Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Mallesons Stephen Jaques [No 2]
[2014] WASC 60
•5 MARCH 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: HUNTINGDALE VILLAGE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) -v- MALLESONS STEPHEN JAQUES [No 2] [2014] WASC 60
CORAM: LE MIERE J
HEARD: 16 AUGUST 2013
DELIVERED : 5 MARCH 2014
FILE NO/S: CIV 1791 of 2012
MATTER :Section 295 of the Legal Profession Act 2008 (WA)
Order 58 r 11 of the Rules of the Supreme Court 1971 (WA)
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)
HUNTINGDALE VILLAGE PTY LTD
First PlaintiffsNORMAN PHILLIP CAREY
Second PlaintiffAND
MALLESONS STEPHEN JAQUES
First DefendantMARK ANTHONY KORDA and DAVID JOHN WINTERBOTTOM as Receivers and Managers of 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)
Second Defendants
Catchwords:
Practice and procedure - Application to stay proceedings pending determination of separate proceedings
Legislation:
Australian Securities and Investments Commission Act 2001 (Cth), s 12GD, s 12GF
Corporations Act 2001 (Cth), s 423, s 434, s 1317H, s 1324
Legal Profession Act 2008 (WA), s 253(1)(a)(i), s 295
Supreme Court Rules 1971 (WA), O 1 r 4A, O 1 r 4B, O 4A r 2(1)
Result:
Application granted
Category: B
Representation:
Counsel:
First Plaintiffs : Mr A Metaxas
Second Plaintiff : Mr A Metaxas
First Defendant : No appearance
Second Defendants : Mr J A Thomson SC
Solicitors:
First Plaintiffs : Metaxas & Hager
Second Plaintiff : Metaxas & Hager
First Defendant : No appearance
Second Defendants : Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Amos v Ian K Fry & Co [2010] QCA 131
Huntingdale Village Pty Ltd (Receiver and Managers Appointed) ATF Huntingdale Village Unit Trust v Perpetual Nominees Ltd [2013] WASC 352
Huntingdale Village Pty Ltd v Mallesons Stephen Jaques [2013] WASC 48
Legal Services Commissioner v Wright [2010] QCA 321
LE MIERE J: The second defendants, who I will refer to as the Receivers, are the receivers and managers of each of the plaintiff companies. In this action the plaintiff companies seek declarations that they are 'third party payers' as defined in s 295 of the Legal Profession Act 2008 (WA) (LPA) in relation to bills of legal costs rendered by the first defendants, Mallesons Stephen Jaques (Mallesons), to the Receivers as receivers and managers of the plaintiff companies in proceeding COR 147 of 2010 in this court, and that Mallesons is required to submit the bills for assessment to a taxing officer in accordance with LPA s 295(3). The Receivers have applied to stay this action until the resolution of proceeding COR 223 in this court.
The Westpoint Group
The second plaintiff, Mr Carey, is the founder of the Westpoint Group of companies which include the first plaintiffs, Huntingdale Village Pty Ltd (Huntingdale), Silkchime Pty Ltd (Silkchime), Vannin Pty Ltd (Vannin), Warwick Entertainment Centre Pty Ltd (Warwick) and Paragon Apartments Ltd (Paragon), as well as Westpoint Corporation Pty Ltd (Westpoint Corporation), Bayview Port Melbourne Ltd (Bayview Port Melbourne) and Westpoint Management Ltd (Westpoint Management). Mr Carey is a director of each of the plaintiff companies. On 28 September 2005, Perpetual Nominees Ltd (Perpetual Nominees) as custodian of the ING Mortgage Pool for ING Funds Management Ltd as the Responsible Entity of the ING Mortgage Pool as lender, and Westpoint Corporation and the plaintiffs, other than Paragon (together the Borrower), as borrower entered into a loan agreement (Loan Agreement). At the same time Perpetual Nominees as lender and Mr Carey, Paragon, Bayview Port Melbourne and Westpoint Management as guarantor entered into a guarantee and indemnity (Guarantee) by which the guarantor guaranteed to the lender the payment to it by the Borrowers under the Loan Agreement of the Guaranteed Money, that is all money and damages which the borrower is liable to pay to the lender. By way of materially identical instruments of fixed and floating charge (Charge Instruments), each of the Borrowers and each of the corporate Guarantors (together the Chargors) granted a fixed and floating charge in favour of Perpetual Nominees over the whole of their assets and undertaking or, in the case of Silkchime and Westpoint Management, specific assets, to secure the borrowings under the Loan Agreement.
