Frigger v Clavey Legal Pty Ltd [No 3] - [2015] WADC 21

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: FRIGGER -v- CLAVEY LEGAL PTY LTD [No 3] [2015] WADC 21

CORAM: HERRON DCJ

HEARD: 15-19 SEPTEMBER, 13-17 OCTOBER, 22-23 OCTOBER 2014

DELIVERED : 12 MARCH 2015

FILE NO/S: CIV 1221 of 2011

BETWEEN: ANGELA FRIGGER
First Plaintiff
HARTMUT FRIGGER
Second Plaintiff
AND
CLAVEY LEGAL PTY LTD
Defendant

Catchwords:

Solicitor/client – Termination of retainer – Allegations of breach of contract, breach of fiduciary duty and breach of duty of care – Collateral attack - Credibility findings – Turns on own facts

Legislation:

District Court Rules 2005
Law Society Professional Conduct Rules 2008

Result:

Plaintiffs' action dismissed

Representation:

Counsel:

First Plaintiff                :     Mr R Cook
Second Plaintiff            :     Mr R Cook
Defendant:     Mr P D Quinlan SC & with him Ms C E Moss

Solicitors:

First Plaintiff                :     Peter J Griffin & Co
Second Plaintiff            :     Peter J Griffin & Co
Defendant:     MDS Legal

Case(s) referred to in judgment(s):

Ahmed v Russell Kennedy (a firm) [2000] VSC 41
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Cachia v Isaacs (1985) 3 NSWLR 366
Codelfa Constructions Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2008] WASC 133
Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2010] HCATrans 139
Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [No 3] [2010] WASC 2
Donnellan v Public Trustee [2007] WASC 213
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7
Forbes v Computer Accounting and Tax Pty Ltd [2009] WASC 89
Frigger v Clavey Legal Pty Ltd [No 2] [2014] WADC 44
Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69
Giannarelli v Wraith (1988) 165 CLR 543
Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2010] WASC 38
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2010] WASC 113
Quigley (A Practitioner) v The Legal Practitioners Complaints Committee [2003] WASCA 228

HERRON DCJ:

Introduction

The plaintiffs are husband and wife. At all material times the plaintiffs were directors and shareholders of Computer Accounting and Tax Pty Ltd (in liquidation) (CAT).
The defendant is an incorporated legal practice. Mr Terry Clavey is a legal practitioner and the sole director and secretary of the defendant.
On 8 January 2010 applications were made to the Supreme Court by Professional Services of Australia Pty Ltd (PSA) and the estate of Martin Banning (Banning) to wind up CAT on the grounds of insolvency and on just and equitable grounds (winding up application), to appoint a provisional liquidator to CAT in the interim (provisional liquidation application), and freeze assets controlled by the plaintiffs with the aim of preserving the portion of a judgment sum in their favour (which I shall explain in more detail shortly) (freezing orders application). The freezing orders application was granted on 10 December 2009: Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [No 3] [2010] WASC 2.
On 21 January 2010 a provisional liquidator was appointed to CAT pursuant to the provisional liquidation application: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2010] WASC 38.
On 23 February 2010 the plaintiffs retained the defendant to act for them in their capacities as directors of CAT (the retainer). Although there is an issue as to exactly what were the terms by which the defendant agreed to act for the plaintiffs, it is sufficient for present purposes to note that the terms of the retainer were contained in the defendant's written costs agreement dated and entered into on 23 February 2010. By the terms of the retainer the defendant was engaged to defend the winding up application. The terms of the retainer also provided that the defendant was engaged to advise on the prospects of securing a stay of a judgment of the Court of Appeal in CACV 76 of 2008 delivered on 23 October 2009 imposing an obligation on CAT to pay to Professional Services of Australia Pty Ltd (PSA) and the estate of Mr Martin Banning (Banning) an amount in excess of $800,000 and/or a variation of orders made in the provisional liquidation application: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183.
On 12 March 2010 the retainer was extended for Mr Clavey to consider the merits upon which a deed of company arrangement (DOCA) could be challenged.
On or about 25 March 2010 the retainer was further extended to include instructions for the defendant to act for the plaintiffs in relation to an application made by PSA and Banning in the Supreme Court in CIV 2265 of 2006 to freeze assets controlled by the plaintiffs, conditional upon a hearing scheduled for 1 April 2010 being adjourned.
On 30 March 2010 the defendant terminated the retainer.
On 6 May 2010 CAT was wound up on the ground that the statutory presumption of insolvency which had arisen by reason of CAT's failure to comply with two statutory demands served in December 2009 (one of which had been issued by PSA for an amount in excess of $800,000 owing to PSA by reason of the Court of Appeal judgment), had not been displaced by CAT: Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93 [20]. In arriving at this conclusion the court found that the evidence put before it in support of the winding up application established that CAT was not able to meet its debts as and when they fell due, and that there was no evidence which would justify a conclusion that CAT could meet its debts as and when they fell due: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [17], [20].

The plaintiff's action

In their re-amended substituted statement of claim dated 13 December 2013 (the statement of claim) the plaintiffs allege that the defendant, in the course of acting for them, breached the terms of the retainer, was negligent and breached the fiduciary duties that it owed to them. The plaintiffs further allege that the defendant's breaches of the retainer, negligence and breaches of fiduciary duties caused them to suffer loss and damage. Central to the plaintiffs' claim for loss and damage is the allegation that if the defendant had not breached the terms of the retainer, by not terminating the retainer and had not breached its common law and fiduciary duties, CAT would have obtained a stay of the Court of Appeal's judgment in CACV 76 of 2008 and consequently it would not have been wound up on the ground of insolvency when it was not insolvent: statement of claim, pars 4(b), 9C, 9E 10(d), 10(f), 11, 15; plaintiffs' opening submissions dated 10 March 2014, pars 44 - 49, 50 ‑ 55. The plaintiffs allege that it was the winding up of CAT which caused them to suffer certain specified losses.
Essentially, the plaintiffs' causes of action are pleaded in pars 9 to 11 of their statement of claim. The plaintiffs allege the defendant's purported termination of the contract between the parties on 30 March 2010 was unlawful and in breach of the contract in consequence of which the plaintiffs have suffered loss and damages.
The plaintiffs further rely on causes of action in negligence and for breach of fiduciary duty, arising both in relation to the circumstances in which they allege the defendant was not entitled to terminate the contract between them, and also based upon the manner in which they allege the defendant represented and advised them.
All of the plaintiffs' allegations are denied by the defendant. Further, the defendant pleads in specific response to the plaintiffs' allegation as to the cause of their loss and damage that any loss and damage allegedly suffered by the plaintiffs from the winding up of CAT arose by reason of CAT's insolvency: amended substituted defence dated 13 February 2014 (the defence), pars 12.7(c) and 17.1.
It is also the defendant's case that the plaintiffs, having been a party to, and opposed, the winding up order, and the plaintiffs not having pursued an appeal from the winding up order, cannot now in this case challenge the winding up order because that would constitute a collateral attack on the Supreme Court decision in Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] that CAT ought be wound up. Such a collateral attack, it is submitted, amounts to an abuse of process and is not permitted: Donnellan v Public Trustee [2007] WASC 213 [42].
Further, even if the plaintiffs could relitigate the decision to wind up CAT they would have to prove that some different result would have ensued and given the findings of Master Sanderson in Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [17]:
Thirdly, and perhaps most importantly, the investigations by Mr Kitay indicate the defendant is insolvent. No elaborate examination of Mr Kitay's evidence is necessary. The defendant is indebted to the plaintiffs in an amount of over $800,000. It does not have the capacity to make that payment. It is therefore not able to meet its debts as and when they fall due and it is prima facie insolvent.
the plaintiffs are unable to prove CAT would, or should, not have been wound up on the grounds of insolvency. There is no new evidence, it is submitted by the defendant, to suggest any different result would have ensued in relation to the winding up of CAT. Therefore, the defendant submits, the winding up of CAT has no causal connection with the conduct of the defendant which occurred prior to CAT being wound up on 6 May 2010 following a hearing on 28 April 2010 four weeks after the termination of the retainer on 30 May 2010.
Counsel for the plaintiffs framed the central question for determination as being whether the agreement between the parties was terminated properly in all of the circumstances which must be tested objectively. Paragraph 11 of the statement of claim pleads the defendant unilaterally terminated the cost agreement on 30 March 2010 without just cause, without giving the plaintiffs sufficient time in which to find alternative legal representation and without consideration as to whether the termination would unduly disadvantage the plaintiffs. In his closing submissions counsel for the plaintiffs submitted there was no proper basis for the defendant to terminate the retainer and it should have continued acting for the plaintiffs. The necessary relationship of trust between the defendant and the first plaintiff had not, it was submitted, been broken so that the defendant was entitled to cease to act for the plaintiffs and remove itself from the court record as the plaintiffs' solicitor in accordance with cl 9.5 of the written costs agreement.

Plaintiffs' application to file re-amended statement of claim

The plaintiffs' re-amended substituted statement of claim dated 13 December 2013 was not signed by counsel or by a solicitor. It was signed by both the plaintiffs personally. It is a difficult pleading to follow and properly understand and to be able to clearly identify the cause or causes of action alleged against the defendant.
This action was earlier listed for trial before another judge, Judge Derrick, commencing on 28 March 2014. When counsel who then appeared on behalf of the plaintiffs advised he had only been belated instructed and sought time to revise and amend the statement of claim to more properly reflect what counsel viewed were the real issues in dispute, both in relation to liability and damages, Judge Derrick adjourned the trial for a short time to allow counsel more time to become familiar with the issues and to draft an amended statement of claim. However when the matter next came before Judge Derrick, counsel was no longer acting for the plaintiffs and Mrs Frigger appeared in person. The trial was subsequently adjourned.
When the trial before me commenced on 15 September 2014, counsel who then appeared on behalf of the plaintiffs (who was not the same counsel who appeared in March 2014) applied to file a re-amended substituted statement of claim in accordance with a minute dated 1 September 2014. That minute had not been signed by either counsel or the solicitor on record. It was again signed by the plaintiffs personally. Counsel was not prepared to either certify as to the correctness of the proposed re-amended substituted statement of claim in accordance with r 43(3)(a) of the District Court Rules 2005, nor was he prepared to sign the minute as counsel. In those circumstances I refused the application to file a re-amended substituted statement of claim in accordance with the minute dated 1 September 2014.
During his opening address, counsel for the plaintiffs abandoned any allegation of fraud against the defendant, and I ordered par 13 of the re‑amended substituted statement of claim dated 13 December 2013 be deleted.

Background to the winding up of CAT

On 9 July 2008, following a Supreme Court trial before Simmonds J against Professional Services of Australia Pty Ltd (PSA) and Martin Banning (Banning), CAT was awarded judgment and granted damages in the amount of $1,106,027.33 plus interest and costs (judgment sum): Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2008] WASC 133. Computer Accounting and Tax had sought damages for negligent misstatement, deceit and misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) and s 10 of the Fair Trading Act 1987 (WA) arising out of the sale and purchase of a BP Service Station in Armadale.
On 25 July 2008 PSA and Banning filed a notice of appeal (CACV 76 of 2008) against the judgment of the trial judge Simmonds J. By application dated 25 August 2008 PSA and Banning applied for an order for suspension or a stay of the judgment pending the hearing and determination of the appeal. On 28 August 2008 Pullin JA ordered that the judgment of the trial judge be suspended until 19 September 2008. On 19 September 2008 the stay was extended until 24 September 2008.
Banning died on 8 September 2008. Thereafter proceedings were continued on behalf of his estate.
On 24 September 2008 Buss JA dismissed the application for a stay after he found he was satisfied, on the basis of Mrs Frigger's affidavit sworn 23 September 2008 that the value of CAT's net assets was about $2,850,043 and that CAT had no liabilities except for quarterly GST liability, there was no risk CAT would be unable to repay the judgment sum in the event of the appeal being allowed: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2008] WASCA 222 [24], [27].
In March 2009, PSA entered into a deed of company arrangement, which was subsequently varied (the DOCA).
PSA and (the then) estate of Martin Banning paid the judgment sum to CAT in June 2009.
Professional Services of Australia and Banning appealed the Supreme Court decision and the judgment was reduced on appeal by $675,078 (plus interest) (Court of Appeal orders): Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] (judgment delivered 23 October 2009). Professional Services of Australia Pty Ltd and Banning then sought repayment of the portion of the judgment sum which exceeded the damages awarded under the Court of Appeal orders.
On 19 November 2009 CAT filed an application for special leave to appeal from the Court of Appeal orders to the High Court of Australia. The application for special leave was heard on 25 May 2010 and was dismissed: Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2010] HCATrans 139.
The plaintiffs placed CAT into a members' voluntary winding up on 12 December 2009.
Professional Services of Australia and Banning issued two statutory demands to CAT in December 2009. One demand, claiming a debt of $18,247.59 to Stewart Forbes was paid by the first named plaintiff, Mrs Frigger on 25 January 2010. The other, being a claim for $800,907.08, the amount by which the portion of the judgment sum exceeded the sum of the damages awarded under the Court of Appeal orders, was not.
As I have already noted on 8 January 2010, PSA and Banning filed applications to wind up CAT in insolvency or on just or equitable grounds (winding up application), to appoint a provisional liquidator to CAT in the interim (provisional liquidation application) and to freeze assets controlled by the plaintiffs with the aim of preserving the portion of the judgment sum which exceed the sum of the damages awarded under the Court of Appeal orders (freezing orders application).
The freezing orders application was granted on 10 December 2009: Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [No 3] [2010] WASC 2.
On 21 January 2010, a provisional liquidator, Mr Kitay, was appointed to CAT pursuant to the provisional liquidation application. On 8 February 2010 the plaintiffs made an application to terminate the appointment of Mr Kitay as provisional liquidator. On 15 February 2010 this application was heard and dismissed by Simmonds J: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2010] WASC 113.
On 18 February 2010 the application to wind up CAT came on for hearing before the acting master. Counsel appeared on behalf of the plaintiffs and sought leave to appear by the plaintiffs on behalf of CAT, which leave was refused.
In late March 2010, the freezing orders application was listed for a further hearing on 1 April 2010 in relation to the extension of the freezing orders.
Therefore by the time the defendant was retained by the plaintiffs on 23 February 2010 the plaintiffs were involved, at least, in the following court actions:
1.the freezing orders application in CIV 2265 of 2006 in which the plaintiffs were acting in person;
2.the winding up application in COR 2 of 2002 in which the plaintiffs, as directors of CAT, were acting in person;
3.an application for special leave to appeal to the High Court (Perth No P47 of 2007) against the judgment of the Court of Appeal: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183 and in which CAT was represented by Lavan Legal; and
4.an application to set aside a deed of company arrangement (DOCA) in which Chris Stokes & Associates were acting for the plaintiffs or for CAT in CIV 2001 of 2009.
After the original judgment sum was paid to CAT by PSA and Banning in June 2009, $1,165,000 was immediately paid by the plaintiffs to themselves or their superannuation fund.
The orders ultimately made by the Court of Appeal on 7 November 2009 included orders that CAT pay to PSA and Banning the sum of $716,188.45 plus interest in the sum of $16,835.33 plus further interest from 23 October 2009 at $117.73 per day to the date of payment. There was a further order CAT pay to PSA and Banning the sum of $59,634.27 plus interest in the sum of $1,372.41 together with further interest in the sum of $9.80 per day from 23 October 2009 to the date of payment. Therefore, by the Court of Appeal orders CAT was required to make payment to PSA and Banning in the sum of $775,822.72 plus interest. The sums ordered to be repaid by the Court of Appeal were never, and have never been, repaid.

