Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd - [2018] WASCA 185

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   HANCOCK PROSPECTING PTY LTD -v- WRIGHT PROSPECTING PTY LTD [2018] WASCA 185
CORAM:   MAZZA JA
MITCHELL JA
BEECH JA

HEARD:   12 SEPTEMBER 2018
DELIVERED          :   24 OCTOBER 2018
FILE NO/S:   CACV 103 of 2017
BETWEEN:   HANCOCK PROSPECTING PTY LTD
Appellant
AND
WRIGHT PROSPECTING PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   LE MIERE J
Citation: WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 13] [2017] WASC 286
File Number            :   CIV 1279 of 2001

Catchwords:

Appeal against primary judge's construction of trial judge's costs orders - Where plaintiff awarded general costs of the action subject to a specific order giving the defendant the costs of a particular claim on which the plaintiff failed - Whether primary judge erred in holding that costs associated with evidence relevant to proving damages were payable to the plaintiff under the general order or to the defendant under the specific order - Whether objective or subjective test to be applied to ascertaining the purpose for which evidence was adduced - Construction and interpretation - Whether primary judge erred in concluding that trial judge held that claim for damages in lieu of specific performance was open to be brought and pursued when not claimed in the writ or pleading

Legislation:

Rules of the Supreme Court 1971 (WA) O 66 r 1(3), r 2(a)
Supreme Court Act 1935 (WA), s 25(10)

Result:

Leave to appeal granted
Appeal dismissed

Category: B

Representation:

Counsel:

Appellant	:	Mr J C Giles SC & Mr C E Bannan
Respondent	:	Mr R M Smith SC & Mr T N Owen

Solicitors:

Appellant	:	Corrs Chambers Westgarth
Respondent	:	Clayton Utz

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

Ailakis v Olivero (No 2) [2014] WASCA 127; (2014) 100 ACSR 524
Arthur Young (a firm) v Brunswick NL [1998] VSCA 87; [1999] 1 VR 387
Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Betts v Neilson (1868) LR 3 Ch App 429
Brown v Heffer (1967) 116 CLR 344
Catton v Wyld (1863) 32 Beav 266; 55 ER 105
Della-Vedova v State Energy Commission (1990) 2 WAR 561
Emmerton v Trustees, Executors and Agency Co Ltd (1896) 2 ALR 281
Godden v Alford [1960] WAR 235
Griffin v Mercantile Bank (1890) 11 LR (NSW) Eq 231
Halligan v Lawson (1922) 22 SR (NSW) 501
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29
Jones v Curling (1884) 13 QBD 262
Mahlo v Westpac Banking Corp Ltd [1999] NSWCA 358
McKenna v Richey [1950] VLR 360
Medway Oil and Storage Co Ltd v Continental Contractors Ltd [1929] AC 88
Rawson v Hobbs (1961) 107 CLR 466
Smith v Madden (1946) 73 CLR 129
Tamplin v James (1880) 15 Ch D 215
TM Burke Estates Pty Ltd v PJ Constructions (Vic) Pty Ltd (in liq) [1991] 1 VR 610
Vanmeld Pty Ltd v Cussen (1994) 121 ALR 619
White Constructions (ACT) Pty Ltd (in liq) v White [2005] NSWCA 173
Wicks v Bennett (1921) 30 CLR 80
Willis v Willis & Mackinnon [1922] VLR 453
Willison v Van Ryswyk [1961] WAR 87

Table of Contents

Summary
Factual and procedural background
Pleaded cases

WPPL's Contract Claim
WPPL's Unconscionability Claim
Damages in lieu of specific performance

Closing submissions at trial
The Liability Decision

WPPL's Contract Claim
Specific performance
Unconscionability Claim
Other issues

Damages

The Final Orders Decision
The Construction Decision

Orders made by the primary judge
Was the Alternative Relief Claim open to be and pursued?
Were the Damages Costs partly attributable to the Other Matters?
Costs of common matters

Grounds of appeal
General principles
Ground 2: Whether the issue of damages arose on the Contract Claim

Whether the trial judge held a claim for damages in lieu was open
Whether it was open to the trial judge to award damages in lieu
Whether WPPL disclaimed a claim for damages in lieu
Conclusion on ground 2

Ground 1: Relationship between damages evidence and the Contract Claim
Request for correction of a slip in the Construction Orders

Orders

JUDGMENT OF THE COURT:

Summary

This appeal concerns the construction of costs orders made by Murray J (trial judge) in the primary proceedings. At issue is whether the appellant (HPPL) or respondent (WPPL) is responsible for the significant costs incurred in relation to the quantification of damages in the primary proceedings. Le Miere J (primary judge) was asked to construe the costs orders and, in effect, found that HPPL was responsible for those costs.
HPPL appeals against the decision of the primary judge. For the following reasons, the primary judge correctly construed the costs orders. While leave to appeal should be granted, the appeal should be dismissed.

