Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth

[2011] WASC 44

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   HUNTINGDALE VILLAGE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) -v- CORRS CHAMBERS WESTGARTH  [2011] WASC 44

CORAM:   LE MIERE J

HEARD:   ON THE PAPERS

DELIVERED          :   3 MARCH 2011

FILE NO/S:   CIV 1826 of 2010

BETWEEN:   HUNTINGDALE VILLAGE PTY LTD (RECEIVERS AND MANAGERS APPOINTED)

SILKCHIME PTY LTD (RECEIVERS AND MANAGERS APPOINTED)
VANNIN PTY LTD (RECEIVERS AND MANAGERS APPOINTED)
WARWICK ENTERTAINMENT CENTRE PTY LTD (RECEIVERS AND MANAGERS APPOINTED)
PARAGON APARTMENTS LTD (RECEIVERS AND MANAGERS APPOINTED)
Plaintiffs

AND

CORRS CHAMBERS WESTGARTH
Defendant

Catchwords:

Practice and procedure - Costs - Recovery of costs by solicitor litigant - Costs against non-party - Indemnity costs - Interlocutory application

Legislation:

Legal Profession Act 2008 (WA), s 280
Rules of the Supreme Court 1971 (WA), O 4 r 5
Supreme Court Act 1935 (WA), s 37

Result:

Plaintiffs' application for interlocutory injunction should not be dismissed
Plaintiffs and Mr Carey should pay defendant's costs of the hearing on 12 August 2010

Category:    B

Representation:

Counsel:

Plaintiffs:     No appearance

Defendant:     No appearance

Solicitors:

Plaintiffs:     Metaxas & Hager

Defendant:     Corrs Chambers Westgarth

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

Atlas v Kalyk [2001] NSWCA 10

Bertini v Lepitan (No 2) [2010] WASC 86

Bosco v Solomon Brothers [2006] WASC 307

Cachia v Hanes (1994) 179 CLR 403

Dobree v Hoffman (1995) 14 WAR 408

Dobree v Hoffman (1996) 18 WAR 36

Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95

Guss v Veenhuizen (No 2) (1976) 136 CLR 47

Khera v Jones [2006] NSWCA 85

Knight v FP Special Assets Ltd (1992) 174 CLR 178

London Scottish Benefit Society v Chorley, Crawford & Chester (1884) 13 QBD 872

Mark Anthony Korda and David John Winterbottom As Receivers and Managers of Westpoint Corporation Pty Ltd (In Liq) (Receivers and Managers Appointed) and the companies listed in Schedule 1 v Silkchime Pty Ltd (Receivers and Managers Appointed) atf Silkchime Unit Trust [2010] WASC 155

Miliangos v George Frank (Textiles) Ltd [1976] AC 443

Naidoo v Williamson [2008] WASCA 179

UTSA Pty Ltd (in liq) v Ultratune Australia Pty Ltd (1997) 1 VR 667

1. LE MIERE J:  Corporations in the Westpoint Group (the Charged Corporations) granted a charge in favour of Perpetual Nominees Ltd (Perpetual) as security for monies advanced pursuant to a loan.  The Charged Corporations defaulted under the loan.  On 24 January 2006 Perpetual appointed, pursuant to the charges, receivers and managers of the Charge Corporations (the Receivers).

2. In application COR 223 of 2009 in this court the plaintiffs assert various claims against Perpetual and the Receivers.  The plaintiffs assert that the defendants (Corrs) has an interest in the subject matter of COR 223 of 2009 in so far as in that action the plaintiffs assert that the legal fees incurred and paid by the Receivers to Corrs have been incurred and paid by the Receivers in breach of the duties owed by the Receivers to the plaintiffs.  Further, the plaintiffs say that in COR 223 of 2009 the Receivers will not be able to prove the reasonableness of the legal fees incurred and paid by the Receivers to Corrs without the Receivers adducing evidence from the partners and employees of Corrs as to the services provided by those partners and employees to the Receivers after their appointment.  The plaintiffs say that there is a reasonable apprehension that Corrs has charged grossly excessive fees for the services it has provided to the Receivers.