The Court of Appeal's orders also set aside the costs orders made by the trial judge on 6 May 2009 and ordered that the costs of the trial be remitted to the trial judge for reconsideration in light of the reasons of the Court of Appeal (exhibit 2.7). Therefore the consequence of the Court of Appeal's orders is that no costs orders for the trial have been made and the sums to be repaid (approximately $850,000 with interest) were to be repaid forthwith.

Credibility

Mrs Frigger

The main witness called by the plaintiffs was Mrs Frigger. Therefore to a significant extent if the plaintiffs' action is to succeed, Mrs Frigger's evidence, especially where her evidence is in conflict with the evidence called by or relied upon by the defendant, must be accepted. Her credibility is a crucial issue I must determine. It is important I first deal with and make findings in relation to Mrs Frigger's credibility before I make any findings regarding the background to the matter before the defendant was retained and as to the nature of and terms of the retainer between the parties and the circumstances surrounding their relationship, in particular the circumstances in which the retainer was terminated and the relationship between the parties ended.

Freezing orders application

I have earlier referred to the freezing orders application which was granted on 10 December 2009. The application was brought by PSA on 3 December 2009 following the Court of Appeal orders requiring CAT to pay approximately $850,000. The application was heard by Simmonds J on 10 December 2009 following which he made freezing and ancillary orders: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3].
The freezing orders, in their final form, were in the following terms:
8.[The Friggers] must not take any steps to enforce the payment to them of any amount claimed to be owing to them by [CAT] pursuant to a deed of charge dated 10 September 2009 or otherwise;
9.[the Friggers] must not take any steps to replace [CAT] as trustee of any trust in which [CAT] is presently the trustee; and
10.[the Friggers] must not take any steps to deal with or diminish the value of any of the following assets:-
(a)the properties known as 140 Edward Street and 46 Pier Street in Perth, and, 296 South Western Highway, Armadale … or, if any have been sold, the net proceeds of the sale;
(b)any money in the trust account of any solicitor acting for [CAT] but in particular Chris Stokes & Associates; but
(c)nothing in order 10(b) hereof shall be taken to prevent the use of the money therein referred to pay the reasonable legal expenses of [CAT].
The background to and the circumstances in which the freezing orders were made and what occurred after the hearing on 10 December 2009 are set out in Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69 (delivered 8 April 2014).
Mrs Frigger gave evidence that on 12 December 2009 the plaintiffs applied to put CAT into members' voluntary liquidation because of the freezing orders application in which she said her and her husband were accused of stealing the two properties from CAT. Glenn Trinick was appointed the liquidator.
A statutory demand by PSA and Banning against CAT was served on her personally and she wrote to the solicitor who had served the statutory demand, Mr Lenhoff, sending it back to him because, she said, she was not allowed to accept service of the document because CAT was in voluntary liquidation. She sent the letter to Mr Lenhoff by registered post and then went on vacation to Germany on 18 December 2009.
She returned from her vacation on 16 January 2010. On 8 January 2010 there was an application for CAT to be wound up which she first heard about on 16 January 2010 from Mr Trinick after she had returned from vacation.
On 21 January 2010 a provisional liquidator for CAT was appointed. The provisional liquidator appointed was Mervyn Kitay.
Following the appointment of the provisional liquidator, various offers were made by the plaintiffs to try and resolve the problem the plaintiffs had about refunding the monies owed as a result of the Court of Appeal judgment. Mrs Frigger believed there would be a difference between the amount owed by CAT as a result of the reduction in the judgment sum and the legal and enforcement costs owing to CAT in relation to the trial and the original judgment of Simmonds J.
Mrs Frigger swore an affidavit dated 21 January 2010 (exhibit 2.10) in support of an application for removal of the provisional liquidator in COR 2 of 2010 in which she referred to and annexed a letter dated 21 January 2010 sent to Mr Lenhoff, the solicitor for PSA and Banning, making an offer (purportedly by the liquidator) on behalf of herself and Mr Frigger as members of CAT in response to the two statutory demands served on CAT. In that letter she estimated that the trial costs for CAT would be taxed at $380,000, and that those costs would be reduced by $20,000 because of the reduction in the damages by reason of the successful appeal. There were further costs associated with two property seizure and sale orders including a receiver having been appointed to sell one of the shares in Banning Holdings. There was interest on the taxed costs calculated for two years at 6%. There were also costs in relation to the appeal. She estimated CAT would owe $30,000 to the successful appellants and they would owe $8,000 to CAT for interlocutory applications.
On 25 January 2010 (in her evidence-in-chief Mrs Frigger said she instructed Kott Gunning on 22 January 2010 but in her affidavit sworn 8 February 2010 she says Kott Gunning were appointed on 25 January 2010 which, given the contemporaneity of the affidavit it is likely to be the more accurate) the plaintiffs appointed solicitors, Kott Gunning in relation to the application for winding up of CAT. On 3 February 2010 Kott Gunning sent a written offer of settlement to solicitors representing the liquidator, Mr Kitay which offer was rejected.
Mrs Frigger sought advice from Kott Gunning generally in relation to the appointment of the provisional liquidator and whether the liquidation could be either stayed or terminated, mainly on the ground that CAT was not insolvent and that it should come out of provisional liquidation so that the plaintiffs could continue with the members' voluntary liquidation.
The offer made by Kott Gunning, as Mrs Frigger explained, was on the basis that her and her husband would lend CAT $850,000 which would be secured in an account and which would not be available until after the application for special leave to the High Court had been determined and that all the legal enforcement costs of CAT had been taxed and assessed so they could then determine what amount should be set off against the amount owing by reason of the Court of Appeal judgment.
While she instructed Kott Gunning, she met with a barrister, Gary Cobby, in relation to what action could be taken to stay the provisional liquidation but, she said, he did not provide any advice.
After the plaintiffs terminated Kott Gunning's instructions, Mrs Frigger prepared an application and supporting documentation to apply to have the provisional liquidation either stayed or terminated on the grounds the plaintiffs would put up $850,000 in whatever security the court decided. She said Mr Frigger gave a written undertaking into the court that he would make the funds available. The affidavit prepared by Mrs Frigger and sworn by each of the plaintiffs on 8 February 2010 is exhibit 2.14.
The application was heard on 15 February 2010 before Simmonds J who dismissed the application: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2010] WASC 113.

Mrs Frigger's attitude to swearing affidavits

Contradictory financial statements for CAT

In cross-examination Mrs Frigger was initially taken to her affidavit sworn on 3 March 2010 in COR 2 of 2010 in opposition to the winding up application. That affidavit was drafted by Mr Clavey and is annexure AF‑2 to Mrs Frigger's affidavit sworn on 18 March 2010 in support of the application to suspend the Court of Appeal judgment in CACV 76 of 2008 (exhibit 1.90) also drafted by Mr Clavey.
Prior to instructing Mr Clavey in relation to the winding up application, the plaintiffs were acting on their own behalf. Mrs Frigger agreed that because of the amount CAT was required to pay following the Court of Appeal judgment in excess of $800,000 and another debt payable to Mr Forbes, that action was taken to wind up CAT. She agreed that the debt of $800,000 was ultimately the focus for the work being done by Mr Clavey.
When asked whether she remembered swearing an affidavit in relation to the proceedings prior to Mr Clavey being appointed, she said she did not remember. She was then taken to the affidavit her and her husband swore on 8 February 2010 in COR 2 of 2010 in support of an application for termination of the provisional liquidation and for the winding up application to be dismissed (exhibit 2.14). When asked whether she remembered swearing the affidavit she said she did not remember they had included the winding up application to be dismissed. She said that all she asked for was for the provisional liquidation to be terminated.
When asked whether the affidavit she swore on 8 February 2010 was correct, curiously she said as of that point in time it was.
She agreed that as the accountant of CAT and also as a director and shareholder, she prepared the 'Report As To Affairs' (RATA) of CAT which included the statement of assets and liabilities, as at 21 January 2010 annexed to the affidavit. The report was prepared for the liquidator. She filled in the blanks in her handwriting in the form sent to her by the liquidator including compiling a statement of assets and liabilities of CAT.
She listed as an asset cash on hand (which was put to her as cash at bank, with which she agreed, but the entry of $80,000 instead relates to item 'cash on hand') in the sum of $80,000 which was being held as a guarantee for BP. She agreed the sum was not available funds because it had to be held as a guarantee for the purpose of the service station business.
She agreed she listed the other assets valued at $976,146.
When it was put to her that at the date of preparing the report, none of the assets which were listed were available to pay the debts of CAT that were owing, she asked what were the debts which were owing and payable and said she did not believe the $800,000 which was owing after the Court of Appeal decision was due and payable to PSA. She said she did not agree the sum of $800,000 was due and payable on that date, and added, which was not responsive to the question put to her, that was why she went to Mr Clavey. When she was then taken to the amount she had included in the list of liabilities as creditors, the sum of $800,917, she agreed it was a debt but said it was not then due and payable.
She explained that the Court of Appeal orders said something but the effect of them was incorrect as far as the DOCA was concerned which is why she went to Mr Clavey to try and work it out to get the court to decide if the plaintiffs needed to pay PSA or Banning and whether they would need to pay after their costs had been taxed.
She agreed there was a statutory demand for payment of the debt but said it was invalid as far as she was concerned. She said she was not willing to pay it.
When she was again asked whether any of the assets she had listed were available to pay the statutory demand she avoided answering the question and said the assets were not necessary because her husband and her offered to put up $850,000 in cash. She then said that if she had all of the litigation completed, if she was able to sell the accounting practice and if she was able to liquidate the Becton Office Fund, some of those funds would have been available to pay the money when it was due and payable.
Again when it was put to her that none of the assets listed were liquid assets from which the debts could be paid, she maintained that some of the assets could have been liquidated and used to pay debts due and owing.
Mrs Frigger agreed that the goodwill of the accounting practice estimated at $350,000 was her estimate. She agreed that amount was not then available to pay any debts that might be owing by CAT.
She agreed the item of $12,000 listed as costs in CACV 76 of 2008 had not been taxed and was not available to pay any debts that were owing by CAT.
In relation to Magistrates Court CIV 7493 of 2009 of $40,000 she agreed that was her estimate of the value of litigation she had against another party and that there was not a judgment to that effect and the amount was not available to pay CAT's liabilities.
She agreed the same applied to the Magistrates Court CIV 11299 of 2009 item of $75,000.
She agreed the sum of $380,000 plus $60,000 interest in CIV 2265 of 2006 was her estimate of what taxed costs would be which had not been taxed and that sum of money was not available to pay any debts which might have been owing by CAT.
She disagreed that at the time she prepared the statement and included the sum of $52,146 for units in the Becton Office Fund, the managers of the fund had closed the fund for redemptions and suspended distributions such that owners of the unit could not redeem their shares. She said those units were available for redemption to her.
She agreed the $1,165,000 that CAT had received by June 2009 was not included in the assets because that sum had been paid out of CAT to the plaintiffs or their super fund which she said was pursuant to an agreement she had with the company dated 1 September 2003 by which any judgment sum would be paid back to the plaintiffs. The sum of $1,165,000 was paid out immediately it was received.
She agreed at the time she prepared the statement, CAT was the registered proprietor of two properties, 140 Edward Street, Perth and 269 South Western Highway, Armadale. However, those properties were not included in the statement of assets and liabilities of CAT. She said they were assets of the Frigger Superannuation Fund and she was in control of them as the trustee of the super fund. She was holding them as assets of the super fund. She said that the properties were not beneficially owned by CAT but were beneficially owned by the Frigger Superannuation Fund. Therefore the properties were not available to the creditors of CAT.
She agreed the liquidator of CAT Mr Kitay argues that the properties are in fact assets of CAT but the plaintiffs continue to maintain the properties are beneficially owned by the Frigger Superannuation Fund.
In cross-examination Mrs Frigger was also taken to an affidavit she swore on 22 June 2010 (exhibit 7.2, pages 1533 and following) in CIV 2265 of 2006, the freezing orders application. In that affidavit she swore the Edward Street property was transferred to the Frigger Superannuation Fund on 1 July 2007 and the Armadale property on 1 July 2008.
At par 13 of her affidavit Mrs Frigger swore that '… on 1 July 2007 ownership of the Edward Street property was transferred to FSF'. When asked whether that was true she said that on 1 July 2007 a transfer of land document was executed for transferring the Edward Street property from the company to the Frigger Superannuation Fund but the transfer did not happen until 6 May 2009. When she was again asked whether par 13 was true she said at the time she swore the affidavit it was true.
She was then taken to par 19 regarding the Armadale property which in her affidavit she said was transferred to the FSF on 1 July 2008. When asked whether as from 1 July 2008 was it her position that both the properties were owned by the Frigger Superannuation Fund she said she would have to qualify that because those were the dates that the transfer of land forms were completed but as an accountant the actual transfer took place when settlement occurred on 6 May 2009. She then said as at 1 July 2008 she did not regard the properties as assets of the Frigger Superannuation Fund. When taken back to par 19 she gave a long and confusing explanation that there was a difference between doing a transfer of land and actually transferring an asset in the books of entities so there was a difference. Although there were transfer documents prepared on those dates, they were not stamped until there was the actual transfer when the value of the asset from the books of CAT to the books of the Frigger Superannuation Trust happened on 6 May 2009.
When it was put to her that once those properties had been transferred on those dates, 1 July 2007 and 1 July 2008, they were not available to pay the debts of CAT from that time on, Mrs Frigger responded as follows (ts 753 – 754):
So that once those properties had been transferred on those dates, 1 July 2007 and 1 July 2008, respectively, they were not available to pay the debts of CAT from that time on, correct?‑‑‑Well, they transferred – the land transfer forms were those dates which you've just said. The actual transfer in the books between the company and the Frigger Super Fund happened later.
All right?‑‑‑But you're right, they were not available and I never, ever pleaded or submitted or swore that they were available to pay the disputed amount under the DOCA.
When you say they weren't available to pay ‑ ‑ ‑?‑‑‑They were never - well, they were never - well, they were never available to paid(?) if the - those amounts ever had to be paid. So when the - when the Court of Appeal reduced the judgment sum, then there was a statutory demand made, et cetera, they were not available to pay the ‑ that ‑ that - those amounts, if - if, in fact, those amounts had to be paid.
And that was your view as at 1 July 2008?‑‑‑No.
Well, you said that it was transferred on the 1st ‑ they were both transferred by 1 July 2008 and ‑ ‑ ‑?‑‑‑No, I just said that they were transferred later on between the books of the company and the books of the Frigger Super Fund. Later. You know, I'm the accountant. I do all of those transactions. I know when they were transferred. I was referring to transfer documents dated ‑ in - in this affidavit I'm referring to transfer documents.
No. The affidavit doesn't refer to transfer documents ‑ ‑ ‑?‑‑‑Well, the ‑ ‑ ‑
‑ ‑ ‑ does it?‑‑‑It ‑ ‑ ‑
It says ‑ ‑ ‑?‑‑‑Mm.
‑ ‑ ‑ that on - for example, paragraph 13 - on July 2007, ownership of the Edward Street property was transferred to Frigger Super Fund?‑‑‑Yep. There is a difference ‑ and ‑ and this is as - as from an accounting point of view, there is a difference when a land transfer document is executed and when the - like a settlement is done later on, the - the amount is transferred from one set of books to another.
Well, in the ‑ ‑ ‑?‑‑‑So the bottom line is that from the 1st of July 2007, the transfer was done but the ‑ the ‑ sorry - the transfer document was executed but the actual transfer took place much later.
And from the ‑ ‑ ‑?‑‑‑And I - I - to be honest, I can't remember the exact date but it was ‑ ‑ ‑
And from the 1st ‑ ‑ ‑?‑‑‑ ‑ ‑ ‑ 2009, I - I believe.
From 1 July 2007, you did not regard the Edward Street property as available to meet the debts of that?‑‑‑No, that's wrong.
And ‑ ‑ ‑?‑‑‑That's completely wrong.
Mrs Frigger was also taken to the company tax returns and accounting records of CAT prepared by Mrs Frigger as the company accountant (exhibit 6.1, pages 473 – 489). As at June 2007 the balance sheet included the Edward Street and Armadale properties as assets of CAT. She accepted she did not include either property as an asset of CAT when she prepared a balance sheet for June 2008 and that as at June 2008 neither of those properties were included as assets of CAT. Mrs Frigger accepted that therefore neither of the properties were available to meet the claims of creditors in relation to the liabilities of CAT as at June 2008 (ts 757).