Factual and procedural background

HPPL and WPPL carried on business as partners, and were parties to a number of partnership agreements. The partnership assets included the partners' interests in mining tenements which were the subject of the Rhodes Ridge Joint Venture (Rhodes Ridge Tenements). The joint venture was the subject of a joint venture agreement and a State Agreement entered into in 1972.[1] At all material times, the agreements provided for the joint venture partners to hold the following legal interests in the Rhodes Ridge Tenements: 25% for HPPL, 25% for WPPL and 50% for a company in the Rio Tinto group.
[1] Effect was given to the State Agreement by the Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972 (WA).
By cl 4 of an agreement between the parties dated 15 February 1984 (1984 Agreement), each partner was given:
the option exercisable at any time during the continuation of the Partnership to require the transfer of the HPPL interests to HPPL and the transfer of the WPPL interests to WPPL.
The 'WPPL interests' were defined to include the partnership's interest in the Rhodes Ridge Tenements.
WPPL gave notice of its exercise of this option on 11 December 1997. A dispute arose as to whether this exercise of the option, or a subsequent purported exercise on 28 June 2000, obliged HPPL to transfer its interest in the Rhodes Ridge Tenements to WPPL.
WPPL commenced the primary proceedings on 2 March 2001. WPPL sought declaratory relief, including a declaration that it had validly exercised the option, and an order in the nature of specific performance of cl 4 of the 1984 Agreement (Contract Claim). The writ and original statement of claim did not expressly seek damages or equitable compensation.[2]
[2] Blue/Green AB 448 - 457.
On 29 August 2005, the primary proceedings were listed for trial from 1 - 28 November 2006, and both parties signed a Certificate of Readiness.[3] Expert reports exchanged prior to trial did not include any evidence of loss or damage suffered by WPPL.
[3] Chronology items 5 - 8; Blue/Green AB 473.
On 8 September 2006, WPPL was granted leave to amend its statement of claim.[4] The amendment introduced what has been referred to as the 'Unconscionability Claim'. The nature of the Unconscionability Claim is referred to at [16] below. On 26 October 2006, the trial dates were vacated and further programming orders were made for a trial commencing on 6 March 2007.[5]
[4] Chronology item 9; Blue/Green AB 475 - 491.
[5] Chronology items 12 - 13; Orders 18 and 19 of the Orders made by the trial judge on 27 September 2006 (Blue/Green AB 515 - 516).
The trial commenced on 6 March 2007, and ran over 61 sitting days between March and the end of August 2007, when the evidence concluded.[6] This was followed by an exchange of written submissions.[7]
[6] Liability Decision [19].
[7] Liability Decision [23] - [27].
The trial judge published written reasons on 5 March 2010 (Liability Decision).[8] His Honour's approach is considered in more detail below. At this point it is sufficient to note that the trial judge found that:
(1)WPPL had validly exercised the option, which was valid and enforceable.
(2)HPPL was obliged to do all things necessary to enable WPPL to have the benefit of the transfer of HPPL's interest in the Rhodes Ridge Tenements.
(3)The court should grant declaratory relief and order specific performance of cl 4 of the 1984 Agreement.
(4)While WPPL's Unconscionability Claim did not arise in these circumstances, it had not been established.
(5)A counterclaim by HPPL was not made out.
(6)A provisional assessment of damages should not be made.
The trial judge invited the parties to prepare and agree a minute of orders giving effect to his Honour's reasons.
[8] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 9) [2010] WASC 44.
Following a further exchange of written submissions, the trial judge made orders on 22 March 2011 (Final Orders). The trial judge published supplementary reasons for making those orders (Final Orders Decision).[9] Orders 1 - 3 of the Final Orders made declarations, to the following general effect:
(1)WPPL had validly exercised the option under cl 4 of the 1984 Agreement.
(2)The partnership's interest in the Rhodes Ridge Tenements remained a 'WPPL interest' as defined in the 1984 Agreement.
(3)The particular tenements comprising the 'WPPL interest' were specified.
[9] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 11) [2011] WASC 74.
Orders 4 and 5 of the Final Orders provided for the specific performance of cl 4 of the 1984 Agreement, while order 6 gave liberty to apply in relation to the implementation of those orders. Orders 7 and 8 provided for the suspension of the enforcement of orders 4 and 5 until further order or the disposition of any appeal. Orders 10 and 11 (Costs Orders), the interpretation of which is the subject of this appeal, provided:
10.Subject to order 11, [HPPL] to pay [WPPL's] costs of the claim and counterclaim, including any reserved costs, to be taxed if not agreed.
11.[WPPL] do pay [HPPL's] costs of [WPPL's] 'unconscionability claim', pleaded at paragraphs 22A - 22M of its statement of claim, to be taxed if not agreed.
Order 12 removed scale limits, while order 13 gave the parties liberty to apply as to the implementation of orders 10 to 12.
HPPL's appeal against the Final Orders was dismissed by this court on 30 October 2012.[10] At the same time, the court dealt with a cross-appeal by WPPL. Relevantly for present purposes, grounds 1 ‑ 10 of the cross-appeal, which challenged the trial judge's findings in relation to the Unconscionability Claim, were dismissed.[11] Ground 13, which sought an order that HPPL pay WPPL's costs of the Unconscionability Claim, was dismissed on the basis that it was predicated on the success of grounds 1 - 10 of the cross-appeal.[12] Except to a limited, and presently immaterial, extent, the cross-appeal was dismissed.
[10] Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 (Appeal Decision).
[11] Appeal Decision [290] - [315].
[12] Appeal Decision [320].

Pleaded cases

WPPL's Contract Claim

After pleading the relevant contractual terms, WPPL pleaded that it served a notice to the effect that it exercised the option contained in cl 4 of the 1984 Agreement.[13] It pleaded that, pursuant to the exercise of the option, the partners were required to transfer the HPPL interests to HPPL and the WPPL interests to WPPL, and to:[14]
do all things necessary including executing documents and joining in the seeking of the consent of any Minister or joint venture party which may be necessary to enable WPPL to have the benefit of the transfer.
[13] Par 19 of the Statement of Claim.
[14] Par 20 of the Statement of Claim.
WPPL pleaded that the partners held for WPPL, and were required to transfer to WPPL, their interest in the Rhodes Ridge Tenements.[15] WPPL pleaded that HPPL had denied those obligations,[16] and so was in breach of the 1984 Agreement.[17] WPPL pleaded that it was ready, willing and able to transfer to HPPL any remaining HPPL interests not already transferred to it.[18] Apart from declaratory relief,[19] WPPL sought an order that HPPL take the necessary steps and execute all necessary documents to transfer the benefit of its interest in the Rhodes Ridge Tenements to WPPL.[20]

WPPL's Unconscionability Claim

[15] Par 21 of the Statement of Claim.

[16] Par 22 of the Statement of Claim.

[17] Par 23 of the Statement of Claim.

[18] Par 24 of the Statement of Claim.

[19] Par 25 - 27 of the Statement of Claim.

[20] Par 28 of the Statement of Claim.

The Unconscionability Claim was expressly pleaded in the alternative; it was only to arise if HPPL was entitled to deny WPPL's entitlement to exercise the option, which HPPL asserted was illegal, unenforceable and of no effect.[21] In broad summary,[22] WPPL alleged that:
(1)It was a term of the partnership agreement that 'each of HPPL and WPPL shall act truly and justly to the other in all transactions relating to the Partnership Business'.[23]
(2)HPPL and WPPL entered into the 1984 Agreement upon the common assumption that the option conferred on each partner the right, exercisable at any time during the continuation of the partnership, to require the transfer of the relevant interests in the partnership assets.[24]
(3)The parties engaged in conduct, including WPPL consenting to various transactions benefitting HPPL, believing the common assumption to be correct.[25]
(4)HPPL's denial of its obligation to transfer its interests in the Rhodes Ridge Tenements to WPPL was a breach of the term referred to at (1) above and its fiduciary duty to its partner, and constituted unconscionable conduct.[26]
WPPL claimed that HPPL's breach of the term referred to at (1) above, and the breach of its fiduciary duty, caused loss and damage to WPPL. WPPL particularised its loss and damage as being represented by the value of its incapacity to assume the sole control over and responsibility for the administration, development and disposal of its interest in the Rhodes Ridge Tenements, including the costs of the proceedings.[27] WPPL sought relief including a declaration that HPPL held its interest in the Rhodes Ridge Tenements on a constructive trust for WPPL,[28] equitable compensation for breach of fiduciary duty[29] and an inquiry as to damages for breach of the term referred to at (1) above and HPPL's breach of its fiduciary duty.[30]

Damages in lieu of specific performance

[21] Par 22C of the Statement of Claim.

[22] A more detailed analysis of the pleading of the Unconscionability Claim is to be found at Appeal Decision [292] - [298].

[23] Par 22E of the Statement of Claim.

[24] Par 22G of the Statement of Claim.

[25] Par 22H, 22I and 22K of the Statement of Claim.

[26] Par 22A and 22L of the Statement of Claim.

[27] Par 22M of the Statement of Claim.

[28] Par 25B of the Statement of Claim.

[29] Par 25C of the Statement of Claim.

[30] Par 25D and par 25E of the Statement of Claim.

WPPL did not expressly claim damages in lieu of specific performance, or plead that it suffered loss and damage as a result of HPPL's alleged breach of cl 4 of the 1984 Agreement. However, there was a prayer for '[f]urther or other order'.[31]
[31] Par 30 of the Statement of Claim.

