Citic Pacific Ltd v Mineralogy Pty Ltd
[2014] WASC 358 (S)
•12 MARCH 2015
CITIC PACIFIC LTD -v- MINERALOGY PTY LTD [2014] WASC 358 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 358 (S) | |
| Case No: | CIV:3012/2012 | ON THE PAPERS | |
| Coram: | EDELMAN J | 12/03/15 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Costs orders to be made | ||
| B | |||
| PDF Version |
| Parties: | CITIC PACIFIC LTD SINO IRON PTY LTD KOREAN STEEL PTY LTD MINERALOGY PTY LTD CLIVE FREDERICK PALMER |
Catchwords: | Practice and procedure Costs Orders as to costs arising from amendments by plaintiffs to statement of claim Orders as to costs arising from amendments by defendants to defence |
Legislation: | Nil |
Case References: | Citic Pacific Ltd v Mineralogy Pty Ltd [2014] WASC 358 One.tel Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548 Walter v Buckeridge [No 4] [2011] WASC 313 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
SINO IRON PTY LTD
Second Plaintiff
KOREAN STEEL PTY LTD
Third Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
CLIVE FREDERICK PALMER
Second Defendant
Catchwords:
Practice and procedure - Costs - Orders as to costs arising from amendments by plaintiffs to statement of claim - Orders as to costs arising from amendments by defendants to defence
Legislation:
Nil
Result:
Costs orders to be made
Category: B
Representation:
Counsel:
First Plaintiff : No appearance
Second Plaintiff : No appearance
Third Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Solicitors:
First Plaintiff : Allens
Second Plaintiff : Allens
Third Plaintiff : Allens
First Defendant : Michael John Dunham
Second Defendant : Michael John Dunham
Cases referred to in judgment:
Citic Pacific Ltd v Mineralogy Pty Ltd [2014] WASC 358
One.tel Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548
Walter v Buckeridge [No 4] [2011] WASC 313
- EDELMAN J:
Introduction
1 As a consequence of the narrowing of the pleadings, the issues in this matter are now extremely confined. On 24 February 2015, I made orders, by consent, programming this matter to a hearing after 2 June 2015. It appears that the sole issue at the hearing will be whether there is any utility in making a declaration concerning the rights of the plaintiffs (the Citic parties) where those rights appear not to be in dispute. The declarations now sought by the Citic parties (with the recent amendments marked up) are as follows:
(a) a declaration that [Citic Pacific Ltd] has not repudiated the CPOA [Citic Pacific Option Agreement];
(b) a declaration that the purported termination of the CPOA by Mineralogy and [Mr] Palmer is invalid;
(c) a declaration that Mineralogy and [Mr] Palmer are not entitled to terminate the CPOA;
(d) a declaration that the CPOA remains in full force and effect;
(e) a declaration that the JDA [Joint Development Agreement] continues to be suspended;
(f) a declaration that the Fortescue Coordination Deed has not been terminated by reason of the purported termination of the CPOA and remains in full force and effect
2 A new case manager, Chaney J, has now been assigned to the case. There is, however, one final dispute between the parties. It concerns a matter which is consequential upon previous decisions of mine. The parties consented to the issue being determined on the papers. The issue is who should bear the costs of amendments that were made by the Citic parties (as above) and by Mineralogy and Mr Palmer in their fourth further amended defence. For simplicity in these reasons I refer to both defendants, Mineralogy and Mr Palmer, as the Mineralogy parties.
3 The Mineralogy parties say that they should be entitled to the costs of the amendments to their defence arising from the narrowing of the Citic parties' case as marked up in the quoted relief above. However, the amendments to the Citic parties' claim arose as a result of a supervening event, and the matter removed by those amendments will be litigated in other proceedings. The costs thrown away by the amendment, to the extent that they are not covered by other costs orders in these proceedings, would generally be ordered to follow the outcome of the other proceedings. Mineralogy should pay the costs thrown away by the Citic parties for the amendments by the Mineralogy parties which were not consequential upon the amendments by the Citic parties.
