Astral Land Pty Ltd v Golden Commercial Pty Ltd
[2012] WASC 274
•31 JULY 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: ASTRAL LAND PTY LTD -v- GOLDEN COMMERCIAL PTY LTD [2012] WASC 274
CORAM: KENNETH MARTIN J
HEARD: 23 MARCH & 14 JUNE 2012
DELIVERED : 31 JULY 2012
FILE NO/S: CIV 2239 of 2011
BETWEEN: ASTRAL LAND PTY LTD
Plaintiff
AND
GOLDEN COMMERCIAL PTY LTD
First DefendantLUAN MAY WONG
Second DefendantLAKEBRIDGE HOLDINGS PTY LTD
Third Defendant
Catchwords:
Practice and procedure - Pleading - Summary judgment application by two of three defendants - Strike out application - Three deeds of release favouring corporate defendants - Australian corporation's plea of unconscionability - Director said not to speak, write or understand English - Nothing said about other corporate officers including secretary - Unconscionability plea struck out in part as failing to disclose arguable cause of action and constituting abuse of process - Misleading and deceptive conduct plea as regards representations - Not appropriate for matter to be subjected to summary dismissal
Legislation:
Nil
Result:
Application for summary judgment refused
Paragraph 105(d) of amended substituted statement of claim struck out
Category: B
Representation:
Counsel:
Plaintiff: Mr S M Davies SC & Mr J D Maclaurin
First Defendant : Mr M L Bennett
Second Defendant : Mr M L Bennett
Third Defendant : Mr M L Bennett
Solicitors:
Plaintiff: Hotchkin Hanly
First Defendant : Bennett & Co
Second Defendant : Bennett & Co
Third Defendant : Bennett & Co
Case(s) referred to in judgment(s):
Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209
Felton v Mulligan (1971) 124 CLR 367
Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112
Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26
Wong v Aripin [2011] WASC 174
KENNETH MARTIN J: There were two interlocutory applications in this action heard on Friday 23 March 2012, brought by the defendants. The first was an application pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 16 on behalf of the first defendant (Golden) and third defendant (Lakebridge) seeking that the claim against them by the plaintiff (Astral) be summarily dismissed. The second defendant (Ms Wong) is an individual. She did not seek a defendant's summary judgment.
Essentially, the summary judgment application by Golden and Lakebridge was advanced on the basis of the clear applicability of release and barring clauses in their favour in three deeds to which they were parties with Astral. Each of these three deeds is dated 29 May 2008. The release and barring clauses are in wide terms. The three deeds are found as attachments NEB2, NEB3 and NEB4 respectively in the affidavit of Nicola Emma Batalin, affirmed 10 November 2011, in support of the first and third defendants' application for summary judgment.
The second interlocutory application on 23 March 2012 was the application of all defendants to strike out in part the plaintiff's minute of substituted statement of claim, commenced by a minute filed 27 October 2011.
To date Astral has filed five iterations of its statement of claim (a statement of claim filed 3 August 2011, an amended statement of claim filed 22 September 2011, a minute of proposed substituted statement of claim filed 3 October 2011, a substituted statement of claim filed 19 December 2011 and an amended substituted statement of claim (ASSOC) filed 20 March 2012). The two applications heard on 23 March 2012 focused upon the most recent iteration of the pleading.
Because they are diverting and unhelpful in what is a long and complex pleading, I state at the outset that there are some typographical or nomenclature errors within the ASSOC which need to be fixed as soon as possible. So that they are not overlooked and do not divert attention from the arguments, I will set them out now:
(a)Paragraph 29(b). Reference to the 'First Defendant' in the first line of this subparagraph should be a reference to the 'Plaintiff', ie Astral. Hence subpar 29(b) should begin, 'Unbeknownst to the Plaintiff, had by that date, contrary to …'.
(b)Paragraph 60(d), third line. The figure of $24 million is incorrect. It should be replaced by the figure $26 million. That is necessary in order to derive what is referred to as the 'assumed value of $24 million' (see par 41(c) contrasted to par 41(b)).
(c)Particulars of par 61(b). The word 'the' at the end of the first line should be replaced by the name 'Andrew', in order to refer to 'Andrew Sugiaputra'.
(c)Paragraph 93. The words 'First Defendant' should be replaced by the word 'Plaintiff'. This is in reference to the averment of loss and damage 'pleaded below'.
(d)Paragraph 105(a). The words 'First Defendant' used towards the end of the third line should be replaced by the word 'Plaintiff'.
(e)Paragraph 105(e), third line. The word 'in' should be replaced by the word 'to' so that the sentence reads, '… the sale of the Plaintiff's shares to Lakebridge'.
(f)Paragraph 105(f), third line. Same error: the word 'in' should be replaced by the word 'to' so that the sentence reads, ' … the sale of the Plaintiff's shares to Lakebridge'.
In addition to those corrections, as a result of the argument which proceeded on 23 March 2012, the plaintiff should also correct par 7(a) which currently reads, 'A duty to act in good faith'. The subclause should read, 'A duty not to act other than in good faith'.
Furthermore par 62 contains an averment which is obviously not a component in any of seven representations pleaded by Astral between pars 40 and 65 of the pleading. Even with the other common law and statutory causes of action Astral invokes, this plea appears to go nowhere. It has a capacity to distract attention from what is already a complex pleading and should be excised.
The O 16 application by Golden and Lakebridge grounded upon the release and barring clauses found in the three deeds of 29 May 2008
There was confusion on the part of the plaintiff's legal representatives on 23 March 2012 when counsel for Golden and Lakebridge sought to press the RSC O 16 application for judgment against Astral. The content of the written submissions and case authorities exchanged between the parties beforehand seemed to have led Astral's representatives to think that only a strike out application was being pursued. That had not been my understanding (there being filed the affidavit of Ms Batalin sworn in support of the application on 10 November 2011 as I mentioned, followed by an affidavit by a solicitor opposing the strike out and summary judgment applications - see affidavit of Gandhi, affirmed 17 February 2012).
As events transpired, I was not persuaded on 23 March 2012 to grant summary judgment in favour of Golden and Lakebridge. The onus upon an applicant to show that the claim brought against it should not proceed to trial is a high one. An application must be evaluated on the basis that averments of fact within a statement of claim can be established: see generally, principles regarding summary dismissal on a defendant's application as summarised by Le Miere J in Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209 [27] ‑ [29].
In the present case, the so‑called 'killer point' raised on behalf of Golden and Lakebridge in their application for summary judgment stems from the argued applicability of release and barring clauses found within the three deeds, namely a deed of termination (NEB2), a deed of share sale and call option agreement (NEB3) and a deed of forfeiture (NEB4), all entered into on 29 May 2008.