Each of the plaintiff companies committed an act of default and on 24 January 2006, acting pursuant to the Charge Instruments, Perpetual Nominees appointed the Receivers as receivers and managers of the Chargors, including each of the plaintiff companies. Since 24 January 2006, acting pursuant to the Charge Instruments, the Receivers have realised assets and caused the Chargors to repay amounts due to Perpetual Nominees. Wespoint Corporation, Bayview Port Melbourne and Westpoint Management are and have been since 2006 in liquidation.
This is one of a number of proceedings in this court which arise out of or are related to the financial collapse of the Westpoint Group of companies and the appointment of the Receivers as receivers and managers of companies in the group.
COR 223 of 2009
On 4 September 2009 the plaintiffs commenced proceedings in the Federal Court against Perpetual Nominees, the Receivers and Westpoint Corporation (in liq) in respect of the conduct of the receiverships by the Receivers. The originating process in the Federal Court stated that the application is principally a complaint about receivers made under s 423, s 434, s 1317H and s 1324 of the Corporations Act 2001 (Cth) and s 12 GD and s 12GF of the Australian Securities and Investments Commission Act 2001 (Cth). Subsequently the Federal Court ordered that the proceedings be transferred to this court and are now COR 223 of 2009.
On 2 December 2009 with the consent of the parties I ordered that the plaintiffs should file a statement of claim and the defendants should file a defence. The plaintiffs subsequently filed a statement of claim and an amended statement of claim. The defendants filed a defence. The defendants applied to disallow amendments to a large number of the paragraphs of the plaintiffs' re‑amended statement of claim. In September 2013 I ordered that a large number of paragraphs of the plaintiffs' re‑amended statement of claim be disallowed: Huntingdale Village Pty Ltd (Receiver and Managers Appointed) ATF Huntingdale Village Unit Trust v Perpetual Nominees Ltd [2013] WASC 352.
Although the plaintiffs' re‑amended statement of claim in COR 223 of 2009 has been substantially struck out, the pleading discloses the nature of the claims which the plaintiffs pursue in that proceeding. The plaintiffs allege that the Receivers realised assets of the Borrowers and the Guarantors and as from 23 January 2008 the Secured Money has been completely paid. The Secured Money is the amount in which the Borrowers and the Guarantors were liable to Perpetual Nominees at the appointment of the Receivers. The plaintiffs say that since at least 23 January 2008, wrongfully and in breach of the relevant Charge, Perpetual Nominees has failed and refused to discharge the relevant security interest and remove the Receivers. The plaintiffs say that the Receivers' conduct in continuing the receiverships after the Secured Money had been repaid was a trespass to the property of the plaintiffs and the Receivers and Perpetual Nominees have forfeited all rights of indemnity from the plaintiffs in respect of the receiverships from at least 24 January 2008. The plaintiffs make other wide ranging challenges to the Receivers remuneration and expenses and to fees paid by the Receivers to Corrs Chambers Westgarth, the solicitors engaged by the Receivers to carry out legal services in relation to a range of matters concerning the receiverships, but it is not necessary to elaborate upon those matters at this time.
