Caratti v Caratti
[2012] WASC 357
•27 SEPTEMBER 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CARATTI -v- CARATTI [2012] WASC 357
CORAM: ALLANSON J
HEARD: 12 SEPTEMBER 2012
DELIVERED : 27 SEPTEMBER 2012
FILE NO/S: CIV 2006 of 2008
BETWEEN: JOHN MICHAEL CARATTI
Plaintiff
AND
ALLEN BRUCE CARATTI
First DefendantTINA MICHELLE BAZZO
Second DefendantKARENE MARIE THOMSON
Fourth DefendantLYONS ROAD LAND COMPANY PTY LTD
Fifth DefendantANKETELL LAND COMPANY PTY LTD
Sixth DefendantGUCCE HOLDINGS PTY LTD
Seventh DefendantGUCCE DEVELOPMENTS PTY LTD
Eighth DefendantMARCIA NATALIE SPARGO
Ninth DefendantDAWNLINK PTY LTD
Tenth DefendantNICOLE MADLEINE CARATTI
Eleventh DefendantMADDELEINE CARATTI
Twelfth DefendantALISHA BETH CARATTI
Thirteenth DefendantSAMANTHA CLARE FERGUSON-SMITH
Fourteenth DefendantJOSEPHINE LYNETTE BAZZO
Fifteenth DefendantPAUL JOHN MANSUTTI
Sixteenth DefendantANKETELL LAND HOLDINGS COMPANY PTY LTD
Seventeenth DefendantBERNGUARD DEVELOPMENTS PTY LTD
Eighteenth DefendantDONCASTER ASSET PTY LTD
Nineteenth DefendantMAMMOTH NOMINEES PTY LTD
Twentieth DefendantMORTIMER LAND COMPANY PTY LTD
Twenty-first DefendantNEWHOME NOMINEES PTY LTD
Twenty-second DefendantOAKFORD LAND COMPANY PTY LTD
Twenty-third DefendantSTARBRAKE HOLDINGS PTY LTD
Twenty-fourth DefendantSTARBRAKE PTY LTD
Twenty-fifth DefendantSUNLAND ASSET PTY LTD
Twenty-sixth DefendantTREVALLEY INVESTMENTS PTY LTD
Twenty-seventh DefendantTURNBERRY NOMINEES PTY LTD
Twenty-eighth DefendantWEDGEPOINT PTY LTD
Twenty-ninth DefendantWESTSWAN LAND COMPANY PTY LTD
Thirtieth DefendantCAMDALE NOMINEES PTY LTD
Thirty-first defendantMOONDANCER HOLDINGS PTY LTD
Thirty-second DefendantODD BALLS (WA) PTY LTD
Thirty-third defendantMAMMOTH FINANCE PTY LTD
Thirty-fourth DefendantWESTRALIA PROPERTY HOLDINGS PTY LTD
Thirty-fifth Defendant109 ST GEORGES TERRACE PTY LTD
Thirty-sixth Defendant1110 HAY PTY LTD
Thirty-seventh DefendantGEORGE 218 PTY LTD
Thirty-eighth DefendantGOLDTUNE INVESTMENTS PTY LTD
Thirty-ninth DefendantMONTVISTA PTY LTD
Fortieth DefendantGREAT NORTHERN LAND COMPANY PTY LTD
Forty-first DefendantBELLAGE PTY LTD
Forty-second DefendantBLUEBEACH HOLDINGS PTY LTD
Forty-third DefendantANKETELL FARMS PTY LTD
Forty-fourth DefendantWESTEND ASSET PTY LTD
Forty-fifth DefendantMOSHEE PTY LTD
Forty-sixth DefendantGUCCE RANFORD ROAD PTY LTD
Forty-seventh DefendantGUNAROO INVESTMENTS PTY LTD
Forty-eighth DefendantPARKDALE ASSET PTY LTD
Forty-ninth DefendantSTARSKY PTY LTD
Fiftieth Defendant89 BURSWOOD ROAD PTY LTD
Fifty-first DefendantNICHE GROUP (WA) PTY LTD
Fifty-second DefendantOCEAN KEYS (WA) PTY LTD
Fifty-third DefendantPARLIAMENT PLACE PTY LTD
Fifty-fourth DefendantPRADA PTY LTD
Fifth-fifth DefendantHERDSMAN TECHNOLOGY LIMITED
Fifty-sixth DefendantWHITBY LAND COMPANY PTY LTD
Fifty-seventh DefendantHUSKER HOLDINGS PTY LTD
Fifty-eighth DefendantDELTA ACE PTY LTD
Fifty-ninth DefendantSUCCESS ASSET PTY LTD
Sixtieth DefendantCHRISTINA MARCIA CARATTI
Sixty-first DefendantNATALIE ROCHELLE CARATTI
Sixty-second DefendantBENJAMIN MICK CARATTI
Sixty-third DefendantOPAL NIGHT PTY LTD
Sixty-fourth DefendantRICH NIGHT PTY LTD
