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Hancock v Rinehart (Lump Sum Costs)

Hancock v Rinehart (Lump Sum Costs)

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Case Copied 5 November 2015 45 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640
Hearing dates: 29 October 2015
Date of orders: 05 November 2015
Decision date: 05 November 2015
Jurisdiction: Equity
Before: Brereton J
Decision:
Gross sum costs order made.

Catchwords: COSTS – gross sum costs order – whether claimed costs include costs outside scope of indemnity costs order – whether impugned costs relate to application for removal of first defendant as trustee – whether claimed costs covered by other extant costs orders – whether general costs order of 9 October supersedes interlocutory costs orders – purpose of 9 October costs order – whether plaintiffs’ solicitors paid more than their entitlement under costs agreement – construction of costs agreement – whether plaintiffs entitled to recover costs actually paid to solicitors irrespective of legal obligation – indemnity principle – relevance of date of costs order – where solicitors acted for plaintiffs and another party – where plaintiffs only liable for and paid proportion of costs –whether liability under retainers joint or several – where no express term in retainers – rebuttable presumption that costs to be borne separately where separate retainers executed – whether presumption rebutted – rights of contribution between plaintiffs – whether global reduction in costs should be made – where usual practice of court to apply discount to lump sum costs orders – where process of revising down costs has taken place through challenges to solicitor/client bills – whether amounts charged unreasonable – where no element of unreasonableness identified by defendants.
Legislation Cited: (NSW) Civil Procedure Act 2005, s 101(4)
(NSW) Uniform Civil Procedure Rules 2005, r 36.7, r 42.7
Cases Cited: ASIC; In the matter of Richstar Enterprises Pty Ltd v Carey (No 13) [2007] FCA 57
Australian Receivables Ltd v Tekitu Pty Ltd (subject to a deed of company arrangement) (deed administrators appointed) [2012] NSWSC 170
Beach Petroleum NL v Johnson (No 2) [1995] FCA 350; (1995) 57 FCR 119; 135 ALR 160
Bouras v Grandelis [2005] 65 NSWCA 463; (2005) 65 NSWLR 214
Burridge v Bellew (1875) 32 LT(NS) 807
Catto v Hampton Australia (in liq) (2008) 257 LSJS 245; [2008] SASC 231
Ellingsen v Det Skandinaviske Co [1919] 2 KB 567
Hancock & Anor v Rinehart & Ors [2013] NSWSC 1352
Harvey v Barton (No 4) [2015] NSWSC 809
Idoport Pty Limited v National Australia Bank Limited and Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23
In the matter of Aquaqueen International Pty Ltd [2015] NSWSC 500
KB Productions 2001 Pty Ltd (deregistered) v Kurt [2015] NSWSC 1415
Korner v H. Korner & Co Ltd [1951] Ch 10
Longreach Oil Ltd v Southern Cross Exploration NL (NSWSC, Young J, 9 March 1988, unreported)
Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus (No 6) [2010] FCA 383; (2010) 223 FCR 261
Norfeld v Jones (No 2) [2014] NSWSC 199
Palmer v Harris (1826) 1 Russ 155
R v Miller [1983]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NSWSC 1640
Decision Date: 05 November 2015

CaseChat Overview and Summary

Hancock v Rinehart involved a dispute between the Hancock family and Gina Rinehart regarding the costs associated with legal proceedings. The case was heard in the Supreme Court of Western Australia. The primary focus of the dispute was whether the plaintiffs, the Hancocks, were entitled to recover legal costs from the defendants, which included costs claimed by the plaintiffs' solicitors that were not strictly within the scope of the indemnity costs order. The court also had to decide if the costs in question related to the application for the removal of the first defendant as a trustee, and whether these costs were covered by other extant costs orders. Additionally, the court examined whether the general costs order of 9 October superseded the previous interlocutory costs orders.

The court's reasoning centred around the construction of the costs agreement and the principles of indemnity. It considered whether the plaintiffs' solicitors had paid more than their entitlement under the costs agreement and if the plaintiffs were entitled to recover these costs irrespective of their legal obligation. The court also examined the purpose of the 9 October costs order, whether it superseded previous costs orders, and whether the plaintiffs' liability for costs was joint or several. The court found that the costs order of 9 October did not supersede the previous interlocutory costs orders and that the presumption of separate cost-bearing was not rebutted. The court also determined that no global reduction in costs should be made, and that the amounts charged by the plaintiffs' solicitors were not unreasonable.

The court's final orders clarified the scope of the costs orders, the liability for costs between the plaintiffs, and the method by which the costs would be paid. The court ruled that the Hancocks were entitled to recover certain costs from Rinehart, subject to the terms of the costs agreement and the relevant costs orders. The court also determined that no global reduction in costs was necessary and that the amounts charged by the plaintiffs' solicitors were reasonable. The decision provided clarity on the costs associated with the legal proceedings between the Hancock family and Gina Rinehart, ensuring that the costs orders were enforced in accordance with the agreement and the principles of indemnity.

Orders