COR 147 of 2010
On 30 August 2010 Mr Carey commenced proceedings in this court (COR 147 of 2010) against the Receivers and Perpetual Nominees in which he claimed relief relating to the inspection and copying of financial records relating to the Westpoint companies. In COR 147 of 2010 the Receivers were represented by Mallesons, the first defendants. There is evidence that between 25 October 2010 and 19 May 2011 Westpoint Corporation paid to Mallesons $403,286.71 for fees incurred in relation to COR 147 of 2010. The plaintiffs required Mallesons to have their bills totalling $403,286.71 assessed pursuant to LPA s 295(3). Mallesons declined to do so on the basis that the plaintiffs are not 'third party payers', as defined in the LPA and therefore have no entitlement to a request that Mallesons' bills be assessed pursuant to LPA s 295(3).
This proceeding
The plaintiffs then commenced this proceeding by originating summons in which they seek a declaration that the plaintiffs are 'third party payers' as defined in LPA s 295 in relation to Mallesons' bills of costs to the Receivers as the receivers and managers of the plaintiffs and others in COR 147 of 2010, a declaration that Mallesons is required to submit the bills for assessment to a taxing officer in accordance with LPA s 295(3) and other related relief.
In November 2012 Mallesons applied to set aside, dismiss or stay the action on the grounds it discloses no serious question to be tried and because the alleged causes of action upon which the plaintiff companies sue are assets under the control of the Receivers and the plaintiff companies, or the director instructing them, do not have authority to commence or maintain the action on behalf of the companies. At the same time Mr Carey applied to be joined as a plaintiff. I dismissed Mallesons' application that the proceeding be summarily dismissed and ordered that Mr Carey be joined as a plaintiff: Huntingdale Village Pty Ltd v Mallesons Stephen Jaques [2013] WASC 48.
Pleadings
One of the issues raised on the pleadings in this action is particularly relevant to this application. In [11] of their statement of claim the plaintiffs plead that between 25 October 2010 and 19 May 2011 the Receivers paid from the bank accounts of the Chargors $403,286.71 to Mallesons for Mallesons to act in COR 147 of 2010. The plaintiffs say that they are non‑associated third party payers in respect of the bills rendered by Mallesons to the Receivers for services in COR 147 of 2010 and are entitled to apply to a taxing officer for an assessment of the whole of the legal costs paid by the Receivers to Mallesons in COR 147 of 2010. They seek declarations to that effect. In their defence the Receivers admit that between 25 October 2010 and 19 May 2011 they paid $403,286.71 to Mallesons but deny that those amounts were paid from the bank accounts of the plaintiffs and say that those amounts were paid from the bank account of Westpoint Corporation. The Receivers plead that on a proper construction of LPA s 253(1)(a)(i), a person is only a third party payer if that person admits that he or she is under a legal obligation to pay all or part of the legal costs for legal services provided to the client. The Receivers then plead that the plaintiffs maintain a claim in COR 223 of 2009 in which they seek relief requiring the Receivers to repay all remuneration and expenses charged to the plaintiffs in the period after 23 January 2008, on the basis that the Receivers have wrongfully remained appointed to the plaintiffs since that date. The Receivers plead that in those circumstances the plaintiffs do not admit that any of them are under a legal obligation to pay all or part of the legal costs for legal services provided to them by Mallesons, which were incurred after 23 January 2008, and therefore on a proper construction of the provisions of LPA s 253(1)(a)(i) the plaintiffs are not entitled to the relief sought. The Receivers have an alternative plea that if their construction of LPA s 253(1)(a)(i) is not correct, then s 253(1)(a)(i) expressly provides that a third party payer is a person who is under a legal obligation to pay all or part of the legal costs for legal services provided to the client. The Receivers plead that whether each of the plaintiffs is under a legal obligation to pay the costs of Mallesons which were incurred after 23 January 2008 depends on the determination of their claim in COR 223 of 2009. The Receivers plead that in those circumstances the plaintiffs are not entitled to the relief sought until after determination of their claim in COR 223 of 2009.