Sixty-fifth Defendant130 FAUNTLEROY AVENUE (WA) PTY LTD
Sixty-sixth DefendantYANCHEP INVESTMENTS PTY LTD
Sixty-seventh DefendantTAAC PTY LTD
Sixty-eighth Defendant
Catchwords:
Practice and procedure - Costs - Costs thrown away - Costs determinations - Unusual difficulty complexity or importance - Costs to be paid forthwith - Turns on own facts
Legislation:
Legal Profession Act 2008 (WA), s 280
Rules of the Supreme Court 1975 (WA), O 66 r 10
Supreme Court Act 1935 (WA), s 37
Result:
Orders made as to costs
Category: B
Representation:
Counsel:
Plaintiff: Mr D Ryan SC
First Defendant : No appearance
Second Defendant : Mr G D Cobby
Fourth Defendant : Mr G D Cobby
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Seventh Defendant : Mr G D Cobby
Eighth Defendant : Mr G D Cobby
Ninth Defendant : Mr G D Cobby
Tenth Defendant : Mr G D Cobby
Eleventh Defendant : No appearance
Twelfth Defendant : No appearance
Thirteenth Defendant : Mr G D Cobby
Fourteenth Defendant : Mr G D Cobby
Fifteenth Defendant : Mr G D Cobby
Sixteenth Defendant : Mr G D Cobby
Seventeenth Defendant : No appearance
Eighteenth Defendant : No appearance
Nineteenth Defendant : No appearance
Twentieth Defendant : No appearance
Twenty-first Defendant : No appearance
Twenty-second Defendant : No appearance
Twenty-third Defendant : No appearance
Twenty-fourth Defendant : No appearance
Twenty-fifth Defendant : No appearance
Twenty-sixth Defendant : No appearance
Twenty-seventh Defendant : No appearance
Twenty-eighth Defendant : No appearance
Twenty-ninth Defendant : No appearance
Thirtieth Defendant : No appearance
Thirty-first defendant : Mr G D Cobby
Thirty-second Defendant : No appearance
Thirty-third defendant : Mr G D Cobby
Thirty-fourth Defendant : No appearance
Thirty-fifth Defendant : No appearance
Thirty-sixth Defendant : Mr G D Cobby
Thirty-seventh Defendant : Mr G D Cobby
Thirty-eighth Defendant : Mr G D Cobby
Thirty-ninth Defendant : Mr G D Cobby
Fortieth Defendant : Mr G D Cobby
Forty-first Defendant : Mr G D Cobby
Forty-second Defendant : Mr G D Cobby
Forty-third Defendant : Mr G D Cobby
Forty-fourth Defendant : Mr G D Cobby
Forty-fifth Defendant : Mr G D Cobby
Forty-sixth Defendant : Mr G D Cobby
Forty-seventh Defendant : Mr G D Cobby
Forty-eighth Defendant : Mr G D Cobby
Forty-ninth Defendant : Mr G D Cobby
Fiftieth Defendant : Mr G D Cobby
Fifty-first Defendant : Mr G D Cobby
Fifty-second Defendant : Mr G D Cobby
Fifty-third Defendant : Mr G D Cobby
Fifty-fourth Defendant : Mr G D Cobby
Fifth-fifth Defendant : Mr G D Cobby
Fifty-sixth Defendant : No appearance
Fifty-seventh Defendant : No appearance
Fifty-eighth Defendant : Mr G D Cobby
Fifty-ninth Defendant : Mr G D Cobby
Sixtieth Defendant : Mr G D Cobby
Sixty-first Defendant : No appearance
Sixty-second Defendant : No appearance
Sixty-third Defendant : No appearance
Sixty-fourth Defendant : No appearance
Sixty-fifth Defendant : No appearance
Sixty-sixth Defendant : Mr G D Cobby
Sixty-seventh Defendant : Mr G D Cobby
Sixty-eighth Defendant : No appearance
Solicitors:
Plaintiff: Lemonis/Tantiprasut Lawyers
First Defendant : No appearance
