Corestaff NT Pty Ltd v Insurance Australia Ltd (No 2) [2021] QSC 226

SUPREME COURT OF QUEENSLAND CITATION: Corestaff NT Pty Ltd v Insurance Australia Ltd (No 2) [2021] QSC 226 PARTIES: CORESTAFF NT PTY LTD ACN 129 495 263 (applicant) v INSURANCE AUSTRALIA LTD ABN 11 000 016 722 (respondent) FILE NO/S: 1369 of 2021 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON: 3 September 2021 DELIVERED AT: Brisbane HEARING DATE: 21 May 2021 JUDGE: Williams J ORDER: THE COURT DECLARES THAT: Pursuant to a contract of insurance between the applicant and the respondent, designated policy number 03MIS1551242 and in respect of the period of insurance from 30 June 2018 to 30 June 2019, by reason of the exception to indemnity cover in clause 7.9(a) thereof, the applicant has no entitlement to indemnity cover by the respondent under clause 3.1 thereof in respect of any liability alleged against the applicant in proceedings NSD 2024/2018 and NSD 2162/2018 in the Federal Court of Australia by cause of action for damages or compensation pursuant to s 236 of the Australian Consumer Law for contravention of ss 18 or 31 of such Law. THE ORDER OF THE COURT IS THAT: 1. The applicant pay the respondent’s costs of the amended Originating Application to be assessed on the standard basis. 2. The parties have liberty to apply in respect of the declaration above. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: -- 1 of 14 -- 2 COUNSEL: SOLICITORS: COSTS FOLLOW EVENT – EVENT: WHAT CONSTITUTES – where the hearing in May 2021 addressed the proper construction of clauses 7.9(a) and 7.9(c) of the insurance policy (Policy) – where the exemption to indemnity cover in clause 7.9(a) operated so that there was no entitlement to indemnity cover by the respondent in respect of the liability alleged against the applicant in two Federal Court proceedings – where clause 7.9(c) did not apply in respect of the Federal Court proceedings – where the respondent contends that it was successful in defending the applicant’s claim for indemnity on the basis that clause 7.9(a) was invoked and accordingly, the appropriate costs order is that the applicant pay the respondent’s costs on the standard basis – where the respondent alternatively submits that if some recognition is to be given to the conclusion in respect of clause 7.9(c) of the Policy then an appropriate order would be that the applicant pay 90 per cent of the respondent’s costs of the application on the standard basis – where the applicant submits that it would be appropriate to reflect the position in respect of clauses 7.9(a) and 7.9(c) of the Policy in separate cost orders – where consideration is given to what is the event – whether costs should follow the event Uniform Civil Procedure Rules 1999 (Qld), r 681, r 684 Alborn & Ors v Stephens & Ors [2010] QCA 58, considered BHP Coal Pty Ltd and Ors v O & K Orenstein & Koppel AG and Ors (No 2) [2009] QSC 64, considered Caloundra City Council v Minister for Natural Resources & Ors [1999] QSC 189, considered Courtney v Chalfen [2021] QCA 25, considered Sequel Drill & Blast Pty Ltd v Whitsunday Crushers Pty Ltd (No 2) [2009] QCA 239, considered Speets Investment Pty Ltd v Bencol Pty Ltd (No 2) [2021] QCA 39, considered R G Bain QC with P Hastie for the applicant R J Douglas QC for the respondent HWL Ebsworth for the applicant Thynne & Macartney Solicitors for the respondent [1] On 10 August 2021, I published reasons (primary reasons) and directed the parties to confer and provide to Chambers draft orders and brief written submissions as to the appropriate relief in light of the primary reasons and costs within 14 days. Both parties have provided draft orders and submissions. [2] Further, the applicant filed and served an affidavit of Ms Chalmers sworn on 24 August 2021 in respect of the issue of costs. -- 2 of 14 -- 3 [3] The hearing on 21 May 2021 addressed the proper construction of clauses 7.9(a) and 7.9(c) of the relevant insurance policy (Policy). In the primary reasons, I concluded that the exemption to indemnity cover in clause 7.9(a) operated so that there was no entitlement to indemnity cover by the respondent in respect of the liability alleged against the applicant in two Federal Court proceedings, being NSD 2024 of 2018 and NSD 2162 of 2018. [4] In respect of clause 7.9(c) of the Policy, in the primary reasons I concluded that clause 7.9(c) did not apply in respect of the Federal Court proceedings. [5] The further submissions from the parties address two issues: firstly, the appropriate form of relief and secondly, costs. Form of relief [6] In light of the primary reasons, the parties have agreed to the form