JUDGMENT No. 238. JE. NOT FOR GENERAL DISTRIBUTION NO ISSUE OF PRINCIPLE IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 863 of 1996 GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SWITZERLAND INSURANCE AUSTRALIA LIMITED Appellant MOWIE FISHERIES PTY LIMITED Respondent CORAM: BEAUMONT, HILL, SACKVILLE JJ PLACE: SYDNEY DATE: 3 JUNE, 1997 MINUTES OF ORDER THE COURT ORDERS THAT: 1. Order 4(b) of the orders made on 10 April 1997, staying Order 2 made on that date, be discharged. | FEDERAL COURT OF \ AUSTRALIA PRINGEAL REGSTRY NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. NOT FOR GENERAL DISTRIBUTION NO ISSUE OF PRINCIPLE IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 863 of 1996 GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SWITZERLAND INSURANCE AUSTRALIA LIMITED Appellant MOWIE FISHERIES PTY LIMITED Respondent CORAM: BEAUMONT, HILL, SACKVILLE JJ PLACE: SYDNEY DATE: 3 JUNE, 1997 REASONS FOR JUDGMENT Hill and Sackville JJ: Judgment was delivered in this appeal on 10 April 1997. By majority (Hill and Sackville JJ, Beaumont J dissenting) the following orders were made: 1. The appeal be dismissed. 2. The appellant pay the respondent's costs of the appeal. 3. Order 2 be stayed for a period of 14 days. 4. Should either party file written submissions on costs within 14 days: (a) the other party should file written submission in reply within a further 14 days from the filing of the first submissions; and (b) Order 2 is stayed until further order. The orders took this form in order to allow the parties, if they wished, to file submissions. on costs. The appellant filed written submissions seeking an order that each party bear its own costs of the appeal or, alternatively, that the appellant be ordered to pay only two thirds of the respondent's costs of the appeal. The respondent, for its part, contended that costs should be awarded in its favour on an indemnity basis or, alternatively, that costs simply follow the event. The appellant supported its submissions on two grounds: e but for the holding that reg 402 of the Marine (Vessels) Regulations 1988 (Vic) (the "Victorian Marine Regulations") was invalid, the appellant would have succeeded on the appeal; and e the respondent failed on the issues raised by the notice ef contention. - 3 = In our view, neither of these grounds warrants a departure from the usual rule that costs should follow the event. The validity of reg 402 of the Victorian Marine Regulations was raised before the primary Judge and on the appeal. While the majority judgment on the appeal did not accept the respondent's suggested construction of reg 402 (a construction adopted by the primary Judge), it was necessary to consider the correct construction of reg 402 before determining its validity. In any event, the construction question took very little time on the appeal. Because of the conclusion reached by the majority, it was not necessary to address other arguments put on behalf of the respondent in relation to the Victorian Marine Regulations. However, it does not follow that the respondent would necessarily have failed on those issues (such as_ the definition of "propulsion power") or that it was unreasonable for the respondent to have raised the arguments. We do not think it was unreasonable for these issues to be raised. The notice of contention challenged the primary Judge's rejection of the respondent's arguments on questions of waiver, breach of duty of good faith and materiality. The majority judgment did not address the issues raised by the notice of contention, because it was unnecessary to do so. It is true that Beaumont J concluded that the primary Judge had correctly rejected the respondent's arguments. However, this does not mean that the respondent failed on the issues raised - 4- by the notice of contention; the majority judgment simply did not deal with them. Nor can it be said that the notice of contention raised points that were not fairly arguable. The respondent pointed out that the primary Judge ordered that the appellant pay costs from 1 July 1996 on an indemnity basis. His Honour made this order because of a "Caldebank" letter sent by the respondent to the appellant offering to compromise the proceedings. However, this does not justify an order that costs on the appeal be awarded to the respondent on an indemnity basis. For these reasons we think that costs should follow the event. The only order that is necessary is that order 4(b) of the orders made on 10 April 1997, staying order 2 made on that date, be discharged. I certify that this and the preceding 3 pages are a true copy of the Reasons for Judgment of the Honourable Justices Hill and Sackville. Associate: SBD Dated: 3 June, 1997 Heard: 24-25 February, 1997 Place: Sydney Decision: 3 June, 1997 Counsel for appellant: Mr B. Rayment QC, Mr G. Nell Solicitors for appellant: Ebsworth & Ebsworth Counsel for respondent: Mr A. Street SC Solicitors for respondent: Allen Allen & Hemsley