David Campbell Transport Pty Ltd v Integra Legal Pty Ltd
[2025] WASC 173
•16 MAY 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: DAVID CAMPBELL TRANSPORT PTY LTD -v- INTEGRA LEGAL PTY LTD [2025] WASC 173
CORAM: HILL J
HEARD: 25 MARCH 2025
DELIVERED : 16 MAY 2025
FILE NO/S: LPA-LPU 19 of 2024
BETWEEN: DAVID CAMPBELL TRANSPORT PTY LTD
Applicant
AND
INTEGRA LEGAL PTY LTD
Respondent
Catchwords:
Practice and procedure - Application to stay proceedings pending determination of separate proceedings - Whether any overlapping issues in proceedings - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA) O 1 r 4A, O 1 r 4B
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Applicant | : | C P K Russell SC |
| Respondent | : | P Cahill SC |
Solicitors:
| Applicant | : | Murcia Pestell Hillard |
| Respondent | : | Integra Legal |
Case(s) referred to in decision(s):
Exxten Pty Ltd as Trustee for the Mitchell Family Trust v David Campbell Transport Pty Ltd [2024] WASC 204
Hawkins v Clayton (1988)164 CLR 539
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Mallesons Stephen Jaques [No 2] [2014] WASC 60
In re Massey & Carey (1884) 24 Ch D 459
Ryan v Hansen [2000] NSWSC 354; (2000) 49 NSWLR 184
Studer v Boettcher [2000] NSWCA 263
HILL J:
On 12 September 2024, David Campbell Transport Pty Ltd (DCT) filed an application seeking an assessment of the costs rendered by its former solicitors, Integra Legal Pty Ltd (Integra Legal), between 18 May 2020 and 13 September 2023. Over this period, Integra Legal issued invoices totalling $390,252.88 to DCT. Of this, $143,230.18 remains outstanding, which is held on trust by DCT's current solicitors.
On 6 December 2024, DCT filed an application seeking a stay of these proceedings until after the resolution or determination of separate proceedings in the Supreme Court (CIV 1776 of 2020) (Main Proceedings), which are being case managed by Musikanth J. The primary issue in those proceedings is whether the parties to those proceedings entered into an agreement for DCT to pay a 'royalty' to Exxten Pty Ltd as Trustee for the Mitchell Family Trust (Exxten) for each tonne of iron ore hauled from a mine site to a rail siding in South Australia.
DCT filed two affidavits in support of the application for a stay: an affidavit of Cheryl Hua‑Chien Sun, a director of DCT's current solicitors, and an affidavit of David Alexander Campbell, the sole director of DCT, both filed 6 December 2024. Confidentiality orders have been made over each of these affidavits by Registrar Hosking.[1]
[1] Orders of Registrar Hosking dated 10 December 2024.
The basis for the stay application is DCT's contention that the work carried out by Integra Legal in relation to the Main Proceedings was negligent [redacted]. This is because, in their submission, Integra Legal failed to identify and advise on whether the royalty agreement was unenforceable by reason of s 533 of the Criminal Code (WA)[2] (Criminal Code). DCT says that this question will be determined in the Main Proceedings and the assessment of costs should await its conclusion.
[2] Schedule to the Criminal Code Act Compilation Act 1913 (WA).
The application is opposed by Integra Legal. Integra Legal says there are no common issues between this application and the Main Proceedings and, accordingly, no basis upon which the court can exercise its discretion to grant a stay.
For the reasons that follow, I consider that the application for a stay should be dismissed.
Applicable legal principles
There was no dispute between the parties as to the legal principles that govern this application. These principles can be summarised as follows.
The court has inherent power to control the conduct of proceedings before it, and can make case management directions under O 4A r 2(1) of the Rules of the Supreme Court 1971 (WA) (Rules) to stay proceedings until after a related action has been determined.[3] In considering whether an order should be made to stay a proceeding, the court's focus is on achieving the 'quick, inexpensive and efficient resolution of proceedings', consistent with O 1 r 4A and r 4B of the Rules.[4]
[3] Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Mallesons Stephen Jaques [No 2] [2014] WASC 60 [20] (Huntingdale Village Pty Ltd).
[4] Huntingdale Village Pty Ltd [21].
Where there are separate but related proceedings before the court:[5]
[T]he court should consider whether it should use its case management powers to achieve efficiency by ensuring that issues are resolved in one proceeding before costs are incurred in preparing for and conducting a trial of the same issues in another proceeding. However, at the same time the court must be mindful to ensure that each proceeding is resolved as quickly as is consistent with the efficient and just resolution of the proceeding.
[5] Huntingdale Village Pty Ltd [21].
Where a stay is sought as part of efficient judicial case management, the court will take the following factors into account when exercising its discretion:
(a)the legal and factual issues that need to be determined in each proceeding;
(b)if there are overlapping issues, whether there is any risk of inconsistent findings and whether it is more appropriate for any overlapping issues to be determined in one proceeding as compared to the other; and
(c)whether any party may suffer prejudice if a stay is granted.