On 23 March, senior counsel for Astral, in resisting the applications for judgment, took me to unconscionability pleas by Astral within pars 105 and 106 of Astral's most recent pleading: see par 105(c) which refers to a 'second agreement' and par 105(d) which also refers to that second agreement, as well as a deed of termination and a deed of forfeiture. Astral's use of the phrase 'second agreement' is a reference to the deed of share sale and call option agreement (par 65(b) of the ASSOC), which is NEB3 to Ms Batalin's affidavit of 10 November 2011.
Taking the pleaded facts at face value for the purposes of evaluating the defendants' summary judgment application, it seemed to me on 23 March that, provided the facts underlying the unconscionability plea were properly verified for the plaintiff, there looked to be enough to resist the RSC O 16 applications by Golden and Lakebridge. This was chiefly on the basis Astral's pleas of statutory unconscionability, made by reference to s 12CC of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), further or alternatively s 51AC of the former Trade Practices Act 1974 (Cth), further or alternatively s 11A of the Fair Trading Act 1987 (WA), were directed against the three deeds and, in particular, the release and barring clauses found in the deed of share sale and call option agreement.
I was not satisfied on 23 March that the underlying facts raising alleged unconscionability and undermining the deeds had been appropriately verified for the plaintiff merely by the affidavit of Gandhi affirmed 17 February 2012. On that basis I indicated I was prepared to dismiss the summary judgment application by Golden and Lakebridge, provided an affidavit for the plaintiff verifying the underlying facts, particularly those pleaded in pars 105 and 106, was filed. This was in a context where it was effectively being contended that the director and moving hand of Astral, Mr Lias Aripin, was a person who could not write, speak or understand English and who had, at the request of Ms Wong (acting for herself and the first defendant), put his signature for Astral and himself to the three deeds of 29 May 2008 without properly understanding the effect of his actions.
On 23 March 2012 I ordered that the plaintiff file an affidavit verifying these matters by 30 April 2012.
As regards the defendants' strike out application, notwithstanding many drafting errors in the pleading properly raised by the defendants, I was not persuaded its contents were so hopelessly untenable as to justify striking it out. This of course was subject to the required correction in due course of the typographical errors and some other minor concessions which had been made along the way by senior counsel for Astral.
Developments after 23 March 2012
What eventuated after 23 March 2012 was the filing of two affidavits on behalf of Astral, seeking to verify the underlying facts regarding unconscionability that had concerned me on 23 March. At ts 92 I had said:
Only because time is crushingly precious, I am of the view to cut this short, that provided there is on behalf of the plaintiff an affidavit filed, say, within a month, verifying the facts in the statement of claim, including the paragraphs 105, 106, 107 to which you have referred, there would on that basis be an arguable [claim].
Subsequently, an affidavit of Lias Aripin affirmed 27 April 2012 and an affidavit of Ms Virlina Yoman affirmed 27 April 2012 were filed.
Ms Yoman's affidavit was read on the basis that she is a translator and interpreter in the Bahasa Indonesia language and can translate to the English language. Effectively, her affidavit therefore seeks to confirm that Mr Lias Aripin's affidavit (which is written out in English and affirmed by him) has been translated and understood by Mr Aripin. Mr Aripin's affidavit appends the ASSOC and (subject to some qualifications) says that the facts within it are correct.
However, counsel for Golden and Lakebridge, Mr Bennett, was not satisfied with the verification on behalf of the plaintiff which has been provided via these further affidavits. Accordingly, Mr Bennett sought to press the RSC O 16 application, or to renew it. Essentially Mr Bennett's point is that the three deeds of 29 May 2008 were all executed by Astral as an Australian corporation (it being pleaded in par 1 of the ASSOC that Astral is a company duly incorporated in the State of New South Wales and having its registered office in the State of Western Australia). Significantly, it is put, Astral executed the three deeds not just by Mr Lias Aripin (as director) but also by his son, Mr James Aripin, as Astral's secretary. Mr James Aripin is also a co‑director of Astral (par 9(e) ASSOC). Mr Bennett says that as regards a plea of unconscionability by Astral, the position of James as to his understanding of the three deeds needs to be explained as well. As a result it is put that the verifying affidavits are deficient, and that the silence as regards James is deafening.
The three deeds are all executed for and on behalf of Astral pursuant to s 127 of the Corporations Act 2001 (Cth). Each of the three deeds carries the signature of Mr Lias Aripin as Astral's director, as well as a signature above the typed word 'secretary'. It is clear that this is the signature of Mr James Aripin, appearing on each of the three deeds. That is readily apparent by reference to attachment NEB1of Ms Batalin's affidavit, which is a deed of agreement made between Golden, Astral and Mr Lias Aripin dated 8 June 2006.
The 2006 deed records Mr Lias Aripin's acquisition of a 10% shareholding in Golden for $750,000, plus Astral's acquisition of a further 20% shareholding in Golden for its outlay of $2 million, on the basis of share acquisitions from various named persons. The result of this was, as between Mr Lias Aripin and Astral, a total 30% shareholding in Golden for the outlay in aggregate of $2.75 million.
The 2006 deed carries the signature and identification of Mr James Aripin as a director of Astral at that time, found underneath the sealing clause on p 3 and adjacent to the signature of Mr Lias Aripin.
From all this it is clear that Mr James Aripin has also applied his signature as secretary for Astral to each of the three deeds of 29 May 2008. Yet there is no reference at all to Mr James Aripin within pars 105 or 106 of the ASSOC. See also the particulars to par 64 of the ASSOC, asserting that on 28 May 2008 James and his father were present at a meeting with Ms Wong and others in Perth prior to executing the three deeds.
It is also clear from an affidavit affirmed by Mr James Aripin on 10 November 2011 in the counterpart Astral action against Wellington Parkland Pty Ltd and Ms Wong (CIV 2518 of 2011), which I am case managing in conjunction with this action, that Mr James Aripin is literate and appears to be proficient in English. Moreover, it appears that from some time in 2006 Mr James Aripin worked for the Golden Group.
Effectively then, Mr Bennett says that this cannot be the more typical case of a vulnerable non‑English speaking individual (Mr Lias Aripin) who has somehow been taken advantage of in a business transaction by reason of their failure to understand English. This is a case of an Australian corporation with three directors (par 9(e) ASSOC) doing business in Western Australia in a transaction concerning a sale of shares in another Australian corporation (Golden), whose significant asset of value is multi‑million dollar land held in the Perth CBD.
It is not appropriate therefore, says Mr Bennett, for Astral to 'hide' behind Mr Lias Aripin as a non‑English speaking director, where key documents are executed on behalf of Astral (the three deeds). Worse than that however, it is apparent, say Golden and Lakebridge, that the three deeds of 29 May 2008 all carry the signature of Mr James Aripin (as Astral's secretary) and, for reasons left wholly unexplained, James is not mentioned at all in pars 105 or 106 or in the verification affidavits. Furthermore, unlike in the counterpart action (CIV 2518 of 2011), Mr James Aripin has not sworn any affidavit for Astral explaining his understanding of the three deeds and no reason has been proffered explaining that omission.
