Chaffey Services Pty Ltd as trustee for Cataby Services Trust, T/A Cataby Services v Doble - [2021] WASC 391

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   CHAFFEY SERVICES PTY LTD AS TRUSTEE FOR CATABY SERVICES TRUST, T/A CATABY SERVICES -v- DOBLE [2021] WASC 391
CORAM:   ALLANSON J
HEARD:   ON THE PAPERS
DELIVERED          :   11 NOVEMBER 2021
FILE NO/S:   CIV 1854 of 2020
BETWEEN:   CHAFFEY SERVICES PTY LTD AS TRUSTEE FOR CATABY SERVICES TRUST, T/A CATABY SERVICES
Plaintiff

AND

MICHAEL PAUL DOBLE
First Defendant

KIRAHNLEY PTY LTD T/A KTR SERVICES
Second Defendant

Catchwords:

Practice and procedure - Costs of interlocutory application - Where orders agreed shortly before scheduled hearing - Whether costs order should be made

Practice and procedure - Conferral - Where party attached correspondence regarding conferral to affidavit filed in support of application - Requirement for leave

Practice and procedure - Costs of interlocutory application - Where not practicable to fix costs - Where contested taxation likely - Whether costs should be ordered payable forthwith

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Costs order made

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	Bennett + Co
First Defendant	:	Midwest Lawyers
Second Defendant	:	Midwest Lawyers

Cases referred to in decision:

Brookvista Pty Ltd v Meloni [2009] WASCA 180
Frigger v Professional Services of Australia Pty Ltd (No 2) [ 2011] WASCA 103 (S)
Lafferty v Waterton [2016] WASCA 183
Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

ALLANSON J:

Introduction

On 20 September 2021, on the day listed for the hearing of an application by the plaintiff for further and better discovery, the parties agreed orders for disposing of the application except as to costs. I made orders for that question to be determined on the papers with each party to file short written submissions. For the reasons which follow, I will order that the defendants pay the plaintiff's costs of the application, to be taxed if not agreed.

