Allen v Merym Pty Ltd t/as EMCO Building [No 4]
[2023] WADC 95
•17 AUGUST 2023
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: ALLEN -v- MERYM PTY LTD t/as EMCO BUILDING [No 4] [2023] WADC 95
CORAM: COMMISSIONER COLLINS
HEARD: ON THE PAPERS
DELIVERED : 17 AUGUST 2023
FILE NO/S: CIV 1102 of 2019
BETWEEN: ROBERT PAUL ALLEN
Plaintiff
AND
MERYM PTY LTD t/as EMCO BUILDING
First Defendant
AXS ACCESS MANAGEMENT PTY LTD
Second Defendant
PAUL HOUGH AND GAETANA FUCILE t/as UNIQUE SCAFFOLDING
Third Defendant
Catchwords:
Practice and procedure - Costs - Whether special costs order should be made - Whether relevant costs determination inadequate - Whether inadequacy arose by reason of unusual difficulty, complexity or importance of matter - Turns on own facts
Legislation:
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA)
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020 (WA)
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA)
Legal Profession Uniform Law Application Act 2022 (WA), s 141
Result:
Plaintiff's application for special costs orders allowed
Representation:
Counsel:
| Plaintiff | : | Mr D J Bayly |
| First Defendant | : | Mr J J Sheldrick |
| Second Defendant | : | Mr C C Rimmer |
| Third Defendant | : | Mr A A Nolan |
Solicitors:
| Plaintiff | : | Hoffmans Lawyers |
| First Defendant | : | Meridian Lawyers (Perth) |
| Second Defendant | : | Sparke Helmore Lawyers |
| Third Defendant | : | McCabes |
Case(s) referred to in decision(s):
Allen v Merym Pty Ltd t/as EMCO Building [No 3] [2023] WADC 55
Bolt v Bolt [2023] WASC 162 (S)
GH1 Pty Ltd (in liq) v Marnbu Projects Pty Ltd [2022] WASC 416 (S)
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S)
Table of Contents
A...... Overview
B...... Plaintiff's position
Plaintiff's materials
Plaintiff's proposed orders
C...... Defendants' positions
D...... General principles
E...... Disposition
Should special costs orders be made?
Maximum hourly and daily rates for counsel which exceed the scale rates
Costs of the plaintiff's application
F...... Conclusion
COMMISSIONER COLLINS:
A. Overview
On 26 May 2023, I delivered my reasons for decision following the trial of this matter.[1] At the time, I gave the parties some time to see if they could reach agreement on the terms of the orders following my decision.
[1] Allen v Merym Pty Ltd t/as EMCO Building [No 3] [2023] WADC 55 (Primary Reasons). In these reasons, I have used the same definitions as contained in the Primary Reasons.
When the matter reconvened on 14 June 2023, the court was provided with an agreed minute of proposed orders, which required the plaintiff to file and serve an application for special costs orders, together with any supporting affidavits and submissions within 30 days of the date of the order. The defendants were similarly to file and serve any submissions and/or affidavits in response within 21 days following the plaintiff's filing.
Ultimately, the court made orders dated 14 June 2023, that relevantly provided as follows:
4.Within 21 days of the date of this order, the plaintiff do file and serve an application for special costs orders, together with any supporting affidavit/s and/or submissions and a minute of proposed orders.
5.The defendants do within 21 days of the filing of the plaintiff's application for special costs orders do file and serve any responsive submissions and/or affidavit/s and a minute of proposed orders.
6.The plaintiff's application under Order 4 be listed for a hearing at 2:15pm on 9 August 2023.
These reasons concern the plaintiff's application for special costs orders.
In summary, the plaintiff sought special costs orders pursuant to s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) (Uniform Law Act) by which the following items were to be taxed without regard to the relevant limits contained in the applicable determination, namely: preparation of the case for trial, counsel fee on brief, counsel fee for hearing and preparation of the schedule of damages.
For the reasons that follow, the plaintiff's application for special costs orders is allowed.
B. Plaintiff's position
Plaintiff's materials
The plaintiff supported his application for special costs orders with the following materials:
(a)the affidavit of Murray Posa sworn 5 July 2023 (Posa affidavit). Attached to Mr Posa's affidavit, was a draft bill of costs; and
(b)the written submissions dated 5 July 2023, settled by senior counsel, Mr Curwood SC and Mr Bayly of counsel (plaintiff's submissions) together with the plaintiff's minute of proposed orders dated 5 July 2023.