This, it is said, is particularly crucial in circumstances where the terms of the release and barring clauses found in the three deeds are widely drawn and, on their face, ostensibly applicable to bar the present Astral claims.
If pars 64 and 65 of the ASSOC are examined, it can be seen that there is express reference by Astral to a meeting in Perth before the three deeds were executed on 29 May 2008. The particulars to par 64 refer to oral representations allegedly made by Ms Wong during the meeting between both Lias and James Aripin on behalf of Astral, Ms Sumiati Herianto (Mr Lias Aripin's wife), Ms Wong and Mr Andrew Sugiaputra (Ms Wong's son) at Golden's premises in Perth.
For his part, senior counsel for Astral asserts that the further affidavits by Mr Lias Aripin and Ms Yoman do meet a verification requirement as regards the plaintiff's plea of unconscionability in respect of the three deeds of 29 May 2008 (or at least the release and barring clauses found therein). For the reasons which I later explain, I disagree. The position as regards James cries out for an explanation and is left in a very unsatisfactory state of omission in my view.
However, senior counsel says there are other arguments for Astral to establish the inappropriateness of summarily dismissing Astral's claims against Golden and Lakebridge.
The terms of the releases, particularly as seen in the deed of forfeiture, are broad: see cl 3.1 referring to 'all rights whatsoever and howsoever arising between the parties herein shall be extinguished and compromised to the fullest extent'. By subcl 3.1(a) the compromise, discharge and release of the parties each to the other was from 'any and all claims whether arising from the Deed, hereunder or otherwise' (the reference to the deed being to the deed of share sale and call option agreement).
There appears to have been a protracted negotiation which saw a 'first agreement' replaced by a 'second agreement' (the first agreement being referred to as the 'past deed' in the deed of termination, with that past deed identified as dated 11 April 2008). The past deed is not before me (by reason of the successful objection to Ms Batalin's second affidavit affirmed 8 June 2012). Nevertheless, enough may be inferred about the 'past deed' by reference to what is said of it in the deed of termination and in the ASSOC - this past deed being referred to as the first agreement in par 56 of the ASSOC and par 56(b) of the ASSOC making reference to an agreed sale by Astral of its shares to Lakebridge (under the first agreement) for $3.69 million.
A proposed sale to Lakebridge of Astral's 30% shareholding in Golden was subsequently terminated under the deed of termination of 29 May 2008. That sale was replaced by arrangements under the share sale and call option deed for the sale of 30 redeemable preference shares in Golden by Astral to Lakebridge for a purchase price (par 4.1) of $2,011,246 if the call option was exercised by Lakebridge. As to that purchase price, I note par 4.2 providing:
Declarations as to purchase price
(a)No statement, promise, representation, advice or information has been provided by the Parties in respect of the assessment of the Purchase Price which has been derived from each party's own assessment and during voluntary negotiations.
(b)The Parties and each of them have independently accepted that the value of the Company is $24 million.
(c)The Parties have independently accepted that the mortgage liabilities of the company are valued at $11.7 million.
(d)The Parties have each obtained advice and accept that notional tax is likely to be about $5.5 million.
There is no conceptual reason why a sale to Lakebridge of Astral's 30% shareholding in Golden could not be lawfully negotiated on the basis of the completion of such a sale being accepted as putting an end to all claims between the parties, particularly claims over the end price obtained by Astral in finally disposing of its 30% shareholding in Golden.
Furthermore, it seems to me that if Astral holds a claim in tort for deceit arising out of the so‑called false representations (see par 73 of the ASSOC), meaning the first to sixth representations, Astral suffered its loss and damage when it irretrievably granted an option to Lakebridge to purchase its 30% shareholding (30 redeemable preference shares) under the terms of the deed of share sale and call option of 29 May 2008.
Therefore, what I assess as Mr Davies' arguments about Astral's loss not being sustained until Lakebridge exercised its call option on 8 July 2008, after the date of the releases in the three deeds on 29 May 2008, does not seem to me to advance Astral's case. If Astral's cause of action in deceit did not accrue until after 29 May 2008, nevertheless Astral's pleaded loss or damage, predicated upon it selling the 30% shareholding in Golden at too low a value (and granting releases and bars the subject of those three deeds of 29 May 2008), still seems on the construction of those provisions to fall within the breadth of widely drawn compromise and release clauses accepted at that earlier time.
Mr Davies also made a point about misleading and deceptive conduct being non‑excludable as a cause of action. I have reservations about the breadth of that statement. The real point, however, is that the three 29 May 2008 deeds are all pleaded to be the product of Astral's reliance upon statutory misleading and deceptive conduct of Golden and Ms Wong by the making of false representations (ie representations 1 through 6) (see pars 65, 81, 87 and 91(b)).
Astral's arguable claims in the face of the release and barring clauses in the three deeds
For convenience, I will set out at this point par 65 of the ASSOC (omitting the heading):
On or about 28 May 2008 and induced by and in reliance upon the First, Second, Third, Fourth, Fifth, Sixth and Seventh Representation and the Misleading Silence pleaded in paragraph 87 hereof [Astral]:
(a)executed a document entitled 'Deed of Termination' and thereby agreed, inter alia, that the First Agreement was terminated;
(b)executed a document headed 'Deed of Share Sale and Call Option Agreement' (the Second Agreement);
(c)Thereby agreed, inter alia, to give to Lakebridge an option to purchase [Astral's] shares in [Golden] for the sum of $2,011,000;
(d)executed a document headed 'Deed of Forfeiture'.
What I extract from a complex pleading is that seven representations (six of which are pleaded to be false) and some other alleged conduct by way of omission by Golden and Ms Wong (defined as the Misleading Silence at par 87 of the statement of claim) are alleged by Astral to have caused the three deeds of 29 May 2008 (containing compromise, release and barring clauses now relied upon as delivering the so‑called 'killer point') to be entered. However, these pleas would appear, as the ensuing causation or reliance, to only be directed towards Golden and Ms Wong (ie not against Lakebridge).
Representations 1 through 6 are collectively defined as 'false representations' (see par 73). That is in the context of a following plea of alleged deceit (ie the common law tort). Again, that appears to be a plea directed against Ms Wong and Golden, not against Lakebridge.
The 'false representations' are pleaded at pars 81 through 97 to amount to statutory misleading or deceptive conduct, contrary to s 52 of the former Trade Practices Act, or made contrary to provisions of the Fair Trading Act (see pars 81 ‑ 84). The so‑called Misleading Silence referred to in par 87 is again raised only as conduct alleged against Golden and Ms Wong, not Lakebridge. Paragraph 91(b) pleads:
[Astral]:
(a)…
(b)entered into the Deed of Termination, the Deed of Forfeiture and the Second Agreement and thereby, inter alia, granted a call option to Lakebridge over [Astral's] shares in [Golden], in reliance upon the First to Seventh Representations and each of them, and in reliance upon the Misleading Silence.
