Alliance Contracting Pty Ltd v James
[2014] WASC 212 (S)
•31 JULY 2014
ALLIANCE CONTRACTING PTY LTD -v- JAMES [2014] WASC 212 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 212 (S) | |
| Case No: | CIV:1022/2014 | ON THE PAPERS | |
| Coram: | BEECH J | 31/07/14 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Some special costs orders made in favour of second respondent | ||
| B | |||
| PDF Version |
| Parties: | ALLIANCE CONTRACTING PTY LTD LAURIE EDMOND JAMES TENIX SDR PTY LTD |
Catchwords: | Costs Whether special costs orders should be made |
Legislation: | Legal Profession Act 2008 (WA), s 280(2) |
Case References: | Alliance Contracting Pty Ltd v James [2014] WASC 212 Pourzand v Telstra Corporation Ltd [2012] WASC 210 (S2) Redhill Iron Ore Ltd v API Management Pty Ltd [2012] WASC 323 (S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
LAURIE EDMOND JAMES
First Respondent
TENIX SDR PTY LTD
Second Respondent
Catchwords:
Costs - Whether special costs orders should be made
Legislation:
Legal Profession Act 2008 (WA), s 280(2)
Result:
Some special costs orders made in favour of second respondent
Category: B
Representation:
Counsel:
Applicant : No appearance
First Respondent : No appearance
Second Respondent : No appearance
Solicitors:
Applicant : Lavan Legal
First Respondent : No appearance
Second Respondent : Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Alliance Contracting Pty Ltd v James [2014] WASC 212
Pourzand v Telstra Corporation Ltd [2012] WASC 210 (S2)
Redhill Iron Ore Ltd v API Management Pty Ltd [2012] WASC 323 (S)
- BEECH J:
Introduction
1 On 19 June 2014, I dismissed Alliance's application for relief in respect of an adjudication made under the Construction Contracts Act 2004 (WA).1 I ordered that the application be dismissed and made orders for the exchange of affidavits and submissions on the question of costs, with that question to be dealt with on the papers. These reasons deal with the question of the costs of the action.
2 It is not in dispute that the costs of the application should follow the event, so that Alliance should pay Tenix's costs of the proceedings. Tenix seeks special costs orders under s 280(2) of the Legal Profession Act 2008 (WA), lifting the limits under the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) (the Scale). Alliance opposes the making of any special costs orders.
Special costs orders - general principles
3 The principles are well established, and were not in dispute.
4 Section 280(2) of the Legal Profession Act provides in substance that if a court 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 may make appropriate orders increasing or removing the limits.
5 The parties agreed that the court should apply the principles stated in Pourzand v Telstra Corporation Ltd2 and in Redhill Iron Ore Ltd v API Management Pty Ltd3.
6 In Pourzand, Edelman J said as follows:
Therefore, before a discretion can be exercised to make a special costs order, the court must be of the opinion:
(1) the Scale item is inadequate, and
(2) the inadequacy arises because of the unusual difficulty, or complexity, or importance of the matter: Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11] (Martin CJ).
These questions are to be addressed as matters of impression rather than detailed evaluation: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7] (Martin CJ). Courts should draw from their experience and act on impressions gained during the litigation to take into account the issues which have been involved, albeit without attempting to make an estimate of the time which is thought to be appropriate when the information for that assessment is not all available: Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S) [43] (Pullin J).
As to (1) (inadequacy of the Scale item), the inadequacy will be demonstrated if there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant costs determination: Heartlink Ltd [16] (Martin CJ).
A conclusion that it is fairly arguable that the taxing officer might properly allow costs at an amount greater than the amount allowable under the Scale does not always require evidence of the costs actually incurred: Frigger v Lean [2012] WASCA 66 [81] (Allanson J; Newnes & Murphy JJA agreeing).
As to (2) (inadequacy arising due to the unusual difficulty, complexity, or importance of the matter), the adjective 'unusual' qualifies only the 'difficulty' of the matter, not its complexity or importance: see, in relation to the identical terms of the predecessor to s 280(2):Heartlink Ltd [17] (Martin CJ); Hodgkinson v Doepel & Associates Architects Pty Ltd [2006] WASC 237 (S) [33] (Simmonds J); SDS Corporation Ltd v Pasdonnay Pty Ltd [2004] WASC 26 (S2) [102] - [106] (Roberts-Smith J).
Finally, although replacing the amount of the Scale item with a different ceiling may be appropriate where sufficient information exists to make that assessment, it is not uncommon for an order to be made removing the limit for the Scale item without replacing that limit with a different ceiling: EDWF Holdings [8] - [9], [13] (Martin CJ). When the Scale ceiling is lifted a taxing officer is otherwise unconstrained and need not allow costs above the previous Scale ceiling.
…
The approach sometimes taken to special costs orders, including the approach taken in this case, is to consider whether the whole of the litigation was of unusual difficulty, or complexity, or importance. This is not the correct approach. The question should be asked separately in relation to each item for which the lifting or removal of the Scale is sought. The words of s 280 refer to the inadequacy of the amount of costs allowable 'in respect of a matter under a costs determination' because of the unusual difficulty, complexity or importance 'of the matter'. Section 280 does not contemplate a usual course of removing all limits because of unusual difficulty, complexity or importance. It focuses attention upon particular items.
