Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth
[2014] WASC 223
•1 JULY 2014
HUNTINGDALE VILLAGE PTY LTD (Receivers & Managers Appointed) -v- CORRS CHAMBERS WESTGARTH [2014] WASC 223
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 223 | |
| Case No: | LPA:31/2013 | 14 MAY 2014 | |
| Coram: | MASTER SANDERSON | 1/07/14 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Both matters stayed | ||
| B | |||
| PDF Version |
| Parties: | HUNTINGDALE VILLAGE PTY LTD (Receivers & Managers Appointed) SILKCHIME PTY LTD (Receivers & Managers Appointed) VANNIN PTY LTD (Receivers & Managers Appointed) WARWICK ENTERTAINMENT CENTRE PTY LTD (Receivers & Managers Appointed) PARAGON APARTMENTS PTY LTD (Receivers & Managers Appointed) CORRS CHAMBERS WESTGARTH |
Catchwords: | Practice and procedure Application to stay proceedings pending determination of related proceedings Turns on own facts |
Legislation: | Nil |
Case References: | Carey v Korda & Winterbottom [2010] WASC 362 Huntingdale Village Pty Ltd (Receivers & Managers Appointed) v Mallesons Stephen Jaques [No 2] [2014] WASC 60 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- LPA 4 of 2010
- SILKCHIME PTY LTD (Receivers & Managers Appointed)
VANNIN PTY LTD (Receivers & Managers Appointed)
WARWICK ENTERTAINMENT CENTRE PTY LTD (Receivers & Managers Appointed)
PARAGON APARTMENTS PTY LTD (Receivers & Managers Appointed)
Plaintiffs
AND
CORRS CHAMBERS WESTGARTH
Defendant
Catchwords:
Practice and procedure - Application to stay proceedings pending determination of related proceedings - Turns on own facts
Legislation:
Nil
Result:
Both matters stayed
Category: B
Representation:
Counsel:
Plaintiffs : Mr A Metaxas
Defendant : Mr B Dharmananda SC & Mr I Dallen
Solicitors:
Plaintiffs : Metaxas & Hager
Defendant : Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Carey v Korda & Winterbottom [2010] WASC 362
Huntingdale Village Pty Ltd (Receivers & Managers Appointed) v Mallesons Stephen Jaques [No 2] [2014] WASC 60
1 MASTER SANDERSON: By chamber summons filed 19 February 2014 Corrs Chambers Westgarth the respondent in these proceedings (Corrs) applied for a stay in LPA 31 of 2013 (LPA 31) pending determination of other related proceedings. In LPA 4 of 2010 (LPA 4) which are related proceedings the solicitors for the plaintiffs (the Companies) filed a chamber summons on 14 May 2014. By that summons the Companies applied to lift a stay of the proceedings presently in place. The parties conferred and sensibly agreed both summons should be heard together. These reasons deal with both applications.
2 In relation to both chamber summons Corrs relies upon the affidavits of Ian Leslie Dallen filed in LPA 31 and sworn on 7 November 2013, 7 March 2014 and 17 April 2014. In LPA 4 the Companies rely upon an affidavit of Norman Philip Carey sworn 8 May 2014.
3 The written submissions filed by the parties followed an unusual format. The submissions filed by Corrs occupied 14 pages and 57 paragraphs. Effectively it was Corrs' arguments put in written form. Counsel for the Companies confined his written submissions to taking issue with certain matters in certain paragraphs but not commenting on the bulk of Corrs' submissions. This was a very effective approach to the applications. These reasons largely reflect the submissions made on behalf of Corrs and pick up the comments put on behalf of the Companies.
4 The factual and procedural background to these applications can be summarised in this way. On 24 January 2006 ING appointed Mr Winterbottom, Mr Zohar and Mr Korda (who are collectively described as 'the Receivers') as receivers of various entities in the Westpoint Corporate Group including the Companies. On 24 January 2006 Mr Zohar telephoned Mr Emmett of the Corrs Sydney Office and instructed Corrs to act on behalf of the Receivers in respect of the receivership of the Westpoint entities including the Companies. Thereafter the Receivers entered into costs agreements with Corrs in respect of the receiverships of the Westpoint entities comprising identical letters of engagement, schedules of rates and expenses and Corrs' engagement terms.
