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

[2010] WASC 341

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   HUNTINGDALE VILLAGE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) -v- CORRS CHAMBERS WESTGARTH (A FIRM) [2010] WASC 341

CORAM:   LE MIERE J

HEARD:   31 AUGUST 2010

DELIVERED          :   30 NOVEMBER 2010

FILE NO/S:   CIV 1940 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 (A FIRM)
Defendant

Catchwords:

Practice and procedure - Costs - Conferral

Practice and procedure - Originating summons to set aside costs agreements - Amendment of originating summons - Cross-vesting jurisdiction - Leave required

Legislation:

Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA), s 4
Legal Profession Act 2004 (NSW), s 317(3), s 328, s 390
Rules of the Supreme Court 1971 (WA), O 59 r 9

Result:

Plaintiffs have leave to amend the originating summons
No order as to costs on the defendant's summons

Category:    B

Representation:

Counsel:

Plaintiffs:     Mr A Metaxas

Defendant:     Dr A S Bell SC & Mr J A Thomson

Solicitors:

Plaintiffs:     Metaxas & Hager

Defendant:     Corrs Chambers Westgarth

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

Dobree v Hoffman (1996) 18 WAR 36

Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161

1. LE MIERE J:  This is one of a number of related proceedings arising out of the appointment of receivers and managers to companies in the Westpoint Group of companies.

2. On 22 June 2010 the plaintiffs filed an originating summons claiming that the costs agreements (Costs Agreements) made on about 10 February 2006 between the defendants and the receivers and the managers of each of the plaintiffs as agents for the plaintiffs be set aside pursuant to s 317(3) and s 328 of the Legal Profession Act 2004 (NSW). The Costs Agreements sought to be set aside were made in New South Wales. On 16 July 2010 the defendant filed a chamber summons for an order that the originating summons be set aside on the ground that this court does not have jurisdiction to adjudicate upon the plaintiffs' claim. The defendants' chamber summons came on for hearing before me on 31 August 2010. In the meantime on 26 August 2010 the plaintiffs filed a minute of proposed amended originating summons. The effect of the proposed amendment is to invoke the inherent jurisdiction of the Supreme Court of New South Wales rather than relying upon s 317(3) and s 328 of the Legal Profession Act. On the hearing of the summons the defendant conceded that with the amendment the application by originating summons would be within the jurisdiction of this court. The defendant did not proceed with its application that the originating summons be set aside but sought an order that the plaintiffs pay the defendant's costs of its application to set aside the originating summons. I made directions for the filing of affidavits and submissions in relation to the issue of costs. These are my reasons for determining the issue of costs of the defendant's application to set aside the originating summons.

The jurisdiction issue

1. The plaintiffs rely on s 4 of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 (NSW) (Cross‑Vesting Act) to contend that this court can adjudicate upon the application in the exercise of cross‑vested jurisdiction from the Supreme Court of New South Wales. The plaintiffs did not contend that this court may adjudicate upon the application in its original jurisdiction. Pursuant to the terms of the Legal Profession Act, the New South Wales Supreme Court is not vested with jurisdiction to determine an application to set aside a costs agreement. Section 328(1) of the Legal Profession Act provides that this jurisdiction is vested in a costs assessor, who pursuant to s 390 of that Act, is not an officer of the New South Wales Supreme Court when acting in that role. Accordingly, the defendant submitted that the Supreme Court of New South Wales does not have jurisdiction to adjudicate upon the plaintiffs' application and therefore this court cannot, by means of the Cross‑Vesting Act, exercise any cross‑vested jurisdiction of the Supreme Court of New South Wales to adjudicate upon the plaintiffs' claim.

2. The plaintiffs accepted that the Legal Profession Act does not confer jurisdiction upon the Supreme Court New South Wales to determine an application to set aside a costs agreement and therefore this court cannot, by means of the Cross‑Vesting Act, exercise any cross‑vested jurisdiction of the Supreme Court of New South Wales to adjudicate upon the plaintiffs' claim. However, the plaintiffs contend that the Supreme Court of New South Wales has inherent jurisdiction to set aside the Costs Agreements and this court, by means of the Cross‑Vesting Act, can exercise the cross‑vested jurisdiction of the Supreme Court of New South Wales to adjudicate upon the plaintiffs' claim. The defendant accepts that is correct and that the originating summons, if and when amended in accordance with the minute of proposed amended originating summons, is within the jurisdiction of this court.

