- First, in Selig v Wealthsure Pty Ltd  HCA 18, the professional indemnity insurer asserted an entitlement to conduct an appeal from a decision of the Federal Court to a Full Court of the Federal Court on behalf of both the first and second respondents, one being bankrupt and the other, with little means. The appeal was successful but reversed on appeal to the High Court. The successful appellants before the High Court sought an order that the insurer (QBE), a non-party to the proceedings, pay the costs of the High Court appeal and the costs of the appeal in the Federal Court.
In deciding to make such a costs order, the High Court said that although it might be suggested that the insurer’s actions in bringing the appeal against the decision of the primary judge could not be said to have been entirely unreasonable, given its success in the Full Court, nevertheless, that factor was not a bar to a non-party costs order against an insurer. Here, “(a)t the time the insurer’s decision to appeal the judgment of the primary judge was made it could not be said that the first and second respondents continued to have an interest in the outcome of the litigation. The insurer acted for itself in seeking to better its position. It took a chance, as litigants do, that if its argument as to the application of Div 2A succeeded, the liability of the first and second respondents would be reduced to 60 per cent of the judgment sum, as the primary judge had found. In these circumstances, why should it be regarded as immune from the risk of an order for costs?”
- Secondly, in Central Queensland Development Corporation Pty Ltd v Sunstruct Pty Ltd  FCAFC 63, a Full Court has confirmed that prior notice to a non-party of intention to claim costs against it will not always be necessary. Whether such a requirement arises will depend on the facts and circumstances of the individual case. Nevertheless, failure to warn may be a material consideration depending on the situation disclosed in the case under consideration. Further, failure to take account of the fact that there was no such warning may amount to a failure to take into account a material consideration.
This article first appeared in the Australian Commonwealth Courts and Family Law Tracker. The cases will be discussed in more detail in the CCH Australian High Court and Federal Court Reporter. Written by Christine Henchman, Senior Writer