Trustees Executors Ltd v QBE Insurance (International) Ltd [2011] NZCA 53; (2011) 20 PRNZ 253 (8 March 2011)

Last Updated: 20 January 2012

IN THE COURT OF APPEAL OF NEW ZEALAND

CA671/2009 [2011] NZCA 53

BETWEEN TRUSTEES EXECUTORS LIMITED Applicant

AND QBE INSURANCE (INTERNATIONAL) LIMITED Respondent

Hearing: 10 June 2010

Court: O’Regan P, Glazebrook and Arnold JJ

Counsel: H McIntosh and S P H Elliott for Applicant M R Ring QC and A Challis for Respondent

Judgment: 8 March 2011 at 4 pm (On the papers)

JUDGMENT OF THE COURT

A The application for recall is declined.

2. The applicant must pay the respondent costs for a standard application on a band A basis and usual disbursements.

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REASONS OF THE COURT
(Given by Glazebrook J)

Introduction

[1] On 14 December 2010 this Court dismissed Trustees Executors’ appeal against a judgment of Ronald Young J in the High Court, which related to an insurance policy issued by QBE to Trustees Executors.[1]
[2] This Court held that the declaratory judgment procedure was not suitable for the interpretation of the insurance policy.[2] It went on, however, to deal in a preliminary manner with the arguments of the parties as the appeal had been fully argued and discussion by the Court could conceivably help in settlement negotiations.[3]
[3] Costs for a complex appeal on a band A basis were awarded to QBE. The Court said:[4]

[73] QBE submits that this should be categorised as a complex appeal on the basis that its complexity and/or significance required the presence of senior counsel. We accept that submission.

[74] While, at first blush, the appeal involved relatively straightforward arguments related to the interpretation of the Policy with limited factual overlay, it also involved more fundamental questions relating to the interpretation of contracts and in particular insurance contracts. Further, the clarity with which the arguments for each side can be stated masks the complexity involved in resolving the interpretation questions involved. The appeal was also one of significance as these type of clauses are common in the industry and have not previously fallen for consideration by this Court.

Application for recall

[4] By application of 20 January 2011 Trustees Executors applies for the judgment to be recalled on the basis that for special reasons justice requires it.[5]
[5] Trustees Executors argues that it was not given a proper opportunity to be heard on costs, given the unanticipated determination of the case. It submits that complex costs were awarded even though Trustees Executors’ appeal was “only dismissed for a matter of form”, being the suitability of the declaratory judgment procedure. Trustees Executors says that QBE had not notified Trustees Executors that it would be contesting the use of the declaratory judgment procedure. Trustees Executors also maintains that it was not unsuccessful in respect of the substantive matter of the appeal. It argues that costs should either lie where they fall or QBE should be awarded costs for a standard appeal on a band A basis.
[6] The application is opposed by QBE. It says that Trustees Executors’ appeal was unsuccessful in that it did not get what it asked for. Further, even if Trustees Executors had made the submissions now contained in its memorandum accompanying its application, the Court would have made the same costs orders. Further, QBE points out that it applied for costs on a complex appeal basis in its submissions on the appeal and so Trustees Executors was clearly on notice and had ample opportunity to submit to the contrary.

Our assessment

[7] This application will be dealt with on the papers in terms of r 51(6) of the Court of Appeal (Civil) Rules 2005.[6]
[8] We do not consider that justice requires that the judgment be recalled.[7] As to the contention that Trustees Executors was not given a proper opportunity to be heard on costs, the parties are required to make any submissions on costs in their written submissions on appeal.[8] If Trustees Executors had any concerns about costs and in particular QBE’s claim in its written submissions on the appeal that this was a case meriting senior counsel and a complex costs award then it should have signalled its disagreement at the hearing or asked that costs be reserved.
[9] We accept that Trustees Executors did not challenge the suitability of the declaratory judgment procedure before the hearing. However, the fact that the Court was concerned about the declaratory judgment procedure was signalled at the hearing. Mr Ring QC, on behalf of QBE, responded that, if the full facts were not available to allow the matter to be determined, then Ronald Young J reached the correct conclusion because he did not make a declaration. Therefore, Mr Ring did not consider it necessary for QBE to seek to uphold the High Court’s judgment on another ground. Whether or not this was the correct approach, Trustees Executors was clearly on notice at the hearing as to possible concerns with the declaratory judgment procedure.
[10] It is true that Trustees Executors’ appeal was dismissed because of the unsuitability of the declaratory judgment procedure. However, the parties had fully argued all of the points related to the appeal and the Court dealt with these arguments in a preliminary (but relatively full) manner. Thus in fact all the arguments made by the parties were addressed.
[11] As to the contention that Trustees Executors was not unsuccessful in the substantive appeal, we accept that, in the Court’s preliminary discussion of the issues, QBE was not successful with all of its arguments. The same applies to Trustees Executors. However, the fact remains that QBE had been required to argue all of the issues, both at the High Court and in this Court, in a case where the procedure chosen by Trustees Executors was not a suitable one. In these circumstances, QBE has to be seen as having been totally successful in its appeal. The principle that costs follow the event therefore applies.

Result and costs

[12] The application for recall is declined.
[13] The applicant must pay the respondent costs for a standard application on a band A basis and usual disbursements. QBE sought increased or indemnity costs. We do not consider that this is warranted.

Solicitors:
Russell McVeagh, Wellington for Applicant
McElroys, Auckland for Respondent

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[1] Trustees Executors Limited v QBE Insurance (International) Limited [2010] NZCA 608.
[2] At [42].
[3] At [46].
[4] At [73] and [74].

[5] See third reason set out in Horowhenua County v Nash (No 2) [1986] NZLR 632 (SC) at 633. The principles relating to the recall of judgments in civil proceedings have been recently set out by this Court in Erwood v Maxted [2010] NZCA 93 at [23].
[6] In any event the parties agree that the application can be dealt with on the papers.
[7] In the sense referred to in Horowhenua County at 633.
[8] Court of Appeal (Civil) Rules 2005, r 41(1)(c).