In their reply the plaintiffs deny the Receivers' pleading in relation to the effect of the determination of their claim in COR 223 of 2009. The plaintiffs plead that pursuant to the Loan Agreement, the Guarantee and the Charge Instruments the Receivers were entitled to indemnity in relation to legal costs incurred by them in the period after 24 January 2006 to the extent that the legal costs were lawfully incurred. The plaintiffs plead that the Receivers' entitlement to indemnity includes indemnity for legal costs incurred after 23 January 2008 which relate to the Receivers conduct before 23 January 2008. The plaintiffs then plead that the matters in dispute in COR 147 of 2010 relate to the conduct of the Receivers from 24 January 2006 onwards so that a determination in COR 223 of 2009 that the Receivers should have retired by 24 January 2008 would not affect the Receivers' entitlement to indemnity as regards costs incurred by them in COR 147 of 2010 as at 19 May 2011.
This application
The Receivers now apply for an order that this proceeding be stayed until final determination of COR 223 of 2009 or further order of the court. In their chambers summons the Receivers state that the grounds of this application are:
1.It is premature to determine whether the Plaintiffs are entitled to a taxation of costs under section 295 of the Legal Profession Act (2008), and to make orders under those provisions, in circumstances where the Plaintiffs' assertion that they are not at all liable to pay the costs that would be the subject of the taxation is a matter pending determination in pre‑existing separate proceedings (being Huntingdale Pty Ltd & Ors v Perpetual Nominees & Ors (COR 223 of 2009)).
2.Having regard to the above issues and the matters set out in Order 1 rule 4A of the Supreme Court Rules, the Court should stay the proceedings pending determination of separate proceedings raising the matters referred to in ground 1 above.
Issues in this proceeding
In Huntingdale Village Pty Ltd v Mallesons Stephen Jaques [2013] WASC 48 I found that for the plaintiffs to be third party payers entitled to apply for an assessment under Legal Profession Act s 295(3), it is not necessary that they be under a legal obligation to pay the specific legal costs in question. It was sufficient for the person to be under a legal obligation to pay all or any part of the legal costs for legal services provided to the client: [2013] WASC 48 [27]. I also found that it was arguable that the plaintiffs were liable to pay the costs incurred by the Receivers to pay Mallesons' legal costs by reason of various indemnities which were contained in the transaction documents establishing the facility upon which companies and the Westpoint Group defaulted and which led to the appointment of the Receivers: [2013] WASC 48 [35].
Receivers' contentions
In COR 223 of 2009 the plaintiff companies allege that the Receivers should have retired as at 23 January 2008 and seek a declaration to that effect. The first plaintiffs also seek an order that the Receivers repay all remuneration and expenses charged in respect of the receiverships for the period commencing 23 January 2008. The Receivers say that the present proceedings relate to expenses of the receiverships for the period between 25 October 2010 and 19 May 2011, that is after the time at which the plaintiffs say in COR 223 of 2009 the Receivers should have retired as receivers and managers.
The Receivers say that proceedings in COR 223 of 2009 will determine, or at least affect, whether the Receivers are entitled to rely upon the indemnities in the transaction documents in relation to receivership expenses after 23 January 2008. If the plaintiffs in COR 223 of 2009 establish that the Receivers should have retired on 23 January 2008 and obtain an order that the Receivers repay all remuneration and expenses charged in respect of the receiverships after 23 January 2008, then the plaintiffs will have no liability to indemnify the Receivers in respect of the costs of Mallesons in COR 147 of 2010. In those circumstances the plaintiffs would have no obligation to indemnify the Receivers, or Westpoint Corporation, in respect of Mallesons' fees in COR 147 of 2010 and would not be third party payers for the purposes of LPA s 295.
The Receivers say that, as a matter of case management, the court should hear and determine COR 223 of 2009 before this proceeding. The Receivers say that to do so would not prejudice the plaintiffs because the plaintiffs have not paid Mallesons' fees, the Receivers have not required the plaintiffs to indemnify them in respect of Mallesons' fees and will not do so until the finalisation of the receiverships.
Plaintiffs' contentions
The plaintiffs submit that:
'whatever the outcome in [COR 223 of 2009], there will be an obligation by the plaintiffs to indemnify in respect of Mallesons' costs in [COR 147 of 2010] … but whether or not that will result in the payment of any money by the plaintiffs will depend on set offs or other rights of contribution.'