Paragraphs 92 and 93 plead:
92.But for the said representations and had there been proper disclosure of the undisclosed matters comprising the Misleading Silence, [Astral] would not have so acted.
93.The first defendant [sic, the plaintiff] has suffered loss and damage as pleaded below.
Furthermore, Astral's plea of loss and damage at par 107(b) reads:
[Astral] has suffered loss and damage as follows:
(a)…
(b)if and to the extent that Wong or [Golden] or Lakebridge are entitled to rely on any release or bar in respect of [Astral's] claim or any part of [Astral's] claim by reason of entry by [Astral] into the First Agreement, the Second Agreement, the Deed of Termination or Deed of Forfeiture, any alleged entitlement being denied, the value of the claim or part of the claim as the case may be.
Astral's ASSOC pleas up to par 107 are sufficient, by reason of their invocation of alleged statutory misleading and deceptive conduct as having brought about Astral's entry into the three deeds of 29 May 2008, to raise an arguable claim that must withstand the present summary judgment application brought by Golden. In other words, potential relief for Astral pursuant to former s 87 of the Trade Practices Act could extend on Astral's case, either to setting aside the 29 May 2008 deeds as a whole, or to avoiding some component clauses therein, or (possibly) to varying by amendment the application of certain clauses in those deeds, such as the release and barring clauses.
On that basis alone, the Astral claim, as against Golden, is not presently appropriate for summary dismissal. The matter can only be safely dealt with at a trial.
This was a point that Mr Davies articulated on 23 March 2012 (ts 85 referring to par 65):
[S]o we have pleaded that we were induced by those false representations to execute the very document that they rely on.
However, as formulated by the ASSOC that protection does not advance Astral's position as regards Lakebridge's RSC O 16 application in reliance upon the release and barring clauses.
Statutory relief for misleading and deceptive conduct is wide and flexible (see s 87 of the former Trade Practices Act). That is enough to require the matter to proceed to a trial. That is the position for Golden.
Lakebridge
However, as regards Lakebridge as third defendant, the position is less explicit. I do not read the ASSOC's misleading and deceptive conduct pleas up to par 107 to be advanced on any basis of the conduct of Ms Wong or of Golden being attributable to Lakebridge. Paragraph 4 of the ASSOC avers that the directors of Lakebridge were Paulus Indra Intan and Ms Wong's son, Mr Andrew Sugiaputra (both appointed 8 April 2008) and Ms Wong herself as from 21 September 2010.
In a temporal sense, however, the seven alleged representations (six of which are defined to be the false representations and on that basis to support statutory relief under the former Trade Practices Act, along with the so‑called Misleading Silence) are all asserted to have occurred in a relatively short period, between March/April 2008 up to 28 May 2008. Hence, Ms Wong's averred subsequent directorship of Lakebridge from 21 September 2010 looks to be substantively irrelevant in terms of her conduct (somehow) being attributed to Lakebridge.
There is a discrete section in the ASSOC at par 108 headed 'Claim against Lakebridge'. This looks to attempt to raise a plea reliant upon the first limb of the rule in Barnes v Addy (see particulars under the heading 'Particulars of knowing receipt'). Essentially, par 108 looks to be formulated on the basis that Lakebridge received Astral's 30% shareholding in Golden, thereby knowingly taking the financial benefit of the disposal of those shares by Astral, at a significant undervalue. (By 28 June 2006 Mr Lias Aripin had apparently transferred his 10% shareholding in Golden to Astral (see par 31 ASSOC), giving it from that point on its 30% shareholding.)
Astral's essential grievance seems to be that if its 30% shareholding in Golden had been properly assessed in terms of its true value, by reference to the land values of the remaining components of the old RAC building owned by Golden at the time, its shares would have been afforded a much higher value. Astral ultimately transferred its 30% shareholding to Lakebridge on the basis of an assessed value of 228 Adelaide Terrace (one of the components of the old RAC building) of only $24 million, under the deed of share sale and call option agreement (ie the second agreement arrangements). Lakebridge exercised the call option it held from Astral under that deed on 8 July 2008 and then acquired Astral’s 30% shareholding in Golden on 11 July 2008 (pars 66 ‑ 68 of the ASSOC). Golden sold the land at 228 Adelaide Terrace for $35.1 million on 13 August 2008.
Astral therefore received $2,011,000 (in July 2008) for its 30% shareholding in Golden (see pars 59, 64 and 65(c)), in circumstances where it is said that, not only was 228 Adelaide Terrace a lot more valuable than the attributed figure of $24 million (as its subsequent sale to 228 DJM Pty Ltd on 13 August 2008 for $35.1 million demonstrated (par 69)), but also that there was a further valuable former RAC building land component owned by Golden, namely the parcel at 236 Adelaide Terrace, which was wholly ignored in an attribution of any value (see par 60(d)). There were also other assets of Golden not factored into the sale price of Astral's 30% shareholding in Golden (see par 60(c)), including some shareholder loans due from Ms Wong personally to Golden which should have been evaluated as valuable (see par 108(ii)(D), (E) and (F)).
On the face of it, the Barnes v Addy claim pleaded against Lakebridge is an equitable one for an account (see prayers for relief A and B). That chose in action theoretically could be amenable to compromise and the application of release and barring clauses within the three deeds of 29 May 2008. On the other hand, there must be an equitable construction of deeds of release: see Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26, 43B. There Kirby P referred to a 'well‑established principle of equity that the general words of a release are limited always to such matters as were specially in the contemplation of the parties at the time when the release was given'. The principle is applied in Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 (Dixon CJ, Fullagar, Kitto and Taylor JJ) at 128 ‑ 129:
If the circumstances make it inequitable for the release to set up the general words of release as applicable to some particular liability which the releasor sought to enforce against him at law, the Court of Chancery might be expected to intervene to restrain a plea in spite of the existence of grounds for supposing that the court of law might itself construe the release down so that the plea would fail.
Whilst mentioning Qantas Airways v Gubbins, I note in the joint reasons of Gleeson CJ and Handley JA (31B ‑ D) their application of observations of Barwick CJ in Felton v Mulligan (1971) 124 CLR 367, 376 in terms:
It is not the law, as I understand it, that a person who has a right under a statute to seek the aid of the court cannot in any case agree not to exercise that right: cf Admiralty Commissioners v Valverda (Owners) [1938] AC 173 at 185 per Lord Wright. But it is true that some statutory rights may not be so foregone. Whether or not the right in question is a right which may not be validly bargained away must depend on the subject matter to which it relates and the terms of the statute from which it is derived. The construction of the statute will be influenced by the principles as to public policy which have been developed by the courts.
Although statutory relief does not appear to be presently sought against Lakebridge by the ASSOC as currently pleaded (by reference to any of the seven representations), two matters at least presently inhibit a summary judgment in favour of Lakebridge. First, the equitable construction approach to deeds of release seems to me to require taking into account all surrounding circumstances applicable when the deed of share sale and call option and the deed of forfeiture of 29 May 2008 were executed. That exercise can only be safely undertaken at a trial.