3. On 3 June 2010 the plaintiffs commenced this action.  The plaintiffs claim an injunction restraining Corrs from acting for the Receivers in COR 223 of 2009.  On 17 June 2010 the plaintiffs caused to be issued a chamber summons seeking an interlocutory injunction restraining Corrs from continuing to act as solicitors for the Receivers in COR 223 of 2009.  Directions for the hearing of the application for interlocutory injunction were made on 1 July and 5 August 2010.  The application for the interlocutory injunction came on for hearing on 12 August 2010.  Meanwhile, on 11 August 2010 the plaintiffs had amended their statement of claim in COR 223 of 2009.  Counsel for Corrs informed the court that the Receivers, who are defendants in COR 223 of 2009, were going to move to disallow the amendments.  That led to an adjournment of the plaintiffs' application for an interlocutory injunction against Corrs.  Corrs applied for an order that the plaintiffs pay the costs of the hearing on 12 August.  After hearing argument I delivered extempore reasons in the following terms:

   The plaintiffs have amended the statement of claim in COR 223 of 2009.  The amendment was filed and served yesterday, 11 August 2010.  The amendments are significant for the plaintiff's application for an injunction to restrain Corrs from acting in this action. 

   It is an important matter in the course of this application precisely what allegations are made in the statement of claim against Corrs.  The amended statement of claim makes amendments which make direct allegations against Corrs.  In particular, the particulars to paragraph 25 allege that costs were unreasonably rendered by Corrs. 

   They further allege that a particular set of costs rendered by Corrs were excessive for the services provided and a second set of costs rendered by Corrs were excessive for the services provided.  The defendants move to disallow the amendments to the statement of claim. 

   Counsel for the plaintiff is not in a position to deal with that motion today and cannot be reasonably expected to deal with that motion today.  Accordingly, the application for injunction must be adjourned to be dealt with or to be resumed after the motion for disallowance has been determined.

   The defendants move that the plaintiffs should pay the costs of today and should pay the costs of the hearing on 5 August thrown away by reason of the amendment.  Counsel for the defendants, on reflection, accepts that the any costs thrown away on 5 August is a matter that cannot be determined today and that that matter would have to be determined after the disallowance motion has been dealt with.

   That leaves the question of the costs for today.  In my opinion those costs should be paid by the plaintiffs.  The adjournment today comes about by reason of the amendment made to the statement of claim. 

   Counsel for the plaintiffs submits that the amendment is made in accordance with the directions earlier made by the Court and the plaintiffs were exercising their right under that direction.  However, the causative factor in the matter being adjourned today is the change in the pleading which has been brought about by the amended statement of claim. 

   The precise allegations made by the plaintiffs against Corrs are of central importance in determining this application for an injunction.  The allegations have significantly changed by reason of the amendment.  That amendment was made after the application had been brought, after the matter had been adjourned to a hearing today, and made on the eve of today's hearing.  In my view that is the cause of the adjournment and for that reason the plaintiffs should pay costs. 

4. On 12 August 2010 I did not make any orders to give effect to my reasons for decision in relation to the costs of the hearing on 12 August because Corrs wished to seek an order that Mr Carey and the plaintiffs should be jointly and severally liable for Corrs' costs of the hearing on 12 August 2010 and Corrs wished to consider applying for a further order that the costs be fixed and payable forthwith.  I made directions for the filing and service of submissions in relation to costs.

5. This matter again came on for hearing on 31 August 2010 together with COR 223 of 2009 and related matters CIV 1094 of 2008, CIV 1940 of 2010 and COR 147 of 2010.  I then gave further directions for the filing of affidavits and submissions in relation to the costs of the plaintiffs' application for an interlocutory injunction.

Orders sought by Corrs

1. Corrs now seek the following orders:

   1.The plaintiffs' application for an interlocutory injunction by chamber summons of 17 June 2010 (Interlocutory Application) be dismissed.

   2.Mr Carey jointly and severally with the plaintiffs, pay the defendant's costs of the Interlocutory Application on an indemnity basis.

   3.Costs to be taxed if not agreed, to be paid forthwith.

   4.Corrs be entitled to recover solicitor's costs in any taxation.

2. Alternatively, Corrs seek orders that:

   1.Mr Carey, jointly and severally with the plaintiffs, pay the defendant's costs of the Interlocutory Application up to 23 August 2010 on an indemnity basis.

   2.Costs to be taxed if not agreed, to be paid forthwith.

   3.Corrs be entitled to recover solicitor's costs in any taxation.

3. The plaintiffs oppose the orders sought by Corrs and seek the following order:

   1.The plaintiffs' costs thrown away on 12 and 31 August 2010 be paid by Dr Bell SC, Mr J Thompson and the defendant, such costs to be taxed and paid forthwith.

   Dr Bell and Mr Thompson appeared as counsel for Corrs on 12 August and 31 August 2010.