An application for special costs orders does not require lengthy evidence or submissions on an individual matter of costs. In some cases the same factors of unusual difficulty, or complexity, or importance will apply to all factors for which a lifting of the Scale is sought. But it is possible that an individual matter in litigation might be unusually difficult, or complex, or important, even if the litigation itself is not, or vice versa4.
7 In Redhill, I applied those principles, and added the following:
Further, one of the policy considerations that should guide a court in addressing an issue under s 280(2) is that the court should not usurp the role of the taxing officer: Heartlink Ltd v Jones [2007] WASC 254 (S) [13]; O'Rourke v P & B Corporation Pty Ltd [2008] WASC 36 (S) [20].
'Importance' in s 280(2) encompasses importance to the parties; it does not require broader importance to the public or a sector of the public: Heartlink v Jones [17] - [19].
'Unusual' in s 280(2) means unusual having regard to what one might describe as the usual run of civil cases determined in the Supreme and District Courts. That involves a value judgment by the court taking into account the court's experience of a particular case compared to the usual run of cases: O'Rourke v P & B Corporation Pty Ltd5.
Tenix's application
8 Tenix seeks an order removing the limit on the hourly rate in respect of items 24(c), 24(d), 28(g), 28(h) and 33(a) of the Scale. It also seeks orders removing the limit on hourly rates, and number of hours, in respect of items 28(b) and 28(d) of the Scale.
Items 24(c), 24(d), 28(g), 28(h) and 33(a) - should the limit on the maximum hourly rate be removed?
9 Items 24(c) and 24(d) relate to preparation and attendance at mediation. Item 28(g) governs the instructing solicitor attending the hearing. The hearing occupied about three hours. Item 28(h) governs the attendance on the reserved decision. Item 33(a) governs other work done not covered by any other item.
10 None of those items sets a maximum number of hours. The Scale provides a maximum hourly rate for these items of $451 for work done by a senior practitioner.
11 The evidence establishes that Tenix was charged $670 per hour for Mr Ryder's time and $495 per hour for the time spent by Ms Botsis. Of course, the simple fact that a successful party has incurred costs exceeding the Scale rate does not justify the lifting of the rate in the Scale. The rates charged are evidently the standard hourly rates for these practitioners. There is no evidence or submission to sustain a conclusion that the hourly rates are incurred because of any unusual difficulty, complexity or importance in the matter. Rather, these are the standard rates of the practitioners concerned in respect of any work which they perform.
12 For these reasons, I decline to lift the limit on the hourly rate in these items of the Scale.
Item 28(b) - preparation for hearing
13 The Scale provides for a maximum of 10 hour's work for a senior practitioner at a rate of $451 per hour.
14 Tenix proposes to claim an amount of almost $60,000. That is derived by application of the hourly rates already mentioned. For the reasons given, I would not lift the limit in respect of the hourly rate.
15 The evidence establishes that the practitioners concerned spent considerably more than 10 hours on the preparation of the matter for hearing.
16 I am satisfied that the issues in the application were complex and important within the meaning of s 280(2) of the Legal Profession Act. The primary questions raised appeared to be novel ones, and the parties' submissions invited consideration of decisions on similar but not identical legislation from a number of different jurisdictions. The questions as to relief were also complex. The amount the subject of the determination was not insubstantial; whether the adjudication was to be set aside was important to the parties.
17 I am satisfied that the complexity and importance of the matter is such that the limit of 10 hours under item 28(b) is inadequate. I am satisfied that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount based on more than the 10 hour limit which would be imposed by the Scale. Consequently, I would order that the limit in item 28(b) as to the maximum number of hours be removed.
Item 28(d) - counsel fee for senior counsel
18 The Scale provides a maximum rate of $638 per hour and $6,380 per day. For item 28(d) it provides for two days preparation and a one day hearing, leading to a maximum of $19,140.
19 Tenix proposes to claim an amount in respect of this item of almost $50,000, based on 75.9 hours of work at $650 per hour.
20 The Scale provides a maximum of $638 per hour. I am not persuaded that the hourly rate in the Scale should be lifted.
21 However, I am persuaded that the complexity and importance of the matter is such that a maximum of 30 hours is inadequate. I am satisfied that it is fairly arguable that the bill of costs may tax at an amount based on more than the 30 hour limit that would be imposed by the Scale item.
22 Of course, the question of the appropriate amount for this and all other items is one for the taxing officer. It remains open to the taxing officer to determine the appropriate amount, and that amount may, in the end, be less than the limit under the Scale.
23 For these reasons, I would order that the limit in item 28(d) as to the maximum amount of time be removed.
The costs of this application
24 Neither party has been entirely successful on the question of what special costs orders should be made. I would make no order as to costs in relation to this application.
Conclusion
25 For the reasons I have given, I make the following orders:
1. The applicant pay the second respondent's costs of the application, to be taxed if not agreed, subject to par 2.
2. There be no order as to the costs of the application for costs orders.
3. The limit as to maximum time in items 28(b) and 28(d) of the Scale be removed.
1Alliance Contracting Pty Ltd v James [2014] WASC 212
2Pourzand v Telstra Corporation Ltd [2012] WASC 210 (S2)
3Redhill Iron Ore Ltd v API Management Pty Ltd [2012] WASC 323 (S)
4Pourzand [9] - [14], [24] - [25]
5Redhill [6] - [8]
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