Second, the present claims of Astral for statutory relief against Golden and under the former s 87 of the Trade Practices Act could potentially (and this is a matter to be evaluated at trial) result in a setting aside or varying of the terms of release and barring clauses within the deeds of 29 May 2008, even as against an innocent third party. This has the potential to impact against the release and barring clauses favouring Lakebridge, albeit Lakebridge may be found in the end not to be a participant to any statutory misleading or deceptive conduct. The breadth of s 87 relief available to Astral could theoretically extend that far, in appropriate circumstances, although a court would no doubt be cautious about orders which impact against the rights of innocent third parties. Again, this is an evaluation which can only safely proceed at trial.
Therefore, even on the renewed or pressed basis, the RSC O 16 applications for summary judgment by Golden and Lakebridge cannot succeed. That is a view I reach without regard to Astral's unconscionability pleas in pars 105 ‑ 106 of the ASSOC, but the position then is not satisfactory.
Unconscionability: pars 105 ‑ 106 of the ASSOC
The pressed or renewed applications for summary judgment by Golden and Lakebridge refocused attention upon Astral's pleas of unconscionability. I refer particularly to par 105(d), which is presently in these terms:
The Second Agreement, the Deed of Termination and the Deed of Forfeiture were each presented to the plaintiff for the first time at the meeting at which Wong and the first defendant required the said documents to be executed in circumstances where Wong and the first defendant knew that Lias Aripin could not understand English and that the plaintiff had not had an opportunity to receive any legal or financial advice on the said documents and at that meeting Wong in her own capacity and as a director of the first defendant said in effect that unless the plaintiff signed immediately the sale would be called off.
In my view, par 105(d) should be struck out as failing to disclose an arguable cause of action, alternatively because it is an abuse of process or, at minimum, on the basis that it is embarrassing. I repeat my observations concerning the position of Mr James Aripin, a co‑director and secretary of Astral, as a signatory to each of the three deeds of 29 May 2008 to which Astral is party.
It is apparent from par 64 of the ASSOC that Mr James Aripin was present with his father at a meeting in Perth with Ms Wong and others, prior to Astral executing the three deeds referred to in par 65. James signed each of those documents for Astral as its secretary. No contention has been raised as to James' proficiency in speaking, writing or understanding English.
In the context of an unconscionability plea invoked on behalf of an Australian corporation, par 105(d) is wholly inadequate. At least, that must be the case until the position of James as a signatory in the capacity of Astral's secretary to each of the three deeds is squarely dealt with, rather than ignored. The point is so obvious it should have been confronted head on at the outset, rather than buried now as an inconvenient truth.
Conclusions
In all the circumstances, Astral should bring in a properly marked up (showing all prior changes) re‑amended substituted statement of claim correcting all the errors which I have identified and also excising par 105(d).
I remain of the view that the costs of all these applications should lie in the cause of the action. I had foreshadowed that view on 23 March 2012 (see ts 136) and subsequent developments have only confirmed the appropriateness of that course.
There has been a measure of success and failure on both sides across the summary judgment and strike out applications. Golden and Lakebridge have not succeeded in obtaining summary judgment against Astral, although they have had some limited success as regards my striking out of par 105(d).
On their RSC O 20 r 19 strike out application the defendants have not succeeded, although they have demonstrated a number of errors requiring correction and made some non‑fatal lesser points. Here again, the costs should lie in the cause.
That leaves a residual interlocutory issue in terms of whether there should be an order for the exchange of witness statements prior to requiring the defendants to plead their defence.
In the rather unique circumstances of this case involving multiple alleged multilingual oral representations (some of which were allegedly made in Indonesia; see the particulars to par 51 of the ASSOC), I indicated a prima facie view on 23 March 2012 that an early exchange of witness statements was appropriate, at least as to liability issues. This could hardly be an onerous task given that the serious nature of the allegations raised on behalf of Astral would almost certainly have called for its legal representatives to hold signed proofs of evidence from Astral's key protagonists before signing off on the present pleadings. It should not take much more work to convert signed proofs to signed witness statements.
There is some scope for the subject matter underlying this action, and the Wellington Park action, to be drawn in by Mr Lias Aripin's pleas of justification in a third (defamation) action I am also case managing as between Mr Lias Aripin and Ms Wong (with Mr Sugiarso), where Ms Wong and Mr Sugiarso are the plaintiffs (see as background my reasons for decision in Wong v Aripin [2011] WASC 174, where the words were allegedly spoken by Mr Aripin at a check‑in counter at the Burswood International Hotel).
With multiple non‑English speaking or less proficient English speaking participants playing a significant role as witnesses in this litigation, I assess it as highly appropriate that witness statements be exchanged at an early point. Furthermore, I see no value at all in requiring the defendants in the Golden action to file a holding defence in an action grounded heavily around oral representations before committing later to a more substantive amended defence (once this material eventually emerges before the trial - as it must, at some point).
It is a more efficient use of resources for Astral's witnesses to file their liability evidence within a fixed period (about which the parties can confer). After that happens the defendants can then file their defence within a fixed period and they can also contemporaneously file and exchange at that time their responsive witness statements dealing with liability. I see that as the more efficient use of resources, particularly for this case.
There is one supplementary point to address. I upheld an objection to the second affidavit of Ms Batalin affirmed 8 June 2012 being read, on the basis that the three documents which she attaches (NEB5, NEB6 and NEB7) appear to be documents that, even allowing for the application of hearsay evidence, were not explained in terms of how Ms Batalin has any sort of direct or indirect connection with the documents. In the end, the success of that objection had negligible impact on my evaluation of the issues at hand.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: ASTRAL LAND PTY LTD -v- GOLDEN COMMERCIAL PTY LTD [2012] WASC 274 (S)
CORAM: KENNETH MARTIN J
HEARD: 7 NOVEMBER 2012
DELIVERED : 18 JANUARY 2013
FILE NO/S: CIV 2239 of 2011
BETWEEN: ASTRAL LAND PTY LTD
Plaintiff
AND
GOLDEN COMMERCIAL PTY LTD
First DefendantLUAN MAY WONG
Second DefendantLAKEBRIDGE HOLDINGS PTY LTD
Third Defendant
Catchwords:
Costs - Special costs orders - Costs thrown away - Amendments - Pleading issues
Legislation:
Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (WA)
Rules of the Supreme Court 1971 (WA), O 66 r 3
Result:
Modified costs orders
Category: B
Representation:
Counsel:
Plaintiff: Mr S M Davies SC & Mr J D MacLaurin
First Defendant : Mr M L Bennett
Second Defendant : Mr M L Bennett
Third Defendant : Mr M L Bennett
Solicitors:
Plaintiff: DLA Piper Australia
First Defendant : Bennett & Co
Second Defendant : Bennett & Co
Third Defendant : Bennett & Co
Case(s) referred to in judgment(s):
Astral Land Pty Ltd v Golden Commercial Pty Ltd [2012] WASC 274
Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82
Major v Woodside Energy Ltd [No 3] [2009] WASC 246
KENNETH MARTIN J: A number of issues arise out of my reasons for decision delivered 31 July 2012 (Astral Land Pty Ltd v Golden Commercial Pty Ltd [2012] WASC 274), namely:
(a)Whether the costs associated with my determinations arising out of special appointments (heard 23 March and 14 June 2012) should 'lie in the cause of the action', in accord with the prima facie view I expressed at [64] ‑ [66] in [2012] WASC 274. The defendants are content that costs be in the cause. However, the plaintiff (Astral), by its minute of 31 October 2012, contends that the defendants should pay the plaintiff's costs of the defendants' application for summary judgment and to strike out the statement of claim, including the special appointments on 23 March 2012 and 14 June 2012, to be taxed.