Plaintiffs' application for interlocutory injunction should not be dismissed

1. From on or about 20 May 2010 Corrs asserted that the Interlocutory Application was premature because the plaintiffs had foreshadowed amendments to the statement of claim.  On the first return on 1 July 2010 Corrs submitted that the application to restrain Corrs from acting was premature and the statement of claim in COR 223 of 2009 made no application against Corrs.  The Interlocutory Application was brought on for hearing on 5 August 2010 and then was adjourned until 12 August 2010 for two purposes.  The first was for the plaintiffs to lead evidence in response to evidence filed by Corrs by way of affidavits of Mr Van Brakel sworn 3 August 2010 and 4 August 2010.  The second was for counsel for the plaintiff to make his reply.

2. Counsel for Corrs submits, and I accept, that the matter was run on 5 August 2010 on the basis of the statement of claim in COR 223 of 2009 dated 9 September 2009.  Corrs submitted that the pleadings in COR 223 of 2009 contained no allegations against Corrs and this meant there was no valid basis for an injunction.  On 11 August 2010 the plaintiffs amended the statement of claim in COR 223 of 2009.  That led to the adjournment of the Interlocutory Application on 12 August 2010.  On 24 August 2010 the plaintiffs filed a further re-amended statement of claim in COR 223 of 2009, sought to join Corrs as a defendant and sought express relief against Corrs.

3. Corrs concedes that the Interlocutory Application has not been determined on its merits but submits that the proceedings can and should be dismissed. Corrs referred to O 4A r 5 of the Rules of the Supreme Court 1971 (WA) which provide that a case manager for a CMC list matter may make any interlocutory order the court considers just and may make any enforcement order (meaning an order as to costs) that the court considers just. Corrs submit that the amendments to the statement of claim in COR 223 of 2009 have fundamentally altered the basis of the plaintiffs' Interlocutory Application. The Interlocutory Injunction was fought on one basis, in which COR 223 of 2009 was an action against the Receivers and included no claims against Corrs. It has now been changed to an entirely different pleaded claim. Corrs submits that the application should be dismissed with the appropriate cost consequences. Further, Corrs submit that the change in the basis for the injunction proceedings against Corrs means that, by their conduct, the plaintiffs have been taken to have abandoned their existing application.

4. I do not accept that the matters referred to by Corrs are a proper or sufficient reason for dismissing the Interlocutory Application.  The plaintiffs wish to proceed with their application for an interlocutory injunction.  They submit that there are adequate grounds for the grant of the injunction.  Corrs say that the grounds or reasons for the interlocutory injunction now relied upon by the plaintiffs are fundamentally different from those advanced when the application was first made.  That may be a reason for requiring the plaintiffs to pay Corrs' costs incurred for work done but wasted as a result of the plaintiffs' changing the basis or reasons for the grant of an interlocutory injunction but it is not a proper or sufficient reason for dismissing the application.

Costs of the Interlocutory Application

1. I have found that the application should not be dismissed at this stage.  It follows that no order should be made at this time that the plaintiffs pay the defendant's costs of the Interlocutory Application.

Costs of the Interlocutory Application up to 23 August 2010

1. Corrs say that the plaintiffs have fundamentally changed the basis or reasons for the grant of an interlocutory injunction.  The application for an interlocutory injunction is now based upon the plaintiffs' statement of claim of 24 August 2010 in COR 223 of 2009.  Corrs say that that is a fundamentally different case than the plaintiffs' case based on the unamended statement of claim.  The plaintiffs submit that is not so.  The plaintiffs submit that the amended statement of claim of 11 August 2010, and the further amended statement of claim of 24 August 2010, did not result in any fundamental change to the basis on which the plaintiffs sought the interlocutory injunction.  The plaintiffs submit that the proposition advanced by Corrs that the amended statement of claim of 11 August 2010 was the first time that the statement of claim in COR 223 of 2009 alleged overcharging by Corrs was fallacious.

2. Whether or not the plaintiff should pay Corrs' costs of the Interlocutory Application incurred prior to 23 August 2010 should be determined after the Interlocutory Application has been determined.  At that time the court will be know whether the Interlocutory Application has been wholly or partly successful or unsuccessful and on what grounds.  That is the appropriate time for determining whether or not any or all of the work done by Corrs prior to 23 August 2010 has been wasted as a result of the plaintiffs' amendment of the statement of claim in COR 223 of 2009.