Closing submissions at trial

The following is a summary of the written closing submissions advanced at trial, so far as they relate to the question of whether damages in lieu of specific performance were claimed by WPPL or whether HPPL understood them to be claimed.
WPPL explained, in effect, that it advanced three cases:[32]
(1)A claim for declarations and specific performance on the Contract Claim.
(2)A claim for a declaration of a constructive trust on the Unconscionability Claim.
(3)A claim for equitable damages on the Unconscionability Claim.
The submissions explained that the second case was advanced in the alternative if (contrary to WPPL's primary case) cl 4 of the 1984 Agreement was invalid, unenforceable or illegal. The third case was advanced as a further alternative if (contrary to WPPL's secondary case) a constructive trust was not the appropriate remedy on the Unconscionability Claim.
[32] Written Outline of Plaintiff's Submissions on Liability and Quantum (Non-confidential Portions only) dated 3 October 2007, par 1194 - 1199 (Blue/Green AB 569).
These closing submissions did not positively indicate that damages in lieu of specific performance were claimed. However, in the course of responding to HPPL's limitations defence, WPPL said that damages in lieu of specific performance were not claimed in the writ but were available under s 25 of the Supreme Court Act.[33]
[33] Written Outline of Plaintiff's Submissions on Liability and Quantum (Non-confidential Portions only) dated 3 October 2007, par 3.10.1(e) (Blue/Green AB 567).
In its closing submissions, HPPL indicated its understanding that it was responding to a claim for damages in lieu of specific performance under s 25(10) of the Supreme Court Act.[34] WPPL's response was that HPPL had misstated WPPL's claim for equitable damages.[35] WPPL said that there was no express claim for damages in lieu of specific performance 'although the court has power to order it whether or not pleaded'.[36]
[34] Defendant's Closing Submissions dated 20 November 2007 volume 4, par 1246 - 1249 (Blue/Green AB 580 - 581) and Defendant's Response to WPPL's Claim for Damages dated 28 November 2007, par 1 - 3.
[35] Plaintiff's Submissions in Reply Chapters 15 - 17 (Non-confidential Portions Only) dated 27 March 2008, par 696 - 698 (Blue/Green AB 593 - 594).
[36] Plaintiff's Submissions in Reply Chapters 15 - 17 (Non-confidential Portions Only) dated 27 March 2008, par 698 (Blue/Green AB 593).

The Liability Decision

WPPL's Contract Claim

The trial judge found that the exercise of the cl 4 option did not, of itself, effect any dealing with the HPPL interests and the WPPL interests. Rather, once the option was exercised, the parties were required to act so as to endeavour to achieve the transfer.[37] It was an implied term of the 1984 Agreement that the parties were required to provide their cooperative endeavour to transfer the HPPL interests and WPPL interests and do all things, including executing documents and joining in the seeking of the consent of the Minister or joint venture party, which may be necessary to enable WPPL to have the benefit of the transfer.[38] In the trial judge's view, what was required to be transferred was whatever assets identified in the schedules to the 1984 Agreement continued to be partnership assets and interests.[39] So construed, cl 4 of the 1984 Agreement was not void for uncertainty and was enforceable.[40]
[37] Liability Decision [153].
[38] Liability Decision [165] - [170].
[39] Liability Decision [217].
[40] Liability Decision [146].
The trial judge rejected the following arguments advanced by HPPL against the efficacy of WPPL's exercise of the option under cl 4:
(1)By acting inconsistently with the maintenance of the option, the parties must be taken to have mutually abandoned reliance upon it.[41]
(2)An estoppel by convention arose from a mutual assumption that the option was unenforceable and would not be relied upon.[42]
(3)The option was illegal, void and of no effect on the basis that it contravened a condition on some of the Rhodes Ridge Tenements which prohibited entry into any arrangement to transfer any direct or indirect interest in the tenement without first obtaining the written approval of the Minister.[43]
(4)The option and its purported exercise was of no legal effect because it involved a breach of a term of the joint venture agreement that WPPL could not dispose of its share without the prior written consent of the other joint venture participants.[44]
(5)The option was rendered void by s 110 of the Property Law Act 1969 (WA).[45]
(6)WPPL was estopped from denying that HPPL was entitled to a 50% share in the proceeds of the sale and development of the partnership's interests in the Rhodes Ridge Tenements, from asserting that cl 4 had effect and from seeking a transfer by way of exercise of the option.[46]
(7)The writ and statement of claim were nullities because the 1984 Agreement was not stamped at the time the primary proceedings were commenced.[47]

Specific performance

[41] Liability Decision [226] - [301].

[42] Liability Decision [302] - [311].

[43] Liability Decision [101], [312] - [356].

[44] Liability Decision [107], [357] - [368].

[45] Liability Decision [372] - [387].

[46] Liability Decision [388] - [481].

[47] Liability Decision [482] - 488.

By reference to the decision in Brown v Heffer,[48] the trial judge observed that specific performance would be granted before required third party consents to the transfer had been obtained. The decree would go no further than directing that the proper steps be taken for the purpose of obtaining those consents and to transfer the interests if consents were obtained.[49]
[48] Brown v Heffer (1967) 116 CLR 344, 350.
[49] Liability Decision [369] - [371].
The trial judge was satisfied that it was appropriate to make an order for specific performance.[50] In considering the exercise of the court's discretion to grant that relief, his Honour observed:[51]
HPPL relies upon specific grounds which it contends disentitle WPPL to relief. It only invokes more general discretionary considerations directed to the proposition that in the circumstances of this case the court should decline an award of specific performance when it refers to the doctrine of 'unclean hands'.
[50] Liability Decision [502].
[51] Liability Decision [503].
The trial judge rejected HPPL's argument that WPPL was disentitled to equitable relief on the discretionary ground that it had breached the rule that a person who seeks equitable relief must come to the court with 'clean hands'.[52]

Unconscionability Claim

[52] Liability Decision [489] - [497].

The trial judge observed that the Unconscionability Claim was raised in the alternative to WPPL's Contract Claim, and on the basis that any one or more of the defences raised in relation to the Contract Claim should succeed. The trial judge found, in effect, that the immediate answer to the Unconscionability Claim was that it did not arise in circumstances where the Contract Claim succeeded leading to an order in the nature of specific performance. However, the trial judge dealt with the Unconscionability Claim on its merits in case he was held to have erred in upholding the Contract Claim.[53] The trial judge ultimately rejected the Unconscionability Claim on a number of grounds.[54]

Other issues

[53] Liability Decision [520].

[54] Liability Decision [521] - [543].

The trial judge considered and rejected HPPL's limitations defence,[55] and counterclaims for breach of s 52 of the Trade Practices Act 1974 (Cth),[56] breach of fiduciary duty[57] and breach of contract.[58]

Damages

[55] Liability Decision [544] - [591].

[56] Liability Decision [593] - [612].

[57] Liability Decision [613] - [634].

[58] Liability Decision [635] - [644].

The trial judge observed that the question of assessment of damages may arise in two ways:[59]
(1)Equitable damages could be awarded under s 25(10) of the Supreme Court Act if there were discretionary grounds for refusing a decree for specific performance.[60]
(2)If WPPL's Unconscionability Claim succeeded but it was not appropriate to make a declaration of a constructive trust as a remedy, equitable damages were sought as alterative relief.[61]
[59] Liability Decision [660].
[60] Liability Decision [661] - [663].
[61] Liability Decision [664] - [665].
The trial judge observed that WPPL claimed compensation for the loss of the commercial chance to sell a 50% interest in the Rhodes Ridge Tenements to Rio Tinto.[62] He referred to the nature of the evidence adduced by the parties in relation to damages, including evidence to the effect that the asset might not be sold for 20 years.[63]
[62] Liability Decision [666] - [670].
[63] Liability Decision [671] - [676].
Regarding the date of assessment of damages, the trial judge observed:[64]
I rather think that, in the circumstances of this case, the appropriate time would be the date of breach of the contract, or the date, which would be the same date, when [HPPL's] refusal to comply with an unenforceable notice was nonetheless properly to be regarded as unconscionable conduct. However, in this case it would not seem to matter if the alternative view, that damages would be assessed as at the date of trial or judgment, was adopted.
[64] Liability Decision [677].
The trial judge referred to the difficult and largely speculative nature of the exercise of making an assessment of damages, and observed that much work would be required for that process.[65] His Honour said:[66]
I have considered whether a provisional assessment should be made, and I have decided that the very considerable delay which has been occasioned in the preparation of this judgment should not be added to by such an undertaking, particularly as, in my view, the performance of the task will not be aided by judgments about the credibility of the witnesses who gave evidence bearing upon the issues, and the resolution of conflicts in the evidence will not be better performed earlier rather than later if, in the very limited circumstances to which I have referred above, an assessment of damages should be required.
[65] Liability Decision [678] - [679].
[66] Liability Decision [680].