It was then put to her that she swore an earlier affidavit which presented a different picture as to the ownership of the properties than that as set out in her affidavit of 22 June 2010 and that she knew the Court of Appeal had found that the sworn statements of Mrs Frigger were directly contrary to other sworn evidence she had given. She responded that the Court of Appeal was wrong (ts 633).
Mrs Frigger agreed that at the time of PSA's and Banning's appeal from the judgment of Simmonds J, they brought an application to stay the orders at trial which application was opposed by CAT. She was asked whether she understood that PSA and Banning were seeking a stay until after the appeal had been determined by the Court of Appeal and somewhat reluctantly she accepted that was what was being sought by the stay. She was then asked whether she was aware that one of the issues raised by the appellants in the stay application was that if they paid the judgment monies and their appeal was successful they might not be able to recover their monies. Mrs Frigger was not prepared to accept that was the case and said that while they obviously did not want to pay the money, which is why they applied for the stay, she could not remember what the reasons were.
I reject Mrs Frigger's explanation that she could not remember the reasons for the stay application. Her resort to a failure of memory, which she frequently did when faced with awkward questions, was disingenuous. I do not believe or accept Mrs Frigger's explanation when she said she could not remember the reasons why the appellants were seeking a stay in relation to the judgment of Simmonds J.
On 23 September 2008 Mrs Frigger swore an affidavit in CACV 76 of 2008 in opposition to an application for a stay of the trial judge's orders in the original trial (exhibit 9.12, contained in exhibit 6.2): the affidavit was sworn in response to an affidavit of Mr Banning filed in support of the application for a stay. That affidavit was sworn less than three months after the date of the June 2008 balance sheet in which she stated CAT owned both properties with a value of $1,100,000 for Edward Street and $615,030 for the Armadale property. In her affidavit Mrs Frigger swore that the respondent's (CAT's) net assets were $2,850,043, including:
(a)the Edward Street property valued at $1,100,000;
(b)the Armadale property valued at $615,030; and
(c)a term deposit with ING Direct Bank to CAT's then current financial position for $999,999 earning interest at 7.7% in the respondent's (CAT's) name.
At par 23 of her affidavit Mrs Frigger swore:
Given the appellant's own admission the respondent's financial affairs are 'buoyant', there is no reason to stay the judgment on the ground that the respondent would not be in a financial position to repay the sum should the appeal be successful.
At par 22 she also swore that 'the Respondent company has no liabilities save quarterly GST liabilities'. As I have noted, the affidavit was sworn less than three months after 1 July 2008 which was the date Mrs Frigger in her affidavit of 22 June 2010 swore the ownership of the Armadale property was transferred to FSF.
The context in which the statements were made was, in my view, clearly to suggest there were sufficient assets such that 'there is no reason to stay the judgment on the ground that [CAT] would not be in a financial position to repay the sum should the appeal be successful'. She agreed the reason she swore the affidavit was to put before the Court of Appeal that there was $2.85 million worth of assets in CAT and there was no risk that the money would not be paid back if the stay was refused.
When it was put to her that what she said in her affidavit was inconsistent with what she had represented in the June 2008 balance sheet she gave the following explanation (ts 758 ‑ 759).
The dates are different. The assets are different?‑‑‑No. The dates of those balance sheets. Those balance sheets were not made until June - in fact July 2010, when I was ordered by Simmonds J to produce financial statements for the company, and that's the first time I had done those financial statements. They were not in existence when I did this affidavit, okay? And the transfers were not effective. Even though the transfer documents had been executed they were not effective as at the time I swore the affidavit of 23 September 2008.
So is what you're saying that, having sworn in September 2008 that those two properties were available to meet the claims of creditors ‑ ‑ ‑?‑‑‑And they were, yes.
‑ ‑ ‑ you made book entries to retrospectively take them out of the assets as at June 2008?‑‑‑Absolutely, because that's allowed under taxation law and superannuation law. They are allowed and that's why I did it.
And can I suggest to you that that is a classic example of you just making up ‑ ‑ ‑?‑‑‑No.
‑ ‑ ‑ the financial position as you go along?‑‑‑No. No
Just ‑ ‑ ‑?‑‑‑Not at all.
Just ‑ ‑ ‑?‑‑‑Not at all.
Just as you did including $850,000 of cash on term deposit in the balance sheet when you supplied it to the High Court?‑‑‑Actually, actually I'm going to come to that. You want to ask me that question again?
No?‑‑‑I didn't make that up at all because according to accounting standards as soon as an asset has been made available to an entity, that entity is allowed to recognise the asset, even if the benefit of the asset is a future cashflow. There you go.
It was an unsatisfactory, and in my view, a dishonest, explanation. Indeed, her evidence in re-examination in relation to the issue served to emphasise the dishonesty involved in her original affidavit of 23 September 2008. Mrs Frigger stated that 'I had intended for it to be a contribution to my super fund but that intention had not been carried out at – as at that time' but that she still fully intended for that to occur. She then gave evidence that they began putting the intention into effect in October 2008 (ie within a month of the 23 September 2008 affidavit identifying them as unencumbered assets of CAT) (ts 887 ‑ 889).
Accordingly, even on Mrs Frigger's own evidence, she swore that assets would be available to repay the judgment sum should the appeal be successful when at that time she 'fully intended' to take them out of CAT.
When asked why the affidavit did not state that the Edward Street property was owned by FSF as at 1 July 2007 she repeated her earlier evidence that it was not owned by the superannuation fund because she had not transferred it at that time and did not transfer it until 6 May 2009. She said she did not as at 1 July 2008 regard the properties to be assets of the Frigger Superannuation Fund.
She agreed as at February 2010 neither of the properties were referred to her as assets of CAT because they had been by then transferred. She also agreed that sum of $999,999 was referred to as an asset of CAT.
Mrs Frigger's explanation for the inconsistencies, as to whether the Edward Street and Armadale properties were assets of CAT or the Frigger Superannuation Fund, seeking to draw a distinction between the date of the transfers and when they were registered, was entirely unconvincing. Her explanation in cross-examination (set out above and also at ts 753 – 754) that although she had prepared documentation to transfer the ownership of the Edward Street and Armadale properties from CAT to the Frigger Superannuation Fund the transfers were not effective even though the transfer documents had been executed at the time she swore the affidavit on 23 September 2008, and that from an accounting point of view there was a difference between when a land transfer document is executed and when a settlement is done later, which, she said, was when the property is transferred from one set of books to another, showed she is a person who is prepared to manipulate and alter the financial position of CAT, and falsely represent the true financial position of CAT, for her own purposes of ensuring she personally obtained the benefit of payment of the original judgment sum, and then once having done so, avoiding having to refund that part of the judgment in consequence of the Court of Appeal judgment. It shows a person with little or no regard for the truth.
In my view the different positions sworn by Mrs Frigger were contradictory and served to defeat the legitimate purposes of the litigation in which they were sworn (compare: Frigger v Professional Services of Australia Pty Ltd [No 3] [109]).
Simmonds J should have recorded in his reasons that the result of the inconsistencies in Mrs Frigger's affidavits of 23 September 2008, 22 June 2010 and 12 October 2010 was that if Mrs Frigger's affidavit of 23 September 2008 contained falsehoods, it resulted in Buss JA refusing the application for a stay. If, on the other hand, her two 2010 affidavits filed in relation to the freezing and ancillary orders application contained the falsehoods, then she was attempting to mislead Simmonds J. It is not necessary to decide which is true for the purpose of this appeal. All that is necessary is to observe that she has been guilty of bending the truth. If all that Mrs Frigger has now offered about CAT's circumstances as at 23 September 2008 had been put before Buss JA, a stay would almost certainly have been granted and the freezing and ancillary orders would not have been necessary. Because Simmonds J did not refer to this in his reasons, it may be inferred that his Honour overlooked it. If this had been detected by his Honour, the order that each party pay their own costs would not have been made.

The $999,999 ING deposit

In relation to the $999,999 deposit in ING, which Mrs Frigger swore in the 23 September 2008 affidavit was an asset of CAT, she said she should not have put that into the affidavit because it was an online term deposit held with ING Direct which when she looked on the internet the holder of the fund was CAT which is why she put it in her affidavit, but later on she realised the rest of the name was 'as Trustee of the Frigger Superannuation Fund'. She said she did not realise that until a long time later, may be two years later. She denied falsely overstating the assets of CAT $999,999 and said it was an inadvertent error and she had immediately assumed the amount belonged to CAT even though she was the accountant for CAT. She accepted the sum was already in fact in the Frigger Superannuation Fund and said that because the name of the holder of the fund was not showing up she simply put it in the CAT assets by mistake. It was unintentionally false. She insisted she did not falsely overstate the assets of CAT by $999,999. Rather it was an inadvertent error. She just assumed the sum belonged to CAT. It is important I set out her evidence about this matter in full (ts 641 – 642):
And is that also your explanation for the fact that the $999,999 deposit of ING you now describe as being held by the Frigger Super Fund even though you swore in the affidavit in 2008 that it was an asset of CAT?---No. That - that – that is the only thing that I should not have put into the affidavit of 23 September 2008. That was an online term deposit held with ING Direct and at the time, when you have – when you look on – on the Internet and you look at the name of the holder of the fund, it said Computer Accounting & Tax Proprietary Limited, that's why I put it into the – my affidavit and later on, I realised that the rest of the name is as – as trustee of the Frigger Super Fund and I didn't realise that until a long time later, maybe two years later.
So are you saying that on 23 September 2008, your affidavit was falsely overstating the assets of CAT by $999,999?---It wasn't false. It was an error. It was an inadvertent error because I could only see Computing Accounting & Tax on the website and I just immediately assumed that it belonged to CAT.
Mrs Frigger, you're an accountant and you're saying that as the accountant of CAT, you made an assumption about something worth almost $1 million?---Yep, I did. I did.
Isn't it really - - -?---Because you know – sorry.
- - - the case, Mrs Frigger, that this is just another example of where you will swear and say what is necessary at the time whether it's true or not?---No, it's not an example. But as I have said that that was an error I made. It was an inadvertent error at the time. It was already in fact in the Frigger Super Fund. That part of the name of the holder of the fund was not showing up and I simply put it in by mistake. It was – I was – I – I did not intend to falsely do something. It was – it was - - -
So it was unintentionally false, is that what you're saying?---If you want to call it unintentionally false, you can call it that, yep.
I was extremely troubled by Mrs Frigger's evidence about this issue.
Mrs Frigger is an accountant by occupation and was the accountant of CAT. I find her explanation extraordinary and I reject it. As Mrs Frigger makes clear in her affidavit, and as she accepted in her evidence, she sought to present CAT as being in a strong financial position to defeat the application for a stay. I do not accept she made an inadvertent error. I do not accept that as an accountant and the accountant of CAT she did not know the sum of $999,999 was an asset of the Frigger Superannuation Fund and not of CAT. I do not accept she was simply careless about that. In my view Mrs Frigger deliberately falsely swore the term deposit with ING Direct in the sum of $999,999 was in CAT's name and an asset of CAT to deliberately misrepresent the financial position of CAT, when she knew that sum was not an asset of CAT, for the purpose of defeating the application for a stay and to obtain immediate payment of the judgment sum, which in turn was immediately paid to, or to the benefit of, the plaintiffs.
It is more than a case of Mrs Frigger being careless with the truth. In my opinion she deliberately falsely swore the term deposit with ING Direct in the sum of $999,999 was an asset of CAT to represent CAT was in a sound financial position, when she knew it was not, and able to refund any sum which it might be ordered to pay if PSA's and Banning's appeal was successful, when she knew CAT was not able to repay any substantial sum without being provided with an injection of funds by the plaintiffs.
I further note that Mrs Frigger's statement in relation to the sum of $999,999 and CAT's financial position was made in an affidavit in which at par 6, responding to Mr Banning's affidavit in which he has apparently referred to conflicting statements made by Mrs Frigger in her affidavit of 24 April 2007, she explains any inconsistencies on the basis the affidavit 'was made shortly after the sudden death of my father and by my failure to check the affidavit, prepared by my new solicitors …, before swearing it'.
It is extraordinary that an accountant knowing the significance of the affidavit she was swearing on 23 September 2008, and having had it pointed out to her that her earlier affidavit contained inconsistences, would not be very careful in her listing of the assets and liabilities of the company of which she was the accountant and a director and shareholder with her husband. I reject her explanation that her inclusion of the sum of $999,999 as an asset of CAT was an inadvertent error because she did not properly read the name of the holder of the sum which identified CAT as the Trustee of the Frigger Superannuation Fund and did not realise that until some years later. In my view, as the accountant of both CAT and the Frigger Superannuation Fund, Mrs Frigger would have known the sum was an asset of the superannuation fund and not CAT. In my view Mrs Frigger has intentionally included the sum of $999,999 as an asset of CAT to intentionally and falsely represent the financial position of CAT. It was intentionally included to mislead the court when opposing the application for the stay of the judgment of Simmonds J for the purpose of persuading the court that if the judgment monies were paid the company was able to repay the monies if the appeal succeeded and CAT was ordered to repay the judgment monies.

