Federal Court of Australia MS Amlin Corporate Member Limited v LU Simon Builders Pty Ltd (No 2) [2023] FCA 745 File number(s): NSD 1009 of 2021 Judgment of: JACKMAN J Date of judgment: 4 July 2023 Catchwords: COSTS – costs consequences and ancillary orders flowing from determination of separate question – accepted that originating application should be dismissed – whether excess layer insurers should pay the costs of the insurance brokers Cases cited: MS Amlin Corporate Member Limited v LU Simon Builders Pty Ltd [2023] FCA 581 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 6 Date of hearing: Determined on the papers. Counsel for the Applicants: Mr E C Muston SC and Ms K Lindeman Solicitor for the Applicants: Lander & Rogers Counsel for the First and Second Respondents: Mr P B Murdoch KC and Mr D Briggs Solicitor for the First and Second Respondents: Giannakopoulos Solicitors Counsel for the Third Respondent: Mr M A Jones SC and Mr N Simone Solicitor for the Third Respondent: Hall & Wilcox Lawyers Counsel for the Fourth Cross-Respondent: Mr S A Lawrance SC and Mr A Byrne Solicitor for the Fourth Cross-Respondent: Clyde & Co Counsel for the Fifth Cross-Respondent: Ms A Smith Solicitor for the Fifth Cross-Respondent: Arnold Bloch Leibler ORDERS NSD 1009 of 2021 BETWEEN: MS AMLIN CORPORATE MEMBER LIMITED First Applicant / Second Cross-Respondent BRIT UW LIMITED AS THE SOLE CORPORATE CAPITAL PROVIDER OF LLOYD'S SYNDICATE 2987 FOR THE 2014 YEAR OF ACCOUNT Second Applicant / Third Cross-Respondent AND: LU SIMON BUILDERS PTY LTD First Respondent / First Cross-Claimant LU SIMON BUILDERS (MANAGEMENT) PTY LTD Second Respondent / Second Cross-Claimant CHAUCER GROUP AS MANAGING AGENT FOR THOSE UNDERWRITING NAMES WHO SUBSCRIBE TO CHAUCER SYNDICATES 1084, FOR THE 2014 YEAR OF ACCOUNT Third Respondent / First Cross-Respondent ELKINGTON BISHOP MOLINEAUX INSURANCE BROKERS PTY LTD Fourth Cross-Respondent AMWINS GLOBAL RISKS LIMITED Fifth Cross-Respondent order made by: JACKMAN J DATE OF ORDER: 4 july 2023 THE COURT ORDERS THAT: 1. The amended originating application be dismissed. 2. The applicants pay the costs of the respondents to the proceedings brought by the applicants, excluding any costs associated with any of the parties' cross-claims (which are reserved). 3. The applicants pay the costs of the respondents and cross-respondents of the Separate Question. 4. The matter stand over to a case management hearing on 11 September 2023 at 9.30 am before me. 5. The parties have liberty to apply on two days' notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT JACKMAN J 1 In my judgment of 5 June 2023 in MS Amlin Corporate Member Limited v LU Simon Builders Pty Ltd [2023] FCA 581, having answered the Separate Question in the affirmative, I gave the parties the opportunity to address in writing the questions of costs, consequential orders and future case management. The parties have now exchanged written submissions on those topics. 2 The applicants accept that the consequence of my reasons and my answer to the Separate Question is that the amended originating application should be dismissed. The applicants also acknowledge that they could not resist a declaration concerning the Atlantis Claims giving effect to the answer to the Separate Question. However, I do not regard such a declaration as necessary. There has also been some discussion in the written submissions as to whether I should make a declaration concerning the Lacrosse Claims, however, those claims were not part of the Separate Question and accordingly I do not regard such a declaration as appropriate. It may well be that there is no remaining controversy concerning the Lacrosse Claims, in which case an appropriate order or declaration can be agreed between the parties. 3 The applicants accept that they should pay the costs of the respondents, being the Insureds and Chaucer, including their costs of the Separate Question hearing. The applicants resist a costs order for the Separate Question hearing in favour of EBM Construction & Marine and Amwins Global Risks Ltd (formerly known as Thompson Heath & Bond Ltd) (the Brokers). However, the participation of the Brokers in the Separate Question hearing was entirely appropriate, as the Separate Question dealt also with an issue that arises on the cross-claims made against the Brokers, those cross-claims arising at least in part out of the primary claim made by the applicants. The Brokers were in an opposing interest to the applicants on the issue which was the subject of the Separate Question. Accordingly, it is appropriate that the applicants should pay the Brokers' costs of the Separate Question hearing. The costs of the Brokers more generally in the proceedings cannot yet be determined, in advance of the cross-claims being finally resolved. The applicants will remain active parties for the purpose of any question of costs arising from those cross-claims. 4 The Insureds also seek certification of Senior Counsel's fees, but I will leave that to the process of costs assessment. I note, however, that in my opinion it was appropriate and reasonably necessary for the Insureds to have briefed Senior Counsel for the Separate Question hearing. 5 As to the future conduct of the cross-claims, it seems to me appropriate for the parties to engage in mediation or some other form of alternative dispute resolution. Given the experience and sophistication of the parties, I will leave it to the parties to decide on the appropriate form of mediation or alternative dispute resolution, whether that is by way of a formal mediation (and if so who the mediator should be) or an informal settlement conference or similar process. In my view, the applicants should participate in that process in light of the fact that they have filed an application for leave to appeal from my determination of the Separate Question, and a compromise of the overall dispute may well also involve compromising that particular application. The costs orders may also be a matter of negotiation. Any response to the letter of Clyde & Co (the solicitors for EBM Construction & Marine) dated 5 June 2023 to the solicitors for the applicants can be dealt with as an aspect of the alternative dispute resolution process. 6 There is a difficulty in timing for the next case management hearing, given the unavailability of the key director of the Insureds for much of the month of August. I will therefore stand the matter over to a case management hearing on 11 September 2023 at 9.30 am before me. There will be liberty to apply on two days' notice. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman. Associate: Dated: 4 July 2023