Procedural history

The plaintiff commenced this action by writ filed on 12 August 2020.
On 21 October 2020, after pleadings had closed, a registrar made consent orders for programming further interlocutory matters, including that the parties give discovery on affidavit by 20 November 2020. The discovery order was expressed in general terms.
A further consent order was made on 4 February 2021 for the parties to give further discovery on affidavit by 23 March 2021.
On 23 July 2021, the plaintiff applied for this action to be admitted to the CMC list for management by a judge. The letter referred to ongoing concerns regarding the completeness of the defendants' discovery and foreshadowed an application for further discovery.
On 4 August 2021, I admitted the matter to the CMC list. I also made orders programming the plaintiff's application for further and better discovery through to a hearing in September.
The plaintiff's application for those orders was supported by an affidavit of Rachel Megan Ross, solicitor, sworn 4 August 2021.
Relevantly, Ms Ross deposed that the defendants had provided five tranches of discovery, two of which were provided formally on affidavit on 26 November 2020 and 10 May 2021. There had also been three informal tranches of discovery in December 2020, January 2021 and June 2021. The plaintiff had provided two tranches of discovery, formally on 1 December 2020 and informally on 5 July 2021.
The balance of the affidavit, and its 17 attachments, set out correspondence between the solicitors for the parties between 23 November 2020 and 5 July 2021. The correspondence was said to be 'containing conferral'.
Order 59 r 9 of the Rules of the Supreme Court 1971 (WA) provides for the filing of a memorandum stating that the parties have conferred to try to resolve the matters giving rise to the application; and the matters that remain in issue between the parties. The court's Practice Directions, in PD 4.3.2 provide for conferral face to face or by telephone, with reliance on written communication justified only where face to face or telephone contact is not feasible.
A memorandum using Form 108 at PD 4.3.2.1 is all that is required. An affidavit is not required.
Clause 9 PD 4.3.2 states:
Affidavits filed in connection with the proceedings should not contain any reference to the conferral without leave of the court.
An affidavit attaching the correspondence between the parties by way of conferral, is unnecessary, inconsistent with the Practice Directions unless leave has been obtained, and may discourage making concessions in the course of those communications. It risks putting before the court material which is privileged or otherwise not properly to be received as evidence.
The plaintiff did not seek to read the affidavit of Ms Ross at the hearing on 4 August 2021. It was unnecessary to consider whether leave would be given for such material to be included in the affidavit.
The plaintiff filed its application by chamber summons on 23 August 2021. There were distinct orders sought for the defendants to:
(1)give further and better discovery of documents 'in electronic or native format', specifically such that all electronic/native documents are provided in complete form with all attachments and 'de‑duplicated';
(2)give discovery of specific categories of documents;
(3)consolidate the five tranches of discovery provided and any further discovery into a single set, organised chronologically and with documents numbered individually; and
(4)give ongoing monthly informal discovery of financial information.
De-duplication (unfortunately) now appears to be recognised as a word in specific contexts, and appears in the Technology Glossary to the Federal Court Practice Notes. There is no equivalent glossary to the Rules and Practice Directions of this court. In complex litigation between sophisticated litigants, with access to technical assistance, the process to which it refers will have a role.
Similarly, 'native format' is a defined term in the Technology Glossary. The final orders included, in parenthesis, an explanation of the term.
Because the orders were ultimately consented to, it was not necessary to consider whether the defendants had the technical and other resources to comply with the terms of the order. It was also not necessary to address the apparent conflation of the obligations to discover and to allow inspection of the documents mentioned in the list.
In support of the chamber summons, the plaintiff filed a further affidavit of Sinead Elizabeth Spencer, solicitor, sworn 23 August 2021. Ms Spencer deposed to the manner in which discovery had been given by the defendants to date. She did not overstate the position in describing the documents produced as 'pages of unpaginated, incomplete emails, not in chronological, or discernible order'.
Ms Spencer also deposed, from her review of documents discovered, to her belief that the defendants have, or at some time had, in their possession, custody or power documents or classes of documents specified in the application for further discovery and that those documents relate to matters in question in the action.
Ms Spencer also sought leave to refer to attached correspondence between the solicitors, between 7 December 2020 and 8 March 2021. At least some of the attached correspondence was directed towards conferral. A memorandum of conferral had been filed, which referred to conferral primarily in writing. The solicitors for the parties spoke by telephone on one occasion.
The plaintiff filed submissions in support of its application, dated 23 August 2021. Practice Direction 2.1, clause 8, provides that submissions should not normally exceed five pages in length in the case of an interlocutory hearing. The plaintiff filed 20 pages of submissions. The submissions were unnecessarily long.
The defendants filed responsive submissions on 15 September 2021, together with an affidavit of the first defendant.
On the day listed for the hearing of the plaintiff's application, the parties presented a minute of agreed orders. The plaintiff had made concessions in removing some of the categories sought by way of further discovery and agreeing to three-monthly (rather than monthly) updates of financial information.
The plaintiff sought costs of the application, and I made orders for that question to be determined on the papers. Both parties filed submissions in accordance with that order.
The plaintiff also, on 20 September 2021, filed an affidavit of Ms Ross sworn that day in support of an order for costs. In it, she requested leave to refer to attached correspondence between the solicitors and the parties. No order had been made for the filing of that affidavit, and no application had been made for leave to adduce correspondence between the parties on affidavit. Ms Ross also set out the part of the content of two telephone conversations with the solicitor for the defendants. That correspondence and those conversations are clearly relevant to the issue of costs and I will give leave for the plaintiff to rely on the affidavit.
Relevantly, Ms Ross deposed:
(1)in conferral on 14 September 2021, following a phone call between the solicitors, it appeared likely there would be some agreement and the solicitors would speak again the following day;
(2)that agreement was not achieved on 15 September, and the defendants filed their submissions and affidavit opposing the orders sought;
(3)on 17 September 2021, in a telephone conversation, agreement was reached on the orders, as made, save as to costs.

The application for costs

I am, in this application, concerned only with the costs of the application for further discovery. The costs of the discovery process, which may be quite substantial, are a separate question.
The plaintiff has not asked for any special costs orders.