The basis for that submission is that the documents which the Receivers were asked to produce in COR 147 of 2010 were documents which related to the receiverships between 24 January 2006 when the Receivers were appointed and 30 August 2010 when the plaintiffs commenced COR 147 of 2010. That period includes the period of the receivership before 23 January 2008. The plaintiffs say that the Receivers have 'an arguable case' to be indemnified in respect of their legal fees in COR 147 of 2010 because the documents which they were required to produce relate, in part, to the receiverships before 23 January 2008.
Mr Carey
Before addressing the case management issues which arise from this application, it is necessary to say something about the position of Mr Carey. The plaintiffs initially submitted that whatever the outcome in COR 223 of 2009 it would not affect Mr Carey because he is not a party to that proceeding. However, in the course of argument counsel for the plaintiffs acknowledged that if in COR 223 of 2009 it is found that the borrowers have no liability to indemnify the Receivers or Perpetual Nominees in respect of the Receivers remuneration and expenses after 24 January 2008 then Mr Carey as a guarantor can have no liability. Hence, Mr Carey's position is not relevantly different from that of the other plaintiffs.
Case management
The inherent power of the court to control the conduct of its proceedings and the power of the court to make case management directions under Supreme Court Rules 1971 (WA) O 4A r 2(1) confers on the court power to stay one action before the court until another related action before the court has been resolved. A case management direction, and the exercise of the court's inherent powers, should have regard to the objects set out in O 1 r 4A and 4B of the Rules. Order 1 r 4A in effect provides that the practice, procedure and interlocutory process of the court shall have as their goal the elimination of unnecessary delay in the resolution of proceedings. Order 1 r 4B provides that the court should exercise its powers of case management with the objects there specified. Sometimes there is, or may appear to be, a tension between some of those objects. For example, the objects include:
(b)disposing efficiently of the business of the court; and
(d)facilitating the timely disposal of business.
The court should use its case management powers to ensure the quick, inexpensive and efficient resolution of proceedings before the court. The only effective means for reducing the costs of the parties are measures which result in less work being done by lawyers over the course of a proceeding. Where, as here, separate proceedings are related, the court should consider whether it should use its case management powers to achieve efficiency by ensuring that issues are resolved in one proceeding before costs are incurred in preparing for and conducting a trial of the same issues in another proceeding. However, at the same time the court must be mindful to ensure that each proceeding is resolved as quickly as is consistent with the efficient and just resolution of the proceeding.
Proceeding should be stayed
I find that staying this proceeding until the resolution of COR 223 of 2009 will give effect to the purpose of achieving the just resolution of this proceeding as quickly, inexpensively and efficiently as possible. If the plaintiffs succeed in obtaining a declaration that the Receivers should have retired on 23 January 2008 and should repay the remuneration and expenses they charged from 24 January 2008, then the court will have to determine whether all or any part, and if so what part, of the legal costs incurred by the Receivers in COR 147 of 2010 relate to the Receivers' conduct before 23 January 2008. That may not be a straightforward issue. In COR 147 of 2010 the plaintiffs sought to inspect documents that record transactions which occurred before and after 23 January 2008, but on one view the conduct of the Receivers which gave rise to COR 147 of 2010 is their conduct after 23 January 2008. In the originating process in COR 147 of 2010 the relief claimed by Mr Carey was that there be an inquiry in relation to the refusal of the Receivers to permit the plaintiff to inspect and copy financial records relating to the corporations as record and explain payments to the Receivers after 24 January 2006 for their fees, and to Corrs Chambers Westgarth after 24 January 2006 for their legal services to the Receivers as receivers and managers of the corporations. These are potentially complex issues.
