JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: KITAY -v- FRIGGER [2022] WASC 284
CORAM: HILL J
HEARD: 7 OCTOBER 2021; 18 FEBRUARY 2022
WRITTEN SUBMISSIONS 25 FEBRUARY 2022,
4 MARCH 2022, 26 JULY 2022 & 27 JULY 2022
DELIVERED : 30 AUGUST 2022
FILE NO/S: COR 131 of 2021
BETWEEN: MERVYN JONATHAN KITAY
First Plaintiff
COMPUTER ACCOUNTING AND TAX PTY LTD (IN LIQUIDATION)
Second Plaintiff
AND
ANGELA CECELIA THERESA FRIGGER
First Defendant
HARMUT HUBERT JOSEF FRIGGER
Second Defendant
Catchwords:
Practice and procedure – Application for summary dismissal of originating process – Whether abuse of process – Whether costs agreement invalid – Indemnity principle - Turns on own facts
Corporations – Claim for oppression against liquidator of company – Application for summary dismissal – Whether defendants are shareholders of company – Whether shares vested in trustee in bankruptcy – Standing to bring application
Corporations – Claim for oppression against liquidator of company – Application for summary dismissal – Whether claim for oppression can be brought against company in liquidation or liquidator – Whether defendants can obtain relief sought under s 233 of Corporations Act 2001 (Cth)
Practice and procedure – Whether discovery should be ordered in originating process commenced under Corporations Act 2001 (Cth) – Whether categories of documents relevant to matters in issue - Application dismissed
Practice and procedure – Application for leave to issue subpoena – Whether legitimate forensic purpose – No exceptional circumstances – Leave refused
Practice and procedure – Application by defendants for summary dismissal of originating process – Whether abuse of process – Whether retainer void – Whether solicitors and counsel validly retained by plaintiffs – Maintenance and champerty – Application dismissed
Practice and procedure – Application by defendants for leave to reopen summary judgment application – Whether orders sought by plaintiffs in current proceedings are re-litigation of matters raised in earlier Federal Court proceedings – Whether orders could and should have been litigated to finality in Federal Court proceedings – Turns on own facts
Legislation:
Bankruptcy Act 1966 (Cth) s 5, 27, 58, s 116
Corporations Act 2001 (Cth) s 53, s 232, s 233, s 234, s 1072C
Rules of the Supreme Court 1971 (WA), O 16 r 1, O 26 r 7, O 36B r 2(2B)
Category: B
Representation:
Counsel:
| First Plaintiff | : | Mr B W Ashdown |
| Second Plaintiff | : | Mr B W Ashdown |
| First Defendant | : | In person |
| Second Defendant | : | In person |
Solicitors:
| First Plaintiff | : | Herbert Smith Freehills |
| Second Plaintiff | : | Herbert Smith Freehills |
| First Defendant | : | In person |
| Second Defendant | : | In person |
Cases referred to in decision:
Achurch v The Queen [2014] HCA 10; (2014) 253 CLR 141
Aqua Botanical Beverages (Australia) Pty Ltd v Botanical Water Technologies Pty Ltd [2022] NSWSC 435
B v State of Western Australia [2002] WASC 298
Bale v Mills [2011] NSWCA 266; (2011) 81 NSWLR 498
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
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- AGLC
- Kitay v Frigger [2022] WASC 284
- Case
- [2022] WASC 284
- Decision Date
CaseChat Overview and Summary
The central legal issues revolved around the interpretation of the Second HSF Costs Agreement and the applicability of the Legal Profession Act 2008 (WA). The court had to ascertain if the agreement was a conditional costs agreement as defined by the Act and whether it contained the necessary mandatory terms to be valid. Furthermore, the court examined whether the absence of a valid costs agreement invalidated the solicitor-client retainer between Mr. Kitay and Mr. Frigger, and if so, the implications of such invalidation on the recoverable costs.