of declaration, except in one minor respect. [7] The respondent proposes a declaration as follows: “THE COURT DECLARES THAT: Pursuant to a contract of insurance between the applicant and the respondent, designated policy number 03MIS1551242 and in respect of the period of insurance from 30 June 2018 to 30 June 2019, by reason of the exception to indemnity cover in clause 7.9(a) thereof, the applicant has no entitlement to indemnity cover by the respondent under clause 3.1 thereof in respect of any liability alleged against the applicant in proceedings NSD2024/2018 and NSD2162/2018 in the Federal Court of Australia by cause of action for damages or compensation pursuant to s 236 of the Australian Consumer Law for contravention of ss 18 or 31 of such Law.” [8] The applicant agrees to the proposed declaration but includes “(Policy)” after the identification of the period of insurance: in effect defining the insurance policy. [9] The respondent submits that the inclusion of the defined term is not necessary. [10] The defined term is relevant to the applicant’s proposed cost orders, as that term is repeated in the following proposed cost orders. However, the defined term is not relevant to the understanding of the declaration as a standalone paragraph of the order. [11] In the circumstances, the inclusion of the word “Policy” as a defined term is not necessary to be included in the declaration. [12] The orders proposed by the respondent also include an order that “[t]he parties have liberty to apply in respect of the declaration above”. [13] The respondent submits that this is appropriate in the circumstances as the Federal Court proceedings are on-going and the liability in those proceedings has not yet finally crystallised. -- 3 of 14 -- 4 [14] In these circumstances, I consider there is some utility in including an order that the parties have liberty to apply in respect of the declaration. This would enable an application to be made to this Court in the most efficient and expeditious manner if required at a future date. Costs [15] The respondent’s primary position is that it was successful in defending the applicant’s claim for indemnity on the basis that clause 7.9(a) was invoked and accordingly, the appropriate costs order is that the applicant pay the respondent’s costs on the standard basis. [16] Alternatively, if some recognition is to be given to the conclusion in respect of clause 7.9(c) of the Policy, then an appropriate order would be that the applicant pay 90 per cent of the respondent’s costs of the application on the standard basis. [17] Conversely, the applicant submits that it would be appropriate to reflect the position in respect of clauses 7.9(a) and 7.9(c) of the Policy in separate cost orders. Given the conclusions reached in respect of each clause, the applicant submits that the appropriate cost orders are: (a) The respondent pay the applicant’s costs associated with the applicant’s argument regarding clause 7.9(c) of the Policy, to be assessed on the standard basis. (b) The applicant pay the respondent’s costs associated with the respondent’s argument regarding clause 7.9(a) of the Policy, to be assessed on the standard basis. [18] It is necessary to consider the factual background, the relevant Uniform Civil Procedure Rules 1999 (Qld) (UCPR) and authorities. Background [19] The affidavit of Ms Chalmers sworn on 24 August 2021 attaches correspondence from the respondent to the applicant’s broker. Reference is also made to an earlier affidavit of Ms Chalmers filed on 5 February 2021 in support of the Originating Application. [20] The relevant factual background includes: (a) On 25 June 2019, the applicant’s broker notified the respondent of two Federal Court proceedings commenced against the applicant and made a claim with respect to those proceedings under the Policy. (b) On 23 December 2019, the respondent wrote to the applicant’s broker denying indemnity under the Policy pursuant to clauses 7.5 and 7.9 of the Policy. (This letter is exhibited to the affidavit of Ms Chalmers, which is Court document two on the Court file at page 44.) (c) The letter dated 23 December 2019 sets out clause 7.9 in full and states: “6. We have conducted a coverage analysis in relation to this claim, and unfortunately, it is our view that cover is excluded by operation of … Section 7.9 … -- 4 of 14 -- 5 … 9. The Proceedings, including the ACL allegations, arise from employment matters. Consequently, the Proceedings brought against Corestaff are not covered by the policy as a result of the above exclusions. 