(b)What costs orders should be made as a consequence of order 5 in orders I made on 22 September 2011. The defendants have applied in respect of that order, and seek to have a taxation of their costs thrown away proceed before a Registrar of this court, with any taxed costs made payable forthwith and the scale limits otherwise applicable in a taxation - specifically items 10(a), 17, 24 and 33 in the Supreme Court Scale of Costs 2010, found within the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (WA) - be removed.
(c)The defendants seek special costs orders in respect of costs not already dealt with arising from the six iterations of the plaintiff's statement of claim. The first iteration was 3 August 2011. The most recent iteration, the plaintiff's 'Further Re‑Amended Substituted Statement of Claim', is of 13 September 2012.
(d)Whether additional paragraphs of the plaintiff's most recent pleading should be struck out. At [59] ‑ [62] of [2012] WASC 274, I explained why par 105(d) of the plaintiff's statement of claim would be struck out. In accord with those reasons, the plaintiff removed par 105(d) from the next iteration of its statement of claim. The defendants then filed submissions on 22 October 2012 in support of an application to strike out the balance of the plaintiff's plea of unconscionability, which is to be found in pars 105 and 106 of the plaintiff's most recent statement of claim. The plaintiff filed written submissions in opposition on 29 October 2012. However, when the matter came on for oral argument on 7 November 2012 the defendants did not press any further challenges to pars 105 and 106.
Issue (a): Reserved costs of 31 July 2012 - Astral's costs or costs in the cause?
The defendants are content with an order that costs of the two special appointments be in the cause, in accord with the prima facie view I expressed in [2012] WASC 274 [64] ‑ [66]. However, the plaintiff disagrees and challenges that prima facie view. This was the subject of the plaintiff's written submissions of 31 October 2012.
The plaintiff accepts that 'costs in the cause' is the usual order, in circumstances where an application for summary judgment is not successful. However, the plaintiff says the defendants had raised numerous other complaints about its statements of claim in the context of the foreshadowed strike out applications, and none of these challenges were advanced by the defendants in the end, causing the plaintiff to incur unnecessary costs in the process.
To advance these costs arguments, the plaintiff sought to have me trawl through the defendants' lengthy earlier written submissions of 3 November 2011, 1 February 2012 and 19 March 2012 in order to show how much unnecessary work was required by it in respect of responding to multiple pleading objection points that in the end it says were subsequently not pursued, let alone upheld by the court.
The plaintiff also says that a lot of the complaints raised in the defendants' written submissions were 'nitpicking' and oppressive by volume, in the sheer scale of grievances they sought to ventilate. The plaintiff says the defendants' approach to their pleading was inconsistent with the contemporary approach to resolving pleading disputes, as discussed by Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82.
Having considered the plaintiff's written submissions, augmented by senior counsel's oral submissions on 7 November 2012, I remain of the view that, in all the circumstances, the appropriate order is that the relevant costs should be in the cause.
I particularly reject the plaintiff's entreaty to trawl through lengthy prior written submissions with a view to conducting some sort of audit upon past arguments once ventilated, but ultimately not determined. That proposal is wasteful and ultimately, untenable.
The plaintiff filed a long and extremely complex first statement of claim on 3 August 2011. It has since taken until 13 September 2012 for a viable pleading to emerge, after six attempts. Coming to grips with various evolving unmarked iterations and minutes of a statement of claim has been a painful process for all concerned, including the court. From time to time the plaintiff's statement of claim has contained errors which have been diverting and frustrating (see [2012] WASC 274 [5]).
Properly and very understandably in my assessment, at two special appointments prior to my 31 July 2012 reasons, counsel for the defendants sought to focus on major asserted pleading deficiencies, particularly in regard to the plaintiff's attempted plea of unconscionability, and on a fatal result (for the plaintiff) delivered by various release clauses found in three deeds of 29 May 2008. I evaluated those core arguments in [2012] WASC 274.
On 23 March 2012 Astral narrowly evaded the defendants' attack. I gave it leave at the end of that day's argument to verify its action by affidavit, to defend the summary judgment application brought against it by two of the defendants. Problems subsequently emerged over an attempted verification by the plaintiff.
Ultimately, I excised what I assessed as an untenable par 105(d) of the statement of claim (see [2012] WASC 274 [59] ‑ [62]).
Although the defendants ultimately did not succeed on their summary judgment application, brought by reference to the effect of releases in three deeds, that release issue still remains fully alive for trial. I have not expressed final views about the fate of those release arguments.
The plaintiff's present invitation to me to revisit voluminous conferral correspondence, written submissions or the like, leading up to two special appointments, so as to evaluate pleading grievances never argued, raises the intolerable, not to mention wasteful, prospect of asking the court to consider subsidiary grievances that in the end were outside the focus of the core arguments dealt with by each application. The insatiable resourcing demands of 21st century litigation now compel courts to strongly encourage parties to jettison their peripheral arguments and to focus upon the significant issues. That is what I ascertain the defendants to have done in this case. A sensible and modern‑day approach to advocacy must be promoted, not punished.
In my view, justice will be done here by an order for costs to lie in the ultimate cause of the action. The consequence will be that the side ultimately successful at trial would then receive its costs of these applications. Since there has obviously been a measure of success and failure on both sides upon these applications, that eventual costs resolution is the most appropriate.
Accordingly, I propose to order in terms:
The costs of the defendants' application for summary judgment; alternatively, to strike out, in part, the amended substituted statement of claim of 20 March 2012, including the costs of the special appointments on 23 March and 14 June 2012, shall be in the cause.
Issue (b): Costs thrown away as ordered in favour of the defendants on 22 September 2011
It is necessary to sketch out the procedural history to a greater extent before resolving this issue. Mr Lias Aripin is the defendant to Ms Luan (Mimi) Wong's defamation action CIV 1550 of 2011, commenced 30 March 2011 and managed in my CMC List.
The Golden Commercial action CIV 2239 of 2011 and the Wellington Parkland action CIV 2518 of 2011 have also been case managed in my CMC List, in conjunction with the earlier defamation action. The Golden Commercial action was commenced on 12 July 2011 and the Wellington Parkland action on 16 August 2011.