Second Defendant : Gadens Lawyers
Fourth Defendant : Gadens Lawyers
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Seventh Defendant : Gadens Lawyers
Eighth Defendant : Gadens Lawyers
Ninth Defendant : Gadens Lawyers
Tenth Defendant : Gadens Lawyers
Eleventh Defendant : No appearance
Twelfth Defendant : No appearance
Thirteenth Defendant : Gadens Lawyers
Fourteenth Defendant : Gadens Lawyers
Fifteenth Defendant : Gadens Lawyers
Sixteenth Defendant : Gadens Lawyers
Seventeenth Defendant : No appearance
Eighteenth Defendant : No appearance
Nineteenth Defendant : No appearance
Twentieth Defendant : No appearance
Twenty-first Defendant : No appearance
Twenty-second Defendant : No appearance
Twenty-third Defendant : No appearance
Twenty-fourth Defendant : No appearance
Twenty-fifth Defendant : No appearance
Twenty-sixth Defendant : No appearance
Twenty-seventh Defendant : No appearance
Twenty-eighth Defendant : No appearance
Twenty-ninth Defendant : No appearance
Thirtieth Defendant : No appearance
Thirty-first defendant : Gadens Lawyers
Thirty-second Defendant : No appearance
Thirty-third defendant : Gadens Lawyers
Thirty-fourth Defendant : No appearance
Thirty-fifth Defendant : No appearance
Thirty-sixth Defendant : Gadens Lawyers
Thirty-seventh Defendant : Gadens Lawyers
Thirty-eighth Defendant : Gadens Lawyers
Thirty-ninth Defendant : Gadens Lawyers
Fortieth Defendant : Gadens Lawyers
Forty-first Defendant : Gadens Lawyers
Forty-second Defendant : Gadens Lawyers
Forty-third Defendant : Gadens Lawyers
Forty-fourth Defendant : Gadens Lawyers
Forty-fifth Defendant : Gadens Lawyers
Forty-sixth Defendant : Gadens Lawyers
Forty-seventh Defendant : Gadens Lawyers
Forty-eighth Defendant : Gadens Lawyers
Forty-ninth Defendant : Gadens Lawyers
Fiftieth Defendant : Gadens Lawyers
Fifty-first Defendant : Gadens Lawyers
Fifty-second Defendant : Gadens Lawyers
Fifty-third Defendant : Gadens Lawyers
Fifty-fourth Defendant : Gadens Lawyers
Fifth-fifth Defendant : Gadens Lawyers
Fifty-sixth Defendant : No appearance
Fifty-seventh Defendant : No appearance
Fifty-eighth Defendant : Gadens Lawyers
Fifty-ninth Defendant : Gadens Lawyers
Sixtieth Defendant : Gadens Lawyers
Sixty-first Defendant : No appearance
Sixty-second Defendant : No appearance
Sixty-third Defendant : No appearance
Sixty-fourth Defendant : No appearance
Sixty-fifth Defendant : No appearance
Sixty-sixth Defendant : Gadens Lawyers
Sixty-seventh Defendant : Gadens Lawyers
Sixty-eighth Defendant : No appearance
Case(s) referred to in judgment(s):
Collins v Westralian Sands Ltd (1993) 9 WAR 56
Frigger v Lean [2012] WASCA 66
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2011] WASC 44
Jeruth Pty Ltd v Haybale Pty Ltd [2004] VSC 319
MacMahon Contractors Pty Ltd v Woodside Energy Ltd [No 2] [2009] WASC 11
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Pasdonnay Pty Ltd v SDS Corporation Ltd [2005] WASCA 9 (S)
Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
ALLANSON J: In 2008, John Caratti began these proceedings by writ. The action started with 12 defendants, the first of whom is John Caratti's brother, Allen.
