Zircon Australia Pty Ltd v BCC Trade Credit Pty Ltd trading as Bond and Credit Co

• Jurisdiction: Australia Federal only
• Judgment Date: 09 June 2023
• Neutral Citation: [2023] FCA 636
• Date: 09 June 2023
• Court: Federal Court

Federal Court of Australia

Zircon Australia Pty Ltd v BCC Trade Credit Pty Ltd trading as Bond and Credit Co [2023] FCA 636

File number:	NSD 1374 of 2021
Judgment of:	STEWART J
Date of judgment:	9 June 2023
Catchwords:	COSTS – where parties with a routine costs order in their favour request reasons for the order – purpose of such request questioned – where applicant filed further amended originating application by consent – where respondents seek orders for costs thrown away – applicable principles and exercise of discretion
Legislation:	Federal Court of Australia Act 1976 (Cth) s 43(2)
Cases cited:	Australian Securities and Investments Commission, in the matter of Whitebox Trading Pty Ltd v Whitebox Trading Pty Ltd (No 2) [2017] FCA 385 Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136; 197 FCR 113 Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; 186 CLR 622 Richmond v Ora Gold Ltd [2020] FCA 70 TFM Epping Land Pty Ltd v Decon Australia Pty Ltd [2020] FCA 955
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs:	21
Date of last submissions:	16 May 2023
Date of hearing:	Determined on the papers.
Counsel for the Applicants:	R Glasson
Solicitor for the Applicants:	Emerson Lewis Lawyers
Counsel for the First and Second Respondents:	B Cameron
Solicitor for the First and Second Respondents:	Kennedys

ORDERS

		NSD 1374 of 2021
BETWEEN:	ZIRCON AUSTRALIA PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 630 424 912) First Applicant ; THREE ALPS PTE LTD (UNIQUE ENTITY NUMBER: 201808099R) (IN LIQUIDATION) Second Applicant ; APIES VENTURES PTE LTD (UNIQUE ENTITY NUMBER: 201111868CC) (IN LIQUIDATION) Third Applicant
AND:	BCC TRADE CREDIT PTY LTD TRADING AS BOND AND CREDIT CO ACN 608 296 233 First Respondent ; TOKIO MARINE & NICHIDO FIRE INSURANCE CO LTD (ABN 80 000 438 291) Second Respondent ; MARSH (SINGAPORE) PTE LTD (UNIQUE ENTITY NUMBER: 197200396D) Third Respondent

order made by:	STEWART J
DATE OF ORDER:	9 JUNE 2023

THE COURT ORDERS THAT:

1. The applicants pay the costs of the first and second respondents thrown away, if any, by the amendments to the amended originating application as reflected in the further amended originating application, in an amount as agreed or taxed.

2. Any party seeking reasons for order 1 do so by making a request by email to the Chambers of Stewart J within seven days of these orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STEWART J:

Preamble

1. Earlier today, I made these orders after considering the written submissions of the parties on the routine question of whether the amending party should pay the costs thrown away by an amendment to a pleading:

1. The applicants pay the costs of the first and second respondents thrown away, if any, by the amendments to the amended originating application as reflected in the further amended originating application, in an amount as agreed or taxed.

2. Any party seeking reasons for order 1 do so by making a request by email to the Chambers of Stewart J within seven days of these orders.

2. Within a short time of the orders being sent to the parties, the first and second respondents by their solicitors requested reasons for the orders. That is their right, of course, but it is a very curious request given that the costs order that I made was in their favour and was essentially the order that they had sought. What possible utility there is in requesting and receiving reasons for such an order escapes me entirely. Other than putting a judge to pointless effort, they would seem to have no purpose at all.

3. Be that as it may, these are my reasons.

Introduction

4. This proceeding concerns a claim by insureds for indemnity pursuant to a trade credit insurance policy. The statement of claim alleges the following. The first applicant (Zircon) and second applicant (Three Alps) are wholly owned subsidiaries of the third applicant (Apies Ventures) and together were joint insureds under the relevant insurance policy. The first respondent (BCC) is an arranger of insurance as an authorised representative of the second respondent (Tokio Marine), an underwriter of insurance. The third respondent (Marsh Singapore) is a trade credit insurance advisory and brokerage firm and was engaged as Three Alps’ and Apies Ventures’ insurance broker agent and adviser. The relevant insurance policy pursuant to which the applicants were joint insureds was entered into by the applicants, BCC and Tokio Marine in August 2019.

5. The applicants make claims against BCC and Tokio Marine for failure to indemnify them for losses sustained in connection with commodity trades said to be covered by the relevant policy. The applicants also advance alternative claims against Marsh Singapore on the basis that it knew or ought to have known that, in the circumstances, the relevant policy was substantially or entirely worthless insurance.

6. For present purposes, it is not necessary to set out in any greater detail the factual background to the claim, or the claims made. The immediate question before me is whether orders should be made that Zircon pay BCC’s and Tokio Marine’s costs thrown away by reason of amendments made to Zircon’s originating application. What is relevant to that inquiry is the procedural history of the proceeding, to which I now turn.

Procedural history

7. On 30 December 2021, Zircon filed an originating application in this Court naming BCC and Tokio Marine as first and second respondents, respectively. In the originating application, Zircon sought declarations that by failing to accept indemnity under the policy, BCC and Tokio Marine had breached their duties of utmost good faith and fair dealing and duties to act reasonably; that upon the proper construction of the policy BCC and Tokio Marine are obliged to indemnify Zircon; and an order that they pay Zircon USD$7,343,346.64 plus interest and costs.

8. Pursuant to orders by consent made by Allsop CJ on 3 February 2022, Zircon filed a concise statement on 16 March 2022. Also pursuant to orders by consent made by Jagot J on 24 March 2022, Zircon filed an amended originating application on 25 March 2022. The amended originating application, referring to the concise statement, sought substantially the same relief as the originating application save that the amount claimed was reduced to USD$7.2 million.

9. It appears that Zircon, BCC and Tokio Marine were engaged in discussions throughout 2022 concerning the necessity for, and form of, a proposed statement of claim and the filing by Zircon of a further amended originating application, including seeking leave to join Three Alps, Apies Ventures and Marsh Singapore to the proceeding. This culminated in Zircon filing an interlocutory application for leave to file a further amended originating application and a statement of claim, as well as for orders that Marsh Singapore, Three Alps and Apies Ventures be joined.

10. On 16 December 2022, Allsop CJ granted leave to Zircon to file an amended interlocutory application and to serve that application on Marsh Singapore, which service was effected on 19 January 2023.

11. At a case...