FEDERAL COURT OF AUSTRALIA

Tosich v Tasman Investment Management Limited [2008] FCA 560

Tosich v Tasman Investment Management Limited [2008] FCA 377 related

IN THE MATTER OF TASMAN INVESTMENT MANAGEMENT LIMITED ACN 066 524 365

JOHN TOSICH and ALL SAINTS INVESTMENTS PTY LIMITED v TASMAN INVESTMENT MANAGEMENT LIMITED, COLIN PHILIP WARNE and AON RISK SERVICES AUSTRALIA LIMITED; TASMAN INVESTMENT MANAGEMENT LIMITED and COLIN PHILIP WARNE v AMERICAN HOME ASSURANCE COMPANY and AON RISK SERVICES AUSTRALIA LIMITED; AMERICAN HOME ASSURANCE COMPANY v TASMAN INVESTMENT MANAGEMENT LIMITED and COLIN PHILIP WARNE; AMERICAN HOME ASSURANCE COMPANY v AON RISK SERVICES AUSTRALIA LIMITED

NSD 3069 of 2003

GYLES J

17 APRIL 2008

SYDNEY

IN THE MATTER OF TASMAN INVESTMENT MANAGEMENT LIMITED ACN 066 524 365

THE COURT ORDERS THAT:

1.             Judgment be entered for the first plaintiff, John Tosich, as against the first defendant, Tasman Investment Management Limited, and the second defendant, Colin Philip Warne, in the sum of $183,616.91.

2.             The proceedings brought by the second plaintiff, All Saints Investments Pty Limited, be dismissed.

3.             Tasman Investment Management Limited and Colin Philip Warne pay John Tosich’s costs for the period he was a plaintiff, as agreed or assessed.

4.             The cross-claim against the first cross-defendant, American Home Assurance Company (first cross-claim), be dismissed.

5.             The cross-claimants to the first cross-claim, Tasman Investment Management Limited and Colin Philip Warne, pay the costs of American Home Assurance Company, as agreed or assessed.

6.             Judgment be entered for the cross-claimants, Tasman Investment Management Limited and Colin Philip Warne, on the cross-claim against the second cross-defendant, Aon Risk Services Australia Limited (second cross-claim), in the sum of $147,679.03.

7.             Aon Risk Services Australia Limited pay 75% of the costs of Tasman Investment Management Limited and Colin Philip Warne of the proceedings as agreed or assessed.

8.             Aon Risk Services Australia Limited pay Tasman Investment Management Limited and Colin Philip Warne the costs which they are liable to pay John Tosich under Order 3.

9.             The third cross-claim be dismissed.

10.         Each party to the third cross-claim bear their own costs of that cross-claim.

11.         The fourth cross-claim be dismissed.

12.         Each party to the fourth cross-claim bear their own costs of that cross-claim. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE MATTER OF TASMAN INVESTMENT MANAGEMENT LIMITED ACN 066 524 365

REASONS FOR JUDGMENT

1                     On 20 March 2008 I delivered reasons for judgment in this matter (Tosich v Tasman Investment Management Limited [2008] FCA 377) and stood the matter over in order to consider the orders to be made and to deal with costs.  Terms used in these reasons (if otherwise undefined or unexplained) are to be understood by reference to that earlier judgment.  A statement of issues agreed and disputed has been provided by parties.  The disputed issues requiring some determination are issues 9–15. 

2                     As to issue 9, whether Tosich is entitled to costs against Tasman Investment and Warne, I can see no proper basis by which the successful plaintiff should be deprived of his costs.  Those costs would not include the period when he was not a plaintiff.  The fact that Tosich may have been effectively funded by All Saints and the proceeding organised in a way that would enable the cross-claim to be pursued is not to the point.  Even if so, that would only put him in the same position as any other plaintiff in such circumstances, including a plaintiff whose case is conducted and funded by an insurer.  There is no substance to the argument that the matter should have been settled by payment.  Even if that were so, that would not be to the disadvantage of Tosich.  As I mention later, in the event, the necessity for litigation was, in one sense, caused by Aon.  I cannot see that Aon has any legitimate interest in any orders between All Saints and the defendants at this point. 

3                     Issue 10, allowance for contingences.  It seems to me that paragraph 10(a) is correct.  It can be calculated in accordance with paragraph 17of Aon’s submissions. 

4                     Issues 11 and 12, the Kotwal and Roach claims.  As payment of the claims has not been proved or admitted, those claims cannot be included in the damages. 

5                     Issue 13, costs payable by Aon to the defendants.  Aon should pay 75% of the costs of the defendants, 25% being attributable to the cross-claim against AIG.

6                     Issue 14, whether a Bullock order should be made against Aon.  Such an order should be made.  If the policy had been in force, the insurer would have taken over the conduct of the claim or would have been responsible for the total claim, including costs, if it had not.  It may well be that the claim would have been settled without litigation.  It needs to be recalled that Aon injected itself into the case between the plaintiffs and the defendants in order to pursue active defences.  There was no evidence that it proposed that the defendants make an admission as to liability, or that it encouraged the defendants to make any offer of settlement.  In that sense, it caused the necessity for the litigation between plaintiffs and defendants in order that there be an appropriate subject for a cross-claim against it.  The allowance for contingencies should not apply to the costs because of the factors relating to the occasion for the litigation to which I have referred. 

7                     Issue 15, whether Aon should pay the defendants’ costs which they are liable to pay to AIG – whether a Bullock order in that sense should be made.  I can see no proper basis on which Aon should be responsible for the joinder by Tasman Investment and Warne of AIG and the consequences of it.

8                     AIG raised a question about the costs for the third cross-claim, being essentially for rectification and related estoppels.  That was an aspect of the case which did occupy some time.  The third cross-claim did not fall for determination because of the failure of the cross-claim based upon the construction of the policy itself.  I did not need to consider the merit of the third cross-claim.  In my view, I cannot make an order in relation to the third cross-claim because it was never dealt with, and it is certainly by no means clear that it would have followed that the third cross-claim would have succeeded if the first cross-claim had not been dismissed.  I think in that sense they are separate and severable.  It may be there is some overlap between the third cross-claim costs and the defence of the first cross-claim which can legitimately be taken up as part of the costs to the first cross-claim.  I do not think I have enough information to deal with that aspect of the matter.  I will have to leave that to agreement between the parties or to the formal assessment of costs. 

Associate:

Dated:         30 April 2008