10. Furthermore, CGU again notes that Corestaff does not hold Employment Practices Liability insurance with CGU. Corestaff may wish to notify its EPL/ML and/or D&O insurer if it has not previously done so.” (d) Further exchanges occurred between 16 January 2020 and 17 November 2020. This correspondence is exhibited to the most recent affidavit of Ms Chalmers. (e) On 5 February 2021, the applicant filed an Originating Application and the affidavit of Ms Chalmers applying to the Court for orders with specific declarations in respect of clause 7.9(c) of the Policy. (f) On 6 April 2021, the applicant filed its Outline of Argument addressing clause 7.9(c). (g) On 7 April 2021, the respondent filed and served its Outline of Argument addressing clause 7.9(c) and also referring to clause 7.9(a). (h) The matter was originally listed for hearing on 8 April 2021 but the hearing was adjourned and an order made that the respondent notify the applicant of any further grounds of exclusion it sought to rely upon. (i) By letter dated 12 April 2021, the respondent confirmed that “the grounds of policy response exclusion it relies upon are those in clause 7.9(a) and 7.9(c) respectively”. (j) An amended Originating Application was filed on 19 April 2021 and further Outlines of Argument were also filed by both parties addressing clause 7.9(a). (k) The hearing proceeded on 21 May 2021 to consider both clauses 7.9(a) and 7.9(c). [21] The applicant points to the correspondence between 16 January 2020 and 17 November 2020 as refining the respondent’s position thereby narrowing the basis that indemnity was said to be excluded as follows: (a) 16 January 2020 – clauses 7.3, 7.4 and 7.11; (b) 4 September 2020 – clause 7.9(c); (c) 25 September 2020 – clause 7.9(c); and (d) 17 November 2020 – clause 7.9(c). [22] The applicant contends that clause 7.9(a) of the Policy had not been identified as an additional reason for the respondent to decline the applicant’s claim for cover under the Policy. [23] The respondent strenuously denies this position. The respondent points to and relies on the letter dated 23 December 2019 which refers to clause 7.9 of the Policy. -- 5 of 14 -- 6 [24] The respondent also points to the affidavit of Ms Chalmers filed on 5 February 2021 which in the body of the affidavit refers to the letter as constituting the respondent’s denial of indemnity as follows: “8. By correspondence of 23 December 2019 to the Broker, the Respondent: (a) denied indemnity under the Policy for the Claim; and (b) in that regard purportedly relied on clause 7.9 of the Policy. 9. Exhibited and marked ‘VJC-5’ is a copy of the email and annexure dated 23 December 2019. 10. The Respondent has maintained, and maintains, its denial of indemnity under the Policy for the Claim.” UCPR [25] The relevant rules in the UCPR are as follows: “681 General rule about costs (1) Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise. (2) Subrule (1) applies unless these rules provide otherwise. … 684 Costs of question or part of proceeding (1) The court may make an order for costs in relation to a particular question in, or a particular part of, a proceeding. (2) For subrule (1), the court may declare what percentage of the costs of the proceeding is attributable to the question or part of the proceeding to which the order relates.” [26] Clearly, the Court has a discretion to make an order for costs in relation to a particular question or part of a proceeding. The issue to be considered here is whether it is appropriate to make such an order. Contentions [27] The respondent contends that the application concerned a single issue: indemnity under the Policy. The argument in respect of indemnity ultimately focused on whether indemnity was excluded under clause 7.9(a) or clause 7.9(c)? The respondent contends that the exclusions are closely related and turn upon consideration of the same evidence. [28] The respondent submits that the letter dated 23 December 2019 clearly identified that the respondent’s position was that cover was excluded by operation of clause 7.9 of -- 6 of 14 -- 7 the Policy. Consequently, the respondent contends that there is a single issue and it is not a case where there are definable and severable parts. [29] The respondent maintains its primary position but does submit that if the Court was to consider that the costs order should reflect some measure of success by the applicant in respect of clause 7.9(c), then it would be appropriate to award a percentage of the costs under r 684(2), rather than have two separate costs orders. [30] In reaching a percentage, the respondent submits that it should be a substantial percentage to recognise that the proceeding would have been brought against the