The charge registered with ASIC

When cross-examined about the effect of the Court of Appeal judgment, Mrs Frigger was not prepared to accept that the effect of the judgment was that CAT was required to repay a substantial sum even though she accepted that the damages which had already been paid to CAT were reduced by $675,000. She maintained that by the terms of the DOCA CAT did not have to pay any money back if the DOCA was terminated and as at 23 October, when the Court of Appeal delivered judgment, the DOCA had terminated. Therefore she wanted to seek a declaration as to what was the effect of the terms of the DOCA.
Mrs Frigger said that on 22 October 2009, the day before the Court of Appeal judgment, she registered with ASIC a fixed charge charging assets of CAT in favour of her and her husband in the sum of $2 million. She explained, the charge covered any future loans or past loans up to a value of $2 million and she delivered it to CAT on 22 October. Mrs Frigger was then taken to an affidavit she swore on 18 January 2011 in CIV 2765 of 2010 (exhibit 2.50) in which at par 55 she said that the charge was registered with ASIC on 23 October 2009. She then said it was registered on 23 October but she delivered it the day before. She maintained that the charge was registered on 22 October and someone had altered the date from the 22 October to 23 October. She did not accept it looked suspicious that a $2 million charge was registered on the very day that she found out the judgment monies would be reduced. When she was taken to a copy of the deed of charge (annexure ACTF-17 of her affidavit), which was date stamped 23 October 2009 she then said she could not remember when it was registered but maintained she signed it on 22 October which is when she delivered it to ASIC. By reference to cl 2 of the schedule to the deed to which Mrs Frigger was taken, which stated that consideration of $2 million was granted by way of a loan secured under the deed which the plaintiffs were entitled to the security to protect the loans both past and present, she again explained that the monies were not repayable unless the objective of the trust was not achieved but because the objective of the trust was achieved the loans did not have to be repaid. That was by reference to a Quistclose trust which she had since heard of.
It was put to Mrs Frigger it would look suspicious if she registered the charge for $2 million on the same day she found out the Court of Appeal had reduced the damages to which CAT was entitled and which would require repayment of a substantial portion of the judgment sum paid to CAT. Mrs Frigger denied it was suspicious. It was also put to her that the reason she was saying the charge was delivered to ASIC on 22 October 2009, despite it being date stamped 23 October, was because she knew it looked suspicious that she was registering a charge in favour of her and her husband on the very day that the damages were to be reduced by the Court of Appeal. She maintained the circumstances were not suspicious and that she gave the members voluntary liquidator Mr Trinick a written undertaking that in the event liabilities exceeded assets, her and her husband would not enforce the charge. She produced no documentation or other evidence to support her evidence. However, Mrs Frigger later, in re-examination contradicted that evidence when she said in (ts 890):
Yes. Now, you were asked about the fixed charge that you had lodged and you recollect that there are different dates, I think the 22nd and the 23rd ‑ ‑ ‑?‑‑‑Yes, yes.
‑ ‑ ‑ of the month on the document that was lodged. Can you just tell us ‑ you said that it was lodged on a particular day. Can you say how it was lodged and what happened precisely in relation to that?‑‑‑Yes, there's ‑ the charged was actually executed on 10 September but ‑ and it is not a coincidence that I took it in for lodgement just about the time that the ‑ the appeal ‑ appeal decision was coming down. I was very, very afraid of the people that ‑ that were opposing me and the types of actions that they would take in relation to my assets. And I actually took it in to ASIC in ‑ late afternoon on 22 October and they accepted it but there was something to do with the time of lodgement and they told me that it would actually be recognised as lodged on the next day. So even though I took it in on the 22nd it somehow ‑ the ‑ there was a timing cut‑off ‑ cut‑off time for lodgement.
Yes. And is there any particular reason why it was lodged on that date?‑‑‑Yes, well, I knew that the ‑ the decision of the Court of Appeal was coming down and I was wanting to make sure that if there had to be any money paid back, that I would do it on my terms and not on the opposition's terms.

This in my view is an example of how Mrs Frigger has been prepared to manipulate and create documentation, including by swearing affidavits, which are often contradictory of and inconsistent with each other, to first, defeat the application for a stay of the original judgment and then, secondly, to defeat and prevent compliance with the Court of Appeal's orders by refunding a sum in excess of $850,000 in circumstances where Mr and Mrs Frigger have personally or through their superannuation fund, received full payment of the original judgment and have both failed and refused to refund the monies required to be refunded in consequence of the Court of Appeal's orders.
I also note that despite the deed of charge referring to past loans made to CAT by the plaintiffs, Mrs Frigger swore in her affidavit of 23 September 2008 that CAT had no liabilities except for GST liabilities.
She was cross-examined about swearing CAT had no liabilities save quarterly GST liabilities. She was taken to par 8 of her affidavit of 22 June 2010 in which she swore her and her husband borrowed $452,450 which they then lent to CAT and which CAT used to purchase the Edward Street property. Mrs Frigger said that although in par 9 of her affidavit she swore that a term of the loan was that CAT would be liable to pay interest on the loan made by her and her husband, that was not the correct position. She said there was no loan that needed to be repaid. The property was purchased with the objective of it being transferred to the Frigger Superannuation Fund and if that objective was completed no monies had to be paid back to her or her husband. She said she now knew that the purchases of both the Edward Street and Armadale properties are what is known as Quistclose resulting trusts.
There was also accrued salary owing to her husband and herself. Mrs Frigger explained there were no liabilities as at 23 September. Computer Accounting and Tax Pty Ltd did not owe her the money then because by accounting standards she could later go back 10 years and try and calculate what would have happened if the monies became available which is what she was trying to do when asked by Simmonds J to explain the transactions.
Again this demonstrates how readily Mrs Frigger is prepared to differently represent the financial position of CAT at different points in time for the purpose of defeating the legitimate purposes of the litigation.

The undertaking in relation to $850,000

On 15 February 2010, Mr and Mrs Frigger, acting in person, applied to set aside the appointment of the provisional liquidator. In support of that application Mrs Frigger swore an affidavit on 15 February 2010, (exhibit 2.17) which included a balance sheet of CAT suggesting that it had $850,000 on term deposit as at 10 February 2010.
The $850,000 was never actually given to CAT for the purposes of paying debts and never became an asset of CAT. While this was originally accepted by Mrs Frigger ('I'm absolutely clear about that'), when presented with the inconsistent balance sheet Mrs Frigger sought to dissemble and reverse her position.
She said her husband signed an undertaking which was filed in the court to provide $850,000 which was a term deposit in his name to secure the payment of debts pending the finalisation of all matters including any outstanding issues as to costs. However, the $850,000 was never given to CAT and never became an asset of CAT.
On 10 February 2010 Mrs Frigger swore an affidavit in support of an application for a stay before the High Court (which is annexed to Mrs Frigger's affidavit of 15 February 2010, exhibit 2.17). The affidavit was sworn two days after she swore the affidavit on 8 February in COR 2 of 2010 (exhibit 2.14) in the provisional liquidation application, which had the RATA attached to it. The purpose of the affidavit was to obtain a stay from the High Court in relation to the orders of the Court of Appeal.
Her affidavit filed in the High Court annexed a copy of a balance sheet of CAT as at 10 February 2010 (which was exhibit 13 to the affidavit) in which she said CAT was solvent. In the balance sheet it listed under assets that CAT had cash on term deposit of $850,000. When it was put to her that that was not true given she had just said that the $850,000 never became an asset of CAT, she explained that as at 10 February her and her husband had decided to transfer the $850,000 term deposit, which was in his name, to CAT. She said however, they never did it because the provisional liquidation application was never granted but as at 10 February they had decided that was what they were going to do. She said that because the undertaking of her husband was dated two days earlier, he said in that undertaking the $850,000 would be transferred to CAT which is the reason why she listed it as an asset of CAT. She tried to explain that because of her husband's undertaking that the term deposit in his name was going to become an asset of CAT, it became an asset of CAT. When it was put to her that she swore an affidavit in the High Court that CAT had cash assets of $930,000 which was not true, she maintained that as at 10 February it was true because her husband had given an undertaking that was going to happen. She said that the $850,000 was a term deposit, which although in her husband's name, he was going to give it to CAT for it to become an asset of CAT. She would not accept that that was an inconsistent explanation or that the affidavit was false (ts 650 ‑ 652).
I am unconvinced by and am indeed also troubled by Mrs Frigger's explanation and I reject it. I find it an extraordinary explanation particularly given she is an accountant. In my view Mrs Frigger dishonestly swore the affidavit to create the false impression CAT was solvent. On no reasonable view could the sum of $850,000 be regarded as an asset of CAT, as Mrs Frigger initially acknowledged. The only reason she listed that sum as an asset of CAT was to deliberately create a false and misleading picture of CAT's solvency. I am satisfied when she swore that affidavit and included the sum of $850,000 as an asset of CAT she well knew it was not an asset of CAT. She swore the affidavit intending to mislead the High Court as to CAT's financial position in an attempt to persuade the High Court to grant a stay of the Court of Appeal judgment requiring CAT to refund the sum in excess of $850,000 being a substantial part of the damages which had already been paid to CAT by PSA and Banning and in turn disbursed by the plaintiffs to or on behalf of themselves.
That view is reinforced by Mrs Frigger's subsequent evidence (ts 653 ‑ 654) in which she accepted by reference to par 8 of her affidavit that there was never a proposal that the $850,000 would be made available to pay the outstanding statutory demand, it was always a conditional offer. It was conditional upon sorting out the costs and all of the matters that she referred to, that is, how the terms of the DOCA affected the payments.
Mrs Frigger was then seeking advice from another solicitor, Mr Darbyshire, who drafted a letter he recommended be sent to the provisional liquidator Mr Kitay setting out an offer. Mrs Frigger said she never saw the draft letter and only saw it when it was discovered by the defendant's solicitors a few months ago. She said she only discussed the letter with Mr Darbyshire but never saw the letter before it was sent. She said had she seen the letter before it went out she would not have allowed it to go out because the letter referred to the company no longer being insolvent if the terms of the offer were accepted by the conditions being accepted to lend the sum of $850,000 to CAT. Mrs Frigger maintained CAT was never insolvent (ts 656). She maintained a circuitous unpersuasive argument that CAT could have paid the judgment debt because her husband would have paid the monies to CAT even though he did not.