By way of summary, Mr Posa referred to the following matters:
(a)the plaintiff had incurred costs in the action in excess of $405,000 (including counsel fees but excluding the costs associated with the special costs application);
(b)the draft bill of costs attached to his affidavit showed that the plaintiff had incurred costs in respect of the following scale items, which exceed the scale limits in the applicable determinations: scale items for preparation of case, preparation of the schedule of loss and damage, counsel fee on brief and counsel fee for hearing;
(c)the work to prepare and advance the plaintiff's case to trial was carried out by Mr Posa, a solicitor and a paralegal, as well as independent counsel (Mr Bayly);
(d)Mr Posa spent in excess of 260 hours undertaking activities preparing the case for trial under items 18 or 19 of the applicable determination;
(e)Mr Bayly also spent time preparing the case for trial. In the plaintiff's submissions, it was submitted that Mr Bayly's hours totalled in excess of 134 hours, and that they would ordinarily fall within item 22 of the 2020 Scale Determination, being the fee on brief; and
(f)Mr Bayly entered into a costs agreement with Mr Posa's firm on the basis that his hourly rate was $550 (inclusive of GST) and a daily rate of $5,500 (inclusive of GST) for court hearings, which exceeded the scale maximum. Mr Posa stated that Mr Bayly was engaged on the basis of his considerable experience in personal injury litigation.
Mr Posa set out in his affidavit various matters which he said contributed to the unusual difficulty, complexity and importance of the matter. Mr Posa referred to the following matters, amongst others:
(a)the plaintiff sustained serious injuries that reduced his earning capacity for the rest of his working life;
(b) the plaintiff was required to prove liability against three defendants, including causation and the plaintiff's damage. This involved examination and consideration of the relationships between the plaintiff and the three defendants. This occurred against the background where there were no witnesses to the accident, the accident scene was not photographed and where the defendants denied that the accident occurred in the circumstances the plaintiff alleged;
(c)the plaintiff was required to defend allegations of contributory negligence, which it did successfully;
(d)the plaintiff's loss was complicated because of pre-existing medical conditions and several operations post the accident, which significantly affected the calculation and assessment of the plaintiff's past economic loss and future loss of earnings and relevant contingencies;
(e)the trial of the action occurred over seven hearing days, with a further hearing day devoted to closing addresses, which supplemented extensive written submissions; and
(f)the Primary Reasons spanned 292 pages, which reflected the number of issues raised during the trial.
Plaintiff's proposed orders
The plaintiff sought the following orders:
1.The plaintiff's costs of the action, as ordered to be paid by the orders made by Commissioner Collins on 14 June 2023, be taxed, if not agreed, without regard to the following limits as set out in the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (2018 Scale), the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020 (2020 Scale) and the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (2022 Scale):
(i)Table A of the 2020 Scale and the 2022 Scale: maximum hourly and daily rates for Counsel;
(ii)item 18(b) of Table B of the 2020 Scale and the 2022 Scale: preparation of schedules required by District Court Rules 45C and 45D;
(iii)item 18 of Table B of the 2018 Scale and item 19 of Table B of the 2020 Scale and the 2022 Scale: preparation of case;
(iv)item 22(a) of Table B of the 2020 Scale: Counsel fee on brief;
(v)item 22(c) of Table B of the 2020 Scale and the 2022 Scale: Counsel fee for the second and each day of hearing.
2.The defendants pay the plaintiff's costs of this application to be taxed, if not agreed, with the defendants' liability to pay the plaintiff's costs of this application to be apportioned in accordance with Order 2 of the Orders made on 14 June 2023.
C. Defendants' positions
The defendants did not file any minutes of proposed orders, affidavits or submissions in relation to the plaintiff's application for special costs orders.
By letter dated 26 July 2023, Mr Mark Birbeck, a partner of Meridian Lawyers and EMCO's solicitors during the trial of the matter, informed the court that the defendants had each advised the plaintiff that they neither consented to nor opposed the plaintiff's application. In the circumstances, the defendants did not intend to file minutes of proposed orders, affidavits or submissions in relation to the plaintiff's application for special costs orders. Mr Birbeck's letter was copied to the solicitors for Mr Allen, AXS and Unique Scaffolding.
The following day, Mr Posa informed the court by email that he had received confirmation from each of the defendants that they neither consented to nor opposed the orders sought by the plaintiff. Mr Posa also enquired whether, having regard to the above circumstances, the plaintiff's application could be dealt with on the papers.
Having regard to the parties' positions, the court wrote to the parties by letter dated 3 August 2023 enquiring whether an oral hearing was required as scheduled, or whether they were content for the court to determine the application on the papers.
As no party required the hearing to proceed, the hearing was vacated.
D. General principles
The court has power to make a special costs order under s 141(3) of the Uniform Law Act.
Section 141 of the Uniform Law Act provides as follows:
(1)The following are regulated by an applicable costs determination -
(a)the taxation of bills of law practices;
(b)any other aspect of the costs charged by law practices.