In considering whether a stay should be granted, the starting point is to identify whether there are any overlapping legal and factual issues that require determination in both the Main Proceedings and these proceedings.
Issues in the Main Proceedings
The factual background to the Main Proceedings is summarised by Musikanth J in Exxten Pty Ltd as Trustee for the Mitchell Family Trust v David Campbell Transport Pty Ltd.[6]
[6] Exxten Pty Ltd as Trustee for the Mitchell Family Trust v David Campbell Transport Pty Ltd [2024] WASC 204 [8] ‑ [38] (Exxten).
For the purpose of this application, it is sufficient to summarise the primary issue in the Main Proceedings as concerning whether there was an agreement for DCT to pay a 'royalty' to Exxten for each tonne of iron ore hauled from a mine site to a rail siding in South Australia. The agreement is pleaded to have arisen from two oral conversations and an exchange of emails.[7]
[7] Exxten [11].
Following a change of solicitors from Integra Legal to Murcia Pestell Hillard, DCT amended its defence and counterclaim to introduce a plea that any royalty agreement is unenforceable by reason of s 533 of the Criminal Code. Shortly prior to filing its amended defence and counterclaim, DCT filed an application for summary judgment. It is clear from the reasons of Musikanth J that the application for summary judgment was based on the defence relying on s 533 of the Criminal Code.
Section 533 of the Criminal Code criminalises the receipt of secret commissions given by a third party to a person who is advising another to contract with the third party. Musikanth J identified the elements of the offence as being:[8]
(a)advice is given by one person to another;
(b)the advice is intended to induce or influence the person advised to enter into a contract with a third person; and
(c)receipt of the valuable consideration occurs without the assent of the person advised,
unless the advice giver was, to the knowledge of the person advised, the agent of the third person.
[8] Exxten [3].
Musikanth J ultimately dismissed DCT's application for summary judgment. His Honour considered that the issue was one of statutory construction and the answers to the relevant factual questions were not 'manifestly evident' from the evidence before him. On this basis, his Honour concluded that there was not a sufficiently high degree of certainty about the ultimate outcome that would justify the grant of summary judgment.[9]
[9] Exxten [81] - [83].
In addition to the defence under s 533 of the Criminal Code, DCT is defending the plaintiffs' claim in the Main Proceedings on a number of other grounds, namely that:[10]
(a)the agreement entered into by DCT was not an agreement with either of the plaintiffs in the Main Proceedings;
(b)the plaintiffs did not assist, alternatively significantly assist, DCT in obtaining the haulage contract;
(c)the amount of the royalty claimed by the plaintiffs is not payable, as any royalty was only payable if the profit exceeded $6.80 per tonne; and
(d)no royalty is payable to the plaintiffs, as the contract generated a loss.
[10] Affidavit of David Alexander Campbell filed 6 December 2024, 'DAC-51'.
Even after the change of solicitors from Integra Legal, these additional grounds remain part of DCT's defence in the Main Proceedings.
These proceedings
On 12 September 2024, DCT filed an application under the Legal Profession Act 2008 (WA) (Act) for an assessment of various invoices that had been rendered by Integra Legal.
The procedure for the assessment of costs and the criteria for the assessment are set out in s 301 of the Act.[11] The assessment will require consideration by the taxing officer as to whether the costs rendered by Integra Legal are proportionate and have been reasonably incurred.
[11] Because the first instructions on the matter were given prior to 1 July 2022, any assessment will occur under the Legal Profession Act 2008 (WA) and not the Legal Profession Uniform Law (WA): see Consolidated Practice Direction PD 4.7.4.
DCT raises a number of objections in relation to the invoices it has received from Integra Legal, namely that:[12]
(a)there is no valid costs agreement between the parties;
(b)the work carried out by Integra Legal was carried out negligently [redacted];
(c)work was done by a practitioner that DCT had specifically requested not to work on the matter;
(d)there was duplication in the work that was undertaken;
(e)work was carried out which was not authorised by DCT; and
(f)the work that was undertaken was done at a standard that ought not be charged for.
[12] Affidavit of Cheryl Hua-Chein Sun filed 6 December 2024, 'CHS-17'.
The second of these issues is said to arise because of the failure to consider the possible defence of illegality under s 533 of the Criminal Code.
Mr Campbell's evidence is that during the time Integra Legal was acting for DCT, its solicitors did not provide any advice to him as to the availability of s 533 of the Criminal Code as a defence in the Main Proceedings or any advice in relation to this possible defence.[13] [redacted],[14] [redacted],[15] [redacted].[16] [Redacted].[17]
[13] Affidavit of David Alexander Campbell filed 6 December 2024 [72].
[14] [Redacted].
[15] [Redacted].
[16] [Redacted].
[17] [Redacted].
