BBI Bergbau­Handelsgesselshaft mbh v Mintech Chemical Industries Pty Ltd

[2010] WADC 54

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   BBI BERGBAU­HANDELSGESSELSHAFT mbh -v- MINTECH CHEMICAL INDUSTRIES PTY LTD [2010] WADC 54

CORAM:   REGISTRAR KINGSLEY

HEARD:   12 APRIL 2010

DELIVERED          :   23 APRIL 2010

FILE NO/S:   CIV 1620 of 2009

BETWEEN:   BBI BERGBAU­HANDELSGESSELSHAFT mbh

Plaintiff

AND

MINTECH CHEMICAL INDUSTRIES PTY LTD
Defendant

Catchwords:

Practice - Application for indemnity costs - Turns on own facts

Legislation:

Nil

Result:

Costs and programming orders made

Representation:

Counsel:

Plaintiff:     Mr M N Solomon

Defendant:     Mr P C Doherty

Solicitors:

Plaintiff:     Sparke Helmore

Defendant:     Minter Ellison

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

Colgate‑Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397

Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (No 2) (1997) 18 WAR 190

1. REGISTRAR KINGSLEY:  On 11 March 2010 I delivered my reasons in relation to the plaintiff's application for summary judgment.  The action involved two contracts, which for the purpose of these reasons are called the "first November contract" and the "second November contract".

2. In my reasons I found the defendant had no defence to the first November contract and allowed judgment to be entered on that contract.  On the second November contract I found the defendant had an arguable defence in relation to a claim of misleading and deceptive conduct only and gave leave to defend.

3. The application comes back to me in relation to determining the costs on the plaintiff's application and to make programming orders for the conduct of the action.

4. During the course of the hearing defendant's counsel made an application for stay of execution.  After argument, as I was of the opinion that the first November contract and the second November contract are separate contracts, I was persuaded the plaintiff was entitled to recover the judgment amount without awaiting the determination of proceedings in relation to the second November contract.

Costs on the plaintiff's summary judgment application

1. The plaintiff's application for summary judgment first came on for hearing on 8 October 2009.  During the course of the submissions it transpired that the defendant sought to additionally raise the issue of misleading and deceptive conduct.  As plaintiff's counsel rightly pointed out that was a completely different case.

2. The defendant's counsel sought an adjournment of the hearing to enable additional evidence to be put before me.  The plaintiff's counsel opposed the adjournment, and foreshadowed that if the defendant came back with a different case and the plaintiff elected not to proceed with the action, then an indemnity costs order would be sought.

3. The action came on for hearing on 8 December 2009 and was fully argued.  In its minute of proposed orders dated 12 April 2010, the plaintiff seeks indemnity costs of the summary judgment application up to and including preparation for and attendance at the adjourned hearing on 8 October 2009 payable forthwith.

4. The usual order for costs is one for party and party costs.  Whilst a court has jurisdiction to make an indemnity costs order where the justice of the case requires such an order, there must be some special or unusual feature in the case to justify a departure from the usual order (see Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 where Pullin J cites Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (No 2) (1997) 18 WAR 190 at 191 and Colgate‑Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233 in support).

5. Whilst there are many examples where indemnity costs orders have been made, most of the examples involve some element of improper, or at least, unreasonable conduct on the part of the parties or their legal advisors – for examples false allegations of fraud, commencing proceedings for an ulterior purpose, wilful disregard of known facts or established law, unduly prolonging a case, the creation of false issues by tactical denials or failure to admit facts (see Colgate‑Palmolive Co (supra), Unioil (supra) and Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397).

6. In this matter the defendant's submissions proceeded on one basis, but during the course of argument it became clear that the evidentiary basis to sufficiently particularise a defence of misleading and deceptive conduct was missing, hence the need for an adjournment.  Whilst this turn of events may be vexing for the plaintiff, in my opinion it does not warrant the censure of an indemnity costs order.  Whilst the class of behaviours justifying an indemnity costs order are not closed, some improper, or at least unreasonable, behaviour is involved.  There is no suggestion of improper behaviour here nor, in my opinion in the way the authorities have articulated the principles behind granting an indemnity costs order, unreasonable behaviour.

7. The plaintiff has been successful in its application pursuant to O 14 of the Rules of the Supreme Court 1971 in relation to the first November contract. In my opinion the plaintiff is entitled to the costs of the action, including the costs of O 14 Rules of the Supreme Court application up to and including the hearing on 8 October 2009, insofar those costs relate to the first November contract.  The plaintiff's minute of orders dated 12 April 2010 suggests an entitlement of 50 per cent of costs on the action.  That may work a disservice to both parties.  As the first November contract is a discrete issue the costs are to be paid forthwith.

8. From 9 October 2009 the O 14 Rules of the Supreme Court application proceeded with the misleading and deceptive conduct issue properly before me.  In my opinion the plaintiff is entitled to 50 per cent of the costs of between 9 October 2009 and 8 December 2009 again payable forthwith.

9. Therefore the orders I make are:

   On the plaintiff's summary judgment application

   1.The defendant pay to the plaintiff interest on the judgment sum of US$71,665.46 at the rate of 6 per cent from 23 January 2009 until payment;

   2.The defendant pay the plaintiff's costs of the action in relation to the first November contract such costs to be taxed forthwith;

   3.The defendant pay the plaintiff's costs on the summary judgment application up to and including 8 October 2009 such costs to be taxed forthwith;

   4.The defendant pay 50 per cent of the plaintiff's costs of the summary judgment application between 9 October 2009 and 12 April 2010;

   5.As to the remaining 50 per cent of costs referred to in order 4 hereof, those costs be costs in the cause;

   On the defendant's application for stay of execution

   6.The defendant's application for stay of execution be dismissed;

   7.The costs of that application be the plaintiff's costs in any event;

   By way of directions generally

   8.The defendant to file and serve a defence and any counterclaim on or before 30 April 2010;

   9.There be a directions hearing on 28 May 2010 at 2.30 pm;

   10.There be liberty to apply in relation to these orders in three business days notice.