Cardaci v Filippo Primo Cardaci as Executor of the Estate of Marco Antonio Cardaci, dec [No 3]
[2020] WASC 44
•19 FEBRUARY 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CARDACI -v- FILIPPO PRIMO CARDACI as Executor of the Estate of MARCO ANTONIO CARDACI, dec [No 3] [2020] WASC 44
CORAM: LE MIERE J
HEARD: 29 JANUARY 2020
DELIVERED : 19 FEBRUARY 2020
FILE NO/S: CIV 3186 of 2016
MATTER: The Family Provision Act 1972
The Estate of Marco Antonio Cardaci of 327 West Coast Drive, Trigg in the State of Western Australia, Businessman, deceased
BETWEEN: MAE CARDACI
Plaintiff
AND
FILIPPO PRIMO CARDACI as Executor of the Estate of MARCO ANTONIO CARDACI, dec
First Defendant
GIOVANNI MAURIZIO CARRELLO as the Trustee in Bankruptcy of the Estate of MARCO ANTONIO CARDACI, dec
Second Defendant
POWERCITY PTY LTD
Third Defendant
DUPORTE CORPORATION PTY LTD
Fourth Defendant
FILE NO/S: CIV 1750 of 2017
MATTER: Section 77 of the Trustees Act 1962
The Washburn Trust and the Marc Cardaci Testamentary Trust
BETWEEN: MAE CARDACI
Plaintiff
AND
FILIPPO PRIMO CARDACI
First Defendant
WASHBURN PTY LTD
Second Defendant
RECTANGULAR PTY LTD
Third Defendant
ONGOLD CORPORATION PTY LTD
Fourth Defendant
DUPORTE CORPORATION PTY LTD
Fifth Defendant
POWERCITY PTY LTD
Sixth Defendant
ANGELA FRANCESCA CARLA FLORIDO
Seventh Defendant
Catchwords:
Costs - Security for costs - Application for further security for costs - Whether draft bill of costs is adequate estimate of the parties' costs
Legislation:
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA)
Result:
The plaintiff to give further security for costs
Category: B
Representation:
CIV 3186 of 2016
Counsel:
| Plaintiff | : | Mr G D Cobby SC |
| First Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Second Defendant | : | Ms E McCloskey |
| Third Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Fourth Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
Solicitors:
| Plaintiff | : | Herbert Smith Freehills |
| First Defendant | : | Bennett + Co |
| Second Defendant | : | Tottle Partners |
| Third Defendant | : | Bennett + Co |
| Fourth Defendant | : | Bennett + Co |
CIV 1750 of 2017
Counsel:
| Plaintiff | : | Mr G D Cobby SC |
| First Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Second Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Third Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Fourth Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Fifth Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Sixth Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
| Seventh Defendant | : | Mr S Penglis SC & Mr W C J Zappia |
Solicitors:
| Plaintiff | : | Herbert Smith Freehills |
| First Defendant | : | Bennett + Co |
| Second Defendant | : | Bennett + Co |
| Third Defendant | : | Bennett + Co |
| Fourth Defendant | : | Bennett + Co |
| Fifth Defendant | : | Bennett + Co |
| Sixth Defendant | : | Bennett + Co |
| Seventh Defendant | : | Bennett + Co |
Case(s) referred to in decision(s):
Nil
LE MIERE J:
Summary
These are related actions being heard together. The plaintiff has given security for the defendants' costs pursuant to orders I made on 31 July 2019 and 19 September 2019. The defendants have applied for orders that the plaintiff provide further security for their costs. For the reasons which follow I will order the plaintiff to give further security for costs as follows:
(a)in CIV 1750 of 2017, $450,000 for the costs of the defendants;
(b)in CIV 3186 of 2016, $50,000 for the costs of the first, third and fourth defendants; and
(c)in CIV 3186 of 2016, $50,000 for the costs of the second defendant.
Existing security for costs
On 31 July 2019 I ordered that the plaintiff provide security for the costs of the defendants in CIV 1750 of 2017 (CIV 1750) and the costs of the first defendant in CIV 3186 of 2016 (CIV 3186). In both actions I ordered that the security be given in tranches and in the form of a deed poll. I ordered the plaintiff to provide the first tranche of security up to and including preparation of the witness outlines in the sums of $250,000 and $100,000 for the defendants in CIV 1750 and the first defendant in CIV 3186 respectively. In each action I ordered that there be liberty to apply to uplift the amount of the security.
On 19 September 2019 I ordered the plaintiff to provide security by way of a deed poll for the second defendant's costs of the action in CIV 3186 in the sum of $50,000 and that there be liberty to apply to uplift the amount of the security.