Background to Mineralogy's fourth further amended defence
4 It is unnecessary to repeat, in these reasons, the history of the many and varied amendments made by the Mineralogy parties to their defence. In my decision on 26 September 2014,1 I recounted the history of amendment to the Mineralogy parties' defences from the first defences they filed on 25 February 2013, through to their application, heard on 26 September 2014, for an eighth change of position in their defences. As I explained, the previous seven changes of position had led to substantial confusion about whether the claims brought by the Citic parties would be defended and, if so, the terms upon which those claims would be defended.
5 At the same time as the Mineralogy parties' application to amend, and their eighth change of position, I heard an application by the Citic parties to strike out paragraphs 16(a), 16(i) and 20(b) of the Mineralogy parties' defence. In written submissions the Citic parties asserted that the paragraphs were inconsistent with an admission made by the Mineralogy parties in par 45(b) of their defence that the Option Agreement and Fortescue Co-ordination Deed remained in full force and effect.
6 In my judgment, I expressed the view that paragraphs 16(a), 16(i) and 20(b) were not necessarily inconsistent with the admission in par 45(b) although there was tension between those paragraphs and par 45(b).2 I explained in my reasons for decision that the Mineralogy parties would need to amend their defence to make clear the basis for its admissions. Leave was granted for the Mineralogy parties to make those amendments. The strike out application was not pressed at that time because much would depend on the terms of the Mineralogy parties' amendment.
The background to the amendments by the Mineralogy parties and the narrowing of the Citic parties' case
7 As I have explained, on 26 September 2014 I granted the Mineralogy parties leave to amend their defence to reconcile the potential inconsistencies arising from their admissions. The Mineralogy parties subsequently provided the Citic parties with two iterations of their proposed amendments.
8 An issue then arose between the parties. The issue concerned the relationship between this action and an associated matter, CIV 1808 of 2013. On 29 January 2015, at a directions hearing, counsel for the Citic parties said that the Citic parties could limit the scope of their claim for declaration (f) so that issues about the continued operation of the Fortescue Coordination Deed could be litigated exclusively in CIV 1808 of 2013.3 This would mean that the hearing of this litigation, CIV 3012 of 2012, would not need to await the outcome of CIV 1808 of 2013.
9 At the 29 January 2015 directions hearing, counsel for the Citic parties proposed that the Citic parties' narrowing of relief occur in their written submissions prior to the hearing of this matter. I did not consider this to be appropriate. In this matter it is of more than usual importance that the position of the parties be set out clearly. I ordered that the Citic parties amend their statement of claim to reflect their narrowed claim for relief.
10 The amendments made by the Citic parties to declaration (f) on 6 February 2015 were as follows:
a declaration that the Fortescue Coordination Deed has not been terminated by reason of the purported termination of the CPOA
11 On 16 February 2015, the Mineralogy parties filed and served a Minute of proposed fourth further amended defence. By consent of the parties, I made orders giving the Mineralogy parties leave to amend their defence in the terms they sought.
The content of the amendments made by the Mineralogy parties
12 The Mineralogy parties submit that their 16 February 2015 amendments were 'in response to' the narrowing of declaration (f) by the Citic parties.4 They therefore submit that the standard order should be made, namely that the Citic parties pay the costs incurred and thrown away by reason of the Citic parties' amendment. Those costs would include the consequential amendment by the Mineralogy parties.
13 Some of the amendments made by the Mineralogy parties were responsive to the Citic parties' narrowing of declaration (f). Without more, it would usually be appropriate that the Citic parties bear the costs thrown away by those amendments by Mineralogy.
14 However, the Citic parties say that their claim that the Fortescue Coordination Deed 'remained in full force and effect' was removed when, subsequent to bringing the claim and subsequent to the Mineralogy parties' defence, Mineralogy served purported notices of termination dated 12 September 2014 and 18 September 2014. The solicitor for the Mineralogy parties had said that those notices arose 'because of events that occurred subsequent to the third amended defence being filed'.5 The Citic parties therefore submitted that their amendment was due to matters that could not have been anticipated at the time they brought their claim, and that the amendment was made for case management considerations.
