Westpac Life Insurance Services Limited v Mahony (No 2) [2017] FCA 277

File number:

QUD 271 of 2016



Date of judgment:

21 March 2017


COSTSwhere money has been paid into Court pursuant to s 215 of the Life Insurance Act 1995 (Cth)applications for costs orders before entitlement to policy has been established


Federal Court of Australia Act 1976 (Cth), s 43

Life Insurance Act 1995 (Cth), s 215

Cases cited:

DSE (Holdings) Pty Limited v InterTAN Inc [2004] FCA 1251

Date of hearing:

Determined on the papers

Date of last submissions:

21 December 2016




General Division

National Practice Area:

Commercial and Corporations


Commercial Contracts, Banking, Finance and Insurance

Insurance List



Number of paragraphs:


Counsel for the Applicant:

Mr M J May

Solicitor for the Applicant:

Cooper Grace Ward Lawyers

Solicitor for the First Respondent:

Mr G F Jongkind of Jongkind Frank & Co

Solicitor for the Second Respondent:

Ms J A Gahagan of Gahagan & Associates

Counsel for the Third Respondent:

Mr P Goodwin

Solicitor for the Third Respondent

Carswell & Company


QUD 271 of 2016






First Respondent


Second Respondent


Third Respondent




21 MARCH 2017


1.    The sum of $2750 be paid to the second respondent out of the sum paid into the Court by the applicant upon the filing of these proceedings.

2.    The sum of $2000 be paid to the third respondent out of the sum paid into the Court by the applicant upon the filing of these proceedings.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.



1    Reasons for judgment were handed down in this matter on 2 September 2016: see Westpac Life Insurance Services Limited v Mahony [2016] FCA 1071. Orders in accordance with those reasons were made on 9 December 2016 and 13 December 2016.

2    The present reasons should be read in light of the relevant background to the proceedings as set out in the earlier reasons. Briefly put, the applicant (Westpac Life Insurance Services Limited) sought declarations pursuant to s 215 of the Life Insurance Act 1995 (Cth) (the Act) in respect of the sum of $150,000 paid into Court upon the filing of the application commencing the proceedings.

3    Section 215 of the Act reads:

215 Power to pay money into Court

(1) A life company may pay into the Court any money payable by the company in respect of a policy for which, in the company’s opinion, no sufficient discharge can otherwise be obtained.

(2) Payment of the money into the Court discharges the company from any liability under the policy in relation to the money.

(3) Any money paid into the Court under this section is to be dealt with according to the order of the Court.

(4) This section has effect subject to the Rules of the Court.

4    The affidavit evidence prepared by the applicant satisfied me at that time that no sufficient discharge of the policy issued by the applicant to Louis Mahony and Lainie Coldwell as joint policy owners and lives insured could be obtained otherwise than by paying the money into Court.

5    For this reason, I made the declarations sought by the applicant, including that the sum of $150,000 in respect of the relevant policy was paid into Court pursuant to the provisions of s 215(1) of the Act. I also made an order that $20,000 be paid out of that sum to the applicant in payment of its costs of and incidental to the application; and, subject to such deduction, the money paid into Court be held in accordance with further order of this Court pending determination of the person or persons entitled thereto. The applicant was excused from further attendance until further order of the Court.

6    The parties were afforded the opportunity of opposing the making of those orders, but did not do so. The second respondent requested by correspondence, however, that a further order be made to provide that the second respondent’s costs of and incidental to the application be paid to her on an indemnity basis out of the funds paid into Court.

7    The solicitor for the litigation representative of the third respondent initially objected to the making of an indemnity costs order in favour of the second respondent. Subsequent correspondence to the Court dated 3 February 2017 then indicated that this objection had been withdrawn.

8    It is to be recalled that the second respondent, Ms Patricia Marlene Coldwell, is the executor of the estate of the late Lainie Coldwell, while the third respondent, Ms Dakota Mardell Mahony, as represented by her litigation representative, Mr Athol Butler, is the daughter of the late Ms Coldwell and Mr Mahony.