5 Mr Carey is a director of the Westpoint entities including the Companies. Mr Carey has caused several proceedings to be brought either by himself or through the Companies seeking to rely on his residual powers as a director of the Companies against the Receivers, ING and Corrs. These are referred to as the 'Carey proceedings'. An overview of the Carey proceedings is set out in Mr Dallen's first affidavit: see pars 18 - 72. For present purposes these do not need to be detailed. It is sufficient to say the Carey proceedings including LPA 4 which is an application for taxation of a large number of invoices rendered to the Receivers by Corrs in respect of work done in carrying out the receivership of the Companies. The Carey proceedings, except for LPA 4 and LPA 31, are currently being case managed by Le Miere J.
6 One of these actions is COR 147 of 2010 (COR 147). In this action, among other things, Mr Carey seeks orders that the Receivers produce to him for inspection financial records in relation to the receivership of the Westpoint entities being in the main the records of the Receivers' fees and Corrs' fees. From time to time the Carey proceedings have been adjourned pending the outcome of COR 147. Mr Carey's purpose in seeking the financial records in relation to the receiverships of the Westpoint entities in COR 147 was to advance the Companies' case in COR 223 of 2009 (COR 223). Le Miere J held this was not an improper purpose: see Carey v Korda & Winterbottom [2010] WASC 362. After various judgments in COR 147 and following the production to Mr Carey of financial records in relation to the receiverships of the Westpoint entities COR 223 is being progressed as part of the case management of the Carey proceedings by Le Miere J. It is Corrs' position at least three of the Carey proceedings raise issues which overlap with those raised by LPA 31 and LPA 4. The Companies do not accept that is so. This difference of opinion between the parties is at the heart of these two disputes.
7 Of the three actions said to overlap the first is Huntingdale Pty Ltd v Perpetual Nominees in COR 223. This action was commenced by the Companies against the Receivers, ING and Westpoint Corporation (in liq) on 4 September 2009. Corrs allege in their written submissions until 22 August 2013 the re-amended statement of claim named Corrs as the sixth defendant and pleaded various claims against Corrs. The Companies point out Corrs was never joined as a party to the action. The Companies say the document was filed in order to set out the case that was sought to be made against Corrs if Corrs were joined as a party.
8 Corrs do acknowledge on 22 August 2013 the Companies filed a substituted re-amended statement of claim which removed the potential claims against Corrs as Corrs was no longer sought to be joined as a party. Although there was disagreement between the parties as to the actual mechanism what is clear is now Corrs are not now and never have been a party to the proceedings in COR 223. There was an application to join them as a party; that application was not pursued.
9 The current re-amended statement of claim was filed on 3 April 2014. Counsel for Corrs summarises that pleading in this way. The Receivers as agents for the borrowers and guarantors (including the Companies) told Mr Emmett of the Corrs Sydney Office that they wished to retain Corrs to act for the Receivers in respect of the receivership of the Westpoint entities and Mr Emmett agreed to act. The Receivers as agents for the borrowers and guarantors (including the Companies) executed a pro forma engagement letter which Corrs prepared in Sydney and which incorporated Corrs' engagement terms. This is referred to as 'the CCW Costs Agreements'.
10 The CCW Costs Agreements specified the scope of legal services to be provided as 'general advice'. After January 2006 the Receivers as agents for the borrowers and guarantors (including the Companies) instructed the Corrs Perth Office from time to time to provide legal services to the Receivers in respect of various pleaded matters. The Receivers' instructions were for legal services other than or in addition to the provision of 'general advice' by Corrs. At all material times pt 13 of the Legal Practice Act 2003 (WA) (the 2003 WA Act) corresponded with pt 3.2 of the Legal Profession Act 2004 (NSW) (the 2004 NSW Act) and applied to the instructions given by the Receivers to Corrs.
11 It is alleged the law of Western Australia applied to the CCW Costs Agreements and the law of Western Australia applied to the legal services provided by Corrs in Western Australia to the Receivers after 24 January 2006. It is also pleaded each instruction from the Receivers to the Corrs Perth Office and the agreements of Corrs to perform work in respect of those instructions was a separate retainer of Corrs by the Receivers. Accordingly the Companies say Corrs was entitled to be paid at the rates in the Western Australian costs scales as applicable from time to time and not at the rates in the CCW Costs Agreements.