15 In Walter v Buckeridge [No 4],6 Le Miere J quoted from Burchett J in One.tel Ltd v Deputy Commissioner of Taxation:7
In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs.
16 The Mineralogy parties dispute the characterisation of the need for amendment as based upon a supervening event. They submit that the narrowing of the relief sought by the Citic parties would not have been required if, in their initial statement of claim, the Citic parties had confined the relief which they sought to the question of whether the Fortescue Coordination Deed had been terminated as a result of the matters pleaded. The Mineralogy parties assert that the Citic parties had 'over-reached' by seeking a declaration that the Fortescue Coordination Deed remained in full force and effect.
17 It is possible that the Citic parties could have pleaded their initial claim in this narrow way. But there would only be a difference between such a narrow pleading, and a broader pleading, if there were some other reason why the Fortescue Coordination Deed had terminated. If some other reason existed then the immediate question would be why the Citic parties would engage in substantial litigation seeking declarations about past facts when those declarations would not resolve the core issue between the parties. Had Mineralogy defended the claim by introducing new bases for termination then the Citic parties' claim that the Fortescue Co-ordination Deed remained in full force and effect would have been maintained by a plea in reply explaining why the Citic parties said that the new allegation did not cause termination.
18 Far from 'over-reaching', the pleading by the Citic parties was therefore entirely consistent with a practical and proportionate approach to pleading which brought all issues into focus.
19 Indeed, it is surprising that counsel for the Mineralogy parties would suggest that the Citic parties' initial pleaded relief involved overreaching when, in April 2014, the same counsel for the Mineralogy parties who made this submission authored, and filed, a proposed third further amended defence that admitted the very relief that is now said to have involved overreaching. The proposed third further amended defence pleaded that the Citic parties 'are entitled to a declaration that the CPOA and the [Fortescue Coordination Deed] remain in full force and effect'.
20 A common order in the circumstances I have described is that there be no order as to the costs of the amendment. However, there is a consideration which has not been raised in the parties' submissions which may require departure from this common order.
21 As I have explained, the current reasons for Mineralogy's claims that the Fortescue Coordination Deed has terminated will be litigated in CIV 1808 of 2013. The only reason that the issue is not being litigated in these proceedings is the case management considerations I have mentioned. In other words, the 'supervening event' has not prevented the issue from being litigated; rather, case management considerations following the supervening event have caused the issue to be litigated in different proceedings.
22 If the issue had been litigated in these proceedings then the successful party (even if successful for only one of a number of reasons) would usually obtain an order for its costs concerning that declaration. I will allow the parties to make any submissions on this point if they wish, but my preliminary view is that since CIV 1808 of 2013 will consider the question of whether the Fortescue Coordination Deed remains in full force and effect the appropriate order would be
The costs of the plaintiffs' 6 February 2015 amendment to declaration (f) in their claim for relief, including the defendants' costs thrown away by that amendment, be adjourned until after the outcome of the proceedings in CIV 1808 of 2013.
23 This does not fully dispose of the issue between the parties. This is because some of the amendments made by the Mineralogy parties in their fourth further amended defence are not purely responsive to the Citic parties' narrowing of declaration (f). In particular, the changes in the fourth further amended defence include the withdrawal of the allegation in par 20(b) of the previous defence that Citic Pacific Ltd had not acquired the fully paid shares in a company owned by either of the defendants by 14 April 2012 or at all.
24 There may be other of the amendments by Mineralogy which are not consequential upon the amendment to declaration (f) and which have caused costs to be thrown away by the Citic parties. For instance, there are also paragraphs which have been withdrawn by the Mineralogy parties, although it appears that these may have been consequential upon admissions made in the previous version of the defence.