respondent in any event and would have proceeded based on the same affidavit material with no cross-examination. It is in these circumstances that the respondent puts forward its alternative proposed order that the applicant be ordered to pay 90 per cent of the respondent’s costs of the application on the standard basis. [31] The applicant’s position proceeds on the basis that prior to the receipt of the respondent’s Outline of Argument on 7 April 2021, the respondent had declined cover on the basis of the exclusion in clause 7.9(c) of the Policy and that was the basis upon which the applicant commenced the proceedings. It was only upon receipt of the respondent’s Outline of Argument on 7 April 2021 that the relevance of clause 7.9(a) of the Policy was raised. [32] The applicant contends that clause 7.9(a) of the Policy had not been identified (at any time during the pre-litigation exchange of correspondence between the parties, or at any earlier time in the course of these proceedings). It is submitted that in these circumstances, it is appropriate to award the applicant its costs in respect of the argument regarding clause 7.9(c). Case law [33] The respondent refers to the Court of Appeal decision in Courtney v Chalfen1 where the Court of Appeal stated: “[2] The respondent proposes merely that the costs of the appeal should follow the event, and on the standard basis. Prima facie, that would normally be the outcome given that the appeal failed. However, the appellant contends that each of what he contends were separately determined issues dealt with in the principal judgment should be treated as an ‘event’ for the purposes of determining where the costs should lie. [3] In my view, that approach is misconceived. [4] The general rule is that costs follow the event and that should only be departed upon in the event of special or exceptional circumstances. The underlying rationale of that approach is that costs are not awarded to punish an unsuccessful party, but as a means of indemnifying the successful party. [5] This Court has endorsed the principles that: (i) ordinarily costs follow the event; (ii) costs can be awarded under r 684 UCPR on discrete issues if they are definable and severable and they 1 [2021] QCA 25. -- 7 of 14 -- 8 occupied a substantial proportion of the trial or hearing; (ii) there must be special or exceptional circumstances to warrant depriving a successful party of its costs; and (iv) the mere fact that the successful party has been unsuccessful on some issues will ordinarily not be sufficient to do so. [6] As was pointed out in the reasons given on the main judgment, the appeal raised three central issues, all concerned with one ground of appeal, namely was there error on the part of the learned primary judge in ordering a stay of the proceedings. The third of the issues was whether the learned primary judge erred in applying the ‘clearly inappropriate forum’ test in determining that the Queensland proceedings should be stayed. In that respect, if that issue was determined against the appellant, and the stay therefore sustained, other issues were rendered otiose. [7] Within the appeal there were a number of contentions as to why the learned primary judge had erred when ordering the stay. However, none of them were severable issues which occupied some particular identifiable portion of the hearing. [8] It is true to say that one argument pressed by the appellant had some success. That is, whether there had been an error by taking into account whether it was unlikely that leave would have been granted, had it been applied for, under r 126 UCPR. However, on this point, as with others that have been urged as separate issues which should be treated as an event in the appellant’s submissions on costs, they are but aspects of arguments all on the central issue of whether the stay was rightly granted. They are not, in my view, severable issues definable as events for the purposes of assessing costs. [9] There is no basis, therefore, to reach the conclusion that special circumstances have been shown which should deprive the successful respondent of its costs. [10] The appellant must pay those costs on the standard basis.” (Footnotes omitted) [34] The respondent also refers to the Court of Appeal decision in Speets Investment Pty Ltd v Bencol Pty Ltd (No 2).2 In that case, the Court of Appeal stated: “[14] It is important to recognise, however, that it does not follow from the foregoing that the application of the general rule should usually lead to costs orders which reflect different results on separate events or issues. The Court is given a broad discretion and is specifically empowered to determine that some other order is more appropriate. 