(2)Subsection (1) is subject to -
(a)any costs agreement made in accordance with the Legal Profession Uniform Law (WA) Part 4.3 Division 4 or the corresponding provision of a corresponding law; and
(b)section 146; and
(c)the Legal Aid Commission Act 1976 section 14.
Note for this subsection:
See the Civil Liability Act 2002 section 15L and the Motor Vehicle (Third Party Insurance) Act 1943 section 27A, which affect costs under particular agreements between a law practice and client.
(3)Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do any or all of the following -
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
(4)Subsection (1) does not limit the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court, judicial officer or taxing officer the amount of costs allowed.
(5)If a costs determination is in force in respect of any business referred to in section 133(1), any subsidiary legislation fixing or purporting to regulate the remuneration of law practices in respect of that kind of business is of no force or effect.
The relevant principles applicable to a special costs determination are well known. In Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) (Buss P, Murphy & Beech JJA), the Court of Appeal summarised the position at [11] - [15]. Relevantly, at [12], the court stated that where a special costs order is sought, the court is required to consider two questions, namely:
(a)whether the maximum amounts allowable under the relevant scale items in the applicable costs determinations are inadequate in the sense that there is a fairly arguable case that, on taxation, costs may properly be allowed in an amount which is greater than the maximum amounts; and
(b)whether the inadequacy of the costs allowable under a costs determination arises because of the 'unusual difficulty, complexity or importance of the matter'.[2]
[2] See also Bolt v Bolt [2023] WASC 162 (S) [10] (Vandongen J, as his Honour then was); GH1 Pty Ltd (in liq) v Marnbu Projects Pty Ltd [2022] WASC 416 (S) [44] (Lundberg J).
Although the Court of Appeal was dealing with the predecessor legislation in that case, the current provision is in the same terms as the repealed provision. Accordingly, as has recently been held in the Supreme Court, the principles expressed as applicable to the predecessor legislation continue to apply.[3]
[3] GH1 Pty Ltd (in liq) v Marnbu Projects Pty Ltd [41] and the cases cited therein (Lundberg J).
As to the second criterion referred to above, in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2], the Court of Appeal stated at [15] as follows:
15The word 'unusual' in s 280(2) of the Act qualifies only the 'difficulty' of the matter, and not its 'complexity' or 'importance'. The word 'unusual' in this context means unusual having regard to what one might describe as the usual run of civil cases determined in the court. That essentially involves the making of a value judgment by the court, having regard to the court's experience of the particular case when compared with the usual run of cases: Wainwright v Barrick Gold of Australia Limited. Also, the reference to 'importance' in this context allows the court to have regard to the significance of the issues that arose in the litigation. Significance can arise either because of the significance of the issues to the parties, or because of the significance of the issues to other prospective parties, or to the public or community generally: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq).
(citations omitted)
If the court forms the view that the answer to both of the above questions is 'yes', then the court may do all or any of the things referred to in s 141(3)(a) to s 141(3)(d) of the Uniform Law Act.
The issues that arise under s 141(3)(a) to s 141(3)(d) of the Uniform Law Act are to be addressed as a matter of impression, rather than as matters of detailed evaluation, precision or science. This means that it will not ordinarily be necessary for the court to determine what amount should be allowed on taxation, but only whether there is a fairly arguable case that a greater amount should be allowed than is otherwise allowable under the relevant costs determination.[4]
[4] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [11] - [12]; Bolt v Bolt [12].
Where a party obtains an order under s 141(3) of the Uniform Law Act, it does not necessarily follow that they will recover costs in an amount that exceed the amount allowed under the relevant determination. That is because it nevertheless remains the task of the taxing officer to consider the reasonableness of and necessity for the work undertaken, and to make a judgment about the remuneration reasonably required.[5]
[5] Sino Iron Pty Ltd v MineralogyPty Ltd [No 2] [11]; Bolt v Bolt [13].
As I have understood the plaintiff's application, the plaintiff submits that the court should exercise the power under s 141(3)(c) by removing the limits that are fixed under the relevant items contained in the applicable determination in relation to the preparation of the case for trial, counsel fee on brief, counsel fee for hearing and preparation of the schedule of damages.
E. Disposition
Should special costs orders be made?
In the plaintiff's submissions, the plaintiff relied on the matters contained in the Posa affidavit referred to above to assert that they supported a conclusion that the matter involved unusual difficulty, complexity and importance.
The defendants did not oppose or consent to the plaintiff's application.
Having regard to the plaintiff's submissions and evidence, the defendants' positions, and my involvement in the trial of the action, I am satisfied that the matter involved unusual difficulty, complexity and importance. This is for the following reasons.