Costs of 12 August 2010

1. On 12 August 2010 I determined that the plaintiffs should pay Corrs' costs of the hearing on that day.  I have set out above my reasons.  The plaintiffs now submit that:

   In hindsight, any costs order against [the plaintiffs] on that day would have been unjust because of the finding in COR 173 of 2009. In COR 173 of 2009 the Receivers applied for directions under s 424 of the Corporations Act 2001 (Cth) in relation to matters arising in connection with the performance of their functions and powers as receivers.

2. On 25 June 2010 I delivered reasons for making directions under s 424 of the Corporations Act: Mark Anthony Korda and David John Winterbottom As Receivers and Managers of Westpoint Corporation Pty Ltd (In Liq) (Receivers and Managers Appointed) and the companies listed in Schedule 1 v Silkchime Pty Ltd (Receivers and Managers Appointed) atf Silkchime Unit Trust [2010] WASC 155. At [88] I said:

   The defendants' claims in COR 223 of 2009 allege unreasonable remuneration charged by the Receivers and expenses unreasonably incurred.  The issues in relation to the reasonableness of the costs of the receivership will involve identifying the work done by them and their legal advisors and assessing the reasonableness of the charges for the performance of that work. 

3. The plaintiffs say that the reasonableness of the costs of the work undertaken by the receivers' legal advisors, Corrs, is a matter that has always been in issue in COR 223 of 2009 or at least the defendants in COR 223 of 2009 and Corrs should have known that the reasonableness of the charges for the work done by Corrs is in issue.

4. On 12 August 2010 I said that the plaintiffs should pay Corrs costs of the day because the matter was adjourned that day by reason of the plaintiffs amending their statement of claim in COR 223 of 2009 the previous day.  I remain of that view.  The plaintiffs should pay Corrs costs of the hearing on 12 August 2010.

Corrs entitlement to solicitor's costs

1. Corrs seek an order that it is entitled to recover solicitor's costs in any taxation.  It would have been unusual for a primary judge to make such an order, as the assessment of costs is usually left to the Taxing Officer, from whom an appeal may be brought in particular circumstances.  However, it is now the practice of judges in the CMC list to fix costs in appropriate cases.  In this case it is appropriate to determine whether or not Corrs are entitled to recover their costs incurred in acting as their own solicitor.  The plaintiffs submit that they are not entitled to such costs.

2. The general rule is that the costs which a litigant may recover are confined to money paid or liabilities incurred for professional legal services and do not include compensation for time spent by a litigant who was not a lawyer in preparing and conducting his case:  Cachia v Hanes (1994) 179 CLR 403. In London Scottish Benefit Society v Chorley, Crawford & Chester (1884) 13 QBD 872 the English Court of Appeal held that a solicitor who successfully acted for himself in litigation was entitled to the same costs as if he had employed a solicitor, except for items such as obtaining instructions or attendances, which were unnecessary because he was his own client. This has become known as the 'Chorley rule' or the 'Chorley exception'.

3. In Dobree v Hoffman (1995) 14 WAR 408 Ipp J ruled that solicitors who represent themselves in litigation should be regarded no differently to lay persons who represent themselves in litigation. His Honour's ruling was affirmed on appeal in Dobree v Hoffman (1996) 18 WAR 36, where Parker J with whom Rowland and Steytler JJ agreed, stated that as the Chorley exception was a rule of practice as opposed to a rule of law, there remains scope for the court, subject to any statutory prescription, to establish rules of practice that best suit the circumstances and practice within the court's jurisdiction. Parker J held that nothing in the court rules expressly or impliedly supported the Chorley exception. This led the court to hold that a firm of solicitors that acted for one of its partners in litigation in which the partner was a litigant was not entitled to its profit costs. Dobree v Hoffman has been applied by the Supreme Court of Western Australia:  see Bosco v Solomon Brothers [2006] WASC 307 [7] (Sanderson M) and Bertini v Lepitan (No 2) [2010] WASC 86 [34] ‑ [38] (Mazza J).

4. Corrs submits that I am bound to follow the 'well‑established rule of practice' that a litigant solicitor is entitled to professional costs and outgoings even though the solicitor is acting on his or her own behalf.  There are two steps in the Corrs argument.  First, Corrs submits that the High Court has recognised and accepted the Chorley exception:  Guss v Veenhuizen (No 2) (1976) 136 CLR 47; Cachia v Hanes.  Secondly, Corrs submits that the doctrine of stare decicis requires a single judge of the Supreme Court of Western Australia to follow the decisions of the High Court and not that of the Full Court in Dobree v Hoffman.