9    In light of the second respondent’s request and the third respondent’s early opposition to it, I directed both parties to make short written submissions on the question of costs that arose. Upon receipt of such submissions, I decided to make the orders set out below on the papers. These are my reasons therefor.

Power of the court to make costs orders

10    Second 43(1) of the Federal Court of Australia Act 1976 (Cth) states that the Court or a Judge has jurisdiction to award costs in all proceedings before the Court other than proceedings in respect of which that or any other Act provides that costs must not be awarded. Section 43(2) provides that, except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.

11    The discretion to award costs is a broad and ample power not to be read down otherwise than by judicial principle conformable with the amplitude of the power: see DSE (Holdings) Pty Limited v InterTAN Inc [2004] FCA 1251 at [14]. As such, the Court is empowered in the appropriate circumstances to make an order that the costs of a party be paid from money paid into Court and before the final resolution of the proceedings.

12    There is no Act preventing costs being awarded in an application pursuant to s 215(1) of the Act. Section 215(3) of the Act expressly provides that any money paid into the Court under this section is to be dealt with according to the order of the Court.

13    In light of this, the costs of the applicant to these proceedings were paid from the $150,000 paid into Court. The question now arises whether the circumstances make it appropriate for the second and third respondent to recover costs from the money paid into Court, bearing in mind that it is still unclear who is entitled to the proceeds of the policy.


14    The second respondent submits that an order for costs be made in her favour on an indemnity basis out of the funds paid into Court in the amount of $2,750, being the lump sum agreed to be paid by her for professional costs and disbursements for all work in relation to this matter up to and including the first case management hearing.

15    The second respondent submits that her participation in the proceedings was required in order to clarify on the Court record that she appeared as the executor and trustee of the estate of the deceased and not in a personal capacity. This amendment to the application was reflected in the orders of the Court following the first case management hearing in these proceedings.

16    The second respondent submits that she sought to participate in the proceedings in the most cost effective way open to her, for example through the decision not to engage counsel and her engagement of Ms Gahagan, a sole practitioner in Hervey Bay, who previously had been engaged to act for the executors of the estate to apply for probate.

17    The second respondent further submits that while her costs may be able to be reimbursed out of the deceased estate, the estate should not bear the costs in light of the fact that the circumstances of the application did not leave it open for the executor to end her participation in the proceedings.

18    The third respondent submitted that if the second respondent was successful in her application for costs, an order for costs should be made in favour of the third respondent on an indemnity basis. It is submitted that the third respondent, like the second respondent, is not in any way responsible for the application having been brought but is a proper respondent in the circumstances whereby the applicant sought a declaration as to the money paid into Court.


19    The peculiarity of this matter is that it has not been possible, in the circumstances, for the Court to make a direction at this stage as to how the proceeds of the policy be dealt with and thereby finalise the appropriate orders as to costs.

20    Given the unusual circumstances which prompted the applicant to apply for declarations regarding the money paid into the Court, coupled with the fact that both respondents were joined to proceedings through no fault of their own, I find it appropriate to make costs orders in favour of both the second and third respondents.

21    The second respondent has made submissions on why a lump sum of costs in the amount of $2750 is fair and reasonable by itemising costs and disbursements (correspondence between parties and the court, appearance in proceedings, travel time to court; filing and service of notices). I accept this is an appropriate sum and therefore am prepared to make an order that these costs be paid from the funds paid into Court.

22    The third respondent (by her litigation representative) has not supplied details of costs and disbursements in these proceedings up to the first case management hearing. It is inappropriate for this matter to drag on any further than it has. The sum of $2000 should amply cover the third respondent’s costs.

23    The orders of the Court are:

1.    The sum of $2750 be paid to the second respondent out of the sum paid into the Court by the applicant upon the filing of these proceedings.

2.    The sum of $2000 be paid to the third respondent out of the sum paid into the Court by the applicant upon the filing of these proceedings.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop.


Dated:    21 March 2017