Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790

New South Wales Supreme Court

CITATION : Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790

HEARING DATE(S) : 28 July 2006

JUDGMENT DATE : 9 August 2006

JUDGMENT OF : Bergin J

DECISION : Indemnity costs refused - interest awarded.

CATCHWORDS : [COSTS] Application for indemnity costs - Calderbank letter - whether genuine offer of compromise - whether rejection of offer unreasonable - whether interest to be awarded.

Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 423 Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 CASES CITED : Lahoud v Lahoud [2006] NSWSC 126 Leichhardt Municipal Council v Green [2004] NSWCA 341 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1987) 186 CLR 622

PARTIES : Cat Media Pty Limited (ACN 077 817 522) (plaintiff) Allianz Australia Limited (ACN 000 122 850) (defendant)

FILE NUMBER(S) : SC 50064/04

COUNSEL : Mr JAC Potts (plaintiff) Mr AS Martin SC/ Mr SA Wells (defendant)

SOLICITORS : Clayton Utz (plaintiff) McMahons National Lawyers (defendant)

- 17 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

BERGIN J

9 AUGUST 2006

50064/04 CAT MEDIA PTY LTD v ALLIANZ AUSTRALIA INSURANCE LTD JUDGMENT 1 On 24 May 2006 I published my reasons for dismissing the plaintiff's (Cat Media Pty Ltd) Second Further Amended Summons in which it sought the entry of judgment for $2.5 million against the defendant (Allianz Australia Insurance Ltd) for interruption to its business allegedly pursuant to its entitlements under the policy of insurance with the defendant (the Policy): Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 423 (the judgment). 2 On 14 June 2006 the defendant filed a Notice of Motion seeking an order that the plaintiff pay the defendant's costs and disbursements of the proceedings on a party and party basis up until 28 February 2006 and on an indemnity basis thereafter. The defendant claims that such costs order should include costs of the defendant's Cross-Claim, the plaintiff's Notice of Motion dated 11 May 2006 and the defendant's Notice of Motion seeking costs and other orders. 3 The defendant also seeks an order pursuant to s 101(4) of the Civil Procedure Act 2005, that the plaintiff pay interest on the costs and disbursements the subject of any order made against it calculated on the basis of an Allowed Percentage of each amount of costs and disbursements actually paid by the defendant, from the date of payment by the defendant until the payment of those costs and disbursements by the plaintiff. The Allowed Percentage is based on the formula ((y/x) x 100)% where: "x" is the total amount of costs and disbursements that the defendant has paid or is liable to pay to its legal advisors in connection with the proceedings; and "y" is the total amount of costs and disbursements allowed on assessment to the defendant in connection with the proceedings. 4 The Notice of Motion was heard on 28 July 2006 when Mr JAC Potts, of counsel, appeared for the plaintiff and Mr AS Martin SC, leading Mr SA Wells, of counsel, appeared for the defendant. Relevant facts 5 The plaintiff made a claim on the defendant under the Policy on 10 June 2003. The defendant denied indemnity on 4 July 2003. The plaintiff commenced the proceedings on 19 May 2004. On 16 September 2005 the matter was set down for hearing for 2 weeks commencing on 27 March 2006. On 31 January 2006 the defendant's solicitors, McMahons National Lawyers, wrote to the plaintiff's solicitors, Clayton Utz, in terms that included the following: We have reviewed the pleadings and evidence in this matter and have formed the view that Allianz is likely to succeed in its defence of CAT Media's claim and its cross-claim against your client.