Mr Campbell's evidence is that had he received advice as to the availability of a defence under s 533 of the Criminal Code, he would have instructed Integra Legal to write to the plaintiff's solicitors [redacted].[18]
[18] [Redacted].
It was not in dispute between the parties that a solicitor is not entitled to recover fees which relate to work which is unnecessary, useless, or negligent.[19] In assessing Integra Legal's failure to advise on the availability of a defence under s 533 of the Criminal Code, it will be necessary to consider whether a qualified, ordinary, competent, and careful solicitor in the exercise of his or her profession would have provided advice on the availability of this defence,[20] as well as the respective advantages and risks involved in raising this defence to enable DCT to make a properly considered choice.[21] The central consideration for the court, in assessing whether the steps taken by Integra Legal were negligent, will be whether the advice was reasonable in all of the circumstances known to Integra Legal at the time it was given.
[19] Ryan v Hansen [2000] NSWSC 354; (2000) 49 NSWLR 184 [71], citing with approval In re Massey & Carey (1884) 24 Ch D 459.
[20] Hawkins v Clayton (1988)164 CLR 539, 580.
[21] Studer v Boettcher [2000] NSWCA 263 [75].
Should these proceedings be stayed pending determination or resolution of the Main Proceedings?
DCT says that it will be necessary on the costs assessment for the following issues to be determined. First, whether the royalty agreement is unenforceable by reason of s 533 of the Criminal Code. Second, whether Integra Legal was negligent in failing to identify the availability of this defence as an arguable defence and provide advice on it. Third, if Integra Legal was negligent, what work carried out by Integra Legal was wasted or of no benefit. Fourth, what charges by Integra Legal should be disallowed or reduced.
DCT says that the first of these issues will be determined in the Main Proceedings, and the second to fourth issues will be determined in these proceedings.
Integra Legal does not accept that the first or second issue arise as issues on the costs assessment. In their submission, the only issues that require determination in these proceedings are whether the work that was done was of benefit to DCT and whether the costs that have been rendered should be allowed or disallowed.
DCT says that the determination of the issues in these proceedings 'cannot proceed' until the first issue is determined and that, as a result, these proceedings should be stayed to await a decision on the first issue.
I do not agree.
For the following reasons, it is my view that the court should not exercise its discretion to order a stay of these proceedings pending resolution of the Main Proceedings.
First, and most importantly, I do not accept that the question as to whether the royalty agreement is unenforceable by reason of s 533 of the Criminal Code is required to be determined prior to any assessment of the costs rendered by Integra Legal. The issue raised by DCT is the failure by Integra Legal to advise as to the availability of this defence and the steps that would have been taken had this occurred. Neither of these matters require an assessment of whether this defence will succeed or has succeeded.
Second, the success or failure of any of the defences advanced in the Main Proceedings, without more, does not mean that the work done by and costs rendered by Integra Legal were for work that was unnecessary, useless, and/or negligent. For DCT to succeed in a claim for negligence against Integra Legal, it will be necessary for DCT to show that Integra Legal's advice was not reasonable in all of the circumstances known by the firm at the time it was given, [redacted].
Third, at present there is, in my view, no risk of inconsistent factual or legal findings in these proceedings and the Main Proceedings. In these proceedings, the taxing officer will need to consider whether Integra Legal is entitled to recover fees for the work that has been done and whether any of this work is wasted or of no benefit to DCT because of the failure to advise on the availability of a defence under s 533 of the Criminal Code. [Redacted]. This does not require a finding or conclusion to be reached as to whether the defence will succeed in the Main Proceedings.
Fourth, as was accepted by DCT, any stay of these proceedings may prejudice Integra Legal. DCT has not paid all of the invoices that have been rendered by Integra Legal. The amount that Integra Legal have not been paid is a substantial amount, particularly for a firm of its size. These amounts have already been outstanding for 18 months. If these proceedings are stayed, there could be a very significant period (of up to five years) before they receive any amount that may be outstanding to them.
At the hearing, senior counsel for DCT submitted that if Integra Legal were to advance an argument at the taxation of costs that its failure to identify the defence under s 533 of the Criminal Code was not negligent because there were issues with the defence or that this defence would not have assisted its case, findings on these matters would need to await the determination of the Main Proceedings.[22] The primary issue with this submission is that, at this stage of these proceedings, it is not clear what conduct DCT will contend was negligent on the part of Integra Legal, nor which costs DCT will contend should be disallowed and why. Integra Legal's response to these contentions is also unclear.
[22] ts 12.
On the material before me, I do not consider that there are any grounds on which the stay should be granted. In my view, staying these proceedings would not give effect to the purpose of achieving the just resolution of these proceedings as quickly, inexpensively, and efficiently as possible.
Conclusion
For these reasons, the application for a stay should be dismissed. My preliminary view is that costs should follow the event but will hear from the parties before I make orders.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
16 MAY 2025
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