Incomlend Pte Ltd v Insurance Australia Ltd (No. 2)

1. [1]

   On 21 November 2024, I delivered judgment in these proceedings on a motion brought by the second and third defendants for the plaintiffs to provide security for costs (the Motion): see Incomlend Pte Ltd v Insurance Australia Ltd [2024] NSWSC 1482 (the Principal Judgment). These reasons assume familiarity with and maintain the same defined terms as in the Principal Judgment.

2. [2]

   In the Principal Judgment, I directed the parties to confer as to the form of orders to give effect to my reasons, including as to costs, and failing agreement, for the parties to provide written submissions such that I may determine any remaining dispute on the papers.

3. [3]

   The parties were substantially able to agree orders to give effect to my reasons (save as to costs), and as such, I made the followings orders on 2 December 2024:

   1. (1)

      Pursuant to rule 42.21(1) of the Uniform Civil Procedure Rules 2005 (NSW) and section 1335 of the Corporations Act 2001 (Cth), the Plaintiffs provide security for the Second and Third Defendants’ costs up to the service of the Second and Third Defendants’ lay evidence in the amount of $1.75 million (Security).

   2. (2)

      The Security be provided to the Second and Third Defendants in the form of an executed Deed of Indemnity in the terms of the Deed annexed to these orders and marked “A” (Deed), or by payment into Court, or by the delivery of an irrevocable bank guarantee in favour of the Second and Third Defendants by 4pm on 4 December 2024.

   3. (3)

      If Security is provided by way of an executed Deed pursuant to order 2, the Plaintiffs pay $45,000 into Court as security for the Second and Third Defendants’ costs to enforce the Deed, with payment to be made by 4pm on 4 December 2024 (or as soon thereafter as the court's administrative processes allow).

   4. (4)

      In the event that the Plaintiffs fail to provide Security in accordance with orders 1 to 3 herein, the proceedings be stayed until further order of the Court.

   5. (5)

      The Second and Third Defendants have liberty to apply to the Court for further security of its costs incurred or to be incurred after the service of their lay evidence.

4. [4]

   The only issue that remains for my determination is the question of costs.

5. [5]

   The two principal disputes which I determined in the Principal Judgment were the form and quantum of security for costs which should be provided. Relevantly, I ultimately determined that:

   1. (1)

      The plaintiffs should provide security for Tokio Marine and BCC’s costs in the amount of $1.75 million for the period up to the completion of Tokio Marine and BCC’s lay evidence; and

   2. (2)

      The security should be provided in the form of the Deed proffered by the plaintiffs at the hearing of the Motion, subject to some amendments.

6. [6]

   These reasons determine the issue of costs in relation to the Motion.

Overview of parties’ positions

1. [7]

   The plaintiffs seek their costs of the Motion, contending that they were successful and, as such, costs should follow the event pursuant to r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).

2. [8]

   In support of this, the plaintiffs contend, in substance, that:

3. [9]

   Tokio Marine and BCC seek the following order in relation to costs:

4. [10]

   In support of this order, Tokio Marine and BCC submitted that:

Relevant legal principles

1. [11]

   The legal principles relevant to the determination of costs were not in dispute. I recently summarised the relevant legal principles at Joudo v Joudo (No 2) [2024] NSWSC 469 at [12]. I do not propose to repeat what I there said.

2. [12]

   The discretion of the Court when dealing with costs is broad: Civil Procedure Act 2005 (NSW) s 98; UCPR r 42.1.

Determination

1. [13]

   The plaintiffs contended that this is not a case where there has been “mixed success”, and as such, questions of apportionment should not arise. I do not accept this contention.

2. [14]

   At [93] of the Principal Judgment, I indicated that my preliminary view is that the costs of the Motion should be costs in the cause. This was because the plaintiffs succeeded as to the form in which the security for costs should be ordered, being in the form of the Deed, but Tokio Marine and BCC had succeeded in obtaining substantially more security than was offered by the plaintiffs. I do not see any reason to depart from this preliminary view.

3. [15]

   There were two substantive issues on the Motion. Each party had substantial success on one of the issues but not complete success. On the issue of the form of the Deed, this was proposed quite late and was being amended during the hearing of the Motion. On the issue of quantum, the evidence put forward by BCC and Tokio Marine was of little assistance, but the plaintiffs never offered any substantial quantum to cover the costs of what was not disputed as the significant investigative work to be carried out.

4. [16]

   In all the circumstances, the appropriate order is that the costs of the Motion be costs in the cause.

Orders

1. [17]

   The orders of the Court are:

   1. (1)

      The costs of the Second and Third Defendants’ motion filed 25 July 2024 be costs in the cause.