The firm Gadens Lawyers represents five of the original defendants. As a group those defendants (and 32 others added later) have been referred to as the Gadens Defendants. It is a convenient shorthand name, so long as it does not mask that the extent of involvement of each of those defendants is not the same.
In September 2008, an appearance was entered for the five Gadens Defendants who were then parties.
The number of parties has progressively increased. In 2009 the plaintiff joined a further four defendants. In April 2010, he applied to amend the writ again, to add defendants 17 to 60. The writ was amended in August 2010. The matter then went to mediation, which failed to resolve it.
Since late 2011, a further eight defendants have been added. Of the 68 defendants, 37 are in the group of Gadens Defendants.
The increase in the number of parties accompanied a growth in the length and complexity of the statement of claim. In June 2011, counsel for John Caratti outlined the case for the purposes of an application that it be tried together with four other actions involving some of the same parties. He described the case as about whether property held by the various defendants were assets of a partnership between John and Allen Caratti, and were to be distributed in accordance with the mechanism set out in a deed that the brothers executed in 2002.
The defendants had not yet pleaded by 30 September 2011, and the court ordered the defendants to file their defences. The timetable was later extended. The Gadens Defendants filed their defence on 1 January 2012.
In 2012, the plaintiff significantly expanded his case. At a strategic conference on 7 February 2012, and in a position paper filed 1 February 2012, counsel for John Caratti identified the issues to be tried. They now included whether various defendants, including Gadens Defendants, were knowingly concerned in breaches of fiduciary duties by Allen Caratti. The plaintiff had not then pleaded these allegations.
The court ordered that the plaintiff file and serve a re‑amended or substituted statement of claim by 6 March 2012. The time for compliance was extended and, on 18 April 2012, the plaintiff filed a substituted statement of claim. It contains extensive additional detail regarding the partnership plea. And John Caratti now alleges that Allen Caratti's conduct constituted a fraudulent and dishonest design to establish and acquire new business interests in breach of his fiduciary duties under the partnership, and that Ms Tina Bazzo (and others) acquiesced in Allen Caratti's conduct with knowledge of his fraudulent and dishonest design.
Following service of a substituted statement of claim, the Gadens Defendants foreshadowed objections to it. On 11 May 2012, the court ordered the Gadens Defendants to file and serve submissions outlining their objections by 8 June 2012. In respect of any objections which remained unresolved after conferral, the plaintiff was to file submissions by 29 June with a view to a hearing in the last week of July.
The plaintiff applied to adjourn the hearing of the application because the Gadens Defendants had served their submissions late. On 12 July, I vacated the hearing.
The plaintiff filed an amended substituted statement of claim and extensive particulars on 14 August 2012. After they had been served with the new pleading, the Gadens Defendants did not press their application to disallow the amendments. While the plaintiff amended his pleading, he does not agree that the objections taken to the substituted statement of claim were sound.
In this context, the Gadens Defendants seek orders that the plaintiff pay their costs thrown away by reason of each of the amendments to the statement of claim since the commencement of the action (including amendments not filed), and the costs of their outline of submissions dated 5 July 2012. They further seek an order that the costs be taxed without regard to the limits imposed by the scale and be paid forthwith.
