Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd
[2014] WASCA 180 (S)
•30 OCTOBER 2014
BIRLA NIFTY PTY LTD -v- INTERNATIONAL MINING INDUSTRY UNDERWRITERS LTD [2014] WASCA 180 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASCA 180 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:124/2013 | 8 OCTOBER 2014 & ON THE PAPERS | |
| Coram: | McLURE P BUSS JA NEWNES JA | 30/10/14 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Costs orders made | ||
| B | |||
| PDF Version |
| Parties: | BIRLA NIFTY PTY LTD INTERNATIONAL MINING INDUSTRY UNDERWRITERS LTD |
Catchwords: | Costs Whether limits on costs should be removed Originating summons Costs in favour of non-party Successful party increased costs by raising issues on which it failed Calderbank offer |
Legislation: | Legal Profession Act 2008 (WA), s 280(2) Supreme Court Rules 1971 (WA), O 58 r 10 |
Case References: | Amaca Pty Ltd (Formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158(S) Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd [2014] WASCA 180 Hughes v St Barbara Ltd [2011] WASCA 234(S) Naidoo v Williamson [2008] WASCA 179 Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : BIRLA NIFTY PTY LTD -v- INTERNATIONAL MINING INDUSTRY UNDERWRITERS LTD [2014] WASCA 180 (S) CORAM : McLURE P
- BUSS JA
NEWNES JA
- Appellant
AND
INTERNATIONAL MINING INDUSTRY UNDERWRITERS LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : HALL J
Citation : BIRLA NIFTY PTY LTD -v- INTERNATIONAL MINING INDUSTRY UNDERWRITERS LTD [2013] WASC 386
File No : CIV 3302 of 2011
Catchwords:
Costs - Whether limits on costs should be removed - Originating summons - Costs in favour of non-party - Successful party increased costs by raising issues on which it failed - Calderbank offer
Legislation:
Legal Profession Act 2008 (WA), s 280(2)
Supreme Court Rules 1971 (WA), O 58 r 10
Result:
Costs orders made
Category: B
Representation:
Counsel:
Appellant : Mr S K Dharmananda SC & Mr T J Palmer
Respondent : Mr G G McArthur QC & Mr P D Herzfeld
Solicitors:
Appellant : DLA Piper Australia
Respondent : Wotton & Kearney
Case(s) referred to in judgment(s):
Amaca Pty Ltd (Formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158(S)
Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd [2014] WASCA 180
Hughes v St Barbara Ltd [2011] WASCA 234(S)
Naidoo v Williamson [2008] WASCA 179
Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97
1 JUDGMENT OF THE COURT: These reasons concern the costs in connection with the judgment in Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd [2014] WASCA 180. Although the parties had been provided with an advance copy of the reasons, they had not put themselves in a position to make submissions on costs when judgment was delivered on 8 October 2014. On that date the court ordered that the appeal be dismissed. The respondent's first contention was upheld and its second and third contentions dismissed. The court also ordered the parties to make written submissions on costs. They have done so.
Primary proceedings
2 The primary judge ordered that the parties bear their own costs. The respondent, who was successful in the appeal, seeks orders in the following terms:
1. The order of the Honourable Justice Hall made on 20 December 2013 as to costs be and is hereby set aside, and the following orders be made in lieu thereof:
a. the appellant pay the respondent and the other insurers of the policy the subject of the appeal (who for the remainder of these orders are referred to collectively as the respondent) its costs of the first instance proceedings numbered CIV 3302 of 2011 (which for the remainder of these orders are referred to as the first instance proceedings), including any reserved costs.
b. the taxation of the costs referred to at paragraph 1(a) of these orders be performed on the basis that:
i. the limit on Item 11 of the Scale be removed;
ii. obtaining a running transcript was justified;
iii. the taxing officer be directed to make allowance for the fees of senior counsel and counsel at trial;
iv. allowance be made for conferences and consultations and other items not allowed for in the Scale; and
v. the taxing officer be directed to make additional allowances (additional to those otherwise available for the fees of senior counsel, counsel and the lawyers for the respondent) in preparing the matter for hearing on the basis that the matter did not follow the usual procedure for an originating summons;
c. the appellant pay the costs of the respondent's application in the first instance proceedings in respect of costs, including submissions, to be taxed as part of the overall bill in respect of the first instance proceedings; and
d. interest to run on costs taxed from 23 October 2013, being the date of judgment on the substantive issues in the action.
4 The appellant commenced proceedings by way of originating summons pursuant to O 58 r 10 of the Supreme Court Rules 1971 (WA) seeking a declaration as to the proper construction of an excess clause in the policy (the primary proceedings). The respondent opposed the constructions contended for by the appellant and advanced a different construction. The respondent initially opposed the use of the originating summons procedure on the basis that it wished to ventilate an estoppel claim and made an interlocutory application for the originating summons to be dismissed. That application did not proceed as the parties agreed that the respondent's estoppel claim would be determined as part of the primary proceedings. As a result of the inclusion of the estoppel claim, the master ordered the filing of pleadings and discovery of documents.
5 Affidavit evidence was adduced in the primary proceedings, including an affidavit of Mr Patrick Plaisted, which was admissible in the estoppel claim but was ruled inadmissible in the construction claim.
6 The inadmissibility ruling was upheld on appeal. The respondent was also unsuccessful in its challenge to the primary judge's rejection of its estoppel claim. The only issue on which the respondent succeeded in the appeal was the construction claim. The outcomes on all issues should be reflected in the costs orders in the primary proceedings and the appeal.
7 We would make the orders in 1(b)(i) and (iii). The source of this court's power to do so is s 280(2) of the Legal Profession Act 2008 (WA). Notwithstanding the absence of evidence in support of its application for special costs orders, it is apparent from the record that the amount of costs allowable under the relevant item in the costs determination (Item 11) is inadequate because of the unusual difficulty, complexity or importance of the matter.
8 However, there should be no special costs orders to compensate the respondent because the primary proceedings did not follow the usual procedure for an originating summons. To the extent that occurred, it was only referable to the respondent's unsuccessful estoppel claim. We would decline to make the orders sought in 1(b)(ii), (iv) and (v).
9 The court has power to award legal costs in favour of a non-party, although it will be exercised only in exceptional cases and with considerable caution: Naidoo v Williamson [2008] WASCA 179 [42]. We see no proper foundation for the order sought by the respondent. There is no evidence in support of the claim. We are unable to see any justification for separate legal representation of the non-party insurers. Moreover, as the appellant points out, the non-party insurers have not identified themselves to the court, are not on the court record, have not applied for costs, have not sought to be joined and have not participated in the proceedings.
10 We would decline to make order 1(c). The respondent's application to summarily dismiss the primary proceedings did not proceed. By agreement, that application was dismissed upon the parties agreeing that the primary proceedings would include the estoppel claim. Each party should bear their own costs of that application.
11 We would also decline to make order 1(d) for the backdating of interest on the costs to be taxed. The obligation to pay the costs arises once they have been taxed (or agreed). We see no justification for interest to run from the date of the judgment.
12 In this case the respondent increased costs in the primary proceedings (and the appeal) by raising issues on which it has failed. Rather than require the taxation of separate and discrete issues, the court may reduce the costs to which the successful party would otherwise be entitled: Amaca Pty Ltd (Formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158(S) [7]. In all the circumstances, we would order that the appellant pay 60% of the respondent's taxed costs of the primary proceedings.
13 Accordingly, the orders will be:
1. The appellant pay to the respondent 60% of the respondent's taxed costs of the proceedings numbered CIV 3302 of 2011 including reserved costs if not agreed.
2. The limits on costs imposed by the relevant Legal Practitioners (Supreme Court) (Contentious Business) Determinations under the Legal Profession Act 2008 (WA) be removed in respect of Item 11 and allowance be made thereunder at senior counsel and junior counsel rates.
Appeal
14 The respondent seeks orders in the following terms:
2. The appellant pay the costs of the appeal of the respondent to be taxed if not agreed.
3. The taxation of the costs referred to at paragraph 2 of these orders be performed:
a. up to and including 27 March 2014, on a party-party basis; and
b. from 28 March 2014 on the basis that:
i. the limit on Item 23 of the Scale be removed;
ii. the taxing officer be directed to make allowance for the fees of senior counsel and counsel for hearing of the appeal; and
iii. allowance be made for conferences and consultations and other Items not allowed for in the Scale.
15 Proposed order 3 is based on a Calderbank offer made in a letter dated 27 March 2014 from the respondent's solicitors to the appellant's solicitors. The respondent offered to pay the appellant the sum of $750,000 on the basis, inter alia, that the appeal be discontinued with no order as to costs. Thus the offer was in effect inclusive of costs.
16 A litigant making a Calderbank offer in an appeal which is not unreasonable for the other party to accept will usually get a costs order in its favour in relation to costs after the offer if the party who rejects it ends up worse off in the appeal judgment: Hughes v St Barbara Ltd [2011] WASCA 234(S) [14].
17 A Calderbank offer expressed to be inclusive of costs will often reduce the weight to be given to it if the offeree is placed in a position of not being able to determine the appropriate amount to attribute to the substantive claim and the costs respectively: Hughes v St Barbara [11]; Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97, 101.
18 In our view it was reasonable for the appellant to reject the offer, having regard to the amount in issue (the appellant had offered to settle for around $6.6 million) and the stalemate below. The primary judge had rejected the interpretations of the policy advanced by both parties and suggested a construction that neither party embraced. As a result, the primary judge made no determination as to the meaning of the excess clause. We would decline to make proposed order 3.
19 For the reasons discussed above, we would decline to make proposed order 4 relating to interest.
20 Having regard to the issues on which the respondent was unsuccessful in the appeal, we would order that the appellant pay 60% of the respondent's taxed costs of the appeal.
Conclusion
21 Accordingly, we would order that:
1. The appellant pay to the respondent 60% of the respondent's taxed costs of the proceedings numbered CIV 3302 of 2011 including reserved costs if not agreed.
2. The limits on costs imposed by the relevant Legal Practitioners (Supreme Court) (Contentious Business) Determinations under the Legal Profession Act 2008 (WA) be removed in respect of Item 11 and allowance be made thereunder at senior counsel and junior counsel rates.
3. The appellant pay to the respondent 60% of the respondent's taxed costs of the appeal if not agreed.
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