Knights Capital Group Ltd v Bajada and Associates Pty Ltd [No 3] - [2018] WASC 323

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   KNIGHTS CAPITAL GROUP LTD -v- BAJADA AND ASSOCIATES PTY LTD [No 3] [2018] WASC 323
CORAM:   PRITCHARD J
HEARD:   12 OCTOBER 2018
DELIVERED          :   12 OCTOBER 2018
PUBLISHED           :   24 OCTOBER 2018
FILE NO/S:   CIV 1875 of 2014
BETWEEN:   KNIGHTS CAPITAL GROUP LTD
Plaintiff

AND

BAJADA AND ASSOCIATES PTY LTD
First Defendant

SELWYN JOHN BAJADA
Second Defendant

BAJADA AND ASSOCIATES PTY LTD
Plaintiff

AND

KNIGHTS CAPITAL GROUP LTD
First Defendant

GRANT BARTLEY HODGETTS
Second Defendant

MICHAEL JOHN BRITTON
Third Defendant

GREGORY JAMES PARAMOR
Fourth Defendant

GRANT CHARLES PRIEST
Fifth Defendant

Catchwords:

Practice and procedure - Application for security for costs - Where further security for costs sought - Appropriate quantum

Legislation:

Nil

Result:

Security for costs in the amount of $150,000 ordered

Category: B

Representation:

Original Action

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance

Counterclaim

Counsel:

Plaintiff	:	Mr M L Bennett
First Defendant	:	Mr A C Willinge
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Bennett & Co
First Defendant	:	Zafra Legal
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance

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

Knights Capital Group Ltd v Bajada & Associates Pty Ltd [No 2] [2017] WASC 245

PRITCHARD J:

(These reasons were delivered extemporaneously on 12 October 2018 and have been edited from the transcript.)

This is an application for further provision of security for costs made by the first defendant to counter-claim (Application). The amount sought by way of security for costs is $265,000 (a revised figure from the $600,000 initially sought by the first defendant to counter-claim in its minute of 7 August 2018).
In support of the Application, the first defendant to counter-claim relies on the affidavit of Shayne Graham Leslie sworn 2 August 2018. In opposing the Application, counsel for the plaintiff to counter‑claim relies on the affidavit of Dominique Jessie Le Miere sworn 25 September 2018. I have been assisted today by the submissions of counsel orally and their written submissions.
I dealt with an application for security for costs by the first defendant to counter‑claim in this matter in August 2017, and made an order for security for costs in the sum of $50,000 (earlier decision).[1] In my reasons for my earlier decision, I set out the relevant legal principles and the facts as they applied on the evidence then adduced. I concluded that $50,000 represented an appropriate quantum of security for costs up until the point when the counter-claim, together with the action, would be ready for a further mediation, by which time discovery would have been completed and lay witness statements prepared. The bases for the present Application, and the legal principles applicable thereto, are unchanged from those set out in the reasons for my earlier decision and I will not repeat them here.
[1] Knights Capital Group Ltd v Bajada & Associates Pty Ltd [No 2] [2017] WASC 245.
In terms of the jurisdictional threshold for the order sought in the Application, there is no dispute that the position is unchanged from the time of my earlier decision. In other words, the Court's discretion to make a security for costs order was enlivened, and continues to be so. The only question for present purposes is the appropriate quantum for the security for costs. (A question may arise as to the form of the security, but I will hear from counsel in due course, if necessary, as to that.)
The costs covered by the Application are said to be the costs for the work done, or to be done, subsequent to the preparation of witness statements in readiness for the earlier mediation. As counsel's submissions were developed, the costs now the subject of the Application represent the costs of a 15-day trial in which a senior counsel and a junior counsel will appear, with a solicitor instructing, some getting-up for the trial (the volume of which needs to be borne in mind, as a 15-day trial is no small event), and witness' fees in respect of the witnesses that the first defendant to counter-claim proposes to call in respect of the counter-claim.
The question that has figured most significantly in the Application is the overall costs represented by the counter-claim, as costs which will be incurred in the action and the counter-claim as a whole. At the time of my earlier decision, I made an assessment of that question based on the pleadings at that time. Given that witness statements have not yet been finalised (and in the case of the plaintiff to counter-claim have not been filed at all as yet) the best gauge to the likely proportion of the overall work which will be taken by the counter-claim is still that provided by the pleadings themselves.
It remains the position that there will be an overlap between the issues to be decided in the action itself and the counter-claim. It is difficult to be precise at this stage as to the amount of time which will be taken by the issues in the counter-claim alone. However having taken into account the pleadings and having had regard to the witness statements filed so far (bearing in mind that amended witness statements have recently been filed and so I take only a broadbrush view of them at this stage), I am satisfied that 60% is a reasonable assessment of the time likely to be taken by the counter-claim in the trial of the action and counter-claim overall.
Turning then to the amount sought as security for costs by the first defendant to counter-claim in the Application, the $265,000 sought effectively represents 75% of the maximum scale allowances for the costs of counsel at trial, for the instructing solicitor at trial, for getting up for trial, for witness' fees for those witnesses who the first defendant to counter‑claim proposes to call, and 50% of the cost of flights for those witnesses to attend the trial.[2]
[2] ts 201, 218.
In assessing the reasonableness of the figure of $265,000 in providing adequate security for the first defendant to counter-claim, I bear in mind that the exercise in which I am engaged is not intended to provide a full indemnity to the first defendant to counter-claim for the costs likely to be incurred; that the figure sought represents the maximum amount allowed under the scale; that the Court needs to bear in mind that all litigation involves some uncertainties (although at this stage I am not inclined to take into account the prospect of much uncertainty about the likely duration of the trial and I proceed on the basis that it will occupy 15 days); and that the Court needs to be relatively conservative in its estimate of the costs, with a view to providing an adequate security based on a judicious estimation of the overall costs involved.
Having taken into account the submissions of counsel, the principles to which I referred in my reasons for my earlier decision, the matters to which I have referred today, and applying a judicious estimation, I have reached the view that an appropriate amount for security for the costs of the first defendant to counter‑claim will be $150,000.
In reaching that figure, I should say that I have not included any allowance for witness' fees. That is not to suggest that I have made any determination at this stage as to whether witness' fees for the witnesses the first defendant to counter-claim proposes to call would be payable on a taxation. Rather, that approach reflects the fact that there has not been evidence to establish the extent to which witness' fees might properly be claimed for the witnesses in question. Accordingly, I have taken the approach that any fees should not be taken into account for present purposes.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
LF
ASSOCIATE TO THE HONOURABLE JUSTICE PRITCHARD
24 OCTOBER 2018