I am satisfied that the proceedings were legally and factually complex. The trial of the action concerned numerous legal and factual issues concerning the circumstances of a workplace accident in early 2017, the interrelationships between the parties, and the plaintiff's medical circumstances before and after the accident. The medical evidence was voluminous and involved different specialisations (heart, left shoulder, and right forearm). Separate to this, the plaintiff relied on technical evidence from a practising chartered structural and civil engineer. The plaintiff's age, work and medical history raised complex issues as to his likely retirement age, the assessment of past economic loss and future loss of earnings and the appropriate deduction for contingencies.
I am also satisfied that the proceedings gave rise to unusual difficulty, compared to the usual run of civil cases in the District Court. In addition to the above matters, the defendants raised allegations of contributory negligence, defences arising out of contracts (including reliance on indemnities), apportionment and contribution claims. The breadth of the matters raised by the proceedings, and their legal and factual complexity, satisfies the unusual difficulty criterion, as is evidenced by the lengthy Primary Reasons.
Finally, I am also satisfied that the proceeding was important in the required sense under s 141(3) of the Uniform Law Act. In this regard, the plaintiff submitted that, to the plaintiff himself, the matter was of very significant importance, given his age, reduced earning capacity and lost earnings during the period he could not work after the accident. I agree with that submission.
Mr Posa included a table referring to data from the draft bill of costs which summarised the differences between the scale maximum and the sum claimed in the draft bill of costs.
I have reproduced part of the table below:
Item description 2022 Scale maximum Sum claimed in the draft bill of costs Plaintiff's particulars of damages Item 18(b) $6,072 $11,880 Preparation of case Item 19 $65,780 $137,940 Counsel fee on brief including first day of trial Item 22(a) $21,285 $73,700 Counsel fees Items 22(a), 22(c), and Table A $4,730 per day and $473 per hour $5,500 per day and $550 per hour
From the above, it can be seen that the sums claimed in the draft bill of costs exceed the amount allowed under the 2022 Scale. In relation to the preparation of plaintiff's damages schedule, preparation of case and counsel fee on brief, the costs incurred significantly exceed the scale maximum. My overall impression is that it is arguable that the plaintiff's solicitors and counsel carried out the work because of the unusual difficulty, complexity and importance of the matter.
I am satisfied, having regard to Mr Posa's affidavit evidence, viewed in the context of my awareness of the complexity and importance of the issues, and the unusual difficulty of the matter, that there is a fairly arguable case to be presented to the taxing officer, to the effect that the amount which should be allowed in respect of each relevant item is greater than the limit which would be imposed in respect of those items under the relevant scale, and that the inadequacy of the scale amount arises because of the unusual difficulty, complexity or importance of the matter.
Maximum hourly and daily rates for counsel which exceed the scale rates
I have also considered whether the plaintiff was justified in engaging counsel with considerable experience in personal injury litigation when compared to the usual run of civil cases. Having regard to the importance of the matter to the plaintiff, and the factual and legal complexity of the matter, I am satisfied that the plaintiff was justified in engaging counsel who charged more than the scale rates.
Costs of the plaintiff's application
As the plaintiff has been successful in its application, it is entitled to an order recovering its costs of the application from the defendants. The defendants should pay the plaintiff's costs of the application, to be taxed, if not agreed, with the defendants' liability to pay the plaintiff's costs of the application to be apportioned in accordance with Order 2 of the Orders made on 14 June 2023.
F. Conclusion
For the foregoing reasons, I consider that the appropriate orders as to costs are:
1.Pursuant to s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA), the plaintiff's costs of the action, as ordered to be paid by the orders made by Commissioner Collins on 14 June 2023, to be taxed, if not agreed, without regard to the following limits as set out in the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (2018 Scale), the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020 (2020 Scale) and the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (2022 Scale):
(i)Table A of the 2020 Scale and the 2022 Scale: maximum hourly and daily rates for Counsel;
(ii)item 18(b) of Table B of the 2020 Scale and the 2022 Scale: preparation of schedules required by District Court Rules 45C and 45D;
(iii)item 18 of Table B of the 2018 Scale and item 19 of Table B of the 2020 Scale and the 2022 Scale: preparation of case;
(iv)item 22(a) of Table B of the 2020 Scale: Counsel fee on brief;
(v)item 22(c) of Table B of the 2020 Scale and the 2022 Scale: Counsel fee for the second and each day of hearing.
2.The defendants pay the plaintiff's costs of the special costs application to be taxed, if not agreed, with the defendants' liability to pay the plaintiff's costs of the special costs application to be apportioned in accordance with Order 2 of the Orders made on 14 June 2023.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AN
Court Officer
17 AUGUST 2023
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