The court concluded that the Second HSF Costs Agreement was a conditional costs agreement and that it contained all the necessary mandatory terms required by the Legal Profession Act 2008 (WA). The court held that such agreements are not automatically void but must include specific provisions to be valid. Since the agreement in question met these criteria, it was deemed valid. Additionally, the court found that the retainer between Mr. Kitay and Mr. Frigger was valid and binding, as evidenced by Mr. Frigger's actions in filing court documents and attending hearings. The court reasoned that even if the costs agreement were invalid, this would not affect the validity of the retainer, which could still support the recovery of costs in accordance with the applicable costs determination or the fair and reasonable value of the services provided.
In summary, the court ruled that Mr. Kitay's liability for costs under the Second HSF Costs Agreement was not arguable, given the agreement's compliance with the statutory requirements. Furthermore, the court held that the solicitor-client retainer was valid and binding, which allowed for the recovery of costs irrespective of the agreement's validity.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The question as to whether Mr Kitay has any liability for costs is a matter of the proper construction of the contract. These principles are well-established. The Second HSF Costs Agreement must be construed objectively by determining what a reasonable businessperson would have understood its terms to mean. This is determined by reference to its text, context and purpose.[39][39] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35] (French CJ, Hayne, Crennan & Kiefel JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] ‑ [47] (French CJ, Nettle & Gordon JJ). I do not accept that under the terms of the Second HSF Costs Agreement, it is arguable that Mr Kitay does not have any liability for costs. The terms of the Second HSF Costs Agreement make clear that HSF will invoice Mr Kitay for the work performed under the agreement but that HSF have agreed not to seek payment unless one of the three circumstances set out in the agreement applies. This includes where costs are recovered from the defendants. On its face, the costs agreement is a conditional costs agreement as that term is defined in the LPA. Section 252 of the LPA defines a conditional costs agreement as 'a costs agreement that provides that the payment of some or all of the legal costs is conditional on the successful outcome of the matter to which those costs relate' (see also s 283(1) of the LPA). Contrary to the submission of the defendants, conditional costs agreements are not automatically void under the LPA.[40] The LPA simply requires that a conditional costs agreement contain certain mandatory terms, without which the agreement will be void. [40] Legal Profession Act 2008 (WA) s 283. See in particular s 283(4)(b). Under the terms of the LPA, Mr Kitay as a liquidator is a 'sophisticated client'.[41] For this reason, any conditional costs agreement is required to set out the circumstances that constitute a successful outcome, it may provide for disbursements to be paid irrespective of outcome, and must be in writing. The Second HSF Costs Agreement complies with each of these requirements.[41] Legal Profession Act2008 (WA) s 252, s 263(2)(c)(iv). In addition, I do not consider it is arguable that the interlocutory process was a nullity as HSF was not retained by Mr Kitay to lodge the Application. As was stated by Pritchard J in Hancock Prospecting Pty Ltd v Hancock [No 3]:[42][O]nce it is established that a solicitor was acting for a client with the client's knowledge and assent, it will be presumed that the retainer existed, and that the client is liable to his or her solicitors for the solicitors' costs. The presumption that a retainer exists is a strong one. So strong is the presumption that it has sometimes been equated to a 'deemed retainer'.[42] Hancock Prospecting Pty Ltd v Hancock [No 3] [21]. In this case, the retainer is evident from the actions of HSF in filing court documents, attending the hearing of the Application and seeking orders. It is clear from Mr Kitay's affidavit that a solicitor-client relationship existed between Mr Kitay and HSF, and that HSF was retained to file the Application. Even if the Second HSF Costs Agreement is not valid, this, of itself, would not invalidate this retainer. The only consequences if the Second HSF Costs Agreement were held to be invalid would be first, the amount of costs payable to HSF or that may be recovered by them may be impacted, and second, the timing of the recovery of any costs may change. Under the terms of the LPA, even if there is no costs agreement between a solicitor and a client, legal costs are recoverable in accordance with the applicable costs determination, or according to the fair and reasonable value of the legal services provided.[43][43] Legal Profession Act 2008 (WA) s 271. In relation to the proceedings commenced in the Federal Court of Australia, see Stevenson v Zafra Pty Ltd [2021] WASCA 181 [288].