Mrs Frigger's insertion of documents into exhibit

On 18 September 2014 Mrs Frigger was initially cross‑examined regarding the affidavit she swore on 22 June 2010 in CIV 2265 of 2006 (exhibit 7.2), the freezing orders application. The affidavit which had been discovered was incomplete and only part of the affidavit had been discovered by the plaintiffs.
On 9 April 2004, Derrick DCJ in Frigger v Clavey Legal Pty Ltd [No 2] [2014] WADC 44 ordered the plaintiffs to give discovery of portions of the affidavits in the following terms:
In summary, my ruling on the appeal is that the plaintiffs must give discovery of the following portions of the affidavits:
1.Affidavit sworn 23 September 2008: pars 1 – 3, 16 – 23 and any annexures referred to in these paragraphs.
2.Affidavit sworn 22 June 2010: pars 1 – 41 and any annexures referred to in these paragraphs.
3.Affidavit sworn 12 October 2010: pars 1 – 10, 12, 16, 19, 20, 22.
and any annexures referred to in these paragraphs.
On 18 September 2014 Mrs Frigger was cross‑examined in the following terms (ts 629):
One of the affidavits that you were asked to provide paragraphs of was an affidavit of 22 June 2010?‑‑‑Yes, I - yes, I think so, yes. Mm hmm.
And the document that you're looking at now, which begins at page 1373 is what you provided to the defendants in response to that order and the request for that document, correct?‑‑‑These documents that I'm looking at now, where it has a - obviously it's a fax from H and A Frigger - are the documents that were - that I provided. But yes, they are the documents I provided.
And the one that we're looking at is the document, is the affidavit of 22 June 2010. Do you agree with that?‑‑‑No. I'm not going to answer because I don't know, okay? I just simply don't know.
Following Mrs Frigger's answer, senior counsel for the defendant's called for the originals of the three affidavits Mrs Frigger was ordered to discover and I ordered that she provide full copies of the three affidavits.
On 19 September 2014 (the final day of the first week of the trial before the trial was adjourned part heard to 13 October) the plaintiffs produced to the court two copies of the green appeal books in the CACV 23 of 2012, being volumes 3 and 4 of 4 appeal books (they became exhibits 6.1 and 6.2 respectively). Senior counsel for the defendant, in the presence of Mrs Frigger and her counsel, informed me (ts 683):
Now, in relation to the documents which I was given access to over the luncheon adjournment, the position is this. The orders that your Honour made yesterday were to produce three affidavits. The three affidavits in question were all affidavits sworn by Mrs Frigger, the first an affidavit sworn 23 September 2008, the second an affidavit sworn 22 June 2010 and the third an affidavit sworn 12 October 2010.
The appeal books which were delivered to your Honour are appeal books which contain a number of affidavits. They contain a full copy of the affidavit dated 23 September 2008. They contain part of the affidavit sworn on 12 October 2010, that is, the pages which are missing appear to be pages 1 and 2 of that affidavit.
And in relation to the third affidavit, which is the affidavit sworn 22 June 2010, that is an affidavit which in the index to volume 4 of the appeal books is described as running from pages 768 to page 855 and the copy of the appeal book provided runs to page 786, so there's a substantial portion of that missing. So there are – there's more than we had, but there's not all of them.
There was then the following exchange with counsel for the plaintiffs (ts 688 – 690):
HERRON DCJ:   Well, Mr Quinlan has said - - -
COOK, MR:   There are other parts not in the book.
HERRON DCJ:   - - - the affidavit of 23 September 2008 is fully reproduced in the appeal books, the affidavit of 27 June 2010 is incomplete and the affidavit of 12 October 2010 is missing pages 1 and 2. It just seems to me, and this what I'm seeking clarification about, if Mrs Frigger was able to comply with the orders of Judge Derrick by providing those parts of the affidavits, it'd be unusual if she doesn't have the full affidavits.
COOK, MR:   Well, it is odd because my - I have to admit it's odd because the affidavit of 22 June that Judge Derrick said had to be provided was paragraphs 1 to 41 and any annexures referred to in those paragraphs and, apparently, the annexures would be in the missing pages of 786 to - 69 missing page that my learned friend has talked about.
…
COOK, MR:   Thank you, your Honour. I've received instructions. These green books were provided to us from Mr Britten‑Jones, a barrister we had appearing for us who's an Adelaide barrister. My instructions are that the documents in 60.2 and 60.3 were provided in full pursuant to the order of Judge Derrick.
My problem is, and I've explained to the client, that my learned friend has said that, for example, the annexures to the affidavit of 22 June 2010 aren't in the green books and where did she get the - I've asked my client where she got the annexures from and she said, "Well, if they're not there now I don't know where they were" or words to that effect, "I'm happy to go and give evidence in the witness box if you want me to explain".
But it would appear that, for some reason, my client believes that she has complied with order 2, but if asked where are the annexures that aren't provided today she doesn't know.
HERRON DCJ:   And in relation to the affidavit of 12 October, which is missing pages 1 and 2?
COOK, MR:   Well, again, she - all she has is what is - she believes she has is what she's got there. That's all she has said she had in her office, were those documents there, and she doesn't know how there's a discrepancy.
…
UNIDENTIFIED SPEAKER:   To give me instructions - - -
COOK, MR:   Look, let me just - - -
HERRON DCJ:   - - - those affidavits are sworn and I'm told that pages 1 and 2 of that affidavit are missing, so they need to be produced.
COOK, MR:   Yes.
…
QUINLAN, MR:   Now, the court matter numbers are these. 23 September 2008 was filed in CACV 76 of 2008 and both the affidavits of 22 June 2010 and 12 October 2010 were sworn in CIV 2265 of 2006.
…
I ordered that each party have leave to have full access to the appeal books and take copies. I also made orders in the following terms:
1.Within 10 days from the date of this order, the first named plaintiff file and serve an affidavit of discovery listing the documents which are or have been in the possession, custody or power of the plaintiffs relating to any matter in question in this action, including:
(a)the affidavit sworn by the firstnamed plaintiff on 23 September 2008 in Supreme Court civil proceedings CACV 76 of 2008 (including annexures);
(b)the affidavit sworn by the firstnamed plaintiff on 22 June 2010 in Supreme Court civil proceedings CIV 2265 of 2006 (including annexures);
(c)the affidavit sworn by the firstnamed plaintiff on 12 October 2010 in Supreme Court civil proceedings CIV 2265 of 2006 (including annexures);
(d)the chamber summons, supporting affidavit and chronology deposed by the firstnamed plaintiff to have been handed to Mr Terry Clavey on 12 March 2010 and referred to at pages 571 and page 572 of the transcript of the trial of this action;
(e)income tax returns of Computer Accounting & Tax Pty Ltd marked annexure DL7 to the affidavit of David Lenhoff sworn 27 August 2010 in Supreme Court civil proceedings CIV 2265 of 2006; and
(f)those documents which have not previously been discovered the plaintiffs.
2.Within 10 days of the date of this order, the solicitor on the record for the plaintiffs file a certificate in accordance with Order 26 rule 16A Rules of the Supreme Court 1971.
Thereafter the defendant's solicitor inspected the green appeal books and took a copy. On 26 September 2014, Mrs Frigger attended the court in person and was provided with the appeal books and took them away from the court.
On 7 October 2014 I heard an application on behalf of the defendant for a springing order on the basis the plaintiffs had failed to comply with my orders of 19 September. Shortly prior to the directions hearing I was provided with a letter from the plaintiffs' solicitor Mr Griffin in response to O 2 and an affidavit of Mrs Frigger sworn on 3 October 2014 in purported compliance with the orders made in par 1. After hearing argument on behalf of the parties, I declined to make a springing order and made the following orders:
1.By no later than midday on Friday, 10 October 2014, the first‑named plaintiff file and serve a further affidavit of discovery;
(a)specifically responding to orders 1(d) and (e) made on 19 September 2014; and
(b)including:
(i)the affidavit sworn by the first‑named plaintiff on 8 December 2009 and listed as document 17 in Volume 1 of the Green Cross Appeal Book filed in CACV23 of 2012;
(ii)the affidavit sworn by the first‑named plaintiff on 18 March 2010 and listed as document 21 in Volume 1 of the Green Cross Appeal Book filed in CACV23 of 2012; and
(iii)the affidavit sworn by the first‑named plaintiff on 18 May 2010 and listed as document 24 in Volume 1 of the Green Cross Appeal Book filed in CACV23 of 2012.
2.The plaintiffs pay the defendant's cost of today forthwith, fixed at $462.
When the defendant's application was heard before me, Mrs Frigger, having removed the appeal books from the court and having not returned the books, I ordered they be immediately returned. The appeal books were returned to the court by Mrs Frigger on 10 October 2014.
On 13 October 2014, Mrs Frigger was cross‑examined about volume 3 of the green appeal book. What emerged in that cross‑examination causes me significant concern and I set out the cross‑examination in full:
QUINLAN, MR:   Mrs Frigger, can I ask you to go to page 1,507 of that book?‑‑‑Yep, I've got it open. Sorry. Seven. Seven, yep. No notice of acting in person.
Yes. Do you recognise that? And down the bottom you will see there's a fax print from H and A Frigger?‑‑‑Mm.
Recording it as a facsimile transmission on 6 May. This is the facsimile that you sent to the defendant's solicitors, following the application for discovery before his Honour Judge Derrick, correct?‑‑‑Yes.
Yes. And you will see that that runs to some - the facsimile, itself, runs to some 66 pages. Do you see that?‑‑‑It - where - where it's got that facsimile thing on the bottom, you mean? Yep.
The last page is 1,625 of the book?‑‑‑Yep. Yep. That's ‑ that's fine.
And over the page, on page 1,508, there's a copy of the affidavit of discovery that you swore on 15 April 2014?‑‑‑Mm hmm.
And on page 1,511, you swore, as part of the list of the documents, documents 165 through to 167, being the affidavit in each of those proceedings in the paragraphs and annexures that are referred to, correct?‑‑‑Well, that's what it says in the - in the document. Yes.
Well, did you do it or not?‑‑‑Absolutely, I - I swore this affidavit. Is that your question?
That was my question?‑‑‑Yes, I swore this affidavit. I prepared the affidavit and I swore it. Is there any other questions about that?
So at that time you said that you had custody of the document which is now lost?‑‑‑No. Just read it, please. It says copy and then it says the affidavit and the paragraphs and the annexures which Judge Derrick had asked me to discover, which form part of the green appeal book which I had got back from my barrister in Melbourne. That's what I was referring to.
So, for example, go to page 1,528?‑‑‑Yep.
And that is a copy of the cover sheet of an affidavit sworn by you on 10 October 2010, correct?‑‑‑Twelfth, actually.
Sorry, 12 October 2010?‑‑‑Mm.
Correct?‑‑‑Mm hmm.
Just stay on that page, Mrs Frigger?‑‑‑Yep.
So you faxed that to the defendant's solicitors on 6 May?‑‑‑I did.
Where did you get it from?‑‑‑Well, if you look at the document itself ‑ ‑ ‑
Will you answer my question?‑‑‑Well, I've already said where I got it from. I got it from the green appeal book which I got back from my barrister who was in Adelaide and which I brought to court. That's where I got it from.
Could the witness be shown that green appeal book, your Honour? Volume 3 that she provided to the court on 19 September this year.
THE WITNESS:   Thank you.
QUINLAN, MR:   Is that what you are saying you got it from?‑‑‑Yes.
Okay. Can you find the page that I've just referred you to in that book, please?‑‑‑Four twenty-one.
Yes?‑‑‑Yes, I've found it.
Can you show me?‑‑‑You want me to show you?
Can I just see it?‑‑‑Okay.
Mrs Frigger, have you had these documents - did you take custody of these documents after they were provided to the court?‑‑‑Yes. I - I - I went to a - an - level 9, like I ‑ we had been instructed. Each party was allowed to take the documents from the court and make copies and bring them back. So I actually came here on a Friday and Judge ‑ his Honour and his associate was not in Perth at the time but I spoke to the receptionist and I believe the receptionist called the associate and got permission for me to - to take them and - and do what I - I did.
And how long did you keep them for?‑‑‑I can't remember. I think I only brought them back last Friday. Is that right? Let me - can I - may I ask? I can't remember the date but I - I returned it to the court.
Were you actually told not to leave the precincts of the court with them?‑‑‑No, I wasn't told that.
And Mrs Frigger, did you change the documents when - did you ‑ when you gave the documents back, had you done anything with them?‑‑‑No.
Well, just have a look at that again, very carefully?‑‑‑Why would I do anything with them? What a joke.
I ‑ ‑ ‑?‑‑‑Anyway ‑ ‑ ‑
‑ ‑ ‑ asked you to ‑ ‑ ‑?‑‑‑I'm sorry. I'm sorry. I ‑ I ‑ I am sorry. I - I ‑ ‑ ‑
I asked you to find ‑ ‑ ‑?‑‑‑I found it. I found it.
‑ ‑ ‑ page 421?‑‑‑Yes. And there is it.
And Mrs Frigger ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ between the time you took that from the custody of the court ‑ ‑ ‑?‑‑‑Mm hmm.
‑ ‑ ‑ and when you brought it back ‑ ‑ ‑?‑‑‑Mm hmm.
‑ ‑ ‑ you've inserted that page in there, haven't you?‑‑‑No. I had actually pulled them out so that I could actually fax it to your office and I just put them back loosely because I don't have one of these machines to ‑ that - that can bound it. So all - all I did was put them back. That's all I did. I - like I had given it to ‑ to his Honour. That's all I did.
It's not true, is it, Mrs Frigger?‑‑‑Well, you can say anything you like. That's what I took out of the court and what I've brought back to the court.
When you took it from the court, the copy that had been provided to the court did not have page 1 of that affidavit in it, did it?‑‑‑Well, what, you think I just, you know, manufactured it out of the air? Is that what you think? Is that what you're implying? Because I didn't.
No. What ‑ ‑ ‑?‑‑‑This - actually, I'll tell you what it ‑ this was actually - you know where it was, it was inserted into the back of the file like that.
Mrs ‑ ‑ ‑?‑‑‑Yes.
Mrs Frigger ‑ ‑ ‑?‑‑‑That's where I found it. And so all I've done is I put - I've reassembled it into the right page order. That's all I have done.
Really?‑‑‑Yep.
You haven't ‑ ‑ ‑?‑‑‑Really.
Did you go to the - didn't you go to the defendant's supplementary bundles, get a copy of that page and insert it in?‑‑‑No.
So are you saying that that copy ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ of page 421 ‑ you're shaking your head, Mrs Frigger but just answer my question. Are you saying that that copy of page 421 of the appeal book ‑ ‑ ‑?‑‑‑Mm hmm.
‑ ‑ ‑ is the page, the actual page, that was ‑ ‑ ‑?‑‑‑Faxed to you?
Yes?‑‑‑Yes. Exactly. Exactly what I am saying.
That's exactly what you're saying?‑‑‑Exactly.
Give me another look at it?‑‑‑Have a look.
COOK, MR:   I wonder could I have a look at this at some stage, too, your Honour?
QUINLAN, MR:   Yes, I'll give it to my friend.
Mrs Frigger, go to that page again?‑‑‑Which one?
The one that we've been ‑ ‑ ‑?‑‑‑The green book?
‑ ‑ ‑ looking at?‑‑‑The green book or this one?
In the green book?‑‑‑In the green book. Yep. Yep, 421. I've got it open.
Do you swear on your oath that the copy that is in front of you, in what you've identified as the green book ‑ ‑ ‑?‑‑‑Mm hmm.
‑ ‑ ‑ is the copy that has always been in the green book and is the copy that was faxed on 6 May 2014?‑‑‑I do swear that, yep. I do swear that.
And that you have not obtained that page from somewhere else and inserted it in the green book?‑‑‑Absolutely not. I know that I cut all these pages off so that it would go through the fax machine and I know that I had pulled them out because Judge Derrick had only asked me to ‑ to discover certain pages. And when I got it from the court I ‑ I ‑ if I remember rightly they were at the back of that and I just pulled them out and I put them into the correct order. That's all.
And Mrs Frigger ‑ ‑ ‑?‑‑‑Yep.
‑ ‑ ‑ you can't then explain why a facsimile imprint actually appears on the bottom of that page?‑‑‑No, I can't.
Look in the top right‑hand corner, Mrs Frigger, of that page?‑‑‑Yep.
Do you see it has the numbers 1457?‑‑‑Yep, I do.
You know where that number comes from, don't you?‑‑‑I have no idea. I have no idea where that comes from.
It comes from the defendant's second supplementary book of documents, doesn't it?‑‑‑I ‑ well ‑ ‑ ‑
Listen to me?‑‑‑No, just ‑ just let me think. Let me ‑ let me just ‑ so you ‑ when you took this copy away you put the copies back in the book, did you?
Oh, Mrs Frigger.
HERRON DCJ:   Mrs ‑ Mrs Frigger, ?‑‑‑Because ‑ because this is the only place I found them. Sorry. This is ‑ I found them in ‑ sorry.
Mrs Frigger?‑‑‑Yes, I'm sorry, your Honour.
Please listen to Mr Quinlan's question?‑‑‑Okay.
QUINLAN, MR: Mrs Frigger, you have just sworn on your oath ‑ ‑ ‑?‑‑‑Yep.
‑ ‑ ‑ that the document that is in front of you is the document that you have had since 6 May ‑ ‑ ‑?‑‑‑No, I said this is the book that I got from the court. I took it home. These loose pages were at the back of the book. I pulled them out and I put them ‑ reassembled them into the right page order. That's what I said. And they are the same copies that I faxed on 6 May to the ‑ to you. They're exactly the same page. I haven't had any other copies of these documents other than what I got from this green appeal book.
How did the number get in the top corner then, Mrs Frigger?‑‑‑Well, I – I think this is what has happened, that you have put copies of them into the back of the file because I certainly didn't extract pages from your defendant's book and put it in there.
Yes you did, Mrs Frigger, didn't you?‑‑‑I did not.
That's exactly what you did and you've been ‑ ‑ ‑?‑‑‑That's exactly not what I haven't done.
You have been ‑ you ‑ ‑ ‑?‑‑‑Well, you know, I tell you how to prove it. Go and have a look at the ‑ at your ‑ your books that you've given me. Go on, have a look at them.
The books that I've given you?‑‑‑Well, you're saying that I've taken these out of your supplementary books and put them into this appeal book document. And I say, well, check our copies to ‑ to prove the point. I haven't put anything out of our ‑ our supplementary books.
You photocopied it?‑‑‑I have not. If I photocopied it, how come they've got all these ‑ all these ‑ you know, this ‑ this stuff here?
Ask them ‑ pass those loose pages to me again?‑‑‑If I photocopied it, it would have been a clean page here, clean ‑ clean edge.
You've been caught out, haven't you, Mrs Frigger?‑‑‑No, I think you've been caught out.
You have taken the documents from the custody of the court personally, not provided them to your solicitor and you have altered them, haven't you?‑‑‑No, I haven't.
Because it's the case, isn't it ‑ ‑ ‑
HERRON DCJ:   Can ‑ can I ‑ can I just clarify that question because there were two aspects of it? Mr Quinlan asked you, you've taken the two green appeal books from the custody of the court?‑‑‑I did, your Honour, yes.
He then asked, you've not provided them to your solicitor. Did you provide them to your solicitor?‑‑‑I did not, no.
And then the next question was, you've kept them in your custody?‑‑‑ I have kept them all ‑ all along, yes. I ‑ I'll just clarify that, your Honour. At one stage I think it was Ms Moss who spoke to Mr Griffin and asked if she could inspect these green appeal books and I ‑ I believe it was on one of those days where Mr Griffin was not in his office so I didn't take them into the court ‑ into Mr Griffin's office. And then we appeared before you on the last directions hearing and you raised a concern that these ‑ these appeal books had not been brought back to the court and I gave an undertaking that I would, and that's all I did, was I brought them back with ‑ together with the ‑ the ‑ a supplementary books of the plaintiff's documents which I've also brought in at the same time.
QUINLAN, MR:   Mrs Frigger, you were in court on the day that those green appeal books were produced, weren't you, on the 19th ‑ ‑ ‑?‑‑‑ I produced them.
Just ‑ just listen to me. You were in court on 19 September when I and my learned friend were addressing his Honour in relation to what had been provided to the court in those appeal books?‑‑‑Correct.
And you heard me say in court that:
The appeal books contain part of the ‑
‑ this is at page 683 of the transcript. You heard me say they ‑
‑ contain part of the affidavit sworn on 12 October 2010. That is, the pages which are missing appear to be pages 1 and 2 of that affidavit.?‑‑‑Correct. Well, I can't remember what you were saying but I knew ‑ I know that you were saying that there were certain pages that were missing and you were not happy with that, et cetera, et cetera, because ‑ ‑ ‑
And ‑ and you ‑ ‑ ‑?‑‑‑Because those were the pages I believe that I was not required to discover.
And is that why you say they were missing, because those were ‑ ‑ ‑?‑‑‑No, no, no, no, no, I ‑ no, sorry.
‑ ‑ ‑ the pages you were not required to discover?‑‑‑No, I'm sorry. There were two issues then on 19 September, as I recall. One was that I had only been asked to discover certain parts of certain affidavits and because I couldn't identify those parts that appeared in one of your books of documents you asked his Honour to make an order that I discover the entire affidavits, and the only copies of the entire affidavits I had were from these green appeal books. So the next day I brought the whole appeal book in with me. That's exactly what I did.
And you heard me say that the affidavit of 12 October 2010 had pages 1 and 2 missing?‑‑‑Yep.
And after that ‑ ‑ ‑?‑‑‑You mean they were missing from the appeal book?
Yes?‑‑‑Okay. Yep.
Well, that's what I said in court. You were in court when I said it?‑‑‑Well, I don't remember everything that you say in court, so are you asking me if I remember that or are you asking me if you actually said it? What's your question?
I identified that there were pages missing in the affidavit in court?‑‑‑Okay. If you say that, you know, I'm not going to argue with you because I can't remember everything that you said.
Well, you remember that, don't you?‑‑‑No. All I remember was that you were not happy that the whole affidavit had not been discovered because Judge Derrick had only asked me to discover certain documents and I was not able to verify, of the pages that you were asking me about, which affidavit belonged to - which pages belonged to which affidavit. That was the issue as far as I remember.
On the next day, when you produced the appeal books ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ I made submissions that there were pages missing from the affidavits in the appeal books. That's why there was another order made on that day?‑‑‑Yep.
Yes?‑‑‑Well ‑ ‑ ‑
And you ‑ ‑ ‑?‑‑‑Because I - well, as I understood - look, I'm not a lawyer. As I understood it, because I couldn't identify the pages you were asking me about as to which affidavit it belonged, his Honour said I should bring the whole affidavit in. That's how I understood it. Maybe I'm wrong.
And after I had identified that there were pages missing you came and took the affidavit from the custody of the court, and over a week later you brought it back?‑‑‑Yes.
And the pages that I had identified that were missing were now in the appeal book?‑‑‑Yep.
And they had on them numbers in the top right-hand corner that showed that they had actually come from documents filed by the defendants?‑‑‑Yep.
And you did that, didn't you?‑‑‑No, I didn't. As I said, I got the appeal books - I didn't even make photocopies of the appeal books, by the way.
Your Honour ‑ ‑ ‑?‑‑‑I haven't made copies of them for anybody. I simply brought them back to the court and gave them back to his Honour's office.
(ts 740 – 748)