The plaintiff has provided security in accordance with the orders.
The applications for further security
The defendants have applied for further security for costs as follows:
(1)in CIV 1750 the plaintiff provide a second tranche of security for the defendants' costs in the amount of $525,000;
(2)in CIV 3186 the plaintiff provide a second tranche of security for the first, third and fourth defendants' costs in the amount of $60,000; and
(3)in CIV 3186 the plaintiff provide further security for the second defendant's costs in the amount of $57,000.
The plaintiff does not oppose giving further security for the defendants' costs in CIV 1750 and for the costs of the first, third and fourth defendants in CIV 3186. In CIV 1750 the plaintiff has offered to provide security in the sum of $376,210.30 up to the conclusion of the trial. In CIV 3186 the plaintiff has offered to provide the first, third and fourth defendants with additional security of $29,094 up to the conclusion of the trial. The plaintiff opposes giving any further security for the costs of the second defendant in CIV 3186.
Security for the defendants' costs in CIV 1750 and first, third and fourth defendants' costs in CIV 3186
In support of their application for security for costs, the defendants in CIV 1750 and the first, third and fourth defendants in CIV 3186 rely on affidavits sworn in each action on 20 January 2020 by Mr Banda, a solicitor experienced in the conduct of commercial litigation who has the conduct of each matter. Mr Banda swears that in preparing the draft bill he estimated the defendants' costs of and following the trial by reference to the items set out in the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA) and his estimate of the disbursements likely to be incurred and allowed on a party and party basis. Mr Banda swears that he believes the amounts set out in each draft bill are reasonable.
The draft bill of costs in CIV 1750 is as follows:
No
Item Description
Scale Item
Fee Earner
Time (days/hours)
Rate
Amount
1
Senior Counsel's Fee on brief for first day of trial and preparation
21(b)
SC
4.5 days
$6,820 p/day
$30,690
2
First Junior Counsel's Fee on brief for first day of trial and preparation
21(a)
C
4.5 days
$4,180 p/day
$18,810
3
Second Junior Counsel's Fee on brief for first day of trial and preparation
21(a)
C
4.5 days
$4,180 p/day
$18,810
4
Attendance at trial by Senior Counsel for second and each successive day of hearing
21(d)
SC
18 days
$6,820 p/day
$122,760
5
Attendance at trial by first Junior Counsel for second and each successive day of hearing
21(c)
C
18 days
$4,180 p/day
$75,240
6
Attendance at trial by second Junior Counsel for second and each successive day of hearing
21(c)
C
18 days
$4,180 p/day
$75,240
7
Additional fee on brief for each five hearing days after the first five hearing days
21(i)
SC
3 days
$6,820 p/day
$20,460
C
6 days (between 2 Counsel)
$4,180 p/day
$25,080
8
Attendance at trial by instructing legal practitioners
21(e)
SP
5 hours x 19 days
$495 p/hr
$47,025
JP
5 hours x 19 days
$352 p/hr
$33,440
9
Preparing written closing submission
21(g)
SC
2 days
$6,820 p/day
$13,640
C
2 days
$4,180 p/day
$8,360
10
Attending on reserved judgment (including preparation, consideration of reasons for decision and all necessary work and attendances to obtain final orders)
21(h)
SP
5 hours
$495 p/hr
$2,475
11
Settling and extracting judgment or order (with appointment)
26(a)
RP
2 hours
$297 p/hr
$594
12
Drawing bill of costs
30(a)
SP
3 days
$4,950 p/day
$14,850
13
Taxation of costs (including the time spent in preparing for the taxation)
30(b)
SP
2 days
$4,950 p/day
$9,900
14
Estimated Transcript Fees (approximately 100 pages per day)
34(b)
1900 pages
$22.60 plus $9.90 per page
$18,832.60
15
Estimated Law in Order - Relativity document hosting
34(b)
4 months
$2,900 (per month)
$11,600
16
Estimated Law in Order - Consultancy fees
34(b)
30 hours
$320
$9,600
TOTAL
$557,480.60
The defendants do not press items 3 and 6. Accordingly, the total of the draft bill relied on by the defendants is $463,430.
