Add Business Group Pty Ltd v Aurenne Mt Ida Pty Ltd
[2023] WADC 120
•20 OCTOBER 2023
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: ADD BUSINESS GROUP PTY LTD -v- AURENNE MT IDA PTY LTD [2023] WADC 120
CORAM: REGISTRAR JEYAMOHAN
HEARD: 11 OCTOBER 2023
DELIVERED : Ex tempore
PUBLISHED : 20 OCTOBER 2023
FILE NO/S: CIV 1939 of 2023
BETWEEN: ADD BUSINESS GROUP PTY LTD
Plaintiff
AND
AURENNE MT IDA PTY LTD
Defendant
Catchwords:
Costs - Application for a stay of proceedings under Commercial Arbitration Act 2012 (WA) - Whether costs can be determined following a stay of proceedings - Turns on own facts
Legislation:
Commercial Arbitration Act 2012 (WA)
Rules of the Supreme Court 1971 (WA)
Supreme Court Act 1935 (WA)
Result:
Proceedings stayed
The costs of the stay application and the summary judgment application to be determined by a registrar in chambers
Representation:
Counsel:
| Plaintiff | : | Mr J R Shepherd |
| Defendant | : | Mr E Fearis |
Solicitors:
| Plaintiff | : | Blackwall Legal LLP |
| Defendant | : | Minter Ellison |
Case(s) referred to in decision(s):
Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52
Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52 (S)
Oshlack v Richmond River Council (1998) 193 CLR 72
Relative Networks Pty Ltd v Evoluzione Pty Ltd [2021] WASC 121
Rinehart v Rinehart [2020] NSWSC 68
Riva NSW Pty Ltd v Key Nominees Pty Ltd [2023] NSWSC 711
REGISTRAR JEYAMOHAN:
[This decision was delivered extemporaneously on 11 October 2023 and edited from the transcript.]
Introduction
By chamber summons application dated 23 August 2023, the defendant applies for the following orders:
(a)an order under the Commercial Arbitration Act 2012 (WA) s 8 that refers ADD Business Group Pty Ltd and Aurenne Mt Ida Pty Ltd and these parties' dispute the subject of these proceedings to arbitration; and
(b)the Applicant's costs of this summons.
(Stay Application)
The Stay Application is supported by a copy of the arbitration agreement and the affidavit of Alex Michael Ian Hackett sworn 22 August 2023.
The Stay Application was returnable for a directions hearing in chambers on 4 October 2023. At the hearing, the plaintiff consented to the matter being referred to arbitration and the proceedings being stayed, but opposed the defendant's proposed orders that the issue of the costs of the defendant's summons for referral to arbitration and the costs of the proceedings to date be the subject of hearing and determination. By its minute of proposed orders dated 3 October 2023, the plaintiff instead proposed that on the question of costs, the costs of the defendant's application for a stay be reserved.
The parties now seek this court's determination on the jurisdiction of the court to determine the costs of the Stay Application and of the broader proceedings following an order that the proceedings be stayed.
Overview
The plaintiff is purportedly engaged in the business of designing, constructing and maintaining remote and permanent accommodation. By writ of summons and statement of claim filed 24 April 2023, the plaintiff alleges that on 20 October 2021, the plaintiff and the defendant entered into a written agreement entitled 'CONTRACT NO SP11 FOR SUPPLY AND FABRICATE CONCRETE BASE BUILDINGS' (Agreement) for the supply and fabrication of concrete base buildings in relation to the defendant's operations at the Mt Ida Gold Project site.
A memorandum of appearance was entered on behalf of the defendant on 19 May 2023.
The plaintiff's claim against the defendant is as set out in the amended statement of claim filed 9 June 2023. The plaintiff alleges that the defendant breached the Agreement by failing to make payment and seeks an order of the court that the defendant pay to the plaintiff the amount of $449,632.02 and interest at the rate of 18% per annum from the date of the claim until payment is made in full.
By chamber summons dated 9 June 2023, the plaintiff applied for an order for summary judgment against the defendant (Summary Judgment Application). By order of the court made 29 September 2023 following a hearing of the Summary Judgment Application, the court made the following orders:
1.The plaintiff's application for summary judgment by chamber summons dated 9 June 2023 be dismissed.
2.The defendant be granted leave to defend.
3.Costs of the chamber summons application dated 9 June 2023 be reserved.
The defendant's chamber summons in respect of the Stay Application preceded the determination of the Summary Judgment Application.
The Stay Application was returnable for a directions hearing on 4 October 2023 in chambers. At the hearing, the plaintiff consented to the matter being referred to arbitration and the proceedings being stayed, but opposed the defendant's proposed orders that the issue of the costs of the defendant's summons for referral to arbitration and the costs of the proceedings to date be the subject of hearing and determination. By its minute of proposed orders dated 3 October 2023, the plaintiff instead proposed that the costs of the defendant's application for a stay be reserved and otherwise opposed the determination of the broader costs of the proceedings. This position was consistent with the plaintiff's minute of proposed orders in respect of the application filed 3 October 2023 which proposed the following orders:
1.The parties be referred to arbitration.
2.The proceedings be stayed until the dispute resolution process is completed.
3.The costs of the defendant's application for a stay be reserved.
Whilst the parties are in agreement on the question of the referral of these proceedings to arbitration and that the proceedings be stayed, the defendant seeks the following orders on the question of costs as set out in the defendant's minute of proposed orders dated 3 October 2023 (relevantly) that:
By 18 October 2023, the defendant file and serve an outline of submissions in relation to the issues of the costs of the defendant's summons for referral to arbitration and the costs of the proceedings to date (Costs Issues).
