Supreme Court New South Wales Medium Neutral Citation: QBE Insurance (Australia) Limited v NTI Limited (No 2) [2022] NSWSC 1357 Hearing dates: On the papers; submissions received 30 September 2022 Date of orders: 6 October 2022 Decision date: 06 October 2022 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Plaintiff to pay defendant's costs on an ordinary basis up to and including 2 September 2022 and on an indemnity basis from 3 September 2022 Catchwords: COSTS – where plaintiff unsuccessful – where two offers of compromise made by successful defendant – where first offer a walk away offer – whether the Court should order that costs not be on an indemnity basis as a result of that offer – where common ground that later offer warrants indemnity costs order Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: QBE Insurance (Australia) Ltd v NTI Ltd [2022] NSWSC 1273 Category: Costs Parties: QBE Insurance (Australia) Limited (Plaintiff) NTI Limited (Defendant) Representation: Counsel: R Sud (Plaintiff) N D Oreb (Defendant) Solicitors: Colin Biggers & Paisley Lawyers (Plaintiff) Turks Legal (Defendant) File Number(s): 2021/201184 JUDGMENT 1. On 21 September 2022, I gave judgment dismissing QBE's claim against NTI. [1] 2. I am now dealing with the question of costs. 3. NTI seeks its costs on an ordinary basis up to and including 25 January 2022 and, from 26 January 2022, on an indemnity basis. Alternatively, NTI seeks its costs on an ordinary basis up to and including 2 September 2022 and, from 3 September 2022, on an indemnity basis. 4. QBE does not contest that it should pay NTI's costs on an indemnity basis from 3 September 2022. 5. What divides the parties is whether NTI should have its costs on an indemnity basis from the earlier date of 26 January 2022. 6. NTI seeks that order because, on 25 January 2022, it made an offer pursuant to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 20.26 to settle the proceedings upon the basis of a judgment in its favour with no order as to costs. 7. As the Summons has now been dismissed, NTI has obtained an order on its claim that is no less favourable that its 25 January 2022 offer pursuant to UCPR r 42.15A. 8. Accordingly, unless I otherwise order, the effect of UCPR r 42.15A(2) is that it must have its costs on an indemnity basis from 26 January 2022. 9. I am persuaded that I should otherwise order. 10. The argument between QBE and NTI was whether QBE was entitled to contribution from NTI in relation to the amount QBE paid to defend and settle the claim arising from the accident of 17 November 2014. This depended upon whether or not the "Tool of Trade" exclusion in the NTI Policy was enlivened. 11. As both parties emphasised in their submissions on costs, this was an "all or nothing" question. Either the exclusion was enlivened, or it was not. 12. In serving its 25 January 2022 offer, NTI did not seek to explain why it contended that QBE's prospects of success were poor. Although I did not accept QBE's submission as to whether the exclusion was enlivened, there was some substance in QBE's contentions. By no means could it be said that its case was hopeless; or anything like it. 13. In those circumstances, and although, as NTI pointed out, "walk away" offers such as NTI's offer of 25 January 2022 are expressly contemplated by the rules. [2] NTI's offer was not, in substance, seeking to achieve a compromise but was rather inviting QBE to abandon its claim. 14. Further, as QBE has pointed out and as NTI accepts, NTI amended its Commercial List Response after the date of its 25 January 2022 offer to rely upon the words "or like operations" in the exclusion. That point played some role in my decision in favour of NTI. [3] 15. On 2 September 2022, NTI made a further offer, this time that there be judgment for QBE against NTI for $25,000. There is no dispute that QBE's non-acceptance of that offer compels the conclusion that it should pay NTI's costs on an indemnity basis from 3 September 2022. 16. For those reasons, my order as to costs is that the plaintiff pay the defendant's costs of the proceedings on an ordinary basis up to and including 2 September 2022, and on an indemnity basis from 3 September 2022. ********** Endnotes 1. QBE Insurance (Australia) Ltd v NTI Ltd [2022] NSWSC 1273. 2. UCPR rr 20.26(2) and 20.26(3)(a)(i). 3. See, for example, at [27] of the judgment. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 October 2022