If the plaintiffs are obliged to indemnify the Receivers against part of Mallesons' costs on the basis that the costs related in part to the conduct of the receiverships before 23 January 2008 another issue might arise. In Amos v Ian K Fry & Co [2010] QCA 131 White JA found that Amos was not a third party payer. In Legal Services Commissioner v Wright [2010] QCA 321 White JA and McMurdo J confirmed the outcome in Amos on the basis that the appellant in that case sought an assessment not of a discrete bill for the costs he was legally obliged to pay, but of the solicitor's bills for all of the work performed for the estate. In those circumstances the costs he sought to have assessed were not the costs which he was legally obliged to pay. In this case an issue might arise whether the costs which the plaintiffs have sought to have assessed are not the costs which they are obliged to pay because they are only obliged to indemnify the Receivers in relation to that part of the costs which relate to the conduct of the receiverships before 23 January 2008. Until those matters have been determined in COR 223 of 2009 those issues cannot be properly determined in this proceeding. If the relevant claims of the plaintiffs in COR 223 of 2009 fail then all of those issues will fall away. That would significantly reduce the complexity and cost to the parties of this action.
Staying this proceeding until COR 223 of 2009 has been determined will not cause any prejudice to the plaintiffs because the plaintiffs have not paid Mallesons' fees, the Receivers have not required the plaintiffs to indemnify them in respect of Mallesons' fees and will not do so until the finalisation of the receiverships which will not occur until COR 223 of 2009 has been resolved.
Conclusion
This proceeding should be stayed until the final determination of COR 223 of 2009 or further order.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: HUNTINGDALE VILLAGE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) -v- MALLESONS STEPHEN JAQUES [No 2] [2014] WASC 60 (S)
CORAM: LE MIERE J
HEARD: 13 MARCH 2014
DELIVERED : 30 APRIL 2014
FILE NO/S: CIV 1791 of 2012
MATTER :Section 295 of the Legal Profession Act 2008 (WA)
Order 58 r 11 of the Rules of the Supreme Court 1971 (WA)
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)
HUNTINGDALE VILLAGE PTY LTD
First PlaintiffsNORMAN PHILLIP CAREY
Second PlaintiffAND
MALLESONS STEPHEN JAQUES
First DefendantMARK ANTHONY KORDA and DAVID JOHN WINTERBOTTOM as Receivers and Managers of 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)
Second Defendants
Catchwords:
Costs - No apportionment of costs of issues - Costs should be fixed - Turns on own facts
Legislation:
Legal Profession Act 2008 (WA), s 295
Result:
Plaintiffs should pay the second defendants' costs fixed in the sum of $3,685 forthwith
Category: B
Representation:
Counsel:
First Plaintiffs : Mr A Metaxas
Second Plaintiff : Mr A Metaxas
First Defendant : No appearance
Second Defendants : Mr J A Thomson SC
Solicitors:
First Plaintiffs : Metaxas & Hager
Second Plaintiff : Metaxas & Hager
First Defendant : No appearance
Second Defendants : Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Amaca Pty Ltd v Hannell [2007] WASCA 158 (S)
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Mallesons Stephen Jaques [No 2] [2014] WASC 60
Luxmore Pty Ltd v Hydedale Pty Ltd (2008) 20 VR 481
LE MIERE J: The second defendants, who I will refer to as the Receivers, are the receivers and managers of each of the plaintiff companies. In this action the plaintiff companies seek declarations that they are 'third party payers' as defined in s 295 of the Legal Profession Act 2008 (WA) (LPA) in relation to bills of legal costs rendered by the first defendants, Mallesons Stephen Jaques (Mallesons), to the Receivers as receivers and managers of the plaintiff companies in proceeding COR 147 of 2010 in this court, and that Mallesons is required to submit the bills for assessment to a taxing officer in accordance with LPA s 295(3). The Receives applied to stay this action until the resolution of proceeding COR 223 of 2009 in this court. On 5 March 2014 I determined that this proceeding should be stayed until the final determination of COR 223 of 2009 or further order: Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Mallesons Stephen Jaques [No 2] [2014] WASC 60.
The Receivers say that they were the successful party to the application and the general rule that the successful party recover their costs should apply. Further, the Receivers say that the costs of the application, and of the application in relation to costs, should be taxed. The plaintiffs say that the stay was granted for reasons relating to case flow management and not for the reasons submitted by the Receivers. The plaintiffs say that the costs of the application should be fixed and should be costs in the cause.
