FEDERAL COURT OF AUSTRALIA D'Anglers Paradise Pty Ltd v MMI General Insurance Australia Limited (ACN 000 122 850) [2002] FCA 1626 D'ANGLERS PARADISE PTY LTD v MMI GENERAL INSURANCE AUSTRALIA LIMITED (ACN 000 122 850) NG 302 OF 1997 DOWSETT J 20 DECEMBER 2002 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY NG 302 OF 1997 BETWEEN: D'ANGLERS PARADISE PTY LTD APPLICANT AND: MMI GENERAL INSURANCE AUSTRALIA LIMITED (ACN 000 122 850) RESPONDENT JUDGE: DOWSETT J DATE OF ORDER: 20 DECEMBER 2002 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Tony Mario Loiero and Julie Loiero comply with the Undertaking as to costs given by them to this Court herein on 23 October 1998; 2. Tony Mario Loiero and Julie Loiero pay the Respondent's costs of proceedings NG302 of 1997 in the sum of $359,210.27 as ordered against the Applicant on 15 My 2002 plus interest from 25 March 2002 pursuant to O 35 r 8 and O 62 subr 45 (6); 3. Tony Mario Loiero and Julie Loiero pay the costs of MMI General Insurance Limited of the motions heard today. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY NG 302 OF 1997 BETWEEN: D'ANGLERS PARADISE PTY LTD APPLICANT AND: MMI GENERAL INSURANCE AUSTRALIA LIMITED (ACN 000 122 850) RESPONDENT JUDGE: DOWSETT J DATE: 20 DECEMBER 2002 PLACE: BRISBANE REASONS FOR JUDGMENT 1 On 23 October 1998, Tony Mario Loiero and Julie Loiero gave an undertaking to the Court in proceedings then pending between a company, D'Anglers Paradise Pty Ltd, as applicant and MMI General Insurance Limited. The undertaking was in the following form: That in the event an order for costs is made against the Applicant in these proceedings which the Applicant is unable to meet within a reasonable time, we will pay the costs so ordered. 2 The outcome of the proceedings was unfavourable to D'Anglers Paradise, and an order for costs was made against it. An appeal was unsuccessful. A certificate of taxation of costs was issued on 25 March 2002. On 15 May 2002, the Deputy District Registrar ordered that D'Anglers Paradise pay those costs. Order 62 r 45 provides that such award is to bear interest calculated pursuant to O 35 r 8, from the date of taxation. On 4 June 2002, the costs not having been paid by D'Anglers Paradise, MMI claimed them from Mr and Mrs Loiero. They have not been paid. MMI applies pursuant to O 35 r 11 for an order that Mr and Mrs Loiero pay the relevant costs. Two issues have been argued before me. The first is whether the subject matter of the undertaking includes the costs of the appeal. The second is whether or not Mr and Mrs Loiero are obliged to pay interest accruing pursuant to O 62, subr 45(6). 3 In my view, the costs to be paid do not include the costs of the appeal. The question depends upon the meaning of the word "proceedings" in the undertaking. At the time that the undertaking was given, the principal action was on foot. The appeal was not. It is, to my mind, beyond argument that the intention was that the Loieros be liable for the costs of the principal action. Had MMI wished to safeguard itself in connection with the costs of the appeal, it could have done so. 4 The second question depends upon the meaning of the word "costs" in the undertaking. It is reasonable to infer that the undertaking was given with knowledge of the provisions of O 62, subr 45(6). I consider that costs, when used in that undertaking, should be taken to include interest accruing thereon pursuant to the Rules. The company was liable to pay such interest in accordance with the Rules. Mr and Mrs Loiero are similarly liable. This does not depend upon any question as to when the costs should have been paid by the company for the purposes of the undertaking. In the end, the Loieros are responsible for all costs for which the company was liable, including interest accruing in accordance with the rule. 5 There will be orders in terms of pars 1 and 2 of the notice of motion filed on 21 November 2002. 6 An application is made on behalf of the Loieros for a stay of this order. The history of the matter is instructive. The relevant loss was suffered in a fire in 1995. On 23 April 1997 these proceedings were commenced in the New South Wales District Registry and were subsequently transferred here. The matter was listed for trial in 2000. The application was dismissed on 4 April 2000. As appears from Mr Loiero's affidavit, he asserted that he was unable to proceed at the trial because of ill-health. That assertion was not accepted, and judgment went against D'Anglers Paradise. An appeal was dismissed on 18 August 2000. On 30 April 2001, proceedings were commenced in the name of Mr and Mrs Loiero in the Supreme Court. It is common ground that those proceedings arise out of the same fire, are under the same alleged policy, and relate to the same alleged loss. 7 It is incomprehensible to me that the Loieros should have allowed proceedings in the name of D'Anglers Paradise to continue until August 2000, when the appeal was dismissed if they considered that they were personally insured and had suffered loss. They also have not explained why it was not until the end of April 2001 that they commenced proceedings in their own name or why proceedings were not served until much later. 8 It is very difficult to avoid the inference that the Loieros are merely seeking to avoid the evil day and to keep MMI out of its money for as long as possible. It is not necessary that I go so far as to draw that inference. It is sufficient to say that the history of the prosecution of proceedings in this Court in the name of D'Anglers Paradise is such that I would not be willing to grant a stay merely because proceedings in the name of Mr and Mrs Loiero have now been commenced in the Supreme Court in the absence of an adequate explanation of the lengthy history of this matter and of the circumstances leading to the commencement of the Supreme Court proceedings. In the absence of any such explanation, I decline to grant a stay. 9 A number of issues have been canvassed today, including the costs of the appeal, the question of interest, and the question of a stay. It seems to me, however, that MMI has been substantially successful. I order that Tony Mario Loiero and Julie Loiero pay the costs of MMI General Insurance Limited of the motions heard today. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 2 January 2003 Counsel for the Applicant: Mr K Barlow Solicitor for the Applicant: Allens Arthur Robinson Counsel for the Respondent: Mr R Bain QC Solicitor for the Respondent: Deacons Date of Hearing: 20 December 2002 Date of Judgment: 20 December 2002