12 In addition to the plea of general retainer it is also pleaded the Receivers retained Corrs on a number of occasions when the retainer is to be inferred from the issue and payment of invoices. By way of relief it is said there should be an inquiry into the conduct of the Receivers including into whether payment at Corrs' rates was a breach of Receivers' duties, whether payment of invoices rendered by Corrs was a breach of Receivers' duties and whether Receivers paid Corrs' excessive and/or unreasonably incurred legal costs. If upon inquiry it is found the Receivers did overpay for one reason or another then they should repay monies to the Companies for loss and damage suffered.
13 It is further alleged the Receivers ought to have discharged the security interest and terminated the receivership by 23 January 2008. On that basis a claim is made for an order that the Receivers 'repay to each plaintiff all remuneration and expenses charged in respect of the relevant receiverships for the period commencing 23 January 2008 or such other date as the court deems appropriate'.
14 Based upon this summary of the pleadings in COR 223 Corrs' say three inter-related issues are raised. First, it will be necessary to identify the retainer for work that was done and determine whether it was a general retainer or whether there were specific retainers for particular work. Secondly, there is the question of the applicable law to the retainer or retainers. Thirdly, there is the question of whether or not the Companies were liable for the work done so that they were a 'party charged' or 'a third party payer' under the 2003 WA Act or the Legal Profession Act 2008 (WA). The Companies do not challenge the summary of the pleadings. Nor could they. A close examination of the pleadings shows the summary put forward by Corrs and which I have adopted is accurate. What the Companies do say is it is not an issue in COR 223 whether the Companies were a party charged or a third party payer. Further they say the first two issues identified by Corrs are to be resolved as between the parties in COR 223 and this does not include Corrs.
15 Corrs go on to assert there is an overlap in respect of the relief claimed being the repayment of allegedly excess monies paid to Corrs which would follow the taxation sought in LPA 4 and LPA 31. The Companies deny there is any overlap. They point out the relief sought in COR 223 is an inquiry into the conduct of the Receivers. If it is found upon inquiry that the Receivers paid excessive legal costs to Corrs then the court may order the Receivers to pay damages to the plaintiffs. The Companies say there can be no order against Corrs in an action to which Corrs are not a party. If Corrs are required to tax their costs and these costs are disallowed to some extent then Corrs would be ordered to repay the monies paid to the Receivers because it is the Receivers who paid the costs. Whatever remedy is granted to the plaintiffs they cannot recover twice.
16 In my view the fact that Corrs are not a party in COR 223 is not relevant. When it comes to taxing bills of costs in LPA 31 and LPA 4 the taxing officer has to have some basis upon which to conduct the taxation. That is to say costs are either taxed pursuant to an agreement entered into by the parties or they are taxed in relation to the relevant scale. If there is a contest between the parties as to the basis upon which the taxation is to be conducted that issue has to be resolved before the taxation can take place. If LPA 31 and LPA 4 were to proceed the taxing officer would have to make a decision. There is a real prospect that decision might be at odds with the decision reached by a judge when hearing COR 223. That to my mind is an outcome which must be avoided.
17 In LPA 4 the Companies seek an order Corrs provide the Companies with itemised bills pursuant to s 231(3) of the 2003 WA Act and an order extending the time for the Companies to request a taxation of these itemised bills pursuant to s 232(3) of the 2003 WA Act. The application concerned all bills of costs rendered by Corrs in relation to the receiverships from 24 January 2006 'to date'.
18 On 24 July 2012 the Companies filed a minute of amended application seeking orders that Corrs file itemised bills of costs in respect of all costs rendered to the Companies 'from 24 January 2006 to date'. The application was again amended on 1 August 2012 seeking orders that Corrs file itemised bills of costs pursuant to s 237(1) of the 2003 WA Act in respect of all costs rendered to the Companies 'from 24 January 2006 to date'. In the alternative it was sought to extend time within which the Companies were entitled to request taxation pursuant to s 232(3) of the 2003 WA Act.