2 [2021] QCA 39, which was followed recently in Wagners Cement Pty Ltd & Anor v Boral Resources (Qld) Pty Limited & Anor [2021] QCA 79 at [14]. -- 8 of 14 -- 9 [15] In practice, courts often take the approach of identifying heads of controversy or ‘units of litigation’ (rather than what might technically be regarded as issues on the pleadings) regarding success or failure on the head of controversy or unit of litigation as the criterion for awarding costs: see Thiess v TCN Channel 9 Pty Limited (No 5) at 207-8 and Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 168 at [1]. [16] The general approach is that there must be special or exceptional circumstances to warrant depriving a successful party of its costs and the mere fact that the successful party has been unsuccessful on some issues will ordinarily not be sufficient to do so: Courtney v Chalfen [2021] QCA 25 at [5]. On an appeal, for example, where a party has succeeded on one of two ways to the same outcome, the Court of Appeal might well regard the costs of the second way on which that party failed as not so distinct conceptually or practically as to warrant making a costs order which reflected that party’s failure: Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd at [1]. On the other hand, one circumstance in which it might be appropriate to award costs of a particular question or part of a proceeding is where that matter is definable and severable and has occupied a significant part of the proceeding: see Courtney v Chalfen, in which the Court of Appeal referred with approval to the decision of McMurdo J (as his Honour then was) in BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (No 2) [2009] QSC 64 at [8].” (Footnotes incorporated) [35] In BHP Coal Pty Ltd and Ors v O & K Orenstein & Koppel AG and Ors (No 2) [2009] QSC 64, McMurdo J ordered the defendants pay 90 per cent of the first, second, third, fifth, sixth and seventh plaintiff’s costs of the proceeding, including reserved costs. On the facts of that case, the defendants who were found liable to the plaintiffs were substantially successful on the issue of quantum of damages, with the issue occupying 11 days of a 92 day trial. [36] The reasons of McMurdo J relevantly state as follows: “[6] … The starting point is the general rule, now expressed in UCPR r 681(1), that costs should follow the event. But by r 684, an order may be made for the costs of a particular question in, or a particular part of, a proceeding and by r 684(2), a court may declare what percentage of the costs of the proceeding is attributable to that question or part. In the defendants’ submission, r 684 provides a wider discretion to depart from the general rule than was the case under previous rules or equivalents in other jurisdictions. This is in answer to the plaintiffs’ argument that a departure from the general rule should be made only where there are ‘special or exceptional circumstances’ … -- 9 of 14 -- 10 [7] As Chesterman J said in Todrell Pty Ltd v Finch & Ors, r 684 does provide a wider discretion than the previous rule in Queensland, in that it refers to ‘a particular question … or a particular part of, a proceeding’, whereas the previous rule referred to several ‘issues’, a term which had tended in some cases to confine the discretion as Thomas J discussed in Colburt v Beard. However, r 684 has not so broadened the discretion as the defendants argue. The general rule remains that costs should follow the event and r 684 provides an exception. Necessarily the circumstances which would engage r 684 are exceptional circumstances, and the enquiry must be: what is it about the present case which warrants a departure from the general rule? That this remains the approach under r 681 and r 684 comes not only from the terms of the rules themselves but also from the recognised purposes for it. In Oshlack v Richmond River Council, McHugh J explained the basis for the usual order as to costs as follows: ‘The expression the ‘usual order as to costs’ embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party, the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for costs of the unsuccessful litigation. As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice.’ [8] Thus in Todrell Pty Ltd v Finch & Ors, Chesterman J approved this passage from the judgment of Einstein J in Mobile Innovations Ltd v Vodafone Pacific Ltd: ‘Notwithstanding that the court has power to deprive a successful party of costs, or even order a successful party to pay costs, that is a course to be taken in unusual cases and with a degree of hesitancy.’ -- 10 of 14 -- 11 I adhere to the view I expressed in Australand Corporation (Qld) Pty Ltd v Johnson & Ors that ordinarily the fact that a successful plaintiff fails on particular issues does not mean that the plaintiff should be deprived of some of its costs, although it may be appropriate to award costs of a particular question or part of a proceeding where that matter is definable and severable and has occupied a significant part of the trial.” (footnotes omitted) [37] Conversely, the applicant refers to authorities which support its position. This includes Caloundra City Council v Minister for Natural Resources & Ors3 where Wilson J concluded that “where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed”. [38] Further, the applicant relies on the Court of Appeal decision in Sequel Drill & Blast Pty Ltd v Whitsunday Crushers Pty Ltd (No 2) [2009] QCA 239 where the Court, constituted by de Jersey CJ, Fraser and Chesterman JJA, recognised: “The application of the general principle may lead to costs orders which reflect different results on separate events or issues, unless the Court considers that some other order is more appropriate.” [39] Reliance is also placed on the decision of the Court of Appeal in Alborn & Ors v Stephens & Ors4 where the Court of Appeal, constituted by Holmes JA (as the Chief Justice then was), Muir JA and Daubney J, considered the meaning of the term “event” in the context of costs and stated: “The ‘event’ is not to be determined merely by reference to the judgment or order obtained by the plaintiff or appellant, but is to be determined by reference to ‘the events or issues, if more than one, arising in the proceedings’. However, a party which has not been entirely successful is not inevitably or even, perhaps, normally deprived of some of its costs.” (Footnotes omitted) [40] The decision in McDermott & Ors v Robinson Helicopter Company (No 2)5 is also relied upon by the applicant. In that case, Peter Lyons J examined the authorities regarding the principles for the awarding of costs to a successful party. His Honour made a costs order that reflected success on one particular issue which had been raised at a late stage in the proceedings and had a significant impact in terms of efficiency and expense. [41] Further, in Cook’s Constructions Pty Ltd v Stork Food Systems Aust Pty Ltd,6 Martin J considered the conduct of a party during the proceeding, including the late amendment of the party’s case. His Honour concluded that in at least some respects the party’s conduct exhibited the degree of irresponsibility referred to in Todrell Pty Ltd v Finch (No 2). 3 [1999] QSC 189, quoting Hughes v Western Australia Crick Association Inc (1986) ATPR 40-748. 4 [2010] QCA 58. 5 [2014] QSC 213. 6 [2008] QSC 220. -- 11 of 14 -- 12 Consideration [42] The difference between the parties centres around the way the denial of indemnity was initially expressed and the subsequent dialogue between the parties exploring aspects of the denial of the claim for indemnity. [43] The respondent’s position is that at all relevant times, it maintained that the claims in respect of the Federal Court proceedings fell within clause 7.9 and thereby the respondent denied indemnity under the Policy. This was clearly set out in a letter dated 23 December 2019. [44] The references in paragraphs nine and ten of the letter identify that the Federal Court proceedings arise from “employment matters” and the applicant did not hold “Employment Practices Liability insurance”. These are matters relevant to the operation of clause 7.9(a) and the letter also sets out clause 7.9 in full, including clause 7.9(a). [45] It does appear that in ongoing discussions between the applicant’s broker and the respondent, submissions were made, including the provision of Counsel’s advice, to try to persuade the respondent as to why the claims came within the coverage of the Policy and were not caught by the exemptions. [46] A review of the correspondence indicates that the ongoing dialogue focussed on various arguments that had been raised in correspondence and responses to that. It was often done in a shorthand way, with clauses from the Policy “cut and paste” into the emails. [47] The email of 16 January 2020 refers to clauses 7.3, 7.4 and 7.11 and addresses some of the arguments raised. However, the email does state “[a]s a result of the above, my indemnity position has not changed.” [48] The email of 4 September 2020 responds to some specific arguments raised and then repeats a request for further information about the manner in which each of the claimant’s were recruited to the insured’s