The parties now seek this court's determination on the jurisdiction of the court to determine the costs of the Stay Application and of the broader proceedings following an order that the proceedings be stayed.
In these circumstances, the defendant's Stay Application was adjourned to hearing on 11 October 2023 to allow each party to file and serve any written submissions they intend to rely on the jurisdiction of the court to determine the costs of the Stay Application and of the broader proceedings following an order that the proceedings be stayed.
The alternative proposal put forward by the defendant that the proceedings not be stayed until all extant issues between the parties have been heard and determined does not cure the limitation of there being no final determination. The alternative proposal is opposed by the plaintiff.
Legal principles summary
A stay of proceedings stops the further conduct of the proceedings in a court at the stage that they have reached, so that the parties are precluded after the stay from taking any further steps in the proceedings: Riva NSW Pty Ltd v Key Nominees Pty Ltd [2023] NSWSC 711 [161].
The defendant relies on the decisions of the Supreme Court of Western Australia in Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52 and Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52 (S) (collectively Australian Maritime). The costs issue between the parties in Australian Maritime was whether costs should be paid on an indemnity basis in respect of the costs of the stay application the subject of the court's orders.
In Rinehart v Rinehart [2020] NSWSC 68, the court there directed the parties to file brief written submissions as to costs with a view to determining that issue on the papers, having previously determined various interlocutory applications, including applications by each of the first and second defendants for a stay of the proceedings and a referral of the parties to arbitration pursuant to s 8(1) of the Commercial Arbitration Act 2010 (NSW) and/or s 8(1) of the Commercial Arbitration Act 2012 (WA).
Neither party has directed this court to any authority on the court's ability to determine the question of costs of the overall proceedings in circumstances where the parties consent to an interim stay of the proceedings and where there has been no determination of the merits of the proceedings in its entirety. Whilst the discretion of the court to order costs under s 37 of the Supreme Court Act1935 (WA) and O 66 r 1 of the Rules of the Supreme Court1971 (WA) is very wide, the discretion must be exercised judicially, that is, in accordance with established principles and factors directly connected with the litigation, and not arbitrarily, capriciously or so as to frustrate the legislative intention: Oshlack v Richmond River Council (1998) 193 CLR 72.
Analysis
I have carefully considered the affidavit evidence and the submissions put to the court including by counsel at the hearing on 11 October 2023.
In the present matter, the plaintiff commenced proceedings against the defendant by writ of summons filed 24 April 2023. On 9 June 2023, the plaintiff filed a chamber summons seeking summary judgement against the defendant. The application was set down for a special appointment on 1 September 2023.
On 23 August 2023, the defendant filed a chamber summons seeking to have the matter referred to arbitration. The plaintiff's application for Summary Judgment by chamber summons dated 9 June 2023 was determined by this court on 29 September 2023. The Summary Judgment Application was dismissed with the question of the costs of that application being reserved.
Analysis: Costs of determined application(s)
Having had regard to the court's decision in Australian Maritime, I accept the defendant's submission that there, the court delivered a supplementary judgment in relation to costs, with judgment being delivered after the court had made orders that the parties be referred to arbitration and the proceedings stayed.
That is, in both Australian Maritime and Rinehart v Rinehart, the court had already made a determination in respect of the underlying subject application with the matter for future determination being limited to the question of costs in respect of the already determined application. This approach is consistent with the position of Master Sanderson in Relative Networks Pty Ltd v Evoluzione Pty Ltd [2021] WASC 121 (Relative Networks). Master Sanderson in Relative Networks made an order, with the consent of the parties, that the proceedings be stayed, and that the parties be referred to arbitration. In so making those orders, the Master Sanderson ordered that the cost of the (stay) application be determined by a registrar.
In the present matter, the Stay Application and the Summary Judgment Application have been the subject of a concluded outcome, either by way of consent or determination, with the remaining issue being limited to that of costs alone. It follows that I am satisfied that the authorities support the court's jurisdiction to determine the costs of the Stay Application and the Summary Judgment Application.
Analysis: Costs of the proceedings
It is useful here to note that there has been no final determination on the merits of the proceedings as a whole. The agreed position in respect of the Stay Application in respect of the orders proposed is no more than that the proceedings be stayed on an interim basis until the arbitral dispute resolution process is completed. There remains therefore the possibility of the proceedings being re‑enlivened.
Adopting the authorities referred to above, it is therefore difficult to accept the defendant's alternative proposal to defer the making of the proposed agreed orders in respect of the substantive Stay Application pending a determination in relation to the issues of the costs of the Stay Application and the costs of the proceedings to date. In circumstances where there has clearly been no final determination of the proceedings as such, the alternative proposal would have the circular effect of these proceedings needing to first proceed to some form of final judgment or dismissal either by consent or on the merits. The alternative proposal therefore cannot be sensibly supported in light of the agreed position in respect of the substantive Stay Application presently before the court.
In all of the circumstances therefore, I am of the view that it would not be appropriate for the court to determine the costs of the proceedings in its entirety in circumstances where the proceedings are not yet in a final form.
Orders
1.The parties be referred to arbitration.
2.Subject to order 3 below, the proceedings be stayed until the dispute resolution process is completed.
3.The costs of the Stay Application and the Summary Judgment Application be determined by a registrar in chambers.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AC
Court Officer
18 OCTOBER 2023
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