Astral Land Pty Ltd, the plaintiff in both CIV 2239 and CIV 2518 of 2011, is a corporation controlled by Mr Lias Aripin. Both actions have been commenced in retaliation against Ms Wong's defamation action, with a view to providing a sustainable basis for pleas of justification now seen in the defamation action. There has been little secret made of this motivation by counsel for Astral and Mr Lias Aripin. There are some serious contentions of fraud in Astral's pleadings made against Ms Wong and the defendant corporations associated with her under the tort of deceit, plus satellite causes of action said to arise out of the parties' previous investment dealings.
Allegations of fraud are serious and must be formulated clearly, coherently and with proper particulars. Much of the pleading contention to date between the parties arises from Astral and Mr Aripin seeking to raise an array of diverse asserted causes of action.
On my assessment, the defendants then responded, understandably, by seeking to hold Astral to a proper and coherent pleading for what are very serious allegations.
On 1 September 2011, I made orders striking out the reference to fraud in par 45 of Astral's first statement of claim, on the basis the pleas were embarrassing, or an abuse of process. I allowed Astral until midday on 19 September 2011 to file an amended statement of claim. I listed the matter for further directions on 22 September 2011. I also awarded the defendants their costs of that directions hearing, which I fixed.
Thereafter, Astral did not comply with my direction concerning its filing of an amended statement of claim by 19 September 2011. There ensued a passing dialogue between the parties' respective solicitors over this. The defendants were insisting upon strict compliance. Astral was contending it needed more time. No order had been made extending Astral's 19 September 2011 pleading deadline, prior to its expiry.
When the matter returned to me on 22 September 2011, with the plaintiff then in default, I made orders allowing the plaintiff to apply for leave to join an additional party pursuant to Rules of the Supreme Court 1971 (WA), O 18 r 6, by 28 September 2011, and for the plaintiff to file and serve an amended writ of summons and statement of claim (with references to fraud removed, as I had ordered on 1 September 2011, but which had not then been complied with). I also made the order:
On the basis that the allegations of fraud in the plaintiff's writ of summons and statement of claim are marked out and shown as struck out and amended under order 2 hereof by reason of the Court's orders of 1 September 2011, the orders made on 1 September 2011 be and are hereby varied such that [Astral] shall now file and serve any minute of proposed re‑amended writ of summons and minute of proposed re‑amended statement of claim by 3 October 2011.
I re‑listed the matter for further directions on 6 October 2011 in the CMC List. Concerning the present costs issue, I also ordered that
[t]he taxed costs of today's application be the defendants' in any event, and beyond that the plaintiff shall pay to the defendants their costs thrown away (if any) arising as a consequence of the plaintiff's failure to file and serve an amended writ of summons and amended statement of claim by 19 September 2011 (which costs are reserved and as to which the parties have liberty to apply).
Pursuant to that liberty, the defendants now move for costs orders in terms of par 5 of a minute dated 24 October 2012. The order for costs thrown away having already been made on 22 September 2011, the defendants now seek:
(a)that they be at liberty to proceed with a taxation of a claim for costs thrown away arising out of the defaults of Astral, before a Registrar of this court;
(b)that it be ordered that any award of taxed costs ascertained under (a) be made payable forthwith; and
(c)allowance and scale limits be raised or removed in order to facilitate that taxation process.
I assess it as wholly appropriate that the relief as sought under (a) and (b) be granted. A more problematic question is whether it is appropriate, as sought by (c) above, that scale allowances be removed or raised?
A sub‑issue arises here concerning a trip to Jakarta made by the defendants' legal advisors, in the period from 22 September 2011. The sub‑issue is whether any legal costs have been wasted in relation to all or part of that trip. Astral does not accept there were wasted costs as a result of the Jakarta trip and the client meetings that took place. The defendants say their legal team departed for Jakarta on the morning of 22 September 2011, it being reasonable for them to expect they would then be in possession of Astral's amended statement of claim by reason of my orders of 1 September 2011, and also because a requested extension of time sought by Astral's legal advisors had been refused.
The defendants say (par 25 written submissions in relation to special costs dated 24 October 2012):
The trip was not confirmed until 19 September 2011. There was no reason, ahead of this time, to convey to solicitors for the plaintiff or the court that Bennett + Co were travelling to Jakarta.
As is apparent, I have already made the order awarding the defendants' costs thrown away (if any), arising out of the plaintiff's defaults by failing to serve an amended writ and an amended pleading by 19 September 2011. However, it is not possible or appropriate for me to determine at this point whether the defendants have or have not sustained any actual wasted legal costs by reason of Astral's default in complying with my directions and orders. On the face of it, the fact the defendants' legal advisors travelled to Jakarta and there engaged in proofing sessions with representatives of the defendants to obtain instructions and prepare for the trial, would not of itself establish that any degree of wasted legal costs had necessarily been sustained in such an exercise. An award of legal costs 'thrown away' requires an identification of actual wasted legal costs proved as sustained by the party advancing the claim.
Nevertheless, the defendants only seek to have a future opportunity before a taxing officer of the court to prove that some wasted legal expenditure was sustained by the defendants by reason of the plaintiff's relevant defaults. They should be afforded that opportunity. A prospect of some wasted costs being sustained from these current circumstances does not present as wholly improbable. But it is a matter for evidence and proof. There should be the opportunity for the defendants to put proper materials before a taxing officer of this court to show the incurring of wholly wasted legal costs arising out of the defaults of Astral, as identified. In that process the defendants must surmount the requisite proof threshold. I express no present view about whether or not they will surmount that threshold.
As to the issue of allowances and scale limits being removed or varied for the defendants, I first observe that this is not a scenario of an award of indemnity costs to the defendants on a solicitor/client basis. Item 17 of the Supreme Court Scale of Costs 2010 (WA) sets the maximum allowance of 120 hours for a senior practitioner at an amount of $51,480. Any potential wasted getting up expenses ultimately proven by the defendants present as readily recoupable within that scale limit. There is nothing before me to indicate otherwise; likewise concerning any proven asserted wasted costs associated with conferral. Item 24(a) carrying a per hour allowance as to a potential quantum of hours does not require variation. Like considerations apply in respect of item 33 of the scale, if invoked.
Accordingly, I propose to order, pursuant to the liberty under order 5 of my orders of 22 September 2011, that the defendants, on their application for costs thrown away (if any), arising as a consequence of Astral's failure to file and serve an amended writ of summons and amended statement of claim by 19 September 2011, may proceed to lodge a bill of costs for taxation before a Registrar of this court in respect of a claim for any wasted legal costs or disbursements arising and that the amount of any wasted costs or disbursements that may be ascertained by that taxation be ordered as payable to the defendants immediately thereafter.
