Bluescope Steel Limited v Allianz Australia Insurance Limited [2015] NSWDDT 2 (20 July 2015)

Published 27 Aug 2015

In 2006, Mr Jackson commenced proceedings against his former employer, Bluescope (previously known as John Lysaght Limited), after he contracted mesothelioma from exposure to asbestos at work in 1957 onwards. In 2007, Mr Jackson died and his wife was substituted as the plaintiff in the proceedings. The matter settled in 2007 and Bluescope paid $225,000 plus the Plaintiff’s legal costs.

Bluescope had indemnity insurance covering it with respect to the liability it incurred from employees through their negligence. This cover was with Manufacturers Mutual Insurance Limited (MMI) which was acquired by Allianz Australia Limited. Bluescope made a claim with Allianz and Allianz declined indemnity.

In 2009, Bluescope commenced proceedings against Allianz in an attempt to obtain indemnity insurance. The proceedings became complex due to multiple issues. Bluescope sought an extension to bring a cross-claim against Allianz in the original 2006 proceedings. The cross-claim was heard before a Judge Finnane in December 2012 – February 2013. The decision was then appealed.

ISSUES
  • In the 2006 proceedings, Bluescope was ordered to pay 50% of the legal costs of Allianz of the hearing. Bluescope was also required to pay all of the legal costs of Allianz outside of the first proceeding and the costs of the second hearing for the appeal.
  • The issue which was discussed on this date related to what type of cost order should be made with respect to the 2009 proceedings.
DECISION

The decision was that Allianz should have its costs of the 2009 hearing. Judge Kearns did not envisage that there would be confusion about which costs were covered in the 2006 proceedings and how the earlier orders would affect the 2009 proceedings. Judge Kearns also pointed out that he did not believe that two cost orders in the favour of Allianz enabled them to double-dip and claim payment twice for the same work. Allianz can only be compensated for its work once.

ORDERS

Orders were made in accordance to prayers 1 and 2 of the notice of motion filed by Allianz on 3 June 2015.