respect of TAL’s notice of motion.

In Mr Makari’s 25 May 2020 submissions at par 20, he submitted, in effect, that if the amendment to its defence then sought to be made by TAL was allowed:

By its submissions received on 22 July 2020, TAL submitted that, as both parties have achieved a measure of success on the notice of motion, the Court should make no order as to costs, with the intent that each party bear his or its own costs.

In the alternative, TAL submitted that, if the Court was minded to make a costs order in the terms proposed by Mr Makari, there should be some adjustment on the basis that Mr Makari briefed both senior and senior junior counsel, which TAL submitted was not necessary, so that the costs order should be proportionate to the significance of the issues raised by the notice of motion.

In my view, the appropriate costs order to be made is that TAL pay (a) Mr Makari’s costs of the notice of motion and (b) his costs of and occasioned by the amendment to TAL’s defence.

As to part (a) of this order, although TAL’s notice of motion succeeded in part, it did so only on a limited basis, and it was reasonable for Mr Makari to seek that limitation. TAL has been given an indulgence by the Court in permitting it to amend its defence at this stage of the proceedings. Part (b) of the proposed costs order is the conventional order that the Court makes when permitting a party to amend its pleadings.

It would not be appropriate for the Court to order that TAL pay the costs of the determination of the issues raised by the permitted amendment in any event.

On the issue of whether Mr Makari should be allowed the costs of senior counsel, I consider that it was warranted for Mr Makari to brief on the notice of motion both of the counsel that that he has retained in these proceedings. The proposed amendments raised significant questions that could have had serious consequences for the conduct of Mr Makari’s case. Counsel for Mr Makari dealt with the amendment application in an efficient and apparently economical way. Ultimately, this is a question that should be determined in any assessment of costs that takes place.

The final orders that the Court makes on TAL’s notice of motion are: