BRUNETTO v BRUMETT Pty Ltd
[2012] WASC 39
•9 FEBRUARY 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BRUNETTO -v- BRUMETT PTY LTD [2012] WASC 39
CORAM: MASTER SANDERSON
HEARD: 13 DECEMBER 2011
DELIVERED : 13 DECEMBER 2011
PUBLISHED : 9 FEBRUARY 2012
FILE NO/S: COR 183 of 2011
BETWEEN: GIUSEPPINA BRUNETTO
Plaintiff
AND
BRUMETT PTY LTD
First DefendantGIUSEPPE BRUNETTO
Second Defendant
Catchwords:
Practice and procedure - Application to compel company to pay costs on indemnity claim - Turns on own facts
Legislation:
Legal Profession Act 2008 (WA), s 289
Result:
Application refused
Category: B
Representation:
Counsel:
Plaintiff: Mr C P Stokes
First Defendant : No appearance
Second Defendant : Mr B G Grubb
Solicitors:
Plaintiff: Chris Stokes & Associates
First Defendant : No appearance
Second Defendant : Metaxas & Hager
Case(s) referred to in judgment(s):
Nil
MASTER SANDERSON: On 18 January 2011, Acting Master Chapman made an order in proceedings between the same parties to this action (COR 1 of 2011) in the following terms:
The plaintiff be granted leave pursuant to s 237 of the Corporations Act 2001 to conduct proceedings on behalf of the first defendant in District Court action numbered CIV 3251 of 2009 including the filing and furtherance of a counter claim in those proceedings and any settlement of those proceedings that may be effected.
The matter was otherwise adjourned to 1 February 2011. At the resumed hearing, Acting Master Chapman made the following order:
The plaintiff be indemnified by the first defendant on a solicitor and own client basis in respect of the conduct of those proceedings on its behalf.
On 3 November 2011, the plaintiff's solicitors wrote to the second defendant enclosing a copy of an account directed to the first defendant. The letter referred to the order for indemnity made by Acting Master Chapman and sought payment of the invoice within seven days. The amount of the invoice was $29,990.75. Of that amount, $27,133 was said to be for 'Professional fees'. No indication was given at all as to how that figure was made up.
On 17 November 2011, the second defendant sent a facsimile to Mr Stokes requesting the invoice issued to the company be taxed. Mr Stokes refused. In fact, a detailed bill has now been prepared and submitted to the first and second defendants. The second defendant still insists the bill should be taxed. Mr Stokes still refuses to submit the bill for taxation. The first defendant can have no input into this situation as it has two directors - the plaintiff and the second defendant - who take opposing views. The first defendant is deadlocked.
It is against that background that these present proceedings have been issued. Relevantly, the plaintiff seeks the following orders:
To facilitate compliance with order 1 of the orders dated 1 February 2011 in Supreme Court proceedings numbered COR 1 of 2011 and pursuant to sections 1318 and 1324 of the Corporations Act 2001 the Principal Registrar of the Supreme Court of Western Australia be appointed to sign on behalf of the second defendant all documents necessary to pay the legal costs of the first defendant incurred in District Court proceedings numbered CIV 3251 of 2009.
The second defendant has filed an affidavit in answer to the application. He says he is quite prepared to sign the necessary documents to pay the account for legal fees after the account has been taxed.
The first point to note about the plaintiff's proposed order is it would not resolve the present impasse. What is proposed is that documents be signed 'to pay the legal costs of the first defendant'. That may or may not mean the account rendered by Mr Stokes. As the case was put on behalf of the plaintiff, what was sought was an order which would permit the payment of Mr Stokes' account.
On behalf of the plaintiff, it was submitted the terms of the order made by Acting Master Chapman were clear. An account had been rendered for the costs that were incurred. There was simply no requirement to tax those costs and, indeed, the first defendant which was liable to make payment had not requested a taxation. Therefore, orders should be made to allow the payment of the account.
On behalf of the second defendant, reference was made to s 289 of the Legal Profession Act 2008 (WA). That section relevantly reads as follows:
289.Legal costs cannot be recovered unless bill has been given
(1)A law practice must not commence legal proceedings to recover legal costs from a person until at least 30 days after the law practice has given a bill to the person in accordance with sections 290 and 291.
On behalf of the second defendant it is said as legal proceedings were commenced prior to the expiry of the 30 day period the action was incompetent and ought be dismissed. Further, reference was made to s 292 of the Legal Profession Act which is the following terms:
292.Request for itemised bill
(1)If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.
(2)The law practice must comply with the request within 21 days after the date on which the request is made.
(3)If the person making the request is liable to pay only a part of the legal costs to which the bill relates, the request for an itemised bill may only be made in relation to those costs that the person is liable to pay.
(4)Subject to subsection (5), a law practice must not commence legal proceedings to recover legal costs from a person who has been given a lump sum bill until at least 30 days after the date on which the person is given the bill in accordance with this Division.
(5)If the person makes a request for an itemised bill in accordance with this section, the law practice must not commence legal proceedings to recover the legal costs from the person until at least 30 days after complying with the request.
(6)A law practice is not entitled to charge a person for the preparation of an itemised bill requested under this section.
(7)Section 290(3) and (6) apply to the giving of an itemised bill under this section.
As I have indicated above the bill from Mr Stokes was directed to the first defendant. The first defendant has not requested an itemised bill. As I understand submissions made by the second defendant he says he falls within the definition of 'any person who is entitled to apply for an assessment of the legal costs'. It is difficult to see how that can be so.
On behalf of the second defendant it was submitted an application of this nature was an abuse of process. It is unnecessary to detail the basis of that submission. This is a matter which can be resolved without the need to examine that area of the law.
It has always been the case an order for indemnity costs covers only those costs reasonably incurred. From time to time orders are framed in that way. But really that is unnecessary. A party who is to pay indemnity costs cannot be expected to pay whatever is demanded but only those costs which in the circumstances are reasonable. The best way to work out what is reasonable in the absence of agreement is to have the bill taxed. That is what should happen in this case.
What the plaintiff is seeking is in the nature of a mandatory injunction. The remedy is discretionary. In this case I would not make an order unless and until the bill has been taxed. Given the second defendant says he will cooperate in allowing for payment of the taxed bill in the end no order ought be made. At this point the proper course is to adjourn this application pending taxation of Mr Stokes' bill. If the parties are not thereafter able to resolve all outstanding issues the matter can be relisted. For the present the costs of this application should be reserved.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BRUNETTO -v- BRUMETT PTY LTD [2012] WASC 39 (S)
CORAM: MASTER SANDERSON
HEARD: ON THE PAPERS
DELIVERED : 13 SEPTEMBER 2012
FILE NO/S: COR 183 of 2011
BETWEEN: GIUSEPPINA BRUNETTO
Plaintiff
AND
BRUMETT PTY LTD
First DefendantGIUSEPPE BRUNETTO
Second Defendant
Catchwords:
Costs - Indemnity costs - Taxation of costs - Turns on own facts
Legislation:
Nil
Result:
Plaintiff to pay second defendant's costs
Category: B
Representation:
Counsel:
Plaintiff: Mr C P Stokes
First Defendant : No appearance
Second Defendant : Mr B G Grubb
Solicitors:
Plaintiff: Chris Stokes & Associates
First Defendant : No appearance
Second Defendant : Metaxas & Hager
Case(s) referred to in judgment(s):
Nil
MASTER SANDERSON: on 18 January 2011 Acting Master Chapman made an order in proceedings between the same parties to this action (COR 1 of 2011) in the following terms:
The plaintiff be granted leave pursuant to s 237 of the Corporations Act 2001 to conduct proceedings on behalf of the first defendant in District Court Action CIV 3251 of 2009 including the filing and furtherance of a counterclaim in those proceedings and any settlement of those proceedings that may be affected.
The matter was otherwise adjourned to 1 February 2011. At the resumed hearing, Acting Master Chapman made the following order:
The plaintiff be indemnified by the first defendant on a solicitor and own client basis in respect of the conduct of those proceedings on its behalf.
The learned Master also made an order that the first defendant was to pay the costs of the application in any event.
On 3 November 2011 Chris Stokes & Associates acting for the plaintiff in this action rendered an invoice for $29,990 to the defendants. On 15 November 2011 the plaintiff commenced these proceedings to enforce payment of the invoice. On 17 November 2011 the second defendant requested an itemised invoice. On the same day, Chris Stokes & Associates by letter responded saying an itemised invoice was not required and the invoice was not required to be taxed in the absence of a resolution of both directors of the second defendant. However, on 18 November 2011 an itemised invoice was provided.
On 24 November 2011 the second defendant's solicitor advised Chris Stokes & Associates that the bill should be taxed. The plaintiff was also invited to discontinue this application. The plaintiff did not refer the invoices to taxation and proceeded with the applications. I heard the application and concluded as follows:
What the plaintiff is seeking is in the nature of a mandatory injunction. The remedy is discretionary. In this case I would not make an order unless and until the bill has been taxed. Given the second defendant says he will cooperate in allowing for payment of the taxed bill in the end no order ought be made. At this point the proper course is to adjourn this application pending taxation of Mr Stokes bill. If the parties are not thereafter able to resolve all outstanding issues the matter can be relisted. For the present the cost of this application ought be reserved [44].
The plaintiff's solicitor's bill of costs was taxed on 3 May 2012. The allocator was signed and on 11 May the amount of the taxed bill was paid.
There remains outstanding the question of costs. I directed the parties should make written submissions and I would decide the question on the papers. Written submissions were received from the second defendant on 27 July 2012. No submissions were made on behalf of the plaintiff.
On behalf of the second defendant he has submitted that the plaintiff ought be ordered to pay costs on an indemnity basis or alternatively on a party party basis. It is said that if the plaintiff's application for a mandatory injunction was unsuccessful then costs ought follow the event. Further, it submitted it should have been obvious this was a case where the plaintiff's bill should have been taxed. That was pointed out to the plaintiff's solicitor by the defendants solicitors well before the hearing took place. It is difficult to understand why this was not done.
I accept the arguments put on behalf of the second defendant. This was one of those clear cases where there could be little or no doubt what the plaintiff properly advised should have done. She should have had the bill of costs taxed. The plaintiff and the second defendant had fallen out to the extent all trust between them had been destroyed. The plaintiff was in a position where she could act on behalf of the first defendant in the District Court proceedings and was indemnified for her costs. As I said in earlier reasons:
A party who is to pay indemnity costs cannot be expected to pay whatever is demanded but only those costs which in the circumstances are reasonable. The best way to work out what is reasonable in the absence of agreement is to have the bill taxed. That is what should happen in this case [13].
It is difficult to see how the plaintiff properly advised could not have come to that conclusion. Without the benefit of any submissions from the plaintiff there is nothing to temper that view.
The order will be:
1.The plaintiff to pay the second defendant's costs of the application on a full indemnity basis save insofar as those costs have unreasonably been incurred.
2.The second defendant should bring in a minute of orders which reflects the disposition of the application.
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