25 It may be that the costs that have been thrown away by the Citic parties as a result of the Mineralogy parties' additional amendments are not substantial. But this is appropriately be a matter for the taxing officer if a taxation of costs occurs. The appropriate order is that the Mineralogy parties pay the costs of the Citic parties thrown away as a result of the amendments in the fourth further amended defence, other than the amendments consequential to the amendment to declaration (f) in the Citic parties' claim for relief.
Conclusion
26 No submissions have been made directly in relation to order 1 below. For that reason, I express the preliminary view, subject to any submissions that the parties wish to make, that the appropriate orders are as follows:
1. The orders as to costs of the plaintiffs' 6 February 2015 amendment to declaration (f) in their claim for relief, including the defendants' costs thrown away by that amendment, be adjourned until after the outcome of the proceedings in CIV 1808 of 2013.
2. The defendants pay, in any event, the costs of the plaintiffs thrown away as a result of the amendments in the fourth further amended defence other than the defendants' amendments consequential to the plaintiffs' 6 February 2015 amendment to declaration (f) in the plaintiffs' claim for relief.
27 I conclude with four observations concerning the status of this matter, following the latest round of amendments and the costs issues in this matter.
28 First, the parties have devoted considerable effort to the application before me. Although I do not have any evidence about the precise quantum of the costs involved as a result of the Citic parties' amendments on 6 February 2015, the costs might not be large. This is especially in circumstances in which it might be unlikely that the Mineralogy parties will have any substantial costs thrown away that are not (i) costs incurred as part of the preparation for the issues in CIV 1808 of 2013, or (ii) costs which may be the subject of the extant costs application referred to immediately below.
29 Secondly, there remains an extant application by the Citic parties for indemnity costs or special costs orders. That application was made on 30 April 2014. As I explained in Citic Pacific Ltd v Mineralogy Pty Ltd,8 the basis of that application was that after 15 months of proceedings, and numerous changes of case, the Mineralogy parties had eventually conceded that the Citic parties were entitled to the substantive declaratory relief that they sought. The Mineralogy parties sought to adjourn this application to a later stage, and the Citic parties did not object to an adjournment. I concluded that it made sense for all costs issues to be dealt with at the conclusion of the matter.9 Since the rationale that remains for the substantive proceedings is not immediately clear, it remains appropriate for these costs orders to be dealt with together with other issues as to costs that arise at the conclusion of the action.
30 Thirdly, it is currently difficult to understand why the Mineralogy parties wish to go to the expense of a full day hearing (with affidavit evidence, and written and oral submissions). As I understand the Mineralogy parties' position, they now accept the underlying basis for the declarations. The only issue upon which they will file evidence and make submissions, and occupy an entire day of court time, is whether there is utility in the making of the otherwise unopposed declarations sought. At first glance, this appears to be an unusual, and time-consuming, manner of opposing an application. If the dominant reason for the hearing, by either party, is solely the costs consequences of success then this might, itself, affect the ultimate costs orders that are made.
31 Fourthly, I currently find it difficult to see why the hearing of this matter will take an entire day.
32 The third and fourth of these concluding matters are issues upon which the parties should confer prior to the directions hearing before the new case manager on 9 April 2015.
33 If the parties wish to make submissions on the terms of these orders then those submissions can be made at the final hearing before me on 20 March 2015.
1Citic Pacific Ltd v Mineralogy Pty Ltd [2014] WASC 358 [27] - [55].
2Citic Pacific Ltd v Mineralogy Pty Ltd [2014] WASC 358 [68] - [69], [80].
3 ts 366 - 367 (29 January 2015).
4 Submissions by the Mineralogy parties, 4 March 2015 [5].
5 Affidavit of Mr Dunham sworn 23 December 2014 [9].
6Walter v Buckeridge [No 4] [2011] WASC 313 [13] (Le Miere J).
7One.tel Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548, 553 [6].
8Citic Pacific Ltd v Mineralogy Pty Ltd [2014] WASC 358 [40].
9Citic Pacific Ltd v Mineralogy Pty Ltd [2014] WASC 358 [41].
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