Volumes 3 and 4 of the green appeal books, with the loose pages, were tendered into evidence by the defendant and became exhibits 6.1 and 6.2 respectively.
In her demeanour Mrs Frigger was very uncomfortable when she was questioned about the pages which were missing from volume 3 of the appeal book when she was initially cross-examined on 18 September 2014, and which was discussed with counsel before me on 19 September 2014. At the beginning of his cross‑examination senior counsel appeared surprised when Mrs Frigger referred to page 421 and asked to look at volume 3 before continuing his cross‑examination. At that stage Mrs Frigger was confident in her demeanour and even arrogant, responding to questions by asking questions of counsel, but as the cross‑examination proceeded her confidence disappeared and she became uncomfortable, defensive and aggressive.
In my view, based both on her demeanour and the objective evidence, Mrs Frigger was untruthful in her evidence when she denied inserting page 421 of volume 3 of the green appeal book (exhibit 6.1) when she removed the green appeal book from the court and retained it in her custody in order to copy the book. She was untruthful when she said she found page 421 inserted into the back of the book or file and that she reassembled it into the right page order. She was untruthful when she denied she had inserted page 421 in the book while she had the book in her custody.
It is clear from the version of page 421 now included in the green appeal book (exhibit 6.2) that it is in fact a copy of page 1457 of the defendant's second supplementary book of documents dated 12 September 2014, which itself contained the page faxed to the defendant on 6 May 2014 (exhibit 9.14, page 1457). That page number appears on the document contained in volume 3 of the green appeal books (exhibit 6.1) (ts 744).
The only inference to be drawn from this evidence is that, between the appeal books being provided to the court on 19 September 2014 and returned on 10 October 2014, page 1457 of the defendant's second supplementary book of documents was inserted into the green appeal books.
It is submitted by the defendant that the only reasonable inference is that, contrary to her denial, that was done by Mrs Frigger during the week that she had possession of the green appeal books. I accept that submission. In my opinion it is the only rational explanation for the appearance of the extra pages in the appeal book on 13 October 2014 when the trial resumed and Mrs Frigger was further cross-examined.
Mrs Frigger's suggestion (ts 744) that it had been done by the defendant's representatives is, in my opinion, entirely fanciful, particularly given that it was the defendant who identified the missing pages in the first place. It was an attempt by her, when faced with the overwhelming evidence that the missing pages could only have been inserted by her when she had the appeal books in her custody, to deflect the blame from her to the defendant's representatives.
I find that on 19 September 2014, when Mrs Frigger originally produced the two volumes of the green appeal books (exhibits 6.1 and 6.2), the first two pages of her affidavit 12 October 2010 were missing from the copy of the appeal books she had produced. The green appeal books were returned to the court by Mrs Frigger on Friday 10 October 2014 and on 13 October 2014 she was cross‑examined about her affidavit of 12 October 2010. By that time the first two pages of her affidavit were contained in volume 3 of the appeal book (exhibit 6.1). Those two pages have stamped page numbers 421 and 422. Above those two pages are typewritten page numbers 1457 and 1458 which I find are copies of the two pages 1457 and 1458 extracted from the defendant's second supplementary book of documents. Those two pages bear a date 6 May 2013 and a time of 11.27 am from H & A Frigger 08 9364 2393. None of the other pages of the loose pages of Mrs Frigger's affidavit of 12 October 2010 bear that numbering.
In my view she inserted the first two pages of the affidavit of 12 October 2010 which were missing, as identified and confirmed in the discussions with counsel before me on 19 September 2010, to avoid any risk of criticism that she had not produced a full copy of the affidavit in response to the order for discovery. She knew the two missing pages were in the defendant's second supplementary book of documents and copied those two pages and inserted them into the green appeal book.
In summary, I find Mrs Frigger inserted pages 421 and 422 into volume 3 of the green appeal book when she took the appeal books from the court and into her custody. In my opinion Mrs Frigger knowingly and deliberately gave false and untruthful evidence when she denied she inserted page 421 into the green appeal book.

Approach to discovery and false statements in discovery certificates

The plaintiffs' approach to the discovery of relevant documents was manifestly inadequate and unfair to the defendant. Undiscovered documents were produced throughout the trial, without any adequate explanation, and documents in existence that were clearly relevant were never discovered. For example:
(a)Mrs Frigger failed to produce, when called upon to do so, the affidavits the subject of the discovery order by Derrick DCJ (ts 683) and was ordered to do so on 19 September 2014 (ts 690 ‑ 691, 696).
(b)She did not produce them and simply identified them as 'lost' (exhibit 10). She provided no adequate explanation for their having been lost (ts 737).
(c)She was specifically ordered to adequately discover taxation and financial records of CAT (ts 696). She never did so, and offered no adequate explanation for the failure (ts 754).
(d)The inadequacy of the documentation in relation to damages having been identified in her examination-in-chief on 18 September 2014 (ts 606 ‑ 608), new schedules of damage and supporting documents were produced on the sixth day of trial (13 October 2014) being the documents in exhibit 12 (ts 828).
(e)Again, on 14 October 2014, those additional documents were identified as being inadequate and the matter adjourned for counsel to confer (ts 906 ‑ 909).
(f)The following day (15 October 2014), more new documents were produced and a new version of the particulars of damage were provided (ts 917 ‑ 919), being the documents in exhibit 13.
(g)On that day, the inadequacy of the documentation produced, including in relation to fees claimed in relation to Mr Dillon, again became apparent (ts 944 ‑ 948).
(h)The following day (16 October 2014), the final day of the plaintiff's case, yet more documents, being a bundle of invoices from Mr Dillon were provided to the defendant (ts 996, 1005). Counsel advised (ts 996):
I think that the problem is that Mrs Frigger didn't believe they were relevant or that they weren't documents that were her documents, they were Mr Dutton's documents …
(i)The documents were tendered through Mr Dutton who confirmed, in cross-examination, that he had been provided with the documents that morning by the plaintiffs' counsel and that they were not part of records that he brought along to court (ts 1009).
In providing the certificates of discovery, Mrs Frigger certified that the list of documents (exhibit 10) had been served on a particular day knowing that to be false (ts 735 ‑ 736):
Yes. But you were prepared to sign it, even though it was wrong?---I find it but it was - but it was - I don't believe it was served on 3 October.
Well, you would know if you'd served it. Correct?---I would know if I'd served it and I say I did not serve it.
So you would have signed that knowing it to be wrong?---Yes. I signed it knowing it to be wrong.
And that's what you do. You sign things knowing them to be wrong, such as the affidavits?---No. No, just a moment. I'm not going to agree with you. This particular document here, it says:
This list and its attachments was served on the defendant's solicitor on 3 October –
2000 - that is - that is obviously wrong because even though, as I say, I sent it, I don't know when Mr Griffin served it but I don't believe he served it on the 3rd. That's the only thing I can say.
Yes?---You can tell me when you - when it was served on you because I don't know.
No, but you were prepared to sign that you had?---Yep. Because I expected it would be served on the same day.
So again, you would prepare – you would sign something as a matter of fact even knowing it not to be true?---Well, I couldn't get – let that document – I could – sorry, I could not make a copy of that document without signing that piece – that particular part there and put it into the court for instance. I couldn't do it. You have to sign every single thing.
So you would – you would make a false declaration in order to get it into the court, is that what you're saying?---I don't believe that's a false declaration because I expected it to be served on the same day.
But it's clearly – well, you didn't. You've just told us that you knew that Mr Griffin doesn't work on a Friday?---Yep. All I can say is that I expected it to.

Advice as to prospects of success

Mrs Frigger initially gave evidence that Mr Clavey had 'assured' her of success in the matters in which he was acting (ts 516).
Well, did he - but did he tell you at the start about whether you had any prospects, or no prospects of succeeding or not succeeding in the ‑ ‑ ‑?‑‑‑After - after - after I - you know, long discussion, and giving him all the documents, and explaining about the DOCA, that was the - the number one thing was on my mind, he assured me that the opposition to the winding up would be successful, and that the stay application would also be successful, based on these kinds of grounds, that we had reasons to stay it.
She repeated that evidence in cross-examination:
But he never assured you of the success of the application at that time, did he?‑‑‑On the first? On the first meeting? At the first one-hour meeting?
Well, ever?‑‑‑He did assure me because there's numerous emails from him saying that it's going to be successful - numerous.
That it's going to be successful?‑‑‑Yes. Absolutely. And not only that, you look at all his notes that he made to his staff and to himself in relation to his own research and the said that the - the application - sorry; the opposition to the winding up was very strong.
That evidence was implausible, which Mrs Frigger later recognised. It was given after she initially said she could not remember the meeting. While I accept Mrs Frigger might not be able to remember in detail what was discussed at the initial meeting with Mr Clavey, I do not accept she is unable to remember the meeting or what, in a general sense, was discussed. It is another example of Mrs Frigger saying whatever she thought would assist her case with little, if any, regard to the truth or what was actually said or done. It is also another example of her resorting to a failure of memory when the real situation did not suit her because it contradicted or was inconsistent with what she said happened. Ultimately, her evidence amounted to nothing more than that Mr Clavey said that the applications had merit (ts 765 ‑ 766).

The correct version of the DOCA

Notwithstanding that the DOCA described as having been further amended by a meeting of creditors held on 28 August 2009 was annexed to Mrs Frigger's affidavit of 3 March 2010, Mrs Frigger was originally adamant that she had not been provided with that version of the DOCA and that it had not been provided to Mr Clavey (660 ‑ 664):
You swore an affidavit – this is the affidavit in – in support of the suspension application?‑‑‑Correct, yes.
Yes. And the affidavit in support of the suspension application annexed as an annexure to that affidavit your prior affidavit of 3 March, did it not?‑‑‑Yep, that's ‑ ‑ ‑
Do you recall doing that?‑‑‑Yes.
Okay. So that the affidavit in support of the suspension application if you look on page 557 in paragraph 5 says:
I crave leave to rely on my affidavit sworn 3 March 2010. A true copy of that affidavit and its annexures are annexed hereto and marked AF2.
Do you see that?‑‑‑Mm hmm.
So when we go to AF2 which is at 577, I think we get back to where we started which is your affidavit of 3 March 2010, correct?‑‑‑Mm hmm.
And that affidavit itself has annexures marked AF1 through to AF26?‑‑‑Yes.
And all of the annexures to the affidavit prepared by Clavey Legal for you which you swore on 3 March 2010, all of the documents were documents that had been provided by you to Clavey Legal?‑‑‑But I am saying that that version of the DOCA was not what I provided to Mr Clavey because I was never given this version because there had been a material change and it was actually hidden from me because it materially affected the arguments that I was making in relation to the DOCA.
If I can just ask you to answer my question, okay? Don't jump ahead where you think it's going?‑‑‑Okay.
The question I asked you was all of the annexures that were annexed to your affidavit were – were documents that you had supplied to Clavey Legal?‑‑‑Except this – this version of the DOCA I did not supply to him.
Indeed, rather than accept that she might be wrong, Mrs Frigger went so far as to imply that a different version of the DOCA had been included by the defendant in the compilation of the defendant's book of documents:
How did it get to be an annexure to your affidavit if you didn't supply it?---Well, you know, the defendant has provided this book of documents. I didn't have anything to do with this book of documents so I don't know how it has come to be in this book of documents that's been filed in the court. But all I know is that this particular version of the DOCA was never given to me.
Senior counsel for the defendant came back to this issue later and the following exchange occurred:
Again, Mrs Frigger, at page 663 of the transcript you're again asked this question:
And all of the annexures to the affidavit prepared by Clavey Legal for you which you swore on 3 March 2010. All of the documents were documents that had been provided by you to Clavey Legal.
And your answer was:
But I am saying that that version of the DOCA was not what I provided to Mr Clavey because I was never given this version because there had been a material change and it was actually hidden from me.
?‑‑‑It was.
Because it materially affected the arguments that I was making in relation to the DOCA.
?‑‑‑Exactly. That's the point I just made.
Mrs Frigger, that answer was a statement that you had ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ not provided it to Mr Clavey?‑‑‑Exactly, and at the time when you asked me the question I didn't remember providing it to Mr Clavey.
And when I asked you:
How did it get to be an annexure to your affidavit if you didn't supply it?
Your answer was:
Well, you know, the defendant has provided this book of documents. I didn't have anything to do with this book of documents so I don't know how it's come to be in this book of documents that's been filed in the court. But all I know is that this particular version of the DOCA was never given to me.
?‑‑‑Correct.
And the suggestion you were trying to make there was that somehow in preparation of the book of documents a different DOCA had been inserted to the one that was actually in your affidavit?‑‑‑Well, that's the impression that you have got.
That's exactly what you were saying, wasn't it?‑‑‑And ‑ and that is exactly my recollection of what had happened in the retainer.
You would prefer to give evidence to suggest ‑ you are prepared to give evidence to suggest that the defendant, in providing that book of documents, provided an incorrect copy of the affidavit, that accept the possibility that you might be wrong and that, in fact, that DOCA was the DOCA you provided to Mr Clavey, correct?‑‑‑No, I ‑ you ‑ you need to split that question up into smaller parts. What exactly are you trying to ‑ ask me your question again, please, because ‑ ‑ ‑
HERRON DCJ: It is a long question, Mr Quinlan.
QUINLAN, MR: I will. On the last occasion you would not accept that the document that appears at page 831 in volume 3 was the document attached to your affidavit?‑‑‑I would not accept it because I thought it should not have been attached.
And when you were asked to explain how it appeared as an annexure to your affidavit ‑ ‑ ‑?‑‑‑Yep.
‑ ‑ ‑ your suggestion in the passage I just took you to was to imply that the defendant had changed it when they put the document books together?‑‑‑Well ‑ and that ‑ that's the only answer I could give ‑ ‑ ‑
Yes?‑‑‑because at the time ‑ ‑ ‑
So ‑ ‑ ‑?‑‑‑I still say ‑ say I finish my question or you just want to ask me questions?
Asking ‑ you wanted me to ask you the questions one piece at a time?‑‑‑All right. So ask me the second question.
So the only answer you gave at the time was, “The defendant must have done something to the documents when they were compiling their book of documents”?‑‑‑No, I didn't say that. I didn't say that. I said that this particular book of documents has been complied ‑ compiled by the defendants and I don't know how that DOCA got into the ‑ into this book because I had nothing to do with it. Overall my answer is that particular version of the ‑ the DOCA should not have been in my affidavit. That is the ‑ that is the bottom line of the ‑ the evidence that I gave and I still do ‑ and I still stick by that.
And the question that I asked you was, you were prepared, sitting in the witness box, to imply that the defendants, in putting the book of documents together, had included a different version of the DOCA than that which appeared in your affidavit?‑‑‑Absolutely, and the reason for that is ‑ ‑ ‑
Just ‑ just ‑ ‑ ‑?‑‑‑You asked me to ‑ if I implied it and I'm agreeing with you. I did imply it.
You ‑ you ‑ ‑ ‑?‑‑‑I did imply it.
Yes?‑‑‑I've answered your question.
And my proposition to you is that you are prepared to make such an allegation rather than accept the obvious point that you were wrong about it appearing in your affidavit?‑‑‑No, I don't ‑ I don't agree with that.
And, Mrs Frigger, you were wrong about it appearing in your affidavit, weren't you?‑‑‑Well, I was wrong that it was attached to my affidavit but I'm not wrong in saying that it should not have been attached to my affidavit.
The true position, as revealed by a certified copy from the Supreme Court, was that the DOCA in the original book of documents was, without doubt, the version annexed to Mrs Frigger's affidavit of 3 March 2010.
When faced with the true position, Mrs Frigger again dissembled in relation to her previous version of events and her explanation was, both confusing and nonsensical. It was also in my opinion untruthful. The version of the DOCA annexed to her affidavit of 3 March 2010 referred to in her affidavit of 18 March 2010, marked AF-Z, (exhibit 1.90) prepared by the defendant, could only have been obtained by the defendant from Mrs Frigger. Because that version of the DOCA did not suit her purposes Mrs Frigger, even when it must have been obvious to her that the defendant could only have obtained a copy of the DOCA from her, accused the defendant of being dishonest by including a false copy of the DOCA in the court bundle. Mrs Frigger had recently, after the defendant ceased to act, read the DOCA and formed the view that cl 6.13 provided a basis for a set off against the obligation to refund the monies owing in consequence of the Court of Appeal judgment.