General rules as to costs
The general rule is that a successful applicant recovers their costs. Ordinarily this is a just outcome because a respondent who turns out to have unjustifiably given the applicant cause to have recourse to the court to obtain the order should be required to recompense that party its costs. Deciding what amounts to success is not always revealed merely by reading the orders of the court. The court will have regard to the outcome in the context of the application and the argument. Where a party, though generally successful in an application has, by the introduction of some issues on which he has failed, increased the costs, the court may order such party to pay the costs of such issues. The power to adjust an order for costs by reference to particular issues upon which the generally successful party has failed is properly exercised only where there are discrete and severable issues upon which the generally successful party has failed, and which have added to the cost of the proceedings in a significant and readily discernible way: Amaca Pty Ltd v Hannell [2007] WASCA 158 (S) [7].
In the ordinary case, it is both appropriate and desirable that a costs question be decided at the conclusion of argument. Rarely will it be necessary for a judge to give detailed reasons for decision adverting to every matter debated in argument: Luxmore Pty Ltd v Hydedale Pty Ltd (2008) 20 VR 481 [12]. In this case the question of costs was not argued and decided when reasons for judgment were handed down. The plaintiffs sought an opportunity to put on written submissions. The Receivers responded with written submissions. I have considered the written submissions of the parties but, in the circumstances, I do not intend to address all of the arguments canvassed by the parties.
Plaintiffs should pay the Receivers' costs
The Receivers were successful in obtaining the order that they sought, that is an order that the action be stayed. There is no sufficient reason for depriving them of their costs.
No apportionment of costs of issues
The Receivers' application was not successful on the grounds advanced by the Receivers under the heading 'Basis for stay application' in their written submissions. The application was supported by an affidavit of Russell Harry Morgan sworn 13 June 2013 which attached various documents relating to COR 223 of 2009. The affidavit was not referred to in the reasons for decision. Those are matters relevant to the quantum of costs but they are not a sufficient reason for depriving the Receivers of their costs or ordering that the costs of any issues be the plaintiffs.
Costs - should costs be fixed
Practice Direction 4.7.1 provides that 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. The plaintiffs say that the general rule referred to in the Practice Direction should be followed and the costs should be fixed. The Receivers say that the costs should not be fixed because the application was more complex than the type of case provided by the schedule to the Practice Direction and therefore the schedule should not apply, the schedule to the Practice Direction is not appropriate and the court does not have sufficient material for it to be confident that it can arrive at an appropriate sum. The Receivers referred to a number of factors relevant to the exercise of the courts' discretion and to the relevance and necessity for the Morgan affidavit.
I have considered the nature of the application, the evidence reasonably necessary to prosecute it, the argument and the reasons for decision. Having regard to all of the circumstances I find that this is an appropriate case for exercising my discretion to fix the costs and order that they be paid forthwith.
Amount of costs
I am satisfied that it is appropriate to fix costs in accordance with the schedule to Practice Direction 4.7.1 notwithstanding the factors referred to and submissions made by the Receivers to the contrary.
The schedule of standard costs orders for interlocutory applications attached to the Practice Direction suggests figures calculated by reference to the time required in a typical, or median instance. The Practice Direction says that the court will fix costs in a lower sum in a simple matter, or adjust the amount upward (or order costs to be taxed) for unusually heavy matters. I consider that the application is a sufficiently heavy matter to allow for the maximum amount under the schedule but not so heavy as to make it appropriate for the costs to be taxed.
The applicable items and amounts in relation to the application and the further submissions in relation to costs, by reference to the schedule, are as follows:
2.1
Chamber summons
$429
2.2
Affidavit in support
$319
2.4
Special appointment
$1,892
2.4
Special appointment ‑ additional hour
$583
2.8
Appearance on delivery of judgment, submissions on costs
$462
Total
$3,685
Order
The order will be: The plaintiffs pay the second defendants' costs fixed in the sum of $3,685 forthwith.
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