Should the amendment be allowed?

1. In their written submissions of 6 September 2010 the plaintiffs submit that the originating summons should be amended as proposed.  On 30 August 2010 the defendant's solicitors informed the plaintiffs' solicitors that the proposed amendment would remove the basis for the objection to jurisdiction made by the defendant and that the defendant does not oppose the amendment.  In their written submissions of 9 September 2010 the defendant says that the plaintiffs require leave to amend the originating summons pursuant to r 21.5 and r 21.6 and whether the proposed amendment is allowed 'is a matter for the court, which must decide whether originating process instituting proceedings that are a nullity for want of jurisdiction can be amended to raise alternate jurisdiction, or whether new proceedings must be instituted'.

2. In its originating summons the plaintiffs seek an order that the Costs Agreements be set aside.  It is within the jurisdiction of this court to adjudicate upon that claim.  The proposed amendment expresses the source of the jurisdiction of the Supreme Court of New South Wales which, together with the Cross‑Vesting Act founds the jurisdiction of this court.  I will grant leave to amend the originating summons in accordance with the minute of proposed amended originating summons of 26 August 2010.

Plaintiffs' claim for costs

1. The plaintiffs submit that the defendant should pay the plaintiffs' costs of the defendant's application. The plaintiffs say that the defendant's challenge to the originating summons was well founded and that was promptly conceded by the plaintiffs' solicitor. The plaintiffs say that their solicitor proposed a 'trifling' amendment to cure the problem but the defendant refused to agree that the proposed amendments were a cure and filed its chamber summons. The plaintiffs say that the defendant has now conceded that the amendments proposed were a cure so that the defendant's application was a waste of time. The plaintiffs say that the defendant did not comply with its obligations under O 59 r 9 and instead engaged in 'gamesmanship' that caused costs to be unnecessarily incurred.

Defendant's claim

1. The defendant seeks orders that the defendant's costs of its application be paid by Mr Carey and the plaintiffs, jointly and severally, be paid forthwith and that the defendant be entitled to recover solicitor costs in any taxation.

2. The defendant says that it ought to be entitled to the costs of its application on one of two bases.  The first basis is that the plaintiffs' originating summons was defective and the defendant's application was properly brought after the conclusion of conferral and had to be brought immediately after that conferral otherwise the defendant would have been taken to submit to non‑existent jurisdiction.  The defendant says that the application would have been, and still is capable of being, determined successfully as the plaintiffs have not yet amended the originating summons.

3. The second basis is that the defendant ought to be entitled to its costs thrown away as a result of the proposed amendment (if it is in fact made), such costs including the costs of the defendant's application, in light of the six week delay in the plaintiffs introducing a minute of proposed amendment, such introduction occurring two business days prior to the hearing of that application.  In addition, the defendant submits that its costs ought to be ordered personally against Mr Carey on a joint and several basis and ought not be limited to counsel costs, but should properly include solicitors' costs despite the defendant acting for itself.

4. The issue of whether the defendant should be entitled to solicitors' costs despite acting for itself requires consideration of the decision of the Full Court of the Supreme Court in Dobree v Hoffman (1996) 18 WAR 36.

Conferral

1. Order 59 r 9 of the Rules of the Supreme Court 1971 (WA) says that no order shall be made on an application in chambers unless the application was filed with a memorandum stating that the parties have conferred to try to resolve the matters giving rise to the application. The court may waive the operation of that requirement in a case of urgency or for other good reason. The purpose of the rule is to ensure that parties resolve issues between themselves so far as possible and only those matters which are really in dispute are referred to the court.

2. In this case the conferral process has failed.  There is no dispute between the parties.  They agree that the court does not have jurisdiction on the basis set out in the originating summons but that the court does have jurisdiction on the basis set out in the proposed amended originating summons.  Furthermore, the defendant does not dispute that the originating summons should be amended in accordance with the proposed amended originating summons.  Notwithstanding that there is no relevant dispute between the parties there remained what might be described as a formal dispute between them until the day before the hearing of the defendant's chamber summons.  Each party blames the other for this situation.