Reconstruction and Embellishment

Mrs Frigger clearly sought to reconstruct events in accordance with how she envisaged it might assist her case.
In a number of instances this involved giving evidence that she had a memory of events simply because they were referred to in a document (ts 659):
And what you have done since that time and in preparation for the trial is look through the documents and you've reconstructed your memory that you must have met with him that afternoon because of what it says there? ‑‑‑ Correct. Absolutely. That's what I did.

The defendant seeks indemnity costs orders on the basis of the plaintiffs' improper conduct, or alternatively on the basis of the plaintiffs' unreasonable refusal of the defendant's Calderbank offer.
Alternatively, if I am not prepared to make an order for indemnity costs, the defendant seeks a special costs order.

Jurisdiction to award costs

Pursuant to s 64(3) of the District Court of Western Australia Act 1969 (WA) and s 37(1) of the Supreme Court Act 1935 (WA), a judge of the District Court has a broad discretion to determine the costs to be paid by the plaintiffs to the defendant.
In Glew v Frank Jasper Pty Ltd [2008] WASCA 186 [14] – [16] the Court of Appeal said:
The usual costs order is one for party and party costs. An order for indemnity costs will only be made if there is some special or unusual feature in the case that justified departure from the ordinary practice. The court has jurisdiction to make an indemnity costs order whenever justice requires such an order: see Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190, 191.
Most indemnity costs orders involve circumstances where there has been some element of improper or at least unreasonable conduct on the part of the parties or their legal advisers. See the examples given in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122(S); (2003) 28 WAR 95 [9]. If there has been improper or unreasonable conduct in the conduct of litigation, then an indemnity costs order may be made as a mark of disapproval on the part of the court about that conduct.
However, speaking generally, an indemnity costs order will not be made if the costs which would be recovered by an order for party and party costs or a special costs order would result in the recovery of the successful party's legal costs.
In Flotilla Nominees Pty Ltd v Western Australia Land Authority (2004) 28 WAR 95; [2003] WASC 122 (S) [8] – [9] Pullin J said:
The usual costs order is one for party and party costs. An order for indemnity costs will only be made if there is some special or unusual feature in the case to justify a departure from the ordinary practice. In effect, the court has jurisdiction to make an indemnity costs order whenever justice requires such an order. Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190 at 191; Colgate‑Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233. When the justice of the case does require such an order, then the court will have a discretion as to whether the order should be made.
Many examples can be found where an indemnity costs order has been made. Suffice it to say that most of these involve some element of improper, or at least unreasonable, conduct on the part of the parties or their legal advisors in relation to the case. See the examples given by Sheppard J in Colgate-Palmolive v Cussons (supra) at page 233 and the circumstances referred to in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 and in Unioil's case. Thus, the making of allegations of fraud knowing them to be false, or the commencement of proceedings for some ulterior motive, or in wilful disregard of known facts or the established law, or the making of allegations which ought never to have been made, or the undue prolongation of a case on groundless contentions, and even an unreasonable refusal to accept an offer of compromise, may lead to indemnity costs orders. See Colgate-Palmolive v Cussons (supra) at 233. The creation of false issues by tactical denials or failures to admit the facts may, in the circumstances of particular cases, lead to such an order: Unioil's case. An action commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success, may lead to such an order because such action might be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law. See Fountain Selected Meats (supra).
Further, [25] he said:
Having said all of that, however, there is still a place for indemnity costs orders. It will be appropriate in cases where there has been improper or unreasonable conduct on the part of a party or his legal advisors. An order for an indemnity costs order is a mark of disapproval on the part of the court about the improper or unreasonable conduct of litigation, even though there should not be much difference in the costs recovered under such an order compared with recovery under a properly formulated special costs order. If the conditions warrant an indemnity costs order, it is likely that the Judge making the order will be more inclined to allow an increase in the hourly rates or an increase in the limits. An order detailing those increases should, in my opinion, be made even where indemnity costs orders are made.
See also Ford Motor Company of Australia Ltd v Lo Presti (2010) 41 WAR 1; [2009] WASCA 155 [63] Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69.
The categories in which the court can exercise the discretion to make an order for indemnity costs order are not closed: Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190, 191.
The defendant submits an order for indemnity costs in its favour ought be made because of the plaintiffs' improper conduct on the following grounds:
(a)without reasonable grounds, the plaintiffs alleged fraud on the defendant's part until they abandoned the claim on the second day of the trial ([20] of my reasons);
(b)the plaintiffs' approach to discovery was manifestly inadequate and unfair to the defendant ([139] of my reasons);
(c)Mrs Frigger gave untruthful, misleading and or intentionally false evidence ([101], [138], [143], [148], [169] of my reasons); and
(d)as a result of the plaintiffs' allegation of fraud, the plaintiffs' approach to discovery, and Mrs Frigger's conduct in giving evidence, the action was unduly prolonged.
In their amended statement of claim filed 7 October 2011, the plaintiffs pleaded that the defendant falsely created evidence to support a defence of loss of trust and confidence as its ground for termination of the costs agreement with the plaintiffs; in effect, it was an allegation of an attempt to pervert the course of justice against the defendant. It was a particularly serious allegation of fraud. This pleading was maintained in some form or another through to the eventual trial of the action.
By a minute of proposed re-amended substituted statement of claim dated 25 March 2014, prepared by the plaintiffs' solicitors Peter J Griffin & Co and settled by Mr John Brooksby as counsel, it was proposed that the allegation of fraud be abandoned. In its written submissions the defendant submits it can be inferred that before the minute was finalised and settled by counsel, counsel and the plaintiffs' solicitors considered the evidentiary basis for the fraud allegation, advised the plaintiffs of the basis upon which an allegation of fraud can be made and the requirements for the making of an allegation of fraud, advised the plaintiffs there was no proper basis upon which the allegation could be made and that it ought be abandoned and took the plaintiffs' instructions in that regard. The plaintiffs in their detailed and lengthy written submissions filed in response to the defendant's written submissions do not dispute or challenge the factual basis upon which I am asked to draw the inference, nor do they submit that the inference cannot be reasonably drawn.
I accept the defendant's submission. In my view not only is it, on the balance of probabilities, a reasonable inference, it is the only inference that can be reasonably drawn. In summary, I find the plaintiffs were advised by counsel there was no proper basis upon which an allegation of fraud could be made and that it ought be abandoned. Despite that advice the plaintiffs persisted with an allegation of fraud.
Ultimately, although Peter J Griffin & Co remained on the court record as the plaintiffs' solicitors, Mr Brooksby did not remain as counsel and when the trial proceeded before me other counsel appeared on behalf of the plaintiffs.
As I explained in my reasons [17] – [20] when the trial before me commenced on 15 September 2014, counsel who then appeared on behalf of the plaintiffs applied to filed a re-amended substituted statement of claim in accordance with a minute dated 1 September 2014 signed by the plaintiffs. That minute was not the same as the minute of proposed re‑amended substituted statement of claim dated 25 March 2014 settled by counsel. The minute of 1 September 2014 maintained an allegation of fraud. For the reasons I explained I refused the application to file a re‑amended substituted statement of claim in accordance with the minute dated 1 September 2014. However, during his opening address counsel for the plaintiffs abandoned any allegation of fraud against the defendant and I ordered par 13 of the re-amended substituted statement of claim dated 13 December 2013 be deleted. The allegation of fraud was only abandoned after senior counsel for the defendant made submissions regarding the adequacy of the pleading and how the case had been opened on behalf of the plaintiffs.
In those circumstances the defendant submits that the plaintiffs made the allegation of fraud without any, or any sufficient, supporting evidence and maintained the allegation when they knew or ought to have known there was no reasonably arguable basis for it and in circumstances where no evidence was ever adduced in support of the application. I accept that submission.
In their written submissions filed in opposition to the defendant's application for indemnity costs on the basis of the plaintiffs' improper or unreasonable conduct, the plaintiffs, in summary, submit:
1.That the defendant's conduct in relation to the retainer agreement between the parties and in the course of the litigation is conduct calculated to occasion unnecessary litigation or expense or is conduct involving the doing of a wrongful act in the course of the retainer agreement [15] – [17].
2.That the defendant through its legal advisors has unnecessarily prolonged the length of the litigation and the trial and unnecessarily raised issues by:
(a)opposing the filing and exchange of witness statements; and
(b)cross-examined Mrs Frigger on issues irrelevant to the issues in dispute 'for the sole purpose of the gratuitous character assassination of Mrs Frigger' [12], [78], [82(f)], [87].
Further, the plaintiffs submit:
1.That prior to the trial Ms Zohar and Mr Clavey discussed their oral evidence to ensure it coincided [40].
2.The opposition to the provision of witness statements was for the purpose of the forensic tactics of the defendant to cross‑examine Mrs Frigger on irrelevant issues [41].
3.The defendant's witnesses gave false evidence at trial [65].
4.The defendant ambushed the plaintiffs by refusing to file witness statements [68].
5.Had the plaintiffs not been ambushed by the defendant, the plaintiffs would not have withdrawn their fraud allegations [68].
6.The defendant's approach to discovery was a forensic tactic to conceal the false documentary and oral evidence of Mr Clavey and Ms Zohar [73(f)].
7.Evidence was concealed from the plaintiffs until the last day of the trial [75].
8.Mr Clavey perjured himself in his affidavit of 13 April 2010 [79].
9.The allegations of perjury and fraud had been made out against Mr Clavey and Ms Zohar [102].
10.As a result of the defendant's misconduct there ought to be no order for costs [76].
Therefore, having, at the commencement of the trial through their counsel, withdrawn the allegation of fraud against the defendant, the plaintiffs renew and elaborate upon the allegation of fraud and now make allegations of perjury.
I reject the plaintiffs' submissions. They are without foundation or substance. They are entirely unmeritorious. All that they do is seek to emphasise the plaintiffs' determination to make serious allegations against the defendant (Mr Clavey and Ms Zohar) without any proper basis for such allegations, in circumstances where, in March 2014, they were advised there was no proper basis for making an allegation of fraud and it ought be abandoned, and after the allegation was actually abandoned at trial by counsel for the plaintiffs because, I infer, they were again advised there was no proper basis for the allegation and it must be abandoned. Despite no further evidence being produced or any sensible further basis being advanced to make such serious allegations, the plaintiffs, who are no longer legally represented in this action, persist with the allegations. Those matters underline and, without more, readily make the case for why an order for indemnity costs ought be made, that is, to mark the court's disapproval about the improper and unfounded allegations of fraud and perjury made by the plaintiffs.
In such a case, an indemnity costs order is appropriate: Colgate‑Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233; Flotilla [9]
I am satisfied there was no proper or sufficient basis upon which the allegation of fraud could be made. No evidence was, or has been, produced to support or justify the allegation. Essentially, the only thing relied upon in support of the allegation was Mrs Frigger's unsubstantiated allegation that the defendant's contemporaneous file notes were not prepared when they were purported to be prepared and were created at some later time. It was an allegation entirely devoid of merit and ought not have been made or maintained. Certainly it is an allegation which ought not have been renewed or persisted with. The renewed allegation of fraud and the fresh allegation of perjury are equally lacking in substance and merit.
I am satisfied the plaintiffs by maintaining the allegation of fraud against the defendant after receiving legal advice to withdraw the allegation when they were represented by counsel, Mr Brooksby, and then to renew the allegation after they withdrew it at the commencement of the trial, after receiving further legal advice from counsel, constitutes improper and unreasonable conduct on the part of the plaintiffs. I am satisfied that in those circumstances it is appropriate that an order for indemnity costs be made. Subject to what I will shortly explain in relation to the consequences of the defendant's Calderbank offer dated 21 May 2013, I would have been prepared to make an order that the plaintiffs pay the defendant's costs of the action on an indemnity basis from 25 March 2014 to reflect my disapproval of the plaintiffs' improper and unreasonable conduct in persisting with the fraud allegation after receiving legal advice to abandon the allegation.

Inadequate and unfair discovery

At [139] of my reasons for decision I conclude for the reasons therein set out that the plaintiffs' approach to discovery was inadequate and unfair to the defendant. The plaintiffs' inadequate approach to discovery persisted up to and throughout the trial.
In my reasons for decision I made adverse credibility findings against Mrs Frigger and found she was an unreliable, dishonest and untruthful witness who deliberately falsely represented the financial status of Computer Accounting and Tax Pty Ltd (CAT).
I am satisfied that because of the complexity and variety of issues raised by the plaintiffs and because it was necessary for the defendant to address Mrs Frigger's credibility, the length of the trial was unnecessarily prolonged. It was necessary to consider and deal with a large volume of documentation arising from a multitude of court actions in which the plaintiffs and their former company CAT are or were involved and in which affidavits, in particular by Mrs Frigger, were filed annexing documentation giving in many instances inconsistent, contradictory and implausible explanations. It was necessary for the defendant to spend considerable time preparing for the trial and in preparing to cross‑examine Mrs Frigger on the evidence given by her in this action and in the multitude of other court actions, to reveal inconsistencies in her evidence and to establish that she was not a credible witness. The defendant submits, which submission I accept, that Mrs Frigger's inadequate approach to discovery, the maintenance of the allegation of fraud until after the commencement of the trial, the need to deal with a large volume of documentation filed in a multitude of court actions and to respond to the multiple issues raised by the plaintiffs, unnecessarily prolonged the duration of the trial and caused the defendant to incur considerable unnecessary costs. The defendant submits that in those circumstances an order for indemnity costs ought be made to mark the court's disapproval of the plaintiffs' wholly improper conduct of this litigation. It is submitted an indemnity costs order should compensate the defendant for all of the costs it has incurred in the action except those costs that are unnecessarily incurred or are of an unreasonable amount.
I find the plaintiffs' conduct of the litigation, including their inadequate approach to discovery, was improper and unreasonable and that an order for indemnity costs in favour of the defendant is in such circumstances warranted.