19 The application to amend was not dealt with at that time and awaited a court ordered mediation of all the Carey proceedings. That mediation did not result in a settlement. The amended application remained pending when LPA 4 was stayed. However the solicitor for the Companies informed the court at the first return date of LPA 31 on 8 November 2013 that the Companies did not intend to proceed with the amendment application pending in LPA 4 and instead would pursue LPA 31.
20 On 18 April 2013 I heard the Companies appeal pursuant to O 60A r 4 of the Rules of the Supreme Court 1971 (WA) against the case management directions made by Registrar S Boyle in LPA 4. On 2 May 2013 I dismissed the Companies' appeal and ordered LPA 4 be stayed until final determination of COR 223 and CIV 1940 of 2010 (CIV 1940) or further order of the court. An application for leave to appeal from that decision was dismissed. On 22 June 2010 the Companies commenced CIV 1940 seeking an order that the CCW Costs Agreements be set aside. Initially the order was sought under s 317(3) and s 328 of the 2004 NSW Act. The originating summons was subsequently amended so that the order was sought in the inherent jurisdiction of the Supreme Court of New South Wales. On 21 February 2011 the plaintiffs were ordered to file a statement of claim on or before 3 March 2011. That was not done. As part of Le Miere J's case management regime these proceedings have been adjourned from time to time most recently on 24 March 2014.
21 LPA 31 was commenced after the stay of LPA 4. In LPA 31 the Companies apply as 'third party payers' for assessment of the costs of the Corrs' invoices rendered to the Receivers over the period from February 2010 to June 2013 in respect of the receiverships of the Westpoint entities. LPA 31 is currently adjourned sine die pending the outcome of this application.
22 The Companies point out CIV 1940 has been dormant for over three years. In their submissions they say the action will be discontinued.
23 Corrs say the court has already exercised its inherent jurisdiction to stay proceedings in a closely related action: see Huntingdale Village Pty Ltd (Receivers & Managers Appointed) v Mallesons Stephen Jaques [No 2] [2014] WASC 60. Corrs' submits consistent with that decision these proceedings ought be stayed.
24 The Companies acknowledge the same parties are the applicants in LPA 31 and CIV 1791 of 2012 (CIV 1791). However they say it is necessary to analyse the facts in the Mallesons' decision. Relevantly they say the Receivers engaged Mallesons to act for them in COR 147 and charged the Receivers $403,286. The Receivers paid Mallesons costs as billed. The parties in the action contended they were 'third party payers' entitled to require the bills rendered by Mallesons to be assessed. Mallesons applied to have the application set aside, summarily dismissed or stayed on the grounds the Receivers and not the plaintiffs had paid Mallesons' bills.
25 Le Miere J dismissed Mallesons' application. Mallesons then abandoned the defence of the action and the Receivers sought to be and were joined as the second defendants. Le Miere J then stayed the application on the basis the costs were incurred in the period between 25 October 2010 and 19 May 2011. His Honour said if the plaintiffs in COR 223 were successful in their contention that the Receivers should have retired in January 2008 then the bills would not need to be taxed and the Receivers would simply have to reimburse the plaintiffs the money paid to Mallesons. The Companies say the issues which were the basis for the say in the Mallesons' decision do not apply to the Corrs bills rendered before 24 January 2008 in LPA 4.
26 Whatever view is taken of the Mallesons' decision it does not seem to me to alter the fundamental position - that is, the proper basis for taxation must be determined before the taxation can proceed. That should be done in COR 223. That conclusion seems to me to be inescapable. It was why I stayed the proceedings in LPA 4. It is to be remembered my decision in that case was an appeal from a decision of Registrar S Boyle. The learned registrar did not feel she was in a position to tax the bills until the legal basis upon which the bills were to be taxed was determined. If LPA 31 was now to proceed there is in my view no doubt the taxing officer would find him or herself in the same position.
27 Accordingly I am satisfied this action ought be stayed. Furthermore I can see no basis upon which the stay in LPA 4 ought be lifted. The circumstances have not materially changed. Accordingly I would dismiss the Companies' chamber summons in that action.
28 I will hear the parties as to the form of orders and as to costs.
2