5. I do not accept Corrs' submissions.  Where a single judge of this court is faced with a decision of the Court of Appeal and a later conflicting decision of the High Court, as a general rule the High Court decision will be followed.  However, where one of the parties argues that the ratio of a decision of the Court of Appeal is in conflict with the ratio of an earlier decision of the High Court, the duty of a single judge of this court is to follow the decision of the Court of Appeal.  In Miliangos v George Frank (Textiles) Ltd [1976] AC 443 Lord Simon of Glaisdale said at 478:

   It is the duty of a subordinate court to give credence and effect to the decision of the immediately higher court, notwithstanding that it may appear to conflict with the decision of a still higher court.  The decision of the still higher court must be assumed to have been correctly distinguished (or otherwise interpreted) in the decision of the immediately higher court.

1. Corrs submit that Dobree v Hoffman has not been followed in New South Wales, Victoria, Queensland or by the Federal Court of Australia.  The New South Wales Court of Appeal in Atlas v Kalyk [2001] NSWCA 10 found that the statements of the majority of the High Court in Guss were not obiter and accordingly it was obliged to follow the High Court in Guss and apply the Chorley exception and not follow Dobree v Hoffman.  Atlas v Kalyk was applied by the New South Wales Court of Appeal in Khera v Jones [2006] NSWCA 85. Corrs submit that it is notable that Ipp JA, who had been the trial judge in Dobree and in that capacity concluded that Guss was not a binding precedent, was a party to the decision of the New South Wales Court of Appeal in Khera which considered that Guss was binding and did not follow Dobree v Hoffman.  However, in Khera v Jones Mason P and Ipp JA followed Atlas v Kalyk and not Dobree v Hoffman because the New South Wales Court of Appeal in Atlas v Kalyk had unanimously held that Guss obliged the court to follow the Chorley exception despite the decision of the Western Australian Full Court in Dobree notwithstanding that 'were the matter uncluttered by authority we would favour the approach in Dobree'.

2. In any event, as a single judge of the Supreme Court of Western Australia it is my duty to follow the decision of the Full Court in Dobree v Hoffman notwithstanding contrary decisions by the New South Wales Court of Appeal or judges of the Supreme Courts of other states.  This is not a case where the High Court decisions in Guss and Cachia v Haynes were overlooked by the Full Court in Dobree v Hoffman.  The Full Court considered those two authorities in the course of its decision.  I am bound to follow the Full Court decision.  As Lord Simon of Glaisdale said in Miliangos:

   Any other course is not only a path to legal chaos but in effect involves a subordinate court sitting in judgment on a decision of its superior court.  That is contrary to law (478).

3. I am bound to follow the decision of the Full Court in Dobree v Hoffman.  Accordingly, no profit costs should be allowed to Corrs for work done by their partnership.

4. At the hearing on 12 August 2010 Corrs were represented by senior and junior counsel.  The plaintiffs submit that counsel's fees are profit costs and should be excluded under the Dobree rule.  I do not accept that submission.  In Dobree counsel's fees were not permitted because the practitioner acted as counsel.  In Dobree Parker J referred with apparent approval to the decision of the High Court in Guss that a solicitor litigant is entitled to have his bill taxed to the extent of actual disbursements for filing fees and counsel's fees (at 44). Corrs are entitled to the costs of counsel in appearing on 12 August 2010.

Claim that Mr Carey pay defendant's costs

1. The defendant submits that the plaintiffs are each impecunious.  They are in receivership.  None of them could provide the undertaking as to damages required from a party requesting an interlocutory injunction.  Mr Carey provided that undertaking in his personal capacity.  The defendant submits that it should be entitled to its costs from the true plaintiff:  Mr Carey.  Mr Carey has utilised his residual powers as a director of the plaintiffs to bring and maintain this litigation.

2. Section 37 of the Supreme Court Act 1935 (WA) empowers the court to make an order for costs against a person who is not a party to the action: Knight v FP Special Assets Ltd (1992) 174 CLR 178; Naidoo v Williamson [2008] WASCA 179 [39] (Steytler J) referring to UTSA Pty Ltd (in liq) v Ultratune Australia Pty Ltd (1997) 1 VR 667, 708.

3. In Knight v FP Special Assets Ltd Mason CJ and Deane J, with whom Gaudron J agreed, recognised a general category of case in which an order for costs should be made against a non‑party. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non‑party has played an active part in the conduct of the litigation and where the non‑party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Their Honours said (at 17 CLR 193) that where the circumstances of a case fall within that category, an order for costs should be made against the non‑party if the interests of justice require that it be made.