The Final Orders Decision

Relevantly for present purposes, the Final Orders Decision dealt with the question of the costs orders which should be made in the primary proceedings.
After referring to O 66 r 1(3) and O 66 r 2(a) of the Rulesof the Supreme Court 1971 (WA),[67] the trial judge noted WPPL's submission that it should not be subjected to an order for the costs of the Unconscionability Claim because:[68]
The evidence relevant to determination of the issue was admissible on, and relevant to, the issues upon which [WPPL] succeeded. No material additional evidence was led or time taken…
The trial judge observed that WPPL made detailed submissions about the evidence and its relationship to the issues raised on the pleadings.
[67] Final Orders Decision [103] - [104].
[68] Final Orders Decision [106].
The trial judge said that there was much discussion on both sides about the substantial time involved in getting up and answering what he referred to as WPPL's 'damages case'. His Honour accepted that, at trial, the overwhelming time and effort and the witnesses led related to the question of damages. The trial judge noted that, in view of his decision to order specific performance, and the way in which the parties framed their cases, he did not find it necessary to make an assessment of damages. The trial judge said that he did not further delay an already long-delayed judgment by making a provisional assessment in case his Honour should, on appeal, be held to have:
(1)erred in making orders in the nature of specific performance of WPPL's Contract Claim rather than ordering that WPPL should have damages in lieu of specific performance; or
(2)alternatively, erred entirely in relation to the Contract Claim and erred in rejecting WPPL's claim for equitable compensation on the basis that the Unconscionability Claim should have been upheld.[69]
The trial judge observed that these were the two scenarios open upon the pleadings and in the way that the issues were fought at trial which would lead to a need to make an assessment of damages.[70]
[69] Final Orders Decision [107].
[70] Final Orders Decision [108].
After referring to part of his discussion of damages in the Liability Decision, the trial judge observed that:[71]
It was open to [WPPL], seeking specific performance in relation to its contractual claim, to advance a case for damages in the alternative in the event that I should hold that equitable relief by way of specific performance should not, for one reason or another, be granted.
[71] Final Orders Decision [108].
The trial judge referred to HPPL's submissions to the following effect. WPPL's damages claim was first expressly pleaded in the context of the relatively late introduction of the Unconscionability Claim. That led to additional expenditure in a range of areas: discovery, confidentiality orders, evidence as to damages and obtaining access to documents filed in Family Court proceedings. HPPL should have all these costs as WPPL failed on the Unconscionability Claim, or alternatively WPPL's costs of the claim and counterclaim should be reduced by 50%.[72]
[72] Final Orders Decision [110] - [111].
WPPL submitted to the trial judge that, however the matter in fact arose, by the time the case got to trial it would inevitably have been the case that it would have sought to make a claim for damages for breach of contract of precisely the same kind as was ultimately presented, as an alternative to the grant of specific performance.[73] After referring to this submission, the trial judge said:[74]
In other words, the alternative of damages to specific performance would have been open and pursued in respect of the loss of the opportunity to obtain [HPPL's] 25% Rhodes Ridge interest and to develop it and deal with it for [WPPL's] profit in due course, subject to any difficulties arising out of the state of the pleadings and the question whether all material facts supporting such a claim had been pleaded. (emphasis added)
[73] Final Orders Decision [111].
[74] Final Orders Decision [112].
The trial judge expressed his reasons for making the Costs Orders in the following terms:[75]
In the final analysis, it seems to me that this is a case where [HPPL's] prima facie entitlement under the rules to have the costs of the failed unconscionability claim is not disturbed by any consideration arising out of the submissions made on either side. A taxing officer would, of course, be required to isolate out those additional elements of costs and disbursements of the kind to which I have referred which may be said to be attributable to the making of the failed claim, in the sense that those costs elements would not have arisen or would not have arisen to the same extent had the unconscionability claim not been made.
That may not be a task without its own difficulty. But I see no reason to suppose that the complexities would be such that at least a broad brush assessment could not be made to enable substantial justice to be done to the parties. In those circumstances, it seems to me to be desirable to make an order in terms of order 11 which allows the award of costs to follow the event of the failure of the unconscionability claim and has the desirable outcome of leaving [WPPL] at hazard in respect of the costs occasioned by the introduction of that claim. (emphasis added).
[75] Final Orders Decision [113] - [114].

The Construction Decision

Orders made by the primary judge

By chamber summons in the primary proceedings dated 21 June 2016, WPPL sought the determination of a number of questions,[76] which were answered by the primary judge. The orders giving effect to those answers (Construction Orders) were in the following terms:
[76] Pursuant to the liberty to apply granted by order 13 of the Final Orders.
In this order, the following terms have the following meanings:
'Alternative Relief Claim' means the claim or potential claim by WPPL for damages or equitable compensation in lieu of specific performance pursuant to the First Claim.
'Amendment Date' means 8 September 2006.
'Cost Orders' means the orders contained in paragraphs 10 to 13 inclusive of the orders made by Murray J on 22 March 2011 (being the subject of reasons for decision published with the medium neutral citation (No 11) [2011] WASC 74).
'Counterclaim' means the counterclaim brought in the proceedings by HPPL.
'Damages Costs' means all costs incurred:
(a)in connection with the quantification of damages or equitable compensation;
(b)with respect to confidentiality orders and the access to documents produced (including by the parties, the Rio Tinto entities and the BHP entities);
including any associated evidence (including expert evidence) and submissions.
'Final Orders Costs' means the costs relating to the preparation of submissions leading to the judgment and order by Murray J delivered on 22 March 2011 (being the subject of reasons for decision published with the medium neutral citation (No 11) [2011] WASC 74).
'First Claim' means the claim pleaded in paragraphs 5 to 22 inclusive and paragraphs 23 and 24 of the Statement of Claim.
'HPPL' means the Defendant, Hancock Prospecting Pty Ltd.
'Other Matters' means the First Claim, the Alternative Relief Claim (if such a claim was open to be brought and was pursued by WPPL in the proceedings) and/or the Counterclaim (that is matters in the proceedings other than the Unconscionability Claim).
'Unconscionability Claim' means the claim pleaded in paragraphs 22A to 22M of the Statement of Claim.
'WPPL' means the Plaintiff, Wright Prospecting Pty Ltd.
---------------------------
In respect of the Chamber Summons filed by the Plaintiff on 21 June 2016 and the agreed questions filed by the parties on 23 August 2016, the Court orders as follows:
1.The Alternative Relief claim was open to be brought by WPPL in the proceedings and was pursued by WPPL.
2.The Damages Costs incurred after the Amendment Date were at least in part attributable to the Other Matters.
3.As a consequence of Order 2 hereof:
a)The costs payable by HPPL to WPPL include any Damages Costs of WPPL that were partly attributable to the Other Matters, such that those Damages Costs of WPPL are payable by HPPL under Order 10 of the Costs Orders.
b)The costs payable by WPPL to HPPL do not include any Damages Costs of HPPL that were partly attributable to the Unconscionability Claim, such that those costs are not payable by WPPL to HPPL.
4.The taxing officer should approach the taxation of costs pursuant to the Costs Orders on the basis that all of the Damages Costs are costs of the claim and are payable by HPPL to WPPL pursuant to Order 10 except in so far as any cost item is shown to be unrelated to the assessment of damages in lieu of specific performance in the sense that the item is not relevant to the assessment of those damages.
5.HPPL to pay WPPL's Final Orders Costs.
6.HPPL to pay WPPL's costs of this application.
The primary judge published written reasons for making those orders (Construction Decision).[77]

Was the Alternative Relief Claim open to be and pursued?