Calderbank offer

By letter dated 21 May 2013 the defendant made an offer to the plaintiffs to settle the action for the sum of $35,000, the terms of settlement, if the offer was accepted, to be formalised in a deed of settlement. That letter set out in considerable detail the basis upon which the defendant considered each of the claims brought by the plaintiffs was bound to fail. In relation to the allegation of fraud it was pointed out there was no evidence to support the allegation.
Further, the defendant's solicitors submitted to the plaintiffs they would be unable to prove CAT's solvency at trial, meaning that all loss flowing from the winding up of CAT was a loss which would have occurred in any event regardless of the involvement of the defendant. In other words even if the defendant was at fault the plaintiffs did not suffer any loss as a result. The defendant expressed the view that the plaintiffs' claims were bound to fail at trial and the offer was made purely on commercial grounds to avoid the costs and inconvenience of a trial. The offer was expressed to be open for acceptance until 4.00 pm on 14 June 2013, the last working day before the trial was originally due to commence on 17 June 2013.
Importantly, the letter concluded in the following terms:
If the Offer is not accepted, then I will refer the Court to this correspondence as to the issue of costs.
This Offer is made pursuant to the principles set out in the decision of Calderbank v Calderbank [1973] 3 All ER 333 and other decisions applying the principles arising from that decision. In accordance with the principles in Calderbank, an application for indemnity costs will be made if the final outcome for you in relation to the claim is not more favourable than that contained in this Offer.
The Offer is open for acceptance until 4.00pm on 14 June 2013. Please communicate the plaintiffs' acceptance in writing by no later than the stipulated time.
As stated above, I reserve the right to refer the Court to this correspondence as to the issue of costs and appropriate indemnity costs.
By letter dated 29 May 2013 the plaintiffs rejected that offer and advised they would accept $430,000 in full and final settlement of its claim against the defendant. The plaintiffs maintained, or at least were not prepared to abandon, the allegation of fraud that the defendant had fabricated evidence.

Legal principles of a Calderbank offer

There is a distinction between whether a party's conduct in the course of litigation should result in an award of indemnity costs on the one hand and whether a party has unreasonably rejected a Calderbank offer on the other: Ford Motor Company [63].
It is well established that, if a party unreasonably rejects a Calderbank offer, the court may consider making an order for indemnity costs in favour of the offeror: Ford Motor Company of Australia Ltd v Lo Presti [16], [23] – [24].
All the relevant facts and circumstances must be considered in determining whether the rejection was unreasonable, including:
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed to the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree's prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed; and
(f)whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it: Ford Motor Company of Australia Ltd [17], [19], citing with approval: Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority [No 2] (2005) 13 VR 435 [25].
The concept of unreasonableness is not to be qualified by words such as manifestly, plainly, or so unreasonable, which suggest a more stringent test: Ford Motor Company of Australia Ltd [28].
Whether rejection was unreasonable is to be assessed at the time the offer was rejected and without the benefit of hindsight. The court should not determine the issue of unreasonableness by adopting the judgment sum ultimately awarded as a yardstick to measure the reasonableness or unreasonableness of rejection of the offer: Ford Motor Company of Australia Ltd [89].
The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted does not mean that its rejection was unreasonable: Ford Motor Company [18].
The party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an order for indemnity costs in its favour: Ford Motor Company [21].
The plaintiffs submit the defendant cannot rely on the Calderbank offer in circumstances where the plaintiffs were unaware what the defendant's oral evidence would be and where the defendant refused to consent to the exchange of witness statements. It was therefore, it is submitted, not unreasonable for the plaintiffs to reject the Calderbank offer.
The plaintiffs also repeat their submission that the defendant's witnesses gave false evidence at trial and therefore it was not unreasonable for the plaintiffs to reject the offer.
Finally, the plaintiffs' submit that the offer contained a condition that if accepted the plaintiffs were required to sign a deed of release on behalf of CAT in the stay application, the winding up application and the DOCA application, which was contrary to s 471A(1) Corporations Act 2001 (WA). Therefore, it is submitted, the offer was incapable of being accepted because it required the plaintiffs to sign a deed of release on behalf of CAT in circumstances where their powers over CAT had ceased. The rejection of the offer, that is, conditional on the release on unrelated proceedings may, it is submitted, be considered reasonable.
I am satisfied that for the following reasons the plaintiffs' rejection of the defendant's Calderbank offer was unreasonable:
1.The offer which was made, 26 days before the trial was due to commence on 17 June 2013 and before the trial dates were vacated on 12 June 2013, was in my view, made at a sufficiently early stage in the history of the District Court proceedings, which if it had been accepted would have avoided the considerable costs incurred by the defendant in proceeding to trial.
2.The offer, which was open for acceptance until 4.00 pm on 14 June 2013, allowed for a sufficient length of time for the plaintiffs to consider the offer.
3.The extent of the compromise offered, which was expressed as a commercial offer, would have met a significant part of the plaintiffs' costs noting that the plaintiffs in their letter of 29 May 2013 rejecting the offer said they were advised by counsel that their legal costs would be in the order of $50,000.
4.The plaintiffs' prospects of success were in my view negligible. In its letter to the plaintiffs, the defendant expressed the view that the claims in the action were bound to fail. In my view at the time that offer was expressed, and without having regard to the decision I have since reached, the defendant's assessment was a realistic one.
5.The letter addressed each of the plaintiffs' pleaded alleged causes of action explaining in detail and at length why the defendant believed the plaintiffs would not succeed at trial. Essentially that letter reflected the defendant's defence to the plaintiffs' causes of action and how the defendant conducted its defence at trial.
6.The terms of the offer were, as I have already observed, set out in considerable detail and in my view were set out in clear terms. I reject the plaintiffs' submission that the offer was incapable of being accepted because it required the plaintiffs to sign a deed of release on behalf of CAT in circumstances where they had no authority to do so. In my view the terms of the offer which referred to the terms of settlement needing to be formalised in a deed of settlement, simply reflected the causes of action pleaded by the plaintiffs in their statement of claim against the defendant.
7.Section 471A of the Corporations Act 2001 (Cth) states that the powers of an officer of a company are suspended during the company's winding up. In my view the defendant's written offer of settlement did not require the plaintiffs to sign a deed of release on behalf of CAT where they were prevented from doing so because of s 471A. All that the Calderbank letter did was identify the various causes of action alleged against the defendant and require the plaintiffs in their personal capacity to release and discharge the defendant from all claims in the action and arising from the action. The defendant's solicitors would clearly have known of the effect of s 471A and would have known the plaintiffs could not have entered into a deed of release on behalf of CAT.
7.Therefore, I reject the plaintiffs' submission that the offer was incapable of being accepted in the terms proposed by the defendant.
8.Finally, the offer foreshadowed that in the event the offer was not accepted and in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333 an application for indemnity costs would be made if the final outcome for the plaintiffs was not more favourable than that contained in the offer.
In my view the defendant's Calderbank offer was made in clear and unambiguous terms. The plaintiffs' rejection of the offer was unreasonable.
Therefore in those circumstances and on this further basis I also conclude the defendant is entitled to an order in its favour for indemnity costs and I accordingly make such an order.
I am satisfied it is proper and reasonable that the plaintiffs be ordered to pay the defendant's costs on an indemnity basis from the date when the Calderbank offer expired on 14 June 2013.

Special costs orders

Finally, the defendant, in the event I am not prepared to make an order for indemnity costs, seeks a special costs order pursuant to s 280(2) of the Legal Profession Act 2008.
The District Court has jurisdiction to make a special costs order by reason of s 280(2) of the Legal Profession Act 2008 (WA) which relevantly states:
(2)… if a court or judicial officer 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, the court or officer may do all or any of the following –
(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;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
Special costs orders can be made either pursuant to section 280(2) of the LPA or pursuant to section 37(1) of the SCA. In either case, before the power will be exercised, the court must form the view that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate, in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the relevant costs determination. Secondly, the court must conclude that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASA 254 (S) [11]; Town of Port Hedland v Hodder [No 2] [2012] WASCA 212 (S) [14].
The court is in a position to form the opinions required under the section as matters of impression rather than science or mathematics: Atwell v Roberts [2013] WASCA 37 (S) [15].
The word unusual in section 280(2) of the LPA qualifies only the difficulty of the matter and not its complexity or importance: Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S) [5].

Applicable scales

The plaintiffs commenced this action in April 2011. The scales applicable to the costs sought by the defendant are therefore:
(a)Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (WA) (2010 Scale) to 31 October 2012;
(b)Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) (2012 Scale) from 1 November 2012 to 30 June 2014; and
(c)Legal Practitioners (Supreme Court) (Contentious Business) Determination 2014 (WA) (2014 Scale) from 1 July 2014.
Clause 3 in each of the 2010 Scale, 2012 Scale and 2014 Scale sets out that the determinations made therein apply to proceedings in the District Court.

Costs determination is inadequate

The defendant submits that, based on the estimates set out in Ms Duthie's affidavit, of 21 August 2015 items 17, 20(b) and 20(d) of the defendant's bill of costs for this action would properly be taxed at amounts higher than those amounts allowed in the scales:

ITEM

DESCRIPTION

AMOUNT ALLOWED

ESTIMATE OF AMOUNT CLAIMED

17

Getting up/preparation of a case

$56,760.00

$130,890.76

20(b)

Senior counsel preparation and first day of trial

$30,195.00

$57,612.50

20(d)

Senior counsel for the second and each successive day of hearing

$77,165.00

$88,550.00

On this basis, the defendant submits that the costs that will be allowed by a taxing officer under the applicable scales will be inadequate.

Unusual difficulty, complexity or importance

Having established that the amounts allowed under the applicable scales are likely to be inadequate, the Court must determine that this inadequacy arises because of the unusual difficulty, complexity or important of the matter.
In its written submissions the defendant submits:
62.The factual matrix of the action was complex. The allegations made by the plaintiffs against the defendant required detailed consideration of the following:
(a)The claim made by the plaintiffs against Professional Services of Australia Pty Ltd and the estate of Martin Banning – Supreme Court, CIV 2265 of 2006;
(b)The appeal by Professional Services of Australia Pty Ltd and the estate of Martin Banning – Supreme Court, CACV 76 of 2008 and CACV 118 of 2014;
(c)Special leave application by the plaintiffs to the High Court – P47 of 2009;
(d)Supreme Court matters involving the winding up of CAT, the liquidator of CAT, the deed of company arrangement of CAT – CIV 2001 of 2009, COR 2 of 2010 and CIV 2765 of 2010; and
(e)Court of Appeal matters involving the winding up of CAT and issues with the liquidator – CACV 51 of 2010, CACV 23 of 2012 and CACV 24 of 2013.
…
69.In these circumstances, the court should be satisfied that the importance of the matter requires the making of a special costs order.
As I have already determined the defendant is entitled to an order for indemnity costs on the basis of the plaintiffs' improper and unreasonable conduct and also on the basis that the plaintiffs' rejection of the defendant's Calderbank offer was unreasonable, it is unnecessary for me to decide whether the defendant is entitled to a special costs order. However, because the defendant's application for special costs orders has been the subject of detailed written submissions by both parties, I propose to briefly consider the application. Also I accept that even if there has been unreasonable conduct by the plaintiffs in the running of their case, an indemnity costs order will not necessarily be made if the costs would be covered by a special costs order. If the conditions warrant an indemnity costs order, an order detailing an increase in the scale limits should still be made: Flotilla [11], [24], [25]
I accept and am satisfied by the materials placed before me by the defendant (Ms Duthie's affidavit of 21 August 2015), and from my knowledge of the matter and how the trial was conducted, and the issues which were canvassed at trial, that the applicable scale limits are likely to be inadequate to meet the costs of the defendant in successfully defending the plaintiffs' claim. I am satisfied that because of the large volume of documentation that the defendant needed to become familiar with, involving the multiple actions in which the plaintiffs were involved and the numerous affidavits sworn by Mrs Frigger at various times, which, as I found in my reasons for decision, contained numerous and significant inconsistencies reflecting adversely on her credibility, that the factual issues were unusually complex or difficult such as to justify an order being made that the defendant be entitled to tax its costs with regard to the limits allowed by the relevant cost scales. I accept the defendant's submissions in this regard.
I am also satisfied for the reasons advanced by the defendant that this matter falls within the meaning of the word 'importance' in s 280(2) of the ALP because of the need to address the serious allegation of fraud made against the defendant, Mr Clavey and Ms Zohar which obviously affected their reputation and credibility. I am satisfied that it was necessary for the defendant to descend into the degree of detail it did and to become familiar with the large volume of documentation because of the serious allegations raised by the plaintiffs against the defendant, Mr Clavey and Ms Zohar, which justifies an order being made that the defendant tax its costs without regard to the limits fixed by the cost scales.

Transcript costs

The defendant also seeks an order pursuant to O 69 r 3 of the Rules of the Supreme Court 1971 (WA) that the expense of obtaining the transcript of the trial and of various directions hearings be made.
I am satisfied it was reasonable and necessary for the proper conduct of the trial and the interlocutory proceedings the defendant obtained the transcript. Accordingly, I make an order the plaintiffs pay the defendant the cost incurred by the defendant in obtaining the transcript both of the trial and of any interlocutory proceedings.
There is one final matter I need to briefly deal with.
After I received each of the parties written submissions and materials pursuant to the orders made by me at the directions hearing on 13 August 2015 as referred to above [3], the defendant by its solicitors wrote to my associate on 16 September 2015 seeking leave to file a further affidavit to be sworn by Ms Duthie in response to the submissions and affidavit filed by the plaintiffs in opposition to the defendant's application. The plaintiffs oppose the defendant being given leave to file the further affidavit.
I have not read the further affidavit of Ms Duthie. As will be evident from these reasons, I have found it unnecessary to consider any further evidence in determining the defendant's application. For the sake of completeness I formally refuse the defendant's application for leave to file the further affidavit of Ms Duthie.

Summary

In summary, I order:
1.The plaintiffs pay the defendant's costs of the action, including reserved costs before 14 June 2013 on a party and party basis to be taxed;
2.The plaintiffs pay all the defendant's costs of the action from 14 June 2013 except insofar as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exclusions the defendant is completely indemnified by the plaintiffs for its costs from 14 June 2013, including the costs of this application for costs.
3.The defendant's costs under items 17, 20(b) and 20(d) be taxed without reference to the limits fixed under the Supreme Court scale of costs.
4.The plaintiffs pay the defendant's costs of obtaining the transcript incurred by the defendant.

ITEM	DESCRIPTION	AMOUNT ALLOWED	ESTIMATE OF AMOUNT CLAIMED
17	Getting up/preparation of a case	$56,760.00	$130,890.76
20(b)	Senior counsel preparation and first day of trial	$30,195.00	$57,612.50
20(d)	Senior counsel for the second and each successive day of hearing	$77,165.00	$88,550.00