Bourk v Power Serve Pty Ltd & Ors [2008] QSC 42

SUPREME COURT OF QUEENSLAND CITATION: Bourk v Power Serve Pty Ltd & Ors [2008] QSC 42 PARTIES: STEPHEN JOHN BOURK (plaintiff) v POWER SERVE PTY LTD ACN 060 977 513 (defendant) and WORKCOVER QUEENSLAND (first third party) and GIO WORKERS’ COMPENSATION (NSW) LTD (second third party) FILE NO: SC 4647 of 2002 DIVISION: Trial Division PROCEEDING: Civil trial ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON: 5 March 2008 HEARING DATE: 5 February 2008 - 7 February 2008 JUDGE: Chesterman J ORDER: Order that 1. The plaintiff pay the defendant’s costs of the action, excluding costs incurred in the third party proceedings, to be assessed on the standard basis. 2. The first third party pay the defendant’s costs of and incidental to its proceeding against the first third party, to be assessed on the indemnity basis. 3. The defendant pay the second third party’s costs of its proceeding against that party, to be assessed on the standard basis. 4. The first third party pay the second third party’s costs of and incidental to the counter-claim, to be assessed on the indemnity basis. CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – COSTS – where the defendant seeks indemnity costs against -- 1 of 3 -- 2 the first third party – where the defendant failed in its claim for indemnity against the second third party – where the second third party is entitled to costs against the defendant– whether the first third party should pay indemnity costs to the defendant – whether the first third party can counter claim the second third party was liable to indemnify the defendant against the plaintiff’s claim. COUNSEL: Mr W Campbell, with him Mr F Dawson for the plaintiff Mr J Kimmins for the defendant Mr K Holyoak for the first/third party Mr R Myers for the second/third party SOLICITORS: Bennett & Philp Solicitors for the plaintiff McCullough Robertson Lawyers for the defendant HBM Lawyers for the first/third party Rankin Nathan Lawyers for the second/third party [1] On 26 February last I gave judgment in the action, dismissing the plaintiff’s claim for damages and declaring that it was the first third party which should indemnify the defendant under its policy with respect to the costs incurred by the defendant in defeating the plaintiff’s claim (which it does not recover from the plaintiff) and in prosecuting its unnecessary action for indemnity against the second third party. [2] I found that the first third party was liable under its policy and the extent to which the defendant was out of pocket by reason of the first third party’s refusal to indemnify the defendant against the plaintiff’s claim, and to conduct the defence of the proceedings at its expense, was money recoverable under the WorkCover policy or as damages for breach of it. [3] When pronouncing judgment I made no orders as to costs but indicated the parties could make written submissions, which I have received. The plaintiff must, of course, pay the defendant’s costs of and incidental to his action to be assessed on the standard basis. There was no suggestion to the contrary. The costs the plaintiff must pay are to be limited to the defence of his claim by the defendant. They are not to include any costs incurred by the other litigants in the third party proceedings. [4] The defendant seeks an order for indemnity costs against the first third party. I think it is entitled to the order. It succeeded in its claim against the first third party and is entitled to its costs. They should be assessed on the indemnity basis because it was the first third party’s denial of its liability to indemnify the defendant under the policy which made it necessary for the defendant to commence those proceedings. The nature of the promise contained in the policy was that the first third party would shield the defendant from all expenses arising out of the plaintiff’s claim against it. Not to award indemnity costs would be to deny the defendant the benefit of the policy. [5] Accordingly I order the first third party to pay the defendant’s costs of and incidental to the third party proceedings against the first third party to be assessed on the indemnity basis. [6] That leaves the second third party’s claim for costs. The defendant failed in its claim for indemnity against the second third party which is therefore entitled to an -- 2 of 3 -- 3 order for costs, on the standard basis, against the defendant. The defendant will be reimbursed those costs pursuant to the WorkCover policy and the declaration I made on 26 February 2008. [7] By counter-claim filed on 19 October 2005 the first third party sought against the second third party declarations that, as between them, it was the second third party which was liable to indemnify the defendant against the plaintiff’s claim. [8] That counter-claim must be dismissed. There should be judgment on it for the second third party against the first third party. The second third party is entitled to its costs of resisting that claim. They should be paid on the indemnity basis because the proceeding was wholly unnecessary. The issue which the first third party sought to have resolved by its counter-claim would have been resolved of necessity by the result of the defendant’s claims made in the alternative against the two third parties. [9] Accordingly I give judgment for the second third party against the first third party on the latter’s counter-claim, and order the first third party to pay the second third party’s costs of and incidental to defending the counter-claim, on the indemnity basis. -- 3 of 3 --