[77] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 13) [2017] WASC 286.

Order 1 of the Construction Orders relates to the claim for damages in lieu of specific performance. Question 1, to which that order related, raised the question of whether that claim was open to be brought and was pursued.
In making order 1, the primary judge noted HPPL's submission that the claim to damages in lieu of specific performance was not available to WPPL at trial because it was not pleaded.[78] Although he did not consider himself bound by it,[79] the primary judge applied the following obiter statement of Murphy JA in Ailakis v Olivero (No 2):[80]
In relation to an award of damages under Lord Cairns Act, it is unnecessary for a plaintiff who applies for such damages at trial to have expressly claimed such damages in the writ or pleading. (citations omitted)
[78] Construction Decision [25].
[79] Construction Decision [27] - [28].
[80] Ailakis v Olivero (No 2) [2014] WASCA 127; (2014) 100 ACSR 524 [173].
The primary judge recognised that the circumstances of a case may lead a judge to decline to award damages in lieu of specific performance where a plaintiff has not pleaded or made such a claim. However, in the primary judge's view, the trial judge did not consider this to be the case. The primary judge therefore concluded that the Alternative Relief Claim was open to be brought by WPPL in the primary proceedings.[81]
[81] Construction Decision [29].
The primary judge then considered whether the Alternative Relief Claim was pursued by WPPL in the proceedings.[82] After referring to the history of pleadings and submissions,[83] the primary judge made the following findings:[84]
(1)WPPL expressly stated that it was open to the court to award damages in lieu of specific performance.
(2)WPPL said that its primary, second and third claims were for relief other than damages in lieu of specific performance.
(3)Damages in lieu of specific performance received little attention in WPPL's extensive submissions.
(4)WPPL did not disclaim a claim for damages in lieu of specific performance.
[82] Construction Decision [30].
[83] Construction Decision [30] - [35].
[84] Construction Decision [36].
The primary judge then observed:[85]
I remind myself that my task is to construe the orders made by Murray J and not to put forward the orders I would have made. Evidence was adduced which was capable of supporting a claim for damages in lieu of specific performance. In the [Liability Decision] Murray J found that it was open to the court to award damages in lieu of specific performance. In its closing submissions WPPL submitted that it was open to the court to award damages in lieu of specific performance. In its submissions HPPL referred to a claim for damages in lieu of specific performance.
[85] Construction Decision [37].
In that context, the primary judge turned to the judgments of the trial judge to see how his Honour viewed the matter. After referring to the passage of the Final Orders Decision referred to at [36] above, the primary judge said:[86]
I find that the Alternative Relief Claim was pursued by WPPL in the proceedings in the sense that WPPL adduced evidence that was relevant and admissible in relation to the assessment of damages in lieu of specific performance and submitted that it was open to the court to award such damages if its claims for declaratory relief, relief in the nature of specific performance, the declaration of a constructive trust and the award of equitable damages did not succeed.

Were the Damages Costs partly attributable to the Other Matters?

[86] Construction Decision [37].

Question 2 asked:
Were the Damages Costs incurred after the Amendment Date wholly attributable to the Unconscionability Claim, or were they at least in part also attributable to the Other Matters?
The primary judge said that the answer to this question depended on what is meant by 'attributable to'. His Honour said that the Damages Costs incurred after the Amendment Date were partly attributable to the Other Matters 'in the sense that they were relevant to and admissible in relation to the Other Matters'.[87] The primary judge found[88] that this was what the trial judge meant by 'attributable to', as that phrase was used in [113] of the Final Orders Decision (which is the first paragraph quoted at [39] above). The primary judge had previously made the following observations in relation to [113] of the Final Orders Decision:[89]
Costs 'which may be said to be attributable to the making of the failed claim' refers to the costs of work done, evidence adduced and submissions made which are relevant and admissible only in relation to the failed claim. His Honour must be taken to have intended that the taxing officer is to determine the matter objectively by considering whether the work done, evidence adduced or submissions made, the costs of which are in contention, were relevant to or admissible in relation an issue in the proceedings other than the failed unconscionability claim. The alternative is that his Honour intended the taxing officer to conduct an inquiry into the parties' subjective intention in doing the work, adducing the evidence or making the submission. That is a wholly inappropriate task for a taxing officer and his Honour should not be taken to have intended the taxing officer to undertake such a task. The meaning I have adopted is entirely consistent with the text of his Honour's reasons. The words 'which may be said to be attributable to' point to an objective inquiry not an inquiry into the subjective reasons for the costs being incurred.
[87] Construction Decision [40].
[88] Construction Decision [40].
[89] Construction Decision [23].

The primary judge therefore made order 2 set out at [40] above.

Costs of common matters

In making order 3 set out at [40] above, the primary judge said:[90]
The meaning of the Costs Orders is that the costs of [WPPL's] unconscionability claim are those costs that relate exclusively to [WPPL's] unconscionability claim; that is, work done, evidence adduced and submissions made that are not relevant to the Other Matters. If work done or evidence adduced is relevant to the damages in lieu of specific performance that the court may have awarded if it had declined relief in the nature of specific performance on discretionary grounds, then it is not wholly attributable to [WPPL's] unconscionability claim. The Damages Costs related to the Other Matters in that the evidence in support of WPPL's claim for equitable damages was relevant to the damages in lieu of specific performance which the court may have awarded if the court had upheld its contractual claim but declined the primary relief sought.
[90] Construction Decision [42].
In explaining order 4 set out at [40] above, the primary judge said:[91]
Murray J said that the assessment of equitable damages and damages in lieu of specific performance would be the same in either case. Therefore, unless it is shown that some item is not relevant to the assessment of damages in lieu of specific performance it should be taken to be costs of [WPPL's] claim.
[91] Construction Decision [43].

Grounds of appeal

HPPL's grounds of appeal contend that the primary judge made two errors.
Ground 1 contends that the primary judge erred in holding that costs associated with evidence relevant, or relevant and admissible, to a claim other than WPPL's Unconscionability Claim were not costs of the Unconscionability Claim for the purpose of order 11 of the Costs Orders.
Ground 2 contends that the primary judge erred by concluding that the trial judge held that a claim for damages in lieu of specific performance was open, and that it was pursued by WPPL.
It is common ground between the parties that leave to appeal is required and no real contest as to whether leave should be granted.
A number of consequential errors are asserted. We accept that the primary judge made the findings alleged in the grounds of appeal, and that if those findings were in error they would infect a number of consequential findings. The critical issue on the appeal is whether the primary judge did err in the respects alleged by the grounds.