3. Judges of this court have emphasised on many occasions that conferral should take the form of oral conferral, either by telephone or by meeting face to face:  Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161. In this case there were no oral discussions. Both parties contributed to that situation. The defendant initiated conferral by emailing to the plaintiffs' solicitors at 8.56 am on 15 July 2010 a draft chamber summons to set aside the originating summons with the observation that 'the grounds explain the basis for the application' and a request that the plaintiffs' solicitor inform the defendant's solicitors of the plaintiffs' attitude to the application by 2.00 pm that day. The apparent reason for requiring a response so quickly is that if the defendant did not file its application by the following day its conditional appearance would become unconditional. By leaving the initiation of conferral so late, initiating conferral by the forwarding of a draft chamber summons and requiring a response within the day the defendant made meaningful conferral difficult.

4. The plaintiffs made a substantive response the following day. They conceded that the Legal Profession Act did not confer relevant jurisdiction on the Supreme Court of New South Wales and hence the basis of the jurisdiction of this court stated in the originating summons did not exist. However, the plaintiffs stated that the inherent jurisdiction of the Supreme Court of New South Wales extended to setting aside the Costs Agreements and hence the cross‑vesting provisions of the Cross‑Vesting Act empowers this court to adjudicate upon the matter. The plaintiffs' solicitors stated that it appeared to them that the matters of which the defendant complained could be remedied by an amendment to the heading of the action to refer to the inherent jurisdiction. The plaintiffs' solicitors asked if the defendant agreed that that would overcome the jurisdictional issue and if not to please explain why not.

5. The response of the defendant's solicitors was twofold.  First, they said:

   We can only respond to the originating summons as it has been brought, not based on a proposed amendment.

   That is an inadequate response.  The duty of conferral requires each party to confer to try to resolve the matter giving rise to the proposed application.  Each party should enter into the conferral with an open mind and genuine desire to reach agreement.  They should communicate and confer with a view to reaching agreement about the dispute between them.  The plaintiffs' solicitors had explained the nature of the amendment they proposed to overcome the objection raised by the defendant.  The plaintiffs' solicitors had asked the defendant to explain the basis of their disagreement if they did not agree that the proposed amendment would overcome the objection.  There was no reason why the defendant's solicitors could not respond to the proposed amendment.  If there was some aspect of the proposed amendment that was not sufficiently clear then they should have said so.

6. The second response made by the defendant's solicitors was, in effect, that the amendment proposed by the plaintiffs did not address the question raised by the defendant because the plaintiffs

   are seeking to set aside a costs agreement under the NSW legislation, which has its own specific procedure involving a costs assessor, as identified in the originating summons.  That process to set aside the retainer cannot be cross‑vested/exercised by the WA courts.  Reference to general powers/the inherent jurisdiction of the court is therefore not an answer to our jurisdictional complaint.

   That position appears to have been subsequently abandoned by the defendant when it conceded that the proposed amendment did overcome their jurisdictional complaint.

7. The plaintiffs' solicitor then responded.  Instead of responding to the further complaints made by the defendant's solicitor the plaintiffs' solicitors put an end to the conferral process by saying:

   We have sufficiently conferred.

   At that stage there had not been sufficient conferral.

8. The defendant then filed its chamber summons on 16 July 2010.  On 13 August the defendant filed its submissions.  On 26 August the plaintiffs filed a minute of proposed amended originating summons and submissions as to the jurisdiction of the court on the basis set out in the proposed amended originating summons.  That is, the plaintiffs delayed six weeks in filing a minute of proposed amended originating summons and in the meantime allowed the defendant to file submissions based upon the originating summons as it stood.

9. The defendant then wrote to the plaintiffs stating that the proposed amendment would fundamentally alter the nature of the proceedings.  That is not correct.  The nature of the proceedings is an application to set aside the Costs Agreements.  The proposed amendment was to state a different basis of jurisdiction.

10. I conclude that both parties are responsible for costs being incurred in relation to the defendant's application rather than the matter being resolved by conferral, as it should have been.  The appropriate order is that there be no order as to costs.