The costs of the directions hearing held on 22 September 2011 were dealt with by order 5, on the basis they be paid to the defendants in any event. Issue (b) concerns the distinct issue of costs thrown away, which were reserved and as to which I granted the defendants liberty to apply.
Issue (c): Special costs orders arising out of the six iterations of a statement of claim between 3 August 2011 and 13 September 2012
By their minute, the defendants also seek orders that 'the plaintiff pay the defendants' cost of and incidental to the amendments made to the plaintiff's pleadings and Minutes set out below, to be taxed if not agreed without regard to the maximum limits (including hourly limits) prescribed by the relevant scale'.
During the course of the special appointment on 7 November 2012, counsel for the defendants indicated the wording of the proposed order sought to capture the defendants' costs thrown away, by reason of six iterations of Astral's statement of claim. The minute's terminology, 'of and incidental to', was intended to capture what counsel referred to as 'the costs of conferral'.
Counsel for the defendants pointed to what he suggested was a somewhat extraordinary situation, where there had been, across a period of about 13 months, six iterations of a very complex pleading. It had taken 13 months to get to a point where there was a statement of claim sufficient to occasion the obligation upon the defendants to plead a defence. Deficiencies in a very complicated statement of claim that was evolving over time, necessarily delivered an unsatisfactory costs burden for the defendants, particularly in circumstances where the court now allows an unlimited right of amendments to pleadings up to within seven weeks of trial: see O 21 r 3(1).
In the end, three key factors bear against special costs orders of the character presently sought by the defendants. In the first place, save for determinations reached at the two special appointments, which are the subject of earlier components in these reasons, the court for the most part has not been called on to reach or make determinations upon the merits or defects of most of the various iterations of the statement of claim. To the extent the court has been called upon to make determinations rather limited in scope, it has done so. Thus, very much for the same reason that an award of costs in the cause is the appropriate outcome for issue (a) in these reasons, in circumstances where costs have not otherwise been dealt with, those same considerations are broadly relevant where pleading arguments have not been fully ventilated. That is not to suggest that parties should be encouraged to litigate to finality interlocutory pleading arguments, to enliven a potential costs entitlement. Again the court's attitude is very much to the contrary. But from the viewpoint of encouraging parties to sensibly confer and to resolve as between themselves as much as they can upon interlocutory arguments over pleading issues, a generally fairer disposition is to order costs to be in the cause.
A second consideration is that I have, at seven prior directions hearings spanning 1 September 2011 ‑ 26 September 2012, already made some specific costs orders which bear upon the ongoing pleading disputation, beyond the orders of 22 September 2011. There were interlocutory orders as to costs on 1 September 2011 (in the defendants' favour fixed at $440), 8 December 2011 (in the defendants' favour fixed at $2,282), 21 December 2011 (costs in the cause), 8 February 2012 (costs in the cause) and 26 September 2012 (costs in the cause).
The order the defendants now seek, as regards all six pleading iterations (one of which is a minute of 3 October 2011) of Astral's statement of claim, manifests a rolled up global approach. It suggests the defendants should be entitled to all costs associated with what has unfolded across 13 months of iterations of the statement of claim. In my view, that global approach is unfocused. It is not appropriate.
Third, O 66 r 3(1) and its ramifications need to be taken account of. That is so particularly in circumstances where there is now a right to amend seven weeks before a trial commences. O 66 r 3(1) of the RSC provides:
The costs of and occasioned by an amendment made without leave in the writ or any pleading shall be borne by the party making the amendment, unless the Court otherwise orders.
To the extent not already covered by my express orders, the operative consequence of O 66 r 3(1) will deliver outcomes such that the defendants are to be entitled to their costs of, and occasioned by, the plaintiff's amendments in:
•the substituted statement of claim of 19 December 2011;
•the amended substituted statement of claim of 20 March 2012;
•the re‑amended substituted statement of claim of 21 August 2012; and
•the further re‑amended substituted statement of claim of 13 September 2012.
Accordingly, by O 66 r 3(1) the defendants should have leave to file bills of costs in respect of any wasted legal costs they claim to have sustained arising out of those four pleadings, on a basis they be taxed and that on ascertainment be payable immediately.
In circumstances where the defendants have not yet filed a defence, the onus is on the defendants, by proper affidavit materials submitted to the taxing officer, to show their actual wasted legal costs in the sense of pointing out legal work for the defendants rendered worthless as a result of the plaintiff's pleading amendments.
It is at this point that I should address an issue concerning time spent between legal advisors in the process of conferral. A pleading amendment would not, of itself, mean that a prior conferral between legal advisers had necessarily been wasted. What would need to be demonstrated is a wholly wasted conferral occasion, tied to the effect of the ensuing amendment. In most instances it would be difficult, I would imagine, to show that any particular conferral exchange between the parties' legal advisors has been a completely wasted exercise. But in some situations that might just be possible. Waiver of privilege issues could intrude into any such an assertion and response. So in the norm such an application for wasted costs would more likely proceed once the litigation was completed. Policy considerations referred to by Le Miere J in Major v Woodside Energy Ltd[No 3] [2009] WASC 246 [16] and [20], concerning a court's fulsome encouragement of the process of conferral, must be kept in mind. The court strongly promotes a sensible and responsive dialogue between the parties' legal advisers with a view to resolving all expressed grievances by the opponent party. The process must promote the avoidance of wasteful expense associated with unnecessary formal interlocutory hearings, and not discourage proper concessions.
The present case, where there have been six iterations of a long and complex statement of claim evolving over 13 months, carries somewhat unique considerations, in the context of a claim for wasted conferral expense by the defendants. But the defendants should not be denied, in my view, a proper opportunity to show to a taxing officer, if they can, by proper evidence that they have sustained wasted legal costs, including wasted conferral expenditure. If they can surmount that proof threshold and show true waste, they should not be prevented from immediately receiving an amount ascertained in their favour at a taxation.
However, I am not persuaded that for the purpose of such a taxation it would be appropriate to remove or adjust any of the scale allowances set under the legal costs determination scale. I repeat, this is not a situation of indemnity costs being awarded. In my view, the scale allowances, particularly under items 10(a), 17, 24 and 33, present as prima facie appropriate to any taxation exercise, as sought.
Accordingly, I would propose to order that the defendants have leave to proceed, pursuant to O 66 r 3(1), to a taxation before a Registrar of this court seeking costs arising out of the four amendments to the statement of claim I have identified and that any amounts ascertained at that taxation would then be payable immediately to the defendants.
Issue (d): Further pleading challenges as regards par 105
These issues did not, in the end, proceed to argument on 7 November 2012. But obviously, some legal costs were incurred in preparation for the argument that did not in the end proceed: see parties' respective written submissions (defendants' written submissions of 22 October 2012 and plaintiff's outline of submissions concerning par 105 and par 106 of 29 October 2012).
On this aspect, Astral should have its costs of resisting that further challenge with those costs fixed at $440 (see item 2.8 of Consolidated Practice Directions 4.7.1.1).
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