General principles

The question which arises in the present case is the proper construction of the Costs Orders. In answering that question, the court will have regard to the reasons for decision and the other surrounding circumstances in which the Costs Orders were made, including the pleadings and the submissions which had been advanced at trial.[92] However, the question remains one of determining the legal effect of the orders which have been made, which must begin with the terms of the orders themselves.
[92] Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58 [28] - [29], [129] - [141].
The form of the Costs Orders is not unusual. A general order, of which order 10 is an example, requires a defendant to pay the plaintiff's costs of an action in which the plaintiff has succeeded. That general order is subject to a specific order, in this case order 11, that requires the plaintiff to pay the defendant's costs of a cause of action on which the plaintiff has failed. A specific order may also qualify a general order in relation to the costs of a particular issue on which the generally successful party has failed. Similarly, a general order may require one party to pay the costs of a claim while a specific order requires the other party to pay the costs of a counterclaim.
Order 66 r 1 and r 2 of the Rules make provision for a specific order to qualify the operation of a general order in this manner. Order 66 r 1(3) provides that:
Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues.
Order 66 r 2(a) provides that, in the absence of any special order:
Where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs shall be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought.
The general effect of general and specific orders of the kind referred to at [59] above is well established. The party with the benefit of the general order should recover the general costs and whatever was reasonably incurred in bringing and maintaining, or defending, the action. The other party should recover the further or increased costs reasonably incurred in relation to the cause of action, issue or counterclaim which is the subject of the specific order.[93]
[93] Smith v Madden (1946) 73 CLR 129, 133 - 134 and cases there cited, Emmerton v Trustees, Executors and Agency Co Ltd (1896) 2 ALR 281; Jones v Curling (1884) 13 QBD 262, 269 - 270; Mahlo v Westpac Banking Corp Ltd [1999] NSWCA 358 [88].
In relation to overlapping costs, a distinction may be drawn between what Dixon J in Smith v Madden referred to as 'mixed items' and 'common items'.
Dixon J referred to mixed items as involving charges for work where a severable part of the work relates to a claim and another severable part relates to a counterclaim.[94] In our view, the same classification can apply in other cases where severable parts of work relate to issues the subject of a general costs order and issues the subject of a specific costs order. In the case of mixed items, the charges are divided into components which relate to the matters the subject of the general order and the matters the subject of the specific order.[95]
[94] Smith v Madden (136).
[95] Smith v Madden (136 - 137).
Common items are those which serve as much purpose in the claims the subject of the general order and the claims the subject of the specific order.[96] There is no apportionment of common items,[97] which are dealt with in accordance with the general order and excluded from consideration under the specific order.
[96] Smith v Madden (137).
[97] Medway Oil and Storage Co Ltd v Continental Contractors Ltd [1929] AC 88; Smith v Madden (136).
In applying general and specific orders of this kind, it is necessary to ascertain, as a matter of substance, what matters belong to the claims the subject of the general order and what matters belong to the claims the subject of the specific order. Pleadings, while relevant, are not to be treated as necessarily decisive.[98]
[98] Smith v Madden (135); Medway Oil (108); Godden v Alford [1960] WAR 235, 237.
In Smith v Madden,[99] Dixon J referred to the costs of witnesses 'whose evidence relates to an issue arising both on the claim and on the counterclaim' as a common item. That approach, which we adopt, involves asking two questions when determining whether costs associated with evidence, and submissions on evidence, are common items. First, does the relevant issue arise, as a matter of substance, on both the claims the subject of the general order and the claims the subject of the specific order? Second, does the evidence associated with the costs relate to the relevant issue?
[99] Smith v Madden (137).
In the present case, it is common ground that the Damages Costs incurred after the Amendment Date were attributable at least in part to the Unconscionability Claim.[100] It is also common ground that, if the Damages Costs are properly classified as common items, those costs are payable to WPPL under order 10, rather than to HPPL under order 11, of the Costs Orders.[101] Adopting the approach of Dixon J in Smith v Madden, the critical issues in this case become:
(1)whether the quantification of damages or equitable compensation arose on WPPL's Contract Claim; and,
(2)if so, whether the evidence as to Damages Costs relates to that issue.
Ground 1 raises the second of these questions, while ground 2 raises the first. It is convenient to deal with ground 2 before turning to ground 1.
[100] Plaintiff and Defendant's Agreed Preliminary Questions for Determination Filed Pursuant to Liberty to Apply dated 22 August 2016 (Supplementary Blue/Green AB 3).
[101] Appeal ts 5, 13; Respondent's Submissions, par 21, 29.

Ground 2: Whether the issue of damages arose on the Contract Claim

By ground 2, HPPL seeks to raise three points:
(1)The primary judge erred in finding that the trial judge held that a claim for damages in lieu of specific performance was open.
(2)As a matter of law, it was not open to the trial judge to award damages in lieu of specific performance because WPPL had not claimed such damages in the writ or statement of claim.
(3)As a matter of fact, WPPL disclaimed any claim for damages in lieu of specific performance, so that the primary judge erred in finding that the claim was pursued.
It is convenient to deal with each point in turn.

Whether the trial judge held a claim for damages in lieu was open

When the trial judge's reasons in the Liability Decision and the Final Orders Decision are read as a whole, it is clear that his Honour did conclude that the claim for damages in lieu of specific performance was open. The reasons as a whole indicate that, but for the fact that judgment had been long delayed and assessing damages would further delay matters, the trial judge would have made a provisional assessment of damages in lieu of specific performance.[102] The trial judge would have done so against the contingency that he was found on appeal to have erred in ordering specific performance rather than equitable damages.[103] It follows from those unqualified findings that the trial judge regarded it as open to award damages in lieu of specific performance if the Contract Claim was established but specific performance was refused on discretionary grounds. But for his Honour's evident concern not to further delay the judgment, he would have assessed damages in lieu of specific performance.
[102] See [107] - [108] of the Final Orders Decision and [660] - [663] of the Liability Decision, summarised at [35] - [36] and [29](1) above.
[103] See [107] - [108] of the Final Orders Decision and [660] - [663] of the Liability Decision, summarised at [35] - [36] and [29](1) above.
HPPL submits that the trial judge reserved the question of whether damages in lieu of specific performance were available in the action. For this purpose, HPPL relies on the last sentence of [112] of the Final Orders Decision, which is emphasised in the quotation at [38] above. We do not accept this submission. In [112] of the Final Orders Decision, the trial judge is doing no more than summarising the effect of a submission which had been advanced by WPPL. Further, the submission concerned whether damages in lieu of specific performance would have been open and pursued in a hypothetical trial at which the Unconscionability Claim was not advanced. Not only did the trial judge not make any determination at this point, but in the passages referred to at [70] above, his Honour concluded that damages in lieu of specific performance were open and pursued in the actual trial.
HPPL also relies on the trial judge's references to the ways in which the question of assessment of damages 'may arise'.[104] It submits that the use of the word 'may' indicates that his Honour was not determining whether the question did arise, and that the word 'may' was being used in the sense of 'might'.[105] There is no merit in this submission. The trial judge used the phrase 'may arise' in relation to both damages in lieu of specific performance and damages on the Unconscionability Claim. The question of assessment of damages clearly would arise in the latter case if the claim for a constructive trust failed. The use of the term 'may' does not indicate any equivocation by the trial judge as to whether the claims were open and pursued.
[104] Liability Decision [660], [664]: see appeal ts 33 - 34.
[105] Appeal ts 33.
As senior counsel for HPPL correctly accepted,[106] our conclusion that the trial judge found that a claim for damages in lieu of specific performance was open is fatal to ground 2. Nevertheless, we will explain why we do not accept the other two points advanced in support of ground 2.

Whether it was open to the trial judge to award damages in lieu

[106] Appeal ts 30 - 31.