The first, third and fourth defendants' draft bill of costs in CIV 3186 is:
No
Item Description
Scale Item
Fee Earner
Time (days/hours)
Rate
Amount
1
Senior Counsel's Fee on brief and preparation (excluding first day of trial)
21(b)
SC
3.5 days
$6,820 p/day
$23,870
2
First Junior Counsel's Fee on brief and preparation (excluding first day of trial)
21(a)
C
3.5 days
$4,180 p/day
$14,630
3
First Junior Counsel's Fee on brief and preparation (excluding first day of trial)
21(a)
C
3.5 days
$4,180 p/day
$14,630
4
5
Preparing written closing submission
21(g)
SC
1 day
$6,820 p/day
$6,820
C
1 day
$4,180 p/day
$4,180
6
Settling and extracting judgment or order (with appointment)
26(a)
SP
2 hours
$495 p/hr
$990
7
Drawing bill of costs
30(a)
SP
1 day
$4,950 p/day
$4,950
8
Taxation of costs (including the time spent in preparing for the taxation)
30(b)
SP
0.5 days
$4950 p/day
$2,475
TOTAL
$67,595
The first, third and fourth defendants do not press item 3. Accordingly, the total of the draft bill relied upon by the first, third and fourth defendants is $52,965.
Plaintiff's response to defendants in CIV 1750 and first, third and fourth defendants in CIV 3186
The plaintiff submits that the defendants' draft bills are an inadequate estimate of their costs because:
(a)the two actions are to be tried together;
(b)there is a high degree of overlap between the issues and the evidence in the two actions; and
(c)the evidence in each action is to stand as evidence in the other.
The plaintiff also submits, by reference to the amounts for various items in the draft bills, that each of the draft bills is not a reasonable or proper estimate of the real costs of the litigation. I will address the items in the defendants' draft bills challenged by the plaintiff.
Items 1 and 2 - counsel's fees on brief
The amounts claimed by the defendants in CIV 1750 are the maximum scale allowances for senior and junior counsel's fees on brief and for the first day of trial. It is likely that the counsel fees on brief and for the first day of trial incurred by the defendants will exceed the scale amounts. Indeed, on the hearing of this application senior counsel for the plaintiff volunteered that there is likely to be an application for a special costs order in any event. I am satisfied that the amounts claimed by the defendants are a proper allowance.
The amounts claimed by the first, third and fourth defendants for counsel fees in CIV 3186 are the maximum amounts allowed for preparation but do not include any allowance for the first day of trial. That is because the defendants in CIV 3186 will be represented at trial by the same counsel as the defendants in CIV 1750.
The plaintiff submits that there is a high degree of overlap between the issues and evidence in the two actions and accordingly the first, third and fourth defendants should be allowed something less than the maximum scale allowances for these items.
In his affidavit sworn on 20 January 2020 in CIV 3186, Mr Banda swore that in preparing the draft bill he estimated the defendants' costs of and following the trial which he considered are not a duplication of the costs incurred in CIV 1750. On the hearing of this application senior counsel for the first, third and fourth defendants outlined the issues in CIV 3186 which although overlapping to some extent with the issues in CIV 1750 properly 'reside' in CIV 3186 in the sense that that is the action in which they primarily arise and give rise to the relief sought in that action.
I am satisfied that Mr Banda's estimate of the counsel fees of the first, third and fourth defendants in CIV 3186 is a proper and reasonable estimate of the counsel fees that should be allowed to those defendants on a party and party basis.
CIV 1750 - items 4, 5 and 7
The plaintiff does not question the amounts allowed for these items in the defendants' draft bill of costs.
CIV 1750 - item 8 - attendance at trial by instructing legal practitioners
The defendants' draft bill allows for attendance at trial by a senior practitioner and a junior practitioner. The plaintiff says that it is not reasonable to allow, by way of security for costs, for the attendance of two instructing legal practitioners.
I find that, having regard to the nature and complexity of the matters in issue, and the amounts in issue and the length of the trial it is appropriate to allow for a senior and junior practitioner to instruct at the trial.
CIV 1750 - item 9, CIV 3186 - item 5 - preparing written closing submissions
The plaintiff did not challenge the appropriateness of the allowances made for these items in the defendants' draft bills of costs.
CIV 1750 - item 10 - attending on reserved judgment
The plaintiff did not challenge the appropriateness of the amount allowed for this item in the defendants' draft bill of costs.
CIV 1750 - item 11, CIV 3186 - item 6 - settling and extracting judgment or order
The plaintiff did not challenge the appropriateness of the amounts allowed by the defendants in their draft bills of costs for these items.
CIV 1750 - items 12 and 13, CIV 3186 - items 7 and 8 - drawing bill of costs and taxation of costs
The plaintiff submits that the amounts allowed by the defendants in their draft bills of costs for these items is more than is appropriate.
The amounts in the defendants' bills are a conscientious estimate made by an experienced commercial litigator with the conduct of the matter. I accept the estimates are broadly appropriate, although they are necessarily only estimates.