The costs thrown away
To date there has been no order for the costs thrown away by reason of the successive amendments to the statement of claim. The plaintiff does not oppose an order that the Gadens Defendants have those costs, even though costs orders were not made at the time of the amendments.
Where costs have been reasonably incurred that relate to work done and wasted by reason of an amendment, it is appropriate that the party who amends pays those costs. Because of my conclusion on the other matters argued, I am satisfied that an order should be made now, even though it is, in some instances, years after the amendment.
The costs of the submissions of 5 July 2012
The application to disallow parts of the substituted statement of claim was not determined on the merits.
Sometimes, when there has been no hearing on the merits, it is still possible to say that one party has succeeded and apply the general rule that the successful party is entitled to its costs. Sometimes it is possible, on the papers, to clearly discern which party would have been successful so that the agreement or compromise that renders the hearing unnecessary does not displace the usual order that the successful party have its costs. And sometimes it is apparent that one party has acted unreasonably. In such cases the court can fairly determine who should pay the costs: see, generally, Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622; Jeruth Pty Ltd v Haybale Pty Ltd [2004] VSC 319.
But this is not such a clear case. The Gadens Defendants objected to many of the paragraphs in the substituted statement of claim. They may have succeeded on some but not others. There has been no argument on the merits of their application. It is not appropriate to attempt to determine what the outcome would have been without hearing argument, and it would also be a poor use of the court's resources to embark on that task.
There should be no order as to costs regarding the submissions dated 5 July 2012.
Should there be an order lifting scale limits for costs
The court may, if it is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter (Legal Profession Act 2008 (WA) s 280(2)):
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination.
The Gadens Defendants do not ask for an order lifting the hourly rates of the practitioners who appeared. They say that the time allowed in the relevant costs determination is inadequate in this matter and should be lifted.
The first question is whether the conditions for the making of a special costs order are satisfied. The judgment to be made by the court is, at this stage, 'preliminary and provisional': Collins v Westralian Sands Ltd (1993) 9 WAR 56, 64, 68; Pasdonnay Pty Ltd v SDS Corporation Ltd [2005] WASCA 9 (S). The court may be able to make that judgment from its own observations and knowledge of the matter without requiring further evidence such as a draft bill of costs: Frigger v Lean [2012] WASCA 66 [82].
In my opinion, from the amendments introduced by the re‑amended writ and statement of claim filed 4 August 2010, the matter can be described as complex. Before then it was a difficult case, but has not been shown to be unusually difficult, complex or important for a matter filed in this court.
Length of pleadings and number of parties do not necessarily determine whether a matter is difficult or complex, but they can be guides. The re‑amended writ in August 2010 increased the number of parties to 60, with separate although similar allegations pleaded against most of the corporate defendants.
The volume of pleadings now filed on behalf of John Caratti is extraordinary. The statement of claim is 474 pages long. Paragraph 1 of the prayer for relief takes 72 pages and seeks multiple alternative declarations against each of many corporate defendants. In addition, the plaintiff has filed 301 pages of further and better particulars of the statement of claim. This is not said to criticise the plaintiff and his lawyers, or the defendants who requested the particulars. There are many defendants, and many transactions have been identified as relevant to the plaintiff's claims.
It may be, as the plaintiff submits, that the complexity of the case is primarily the product of the number of corporate defendants and the complexity of the inter‑relationship between those companies and others. But that only explains why it is complex, and does not deny that it is. The complexity of the inter‑relationships and the number of transactions relied on by the plaintiff make it fairly arguable that the time allowed under the relevant costs determination falls well short of the time reasonably required to carry out particular tasks. The court can make that assessment without further evidence. That is all that is required for an order under s 280. The order is, in no sense, punitive. It does nothing more than recognise that, in these circumstances, the determination may not provide reasonable compensation for the costs actually incurred.