4. The evidence establishes that Mr Carey has played an active part in the conduct of the litigation and as an interest in the subject matter of the litigation.  Counsel for the plaintiffs did not contend otherwise.  However, counsel for the plaintiffs submitted that there is no evidence that the plaintiffs are impecunious.  Counsel submitted that the fact that the plaintiffs are in receivership proves nothing about their net asset position.  Counsel further submitted that Silkchime has an asset which is effectively unencumbered and worth in excess of $7 million.

5. The plaintiffs have no funds with which to pay any costs order in favour of Corrs.  The assets of the companies are in the hands of the Receivers.  To the extent that the Receivers are appointed to limited assets of Silkchime, St George Bank Ltd has appointed receivers and managers to the property of Silkchime.  The evidence is that any costs order against the plaintiffs will not be satisfied.

6. Mr Carey is the effective litigant conducting the litigation by the plaintiff companies.  He is a director of, and ultimately a shareholder, in all of the companies.  Mr Carey has provided a personal undertaking as to damages in this matter on behalf of the plaintiffs.  It is just that Mr Carey should pay the Corrs' costs personally.

Time for payment of costs

1. I have found that Corrs' costs, that is disbursements and counsel fees, of the hearing on 12 August 2010 should be paid by the plaintiffs and Mr Carey jointly and severally.  Corrs seek an order for the costs to be paid forthwith.  As a general rule, where an order for costs is to be made against a party in interlocutory proceedings, the costs will be fixed and ordered to be paid forthwith or by a particular date:  Consolidated Practice Directions 4.7.1(3).  The parties have not submitted that I should fix the costs.  It is appropriate that the general rule that interlocutory costs be ordered to be paid forthwith should apply in this case.

Indemnity costs

1. Corrs seek an order that their costs be paid by the plaintiffs and Mr Carey on an indemnity basis, that is, all costs incurred by Corrs except to the extent that they are of an unreasonable amount or have been unreasonably incurred.  As I have found that Corrs are not entitled to profit costs, the relevant costs are disbursements in the form of filing fees and counsel fees.

2. In Western Australia there is less need for an indemnity costs order than elsewhere.  This is because the Legal Profession Act 2008 (WA) s 280(2) empowers the court to order, as between party and party, an amount exceeding the scale if it considers that scale costs are inadequate because of the unusual difficulty, complexity or importance of the matter. In Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [13] Pullin J noted that where a properly formulated special costs order is made there should be little need for an indemnity costs order to try and recover costs incurred above the scale. However, where the behaviour of a party has unjustifiably increased the costs incurred by the other party an order for indemnity costs may be justified. In Flotilla Nominees Pty Ltd v Western Australian Land Authority Pullin J explained:

   It will be appropriate in cases where there has been improper or unreasonable conduct on the part of a party or his legal advisors. An order for an indemnity costs order is a mark of disapproval on the part of the court about the improper or unreasonable conduct of litigation, even though there should not be much difference in the costs recovered under such an order compared with recovery under a properly formulated special costs order. If the conditions warrant an indemnity costs order, it is likely that the judge making the order will be more inclined to allow an increase in the hourly rates or an increase in the limits. An order detailing those increases should, in my opinion, be made even where indemnity costs orders are made [25].

3. I have found that the adjournment on 12 August 2010 was caused by the conduct of the plaintiffs in amending their statement of claim in COR 223 of 2009 on 11 August 2010.  That occurred in circumstances where the application for an injunction was part heard and counsel for the plaintiffs had previously raised the prospect of an amendment to the statement of claim in COR 223 of 2009 but expressly declined to move for such an amendment on the grounds that 'otherwise there will be costs consequences'.  That is all conduct which might justify an indemnity costs order.  However, I decline to make such an order for two reasons.  First, the costs are confined to the disbursements and counsel fees of the hearing on 12 August 2010.  Secondly, there is no evidence of the disbursements or counsel fees incurred by Corrs in respect of the appearance on 12 August 2010 and hence it is not known whether counsel's fees exceed the scale amounts or, if they do, what increase should be made in the hourly rates and limits for counsel fees.

Orders sought by plaintiffs

1. I have determined that the plaintiffs and Mr Carey should pay Corrs' costs of the hearing on 12 August 2010.  It follows that I will not order Mr Bell SC and Mr Thompson to pay the plaintiffs' costs of the hearing on that date.

Orders

1. I will hear the parties as to the appropriate orders to give effect to these reasons.