CIV 1750 - item 14 - estimated transcript fees
It is appropriate for the defendants to obtain a transcript. The amount allowed in the defendants' draft bill is based on the rate set out in the Regulations and a reasonable estimate of the number of pages of the transcript.
CIV 1750 - items 15 and 16 - Law in Order fees
Law in Order is a commercial provider of document services. Mr Banda has estimated the 'relativity document hosting' and consultancy fees to be paid by the defendants to Law in Order for those services. There is no material before me to contradict or question Mr Banda's estimates.
Further security for costs in CIV 1750
In ordering an appropriate amount of security the court should fix an amount it considers as adequate for the services to be rendered. The court has regard to the probable costs which the defendant may be put to, so far as it can be ascertained. An applicant for security bears the onus of adducing material that enables the court to estimate the costs that they will incur. The amount fixed as security is not intended as a pre‑estimate of the actual amount of party/party costs that might become payable should the case go to trial and the defendant succeed.
Having regard to the evidence of Mr Banda and the submissions of senior counsel for the defendants, I am satisfied that the amounts set out in the defendants' draft bill of costs is less than the costs likely to be incurred by the defendants. The amounts set out in the defendants' draft bill are appropriate amounts to order as security for the defendants' costs. The amounts cannot be estimated with mathematical precision. I will order the plaintiff to provide further security in the amount of $450,000.
First, third and fourth defendants' costs in CIV 3186
The amounts allowed in the first, third and fourth defendants' draft bill of costs in CIV 3186, disregarding the item no longer pressed, is $52,965. That is a reasonable estimate of the costs likely to be incurred by those defendants based on scale rates, and less than the actual costs likely to be incurred by those defendants. I will order that the plaintiff provide further security for those defendants in the amount of $50,000.
CIV 3186 - second defendant's costs
The plaintiff resists providing any further security for the costs of the second defendant. First, the plaintiff says that an order for the provision of security for costs is an interlocutory order which the court should set aside only upon the basis that there has been a material change in circumstances so as to warrant a variation of the original order.
That principle does not apply in this case. The order made on 19 September 2019 expressly provides for liberty to apply to uplift the amount of security ordered.
Secondly, the plaintiff says that the security ordered on 19 September 2019 was to cover the following actions up to the conclusion of trial: discovery by trustee in bankruptcy; inspection of other parties' documents; strategic conference and subsequent directions hearing; preparation for and attendance at four days of trial; and correspondence. That contention is based upon the terms of the plaintiff's solicitors' letter of 12 April 2019 in which the plaintiff offered to provide security in the amount of $50,000 based upon the plaintiff's estimate of the costs for those items of work up to trial.
I do not accept that contention. The second defendant's solicitor responded to the plaintiff's solicitor's letter on 5 August 2019 stating that the second defendant accepted the plaintiff's offer of security 'in the amount of $50,000 on the basis that our client's right to seek further security is expressly preserved should that estimate prove insufficient as the proceedings progress'.
Thirdly, the plaintiff says that the second defendant has not shown that it has exhausted the security provided to it in incurring costs that will be recoverable as costs in this action if the second defendant obtains an order for costs in its favour, as distinct from having incurred the costs in carrying out work for or in relation to the administration of the estate.
The second defendant's application is supported by an affidavit sworn by Mr Bone, a solicitor who assists Ms McCloskey, the senior practitioner who has conduct of the matter for the second defendant. Mr Bone swears that he has reviewed invoices rendered by the second defendant's solicitors 'in respect of the costs incurred by the second defendant in this action' and is able to say that:
(a)in the period 29 November 2018 to 4 August 2019 the second defendant has incurred legal fees in excess of $45,000 (not including GST and disbursements) in respect of these proceedings; and
(b)in the period 5 August 2019 to the date of this affidavit the second defendant has incurred legal fees in excess of $69,000 (not including GST or disbursements) in respect of these proceedings.
5 August 2019 is the date on which the second defendant agreed that the plaintiff should provide security for the second defendant's costs of the action in the amount of $50,000.
The evidence is that the second defendants have incurred the costs referred to by Mr Bone 'in this action'.
Fourthly, the plaintiff says that the second defendant has a very limited role in the action and further security for costs are not necessary or warranted. I am satisfied from Mr Bone's affidavit and the submissions of Ms McCloskey, as counsel, that it is appropriate to order the plaintiff to provide further security for the second defendant's costs up to the trial.
The second defendant seeks further security in the sum of $57,000, including disbursements of $18,832.60 for a transcript. I find that the plaintiff should provide further security for the costs of the second defendant in the sum of $50,000 including the cost of obtaining a transcript.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
GG
Research Orderly to the Honourable Justice Le Miere19 FEBRUARY 2020
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