B D Cole Pty Ltd v Vale Belvedere (BC) Pty Ltd - [2010] WASC 372

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: B D COLE PTY LTD -v- VALE BELVEDERE (BC) PTY LTD [2010] WASC 372

CORAM: MASTER SANDERSON

HEARD: 25 NOVEMBER 2010

DELIVERED : 13 DECEMBER 2010

FILE NO/S: CIV 1934 of 2010

BETWEEN: B D COLE PTY LTD
Plaintiff
AND
VALE BELVEDERE (BC) PTY LTD
First Defendant
VALE BELVEDERE PTY LTD
Second Defendant

Catchwords:

Costs - Plaintiff discontinuing action under O 23 r 2(1) - Defendants entitled to costs - Defendants seeking direction as to what should be included in costs - Turns on own facts

Legislation:

Nil

Result:

Application refused

Category: B

Representation:

Counsel:

Plaintiff:     Mr C P K Russell
First Defendant            :     Mr R W Douglas
Second Defendant        :     Mr R W Douglas

Solicitors:

Plaintiff:     Mallesons Stephen Jaques
First Defendant            :     Baker & McKenzie
Second Defendant        :     Baker & McKenzie

Case(s) referred to in judgment(s):

Cing International Pty Ltd v Victory Hill Pty Ltd (unreported, WASC, Library No 980283, 27 May 1998

MASTER SANDERSON: This matter concerns costs when the plaintiff discontinued the action. Although there is no application on foot the defendants effectively seek a direction as to how any taxation of costs is to be approached by the taxing officer. To understand how this situation has developed it is necessary to give a brief chronology of events.
On 22 June 2010 the plaintiff filed a writ endorsed with a statement of claim. The writ was served on 7 July 2010. On 22 July 2010 the defendants wrote to the plaintiff setting out why it was they (the defendants) believed the proceedings were misconceived. The response to that letter from the plaintiff on 4 August 2010 indicated the statement of claim was to be amended. In fact no amended statement of claim was ever filed.
On 9 August 2010 the defendants filed a conditional appearance. The required summons to set aside the originating process was never filed by the defendants and the appearance in due course became unconditional. On 24 August 2010 the defendants sought the plaintiff's consent to cross‑vest the action to the Supreme Court of Queensland. On 26 August 2010 the plaintiff declined to consent to the cross‑vesting application. On 2 September 2010 the defendants filed their cross‑vesting application.
On 1 October 2010 the plaintiff filed a notice of discontinuance. The plaintiff discontinued under O 23 r 2(1). That order is in the following terms:
The plaintiff may, at any time before receipt of the defendant's defence, or after the receipt thereof before taking any other step in the action, by notice in writing, wholly discontinue his action against all or any of the defendants or withdraw any part or parts of his alleged cause of complaint, and thereupon he shall pay such defendant's costs of the action, or, if the action be not wholly discontinued, the costs occasioned by the matter so withdrawn.
It is not in dispute between the parties the plaintiff is liable to pay the defendants' costs. It is the defendants' position those costs should include the costs of the cross‑vesting application. Soon after the action was discontinued the defendants wrote seeking from the plaintiff agreement any costs would include the costs of preparing the cross‑vesting application. The plaintiff replied in essence the defendants were entitled to such costs as the taxing officer deemed reasonable on taxation. It was the plaintiff's view the cross‑vesting application was premature and it reserved the right to argue before the taxing officer no allowance should be made for making the cross‑vesting application. It is worth noting the plaintiff did not at any stage say it would necessarily oppose such costs being awarded. Rather the plaintiff reserved its position until it had at least seen the defendants' bill and quite likely until the matter came on before the taxing officer.
The refusal of the plaintiff to concede on the costs of the cross‑vesting application produced a remarkable flurry of correspondence. It has now produced a number of lengthy affidavits. It is unnecessary to go to these affidavits and examine the evidence in detail. The parties' positions are quite clear. The defendants want a direction the costs payable on the discontinuance include the costs relating to the cross‑vesting application. The plaintiff says first, there is no power to give such a direction. Second, even if such a power exists it should not be exercised because the decision is one for the taxing officer and the taxing officer alone.
Order 23 rule 2(1) is quite straightforward in its terms. It awards the costs on a discontinuance to the defendants. There does not appear to be any role for the court in relation to those costs. Rule 2(2) mandates the costs should be taxed. The procedure then is the notice of discontinuance is filed, the defendants have a right to have their taxed costs paid by the plaintiff. The defendants lodge a bill, it is taxed in the normal way, the allocator is signed and the defendants are free to enforce the costs order. If the plaintiff is disgruntled by the taxation it can seek a review in the normal way.
On that approach there seems to be no room for any direction such as that sought by the defendants. But it does appear it would be open to the court to order indemnity costs be paid on a discontinuance. That was the conclusion reached by Master Bredmeyer in Cing International Pty Ltd v Victory Hill Pty Ltd (unreported, WASC, Library No 980283, 27 May 1998). The learned Master looked at both the Supreme Court Act and the Rules. He concluded:
In summary I consider that:
(1)Order 23 r2(1) takes away the Court's power, which it would otherwise possess under s37, to decide whether to give the defendant costs or not on the plaintiffs' discontinuance of an action under that subrule.
(2)Where a plaintiff has discontinued under O23 r2(1) the normal costs awarded to the defendant are party/party costs under the scale by virtue of O66 r11(2).
(3)Order 66 r11(2) provides that costs on some other basis can be ordered.
(4)Order 66 r12(1) empowers the Court to give costs on a higher basis in the special circumstances set out in that rule.
I conclude that I do have power to order costs to be paid to the defendant on an indemnity basis.
Order 66 rule 11(2) is in the same terms now as it was as at the date of the learned master's decision. But r 12(1) has been repealed. To that extent the Cing decision must be treated with some caution. Nonetheless, the learned master concluded r 11(2) conditioned O 23 r 2(1). The relevant rule now would be O 66 r 11(4) which is in the following terms:
Subject to the provisions of this Order, and to any other order made by the Court and the terms of any relevant scale, fees prescribed by any relevant scale cover all work done, whether by the solicitor or by counsel. (my underlining)
The facts of this case are not sufficiently close to the facts in Cing to warrant my expressing a view as to the correctness of that decision. What the learned master was dealing with in Cing was an application for indemnity costs which would have coloured the entire taxation. It is for the court to determine whether a party ought pay indemnity costs - it is not a matter which can ever be determined by a taxing officer. The situation here is different. If the bill claims costs for the cross‑vesting application then the taxing officer can determine whether or not those costs are reasonable and whether they were reasonably incurred. That is the role of the taxing officer. In certain circumstances it may be appropriate for a court to offer a direction as to how costs are to be taxed. In my view, this is not one of those situations.
In the course of his submissions counsel for the defendants pointed out a direction provided now would avoid any difficulty when the matter came before the taxing officer. Affidavits had been filed, submissions had been prepared and the matter could be determined in circumstances that would not apply when a bill came before the taxing officer. Counsel submitted best use of resources dictated a decision be made now. There is strength in that argument. But in the end it is a question of whether or not I have power to make such a direction. In my view, such a power is not to be found in the Rules. For reasons I have explained, the position was different in Cing. The position would be different again if the plaintiff had applied for summary judgment under O 16 and had been successful. I could then have determined whether the costs payable by the plaintiff would include the costs of the cross‑vesting application. But O 23 r 2(1) acting as it does, in my view, precludes my making the direction sought by the defendants. Accordingly, I would decline to make any order.
I will hear the parties as to the costs of this application.