Section 25(10) of the Supreme Court Act relevantly provides:
In all cases in which the Court entertains an application for … specific performance of any … contract … the Court may, if it thinks fit, award damages to the party injured … in substitution for such … specific performance, and such damages shall be assessed in such manner as the Court directs.
It is established in this State that damages in lieu of specific performance may be awarded under this provision even though damages are not expressly claimed on the writ or pleading.[107] That approach is consistent with the natural meaning of the statutory text, which refers to damages being available in all cases where the court entertains an application for specific performance of a contract, rather than only those cases in which the relief is expressly claimed. The approach is also consistent with the approach to Lord Cairns Act equivalents in other jurisdictions.[108] We see no reason for departing from this approach, and nothing in recent amendments to the rules is inconsistent with that approach to the operation of s 25(10) of the Supreme Court Act.
[107] Willison v Van Ryswyk [1961] WAR 87, 89 - 90, cited by Murphy JA in Ailakis [173].
[108] See Vanmeld Pty Ltd v Cussen (1994) 121 ALR 619, 621; McKenna v Richey [1950] VLR 360, 371 - 372; Griffin v Mercantile Bank (1890) 11 LR (NSW) Eq 231, 242, 248, 258; Tamplin v James (1880) 15 Ch D 215, 222 - 223; Betts v Neilson (1868) LR 3 Ch App 429, 441; Catton v Wyld (1863) 32 Beav 266; 55 ER 105. Cf White Constructions (ACT) Pty Ltd (in liq) v White [2005] NSWCA 173 [309] - [310].
The point may also be resolved by the application of a more general principle that is 'at the very root of the administration of justice'.[109] Where a plaintiff pleads and proves facts which give rise to a cause of action then, so long as it does so in a manner which is fair to the other parties, it is for the court to find and give the appropriate remedy. The court is not confined to granting relief which the plaintiff has specified.[110] That principle is reflected in s 24(7) of the Supreme Court Act, which empowers the court to grant all remedies to which parties may appear to be entitled to in respect of every legal and equitable claim properly brought forward by them in the cause or matter. In the present case, WPPL pleaded facts constituting a breach of contract by HPPL and loss and damage which can be seen to flow from that breach. The trial judge found that breach of contract was proved, and there was evidence before his Honour as to damages. The fact that damages in lieu were not specifically claimed did not deprive the court of the power to grant that relief if specific performance was refused on discretionary grounds. Doing so would not result in any unfairness to HPPL.
[109] Wicks v Bennett (1921) 30 CLR 80, 100.
[110] Rawson v Hobbs (1961) 107 CLR 466, 485, 493; TM Burke Estates Pty Ltd v PJ Constructions (Vic) Pty Ltd (in liq) [1991] 1 VR 610, 617; Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, 318; Arthur Young (a firm) v Brunswick NL [1998] VSCA 87; [1999] 1 VR 387 [20]. Cf Della-Vedova v State Energy Commission (1990) 2 WAR 561, 572 - 573.
Therefore, in the present case, it was open to the trial judge to award damages in lieu if specific performance was refused on discretionary grounds, despite the absence of an express claim for that relief.

Whether WPPL disclaimed a claim for damages in lieu

The primary judge explained the sense in which his Honour found damages in lieu of specific performance to have been pursued by WPPL. Damages were pursued:[111]
in the sense that WPPL adduced evidence that was relevant and admissible in relation to the assessment of damages in lieu of specific performance and submitted that it was open to the court to award such damages if its claims for declaratory relief, relief in the nature of specific performance, the declaration of a constructive trust and the award of equitable damages did not succeed.
[111] Construction Decision [37].
HPPL takes issue with the proposition that WPPL adduced evidence that was relevant and admissible in relation to the assessment of damages in lieu of specific performance. It does so on the basis that the case was not put. HPPL also takes issue with the statement that WPPL submitted it was open to the court to award such damages if that goes beyond the submissions referred to at [20] - [21] above.[112]
[112] Appeal ts 37 - 38.
In our view, the passage quoted at [78] above is an accurate summary of the position advanced by WPPL at trial. While WPPL's focus was on obtaining relief which would secure it the Rhodes Ridge Tenements, it indicated that damages were open as alternative relief. WPPL never disclaimed damages as a remedy, in the sense of abandoning the claim.

Conclusion on ground 2

In our view, the primary judge did not make the specific errors alleged by ground 2. The primary judge correctly construed the judgments of the trial judge. The primary judge correctly understood that damages for specific performance could be awarded in the absence of a specific claim for that relief in the writ and pleadings and was pursued by WPPL, in the sense his Honour described.
Further, considered as a matter of substance, a claim for damages arose in both the Contract Claim and the Unconscionability Claim. Both claims sought relief that would obtain the Rhodes Ridge Tenements for the benefit of WPPL. The Contract Claim would achieve this by an order for specific performance, and the Unconscionability Claim would achieve this by a declaration of constructive trust. In both claims, damages were alternative relief which would be awarded only in limited circumstances. The trial judge would only be required to assess damages in lieu of specific performance if the Contract Claim was established but specific performance was refused on the discretionary ground that WPPL did not come to the court with 'clean hands'. The trial judge would only be required to assess damages in the Unconscionability Claim if the claim to equitable relief was established but a constructive trust was, for some reason, not considered to be an appropriate remedy.

Ground 1: Relationship between damages evidence and the Contract Claim

As the issue of damages in lieu of specific performance arose on the Contract Claim, the Damages Costs will be a common item if they relate to that issue. Evidence which is admitted at trial, and submissions on that evidence, will relate to an issue if the evidence is relevant to the issue. That is the test which the primary judge correctly applied, and which is reflected in the orders which his Honour made.
HPPL submits that the trial judge's reasons for decision reveal that his Honour intended a different test to be applied. HPPL principally relies on the part of [113] of the Final Orders Decision emphasised in the quote at [39] above. HPPL contends that the reference in order 11 to HPPL's costs of WPPL's Unconscionability Claim is to the costs which would not have been incurred if the Unconscionability Claim had not been made. HPPL contends that this involves a 'but for test', which has both a temporal and a subjective element. HPPL submits that:[113]
(1)it is necessary to ascertain the motivation of the representatives of WPPL at the time particular expenditure was incurred; and
(2)the inquiry as to motivation is subjective, although an inference as to subjective motivation will ordinarily be determined by reference to objective facts such as pleadings and submissions which had been advanced.
[113] Appellant's Submissions, par 30 - 32; appeal ts 6 - 9, 14, 17, 23, 27.