employment. This information was identified as necessary to “allow [the respondent] to complete [its] assessment of policy indemnity”. [49] The email dated 25 September 2020 again calls for further factual background, including the facts provided to Counsel as the basis for the advice that had been shared with the respondent. While the email does engage with the arguments concerning clause 7.9(c), the email concludes “we would be grateful for the information we have reasonably requested about the circumstances of the claim, so that we may finalise our determination about liability under the Policy”. [50] What is apparent, at no time, was there any clarification of a change in the respondent’s position such that it was not relying on clause 7.9(a). While the focus in the correspondence turned to clause 7.9(c), the respondent’s reliance on clause 7.9(a) appears to have “fallen off the radar”. [51] The decision of the applicants to commence proceedings seeking declaratory relief in respect of clause 7.9(c) only and for the original submissions to also only focus on that clause is unfortunate. -- 12 of 14 -- 13 [52] Further, it is unfortunate that the reliance on clause 7.9(a) was not identified at a time earlier than the completion of the written submissions, so that the proceeding could have progressed in the most efficient and expeditious manner. [53] As a result, the original hearing needed to be adjourned with an amended Originating Application being filed and further submissions from both parties addressing clause 7.9(a). [54] At the final hearing of the Originating Application, a considerable amount of time was spent on the nature of the Federal Court proceedings and also the terms of the Policy. This included a consideration of all relevant sections of the Policy by way of context. This was relevant to the proper construction of both clauses 7.9(a) and 7.9(c). [55] Consideration needs to be given to what is the “event”. Here, the applicant really sought a declaration that the Policy responded to the Federal Court claims and that indemnity was not excluded by clause 7.9. Conversely, the respondent’s position was that indemnity was excluded by operation of one or more of the paragraphs in clause 7.9 of the Policy. To succeed, the respondent just needed to establish that one of the paragraphs of clause 7.9 applied. Given my findings in the primary reasons, that outcome was successful. [56] While it would have been preferable for the respondent’s position to be clarified at an earlier point in time to correct the applicant’s misapprehension that clause 7.9(c) was the only basis relied upon by the respondent, I do not consider that the facts establish the “degree of irresponsibility” referred to in the cases to warrant a departure from the usual approach to costs. [57] The respondent has ultimately been successful: on the basis of the primary reasons, the applicant is not entitled to indemnity cover by the respondent as a result of the operation of an exception to indemnity in clause 7.9 of the Policy. While this is ultimately as a result of the operation of clause 7.9(a), this outcome is consistent with the position maintained by the respondent in its letter dated 23 December 2019 and onwards. [58] Further, there are not two clearly defined and severable parts. The evidence was the same in respect of both clauses. The construction of each clause was clearly related and involved the interpretation of the exemptions to an indemnity under the Policy. [59] In these circumstances, costs should follow the event and the appropriate costs order is that the applicant pay the respondent’s costs of the amended Originating Application to be assessed on the standard basis. [60] Accordingly: THE COURT DECLARES THAT: Pursuant to a contract of insurance between the applicant and the respondent, designated policy number 03MIS1551242 and in respect of the period of insurance from 30 June 2018 to 30 June 2019, by reason of the exception to indemnity cover in clause 7.9(a) thereof, the applicant has no entitlement to indemnity cover by the respondent under clause 3.1 thereof in respect of any liability alleged against the applicant in proceedings NSD 2024/2018 and NSD -- 13 of 14 -- 14 2162/2018 in the Federal Court of Australia by cause of action for damages or compensation pursuant to s 236 of the Australian Consumer Law for contravention of ss 18 or 31 of such Law. THE ORDER OF THE COURT IS THAT: 1. The applicant pay the respondent’s costs of the amended Originating Application to be assessed on the standard basis. 2. The parties have liberty to apply in respect of the declaration above. -- 14 of 14 --