The evidence does not permit me to impose limits in substitution for those prescribed. It will be for the Gadens Defendants to justify the time they claim to the taxing officer.
Should the costs be ordered to be paid forthwith
Costs may be dealt with by the court at any stage of the proceedings, and the court may order the costs to be paid forthwith notwithstanding that the proceedings are not concluded: Rules of the Supreme Court 1971 (WA) O 66 r 10(1).
Paragraph 3 of Consolidated Practice Direction 4.7.1 provides that as a general rule, where an order for costs is to be made against a party in interlocutory proceedings, the costs will be fixed and ordered to be paid forthwith or by a particular date. That is not to put an onus on the plaintiff, but simply to recognise, in exercising a discretion that is not otherwise confined, that the usual practice of the court is to order that costs of interlocutory applications will be paid forthwith. The fact that the costs are to be taxed rather than fixed does not alter the power to order that they be paid forthwith: see, for example, Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2011] WASC 44 [35]; MacMahon Contractors Pty Ltd v Woodside Energy Ltd [No 2] [2009] WASC 11.
The plaintiff submits that the same considerations that apply to the costs of an interlocutory application may not apply to costs thrown away as a result of an amendment. The usual order is that the costs thrown away be the other party's in any event, and those costs are taxed at the conclusion of the matter. The plaintiff argues that this usual rule should apply unless there are exceptional circumstances.
Finally, the plaintiff says that it will only be possible to say with accuracy what costs were thrown away after the Gadens Defendants have put on a defence and the proceedings have been heard.
Even if the usual rule is that argued by the plaintiff, I do not accept that exceptional circumstances are required to depart from it. Neither s 37 of the Supreme Court Act 1935 (WA) nor O 66 r 10 requires exceptional circumstances before an order is made that costs be paid forthwith. As a general proposition, it is inappropriate to read a provision that confers jurisdiction or grants powers to a court by making conditions or imposing limitations which are not found in the words used: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21] ‑ [22]. A requirement that there be exceptional circumstances would limit the court's discretion unnecessarily.
There are two circumstances which, in this case, justify making an order that requires the payment now of the costs thrown away.
First, this matter has been proceeding for four years. Costs have been incurred by the Gadens Defendants that will be paid by the plaintiff in any event. The event is some time in the future. The pleadings are not complete. This case will not get to trial this year.
Second, the case changed in character with the introduction of the plea that some of the Gadens Defendants knowingly participated in fraudulent and dishonest conduct. That change was first pleaded in a substituted statement of claim after the Gadens Defendants had filed their defences. It is inevitable that the defendants will file a substituted defence.
These circumstances are sufficient to support an order that the costs thrown away to date by the successive amendments be taxed and paid now.
It may be difficult to accurately establish the costs which have been thrown away to date, but those difficulties are likely to be no worse now than at the conclusion of the proceedings.
Costs of the application
The plaintiff asks for an order that he have the costs of the directions hearing on 4 September 2012, and the hearing on 12 September 2012 of the Gadens Defendants' application for costs. Except for the costs of the submissions of 5 July 2012, the defendants have been substantially successful. The plaintiff's application is dismissed.
Conclusion
The orders will be to the following effect:
1.The plaintiff is to pay the costs thrown away by the second, fourth, seventh to tenth, thirteenth to sixteenth, thirty‑first, thirty‑third, thirty‑sixth to fifty‑fifth, fifty‑eighth to sixtieth, sixty‑sixth and sixty‑seventh defendants by reason of the amendments to the writ and statement of claim up to and including the amended substituted statement of claim filed 14 August 2012.
2.There is an order under s 280 of the Legal Profession Act 2008 (WA) lifting the limit on the times allowed in the determinations made under that Act, from 4 August 2010.
3.The costs are to be taxed, if not agreed, and are to be paid forthwith.
4.The defendants' application is otherwise dismissed.
5.The plaintiff's application for the costs of the hearings on 4 and 12 September 2012 is dismissed.
3