We reject those submissions for the following reasons.
First, [113] of the Final Orders Decision begins by referring to HPPL's 'prima facie entitlement under the rules'. Here the trial judge is referring to Order 66 r 1(3) and r 2(a), set out at [60] and [61] above. In that context, the reference in order 11 to HPPL's costs of the Unconscionability Claim is to the increased costs incurred by HPPL in relation to the Unconscionability Claim. Costs of dealing with evidence that was substantially relevant to both the Contract Claim and the Unconscionability Claim cannot be characterised as increased costs incurred by HPPL in relation to the Unconscionability Claim.
Secondly, the submissions before the trial judge when the Final Orders Decision was made did not invite his Honour to make orders requiring an inquiry into the subjective and temporal elements referred to above. WPPL had submitted that no order should be made to excise costs of the Unconscionability Claim from the costs payable to it.[114] HPPL submitted that the Costs Orders should be made, contending that as a matter of fact an award of damages arose only on the Unconscionability Claim.[115] In the course of doing so, HPPL submitted:[116]
A party who succeeds on one issue and is given the costs of it, while his or her opponent is allowed the general costs of the action, does not recover his or her costs as if the issue had been the only issue at the trial, but is entitled to only such proportionate amount of the costs as is exclusively referrable to that issue: Emmerton v. Trustees, Executors & Agency Co Ltd …, including an allowance for witnesses whose evidence went substantially to that issue: Willis v Wilson & Mackinnon [1922] VLR 453 at 459.
In reply, WPPL maintained its position as to costs, submitting that the question was how costs were increased by the introduction of the issue. WPPL submitted:[117]
What is required, in relation to pre-trial preparation and trial, is an analysis of what additional factual material was led that would not have been admissible on WPPL's other (successful) issues. The question is what proportion of costs were exclusively referable to that issue (Emmerton v Trustees …) or solely related to the issue (Morosi v Mirror Newspapers (1977) 2 NSWLR 749 at 809G).
[114] Plaintiff's Outline of Submissions in Support of an Application for Final Orders and Costs dated 30 July 2010, par 33 - 67 (Blue/Green AB 609 - 619).
[115] Defendant's Outline of Submissions in Relation to Costs dated 2 September 2010, par 89 - 103 (Blue/Green AB 633 - 635).
[116] Defendant's Outline of Submissions in Relation to Costs dated 2 September 2010, par 93 (Blue/Green AB 634).
[117] Plaintiff's Reply Submissions in Support of an Application for Final Orders and Costs dated 24 September 2010, par 21 (Blue/Green AB 669).
That is, neither party submitted before the trial judge that the proposed costs orders would operate by reference to the subjective motivation for incurring costs at the time of expenditure. Rather, the criterion advanced was whether evidence went substantially to an issue (in HPPL's submissions) or was admissible on an issue (in WPPL's submissions), both of which entail an objective evaluation. It is unlikely that the trial judge would have intended to provide for an allocation of costs in a way that departed from the parties' submissions, without making it clear that he was doing so.
Thirdly, as the primary judge correctly recognised,[118] the construction advanced by HPPL would be likely to result in considerable difficulties at taxation. The taxing officer would be required to inquire into the subjective motivation of the representatives of the parties for leading and responding to evidence. If the relevant inquiry is to subjective motivation, then in the context of an order for the payment of HPPL's costs of the Unconscionability Claim, there is no principled reason to confine attention to WPPL's motivation. HPPL's closing submissions noted at [21] above would appear to indicate that it incurred Damages Costs under the subjective belief that WPPL's claim was for damages in lieu of specific performance. Direct evidence from the relevant representatives of both parties as to their subjective motivation would be relevant and admissible on the taxation, which could be transformed into a trial of the issue of fact as to relevant representatives' subjective understandings. It is inherently unlikely that the trial judge intended to potentially require such an inquiry by the taxing officer.
[118] Construction Decision [23].
Fourthly, the trial judge's reference to the taxing officer undertaking a 'broad brush assessment'[119] which would 'enable substantial justice to be done to the parties'[120] is inconsistent with HPPL's construction of the Costs Orders. What is involved in HPPL's construction is not a broad assessment, but rather is an item-by-item assessment involving consideration of the parties' subjective motivation for incurring costs at the time each relevant item of expenditure was incurred.
[119] Final Orders Decision [114].
[120] Final Orders Decision [114].
Fifthly, the trial judge's reference to WPPL's prima facie entitlement to costs of the Unconscionability Claim not being 'disturbed by any consideration arising out of the submissions made on either side'[121] does not point toward a subjective inquiry. The focus of the submissions to which the trial judge referred, as summarised at [106] ‑ [112] of the Final Orders Decision, related only the issue of damages. However, as senior counsel for both parties accepted on appeal,[122] the parties incurred costs, other than Damages Costs, which related only to the Unconscionability Claim. An example is submissions which were addressed to the issue of liability on the Unconscionability Claim. In that context, the fact that the trial judge did not resolve the competing submissions as to damages does not imply that there was to be an inquiry, of the kind HPPL proposes, as to the motivations for incurring those costs. Nor is such an inquiry implicit in the trial judge's acknowledgement that the task required was not 'without its own difficulty'.[123] This may well have been a reference to determining whether any parts of the evidence from witnesses of fact (such as Mr Michael Wright and Ms Angela Bennett) related only to the Unconscionability Claim.
[121] Final Orders Decision [113].
[122] Appeal ts 24 - 25, 41.
[123] Final Orders Decision [114].
Sixthly, HPPL's submissions as to the temporal element of the inquiry do not assist it in the present case. The claim for damages in lieu of specific performance was always inherent in the Contract Claim. The prospect of an award of damages in lieu of specific performance was raised by HPPL's plea as to WPPL's alleged 'unclean hands'. That plea was introduced on 6 October 2006.[124] This was only shortly after the Amendment Date of 8 September 2006, when the Unconscionability Claim was introduced. There was no material change in position when WPPL referred to the availability of such damages in the course of addressing a limitation argument in its closing submissions.
[124] By par 33M(b) of the Further Further Further Re-amended Defence and Counterclaim dated 6 October 2006.
We note that support for a subjective test can be found in cases, mostly from the 19^th Century, dealing with the costs of subpoenas and witness fees. Texts analysing those cases concluded that the 'true rule' was as follows:[125]
(1)The party entitled to the general costs is entitled to the costs of all witnesses properly called by that party, unless it is clear that the evidence would not have been brought if the issue on which that party failed had not been on the record.
(2)The party who gets the costs of an issue is only entitled to the costs of witnesses who would not have been called had the issue on which that party succeeded not been on the record.
While this analysis supports a subjective inquiry as to the reasons for calling evidence, the cases have not been recently applied. The trial judge was not referred to them. Indeed, the cases and texts were not referred to by either party in the appeal, presumably on the basis that they were unaware of them. Moreover, as we have explained, the parties' submissions to the trial judge did not invite a subjective inquiry. In these circumstances, these cases and texts do not assist in discerning the proper construction of the trial judge's orders. To the extent that this consideration is relevant at all, it is substantially outweighed by the other considerations to which we have referred.
[125] A G Saddington, Taxation of Costs Between Parties (Law Book Co, 1919), pp 75 - 76; J Gray, A treatise on the law of costs in actions and other proceedings in the Courts of Common Law at Westminster, (Butterworths, 1853), pp 71 - 82. The Saddington text was referred to by Ferguson J in Halligan v Lawson (1922) 22 SR (NSW) 501, 511. The Gray text was referred to by Cussen J, with whom Schutt J agreed, in Willis v Willis & Mackinnon [1922] VLR 453, 465 -466.
For these reasons, ground 1 has not been made out.

Request for correction of a slip in the Construction Orders

As foreshadowed at the hearing of the appeal, on 17 September 2018 the parties filed a consent notice for an order correcting a slip in the definition of 'Damages Costs' in the Construction Orders. The consent notice proposes orders that would vacate the Construction Orders and replace them with substituted orders which correct the slip. While the general division of this court clearly has jurisdiction to correct a slip of this nature, it is far less clear that the Court of Appeal division has jurisdiction to vary the Construction Orders unless the appeal or a cross-appeal is allowed. We have concluded that neither of the grounds of appeal are established, and there is no cross-appeal. In these circumstances, it is better for the consent notice to be directed to the primary judge rather than dealt with by this court.

Orders

For the above reasons, while we would grant leave to appeal, the appeal should be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ET
RESEARCH ASSOCIATE/ORDERLY TO THE HONOURABLE JUSTICE MITCHELL
24 OCTOBER 2018

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION: HANCOCK PROSPECTING PTY LTD -v- WRIGHT PROSPECTING PTY LTD [2018] WASCA 185 (S)
CORAM:   MAZZA JA
MITCHELL JA
BEECH JA

HEARD:   24 OCTOBER 2018
DELIVERED          :   29 OCTOBER 2018
FILE NO/S:   CACV 103 of 2017
BETWEEN:   HANCOCK PROSPECTING PTY LTD
Appellant
AND
WRIGHT PROSPECTING PTY LTD
Respondent