The principles

The costs of and incidental to all proceedings in court are in the discretion of the court: Supreme Court Act 1935 (WA) s 37(1). The discretion must be exercised judicially, but it is otherwise unconfined.[1] While the discretion to award costs cannot be shackled, and considerations which might guide the exercise of the discretion cannot be rigidly applied, the Rules of the Supreme Court and the authorities offer guidance on the proper exercise of the discretion and help to ensure consistency in the exercise of judicial discretion.
[1] See, for example Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21] ‑ [22], [134]; Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 [24] - [25]
Order 66 r 1, while it is expressed to not limit the general discretion conferred on the court, provides that the court will generally order that the successful party to any action or matter recover his costs.[2]
[2] Northern Territory v Sangare [25].
Whether a party is successful is to be determined by the reality of the circumstances, by which party has succeeded in the underlying real contest.[3]
[3] Frigger v Professional Services of Australia Pty Ltd (No 2) [ 2011] WASCA 103 (S) [12]; Oshlack v Richmond River Council [70].
The applicable principles where a matter resolves without a decision on the merits were outlined by the Court of Appeal in Lafferty v Waterton:
The general rule, however, is based upon the identification of the successful party by a hearing on the merits. In cases where the matter is settled without a determination on the merits the court is deprived of the factor that will usually determine how the discretion as to costs is to be exercised. As McHugh J pointed out in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, 624, the court cannot try a hypothetical action between the parties and burden the parties with the costs which by their settlement they had avoided.
There may, however, be cases where despite the lack of a final determination the court is able to find that the settlement was in fact simply a capitulation by one party in the face of probable defeat, where an order for costs may be appropriate. There may also be cases where the court is able to conclude that one party has acted so unreasonably that the other party should be entitled to an order for costs. But where it appears that both parties have acted reasonably in commencing and defending the proceedings, and their conduct continued to be reasonable until the proceedings came to an end, the proper exercise of the costs discretion will usually mean that the court will make no order as to costs: Ex parte Lai Qin , 625.[4]
[4] Lafferty v Waterton [2016] WASCA 183 [17] - [18].

Consideration

When considering the whole of the application, the plaintiff was the successful party. Although the scope of discovery ultimately agreed was reduced from that sought in the summons, the plaintiff obtained orders for most of what it had asked for.
The way in which discovery had been given by the defendants before the application was brought was clearly inadequate.
First, it was deficient in form. The requirements for an affidavit of discovery, in O 26 r 4(1), are that it 'must enumerate the documents in a convenient order and as shortly as possible, but describing each of them or, in the case of bundles of documents of the same nature, each bundle, sufficiently to enable it to be identified.' Attempts by the plaintiff to have the defendants remedy the defects in form received some response, but it was not sufficient. Emails were provided in bundles not in chronological order, incomplete, and with missing attachments.
At the time the plaintiff brought the application, it had repeatedly requested the defendants to attempt to address its concerns and to provide a set of chronological, paginated or numbered documents. It continued to attempt to resolve the issue up to 15 September 2021, when the defendants filed their submissions and affidavit. Agreement was reached only on the Friday before the hearing.
Second, the discovery given was inadequate in substance (exacerbated by the disordered way in which the defendants provided documents to the plaintiff). While some categories of documents were excluded from the application by agreement, the defendants have agreed to the majority of them. I am satisfied, on the evidence of Ms Spencer, that those categories that were eventually agreed are properly discoverable. The acceptance of those categories by the defendants was the acceptance of the inevitable. Acting reasonably the defendants would have provided, or agreed to provide, discovery of those documents before the eleventh hour.
I have taken into account that all parties failed to comply with the timetable ordered on 4 August 2021. But the defendants did not raise the late filing of the plaintiff's application, and filed their submissions and an affidavit only on the Wednesday before the (Monday) hearing.
I am satisfied that the defendants should pay the plaintiff's costs of the application for discovery.
I have not been asked to fix costs; indeed the plaintiff has submitted that it anticipates seeking the scale maxima. Fixing costs would, in these circumstances, be impractical. As Newnes JA said in Brookvista Pty Ltd v Meloni:[5]
The power to award a fixed sum should only be exercised when the court considers that it can determine the amount of the costs fairly. That means the court must have available to it sufficient material that it is confident it can arrive at an appropriate sum: see Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738 [22].
[5] Brookvista Pty Ltd v Meloni [2009] WASCA 180 [27].
The final question is whether the costs should be paid forthwith notwithstanding that they cannot be fixed.
It is possible to make an order that costs be payable forthwith, even where those costs cannot be fixed but will require taxation or assessment. In considering that course, the court must have regard to the objects set out in O 1 r 4A and 4B, and consider whether that course is the most efficient use of the court's resources, and is proportionate to the value of the subject matter in dispute and the resources of the parties.
The order sought by the plaintiff would, inevitably, result in a parallel contested process for the taxation. The benefits contemplated by PD 4.7.1 would not be achieved. I do not believe that, in the circumstances of this case, an order for costs to be taxed and payable forthwith would be consistent with the objects of O 1 r 4A and 4B.
The order will be that the defendants pay the plaintiff's costs of the application filed by chamber summons, dated 23 August 2021, in any event.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Associate to the Honourable Justice Allanson
11 NOVEMBER 2021