Lew Footwear Holdings Pty Ltd v Madden International Ltd (No 3)
[2014] VSC 595
•14 NOVEMBER 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2013 2769
| LEW FOOTWEAR HOLDINGS PTY LTD | Plaintiff |
| v | |
| MADDEN INTERNATIONAL LTD | Defendant |
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JUDGE: | ELLIOTT J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 14 NOVEMBER 2014 |
DATE OF RULING: | 14 NOVEMBER 2014 |
CASE MAY BE CITED AS: | LEW FOOTWEAR HOLDINGS PTY LTD v MADDEN INTERNATIONAL LTD (No 3) |
MEDIUM NEUTRAL CITATION: | [2014] VSC 595 |
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COSTS – discretion – plaintiff ultimately successful – defendant justified in making application based on writ and statement of claim at time of application – indulgence granted - further hearing – costs to reflect merits of application before final hearing – certification of senior counsel’s appearance fee above scale – Supreme Court (General Civil Procedure) Rules 2005 (Vic), rr 63.02 and 63.03(1) and appendix A, item 19(a) and (k).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | L Glick QC with C Juebner | SBA Law |
| For the Defendant | L Forde (solicitor) | Sladen Legal |
HIS HONOUR:
A. Ruling on costs of applications
A.1 Introduction
The judgments delivered on 8 August 2014[1] (“the Principal Judgment”) and 30 October 2014[2] (“the Second Judgment”) set out the relevant procedural history in relation to this matter. I rely on what is contained in those judgments for the purposes of this costs dispute. The principal dates are:
[1][2014] VSC 320.
[2][2014] VSC 541.
(1)On 10 October 2013, a summons was filed by the defendant, Madden International Ltd (“Madden”) seeking, amongst other things, to set aside service of the writ or to stay the proceeding permanently. Orders were made by an associate judge on the basis that Madden’s application was the only application before the court.
(2)On 31 March 2014, the plaintiff, Lew Footwear Holdings Pty Ltd (“Lew Footwear”) filed a summons to deal with the absence of an indorsement of the writ.
(3)On 29 April 2014, the matter came before me for the first substantive return date. That hearing was adjourned because Lew Footwear did not then have in place the relevant material required to fully agitate the issues between the parties.
(4)Following this hearing, Lew Footwear proposed various changes to its writ and statement of claim. By agreement between the parties, the matter was adjourned to 10 June 2014. On that date, a substantive hearing occurred.
(5)On 13 June 2014, Madden was required to respond to Lew Footwear’s further development of its case in a further proposed pleading, by way of particulars of loss, and further evidence. That material of Lew Footwear was the subject of leave granted by the court on 10 June 2014.
(6)Upon delivery of the Principal Judgment on 8 August 2014, Lew Footwear was unsuccessful. However, the court gave Lew Footwear the opportunity to put on further material.[3]
(7)On 10 October 2014, the matter was listed for further directions. The hearing was adjourned on that date, by consent and without appearances, to allow Lew Footwear to put on a proposed further amended pleading to accord with the further evidence filed by Lew Footwear, and to provide the court with a table, setting out what, in the Principal Judgment, needed to be amended to account for that further evidence.
(8)On 17 October 2014, a further hearing took place, based on the further evidence filed by Lew Footwear.
(9)The Second Judgment was delivered on 30 October 2014.
[3]Principal Judgment, [246] and [247].
A.2 The parties submissions
The parties made competing submissions on the question of costs. In summary, Lew Footwear submitted that the parties’ costs of Madden’s summons up to and including 8 August 2014 should be costs in the cause and, further that Madden’s costs of Madden’s summons from 9 August 2014 should be Madden’s costs in the cause. Lew Footwear accepted it should pay Madden’s costs of the summons filed by Lew Footwear seeking dispensation. In response, Madden submitted that the costs of the hearing on 10 June 2014, including the affidavit material in that hearing, should be costs in the cause but, otherwise, that Madden should have the costs of the summonses dated 10 October 2013 and 31 March 2014.
A.3 The basis upon which Lew Footwear was ultimately successful
In essence, Lew Footwear filed and served, out of Australia, a writ and statement of claim which did not comply with the Supreme Court (General Civil Procedure) Rules 2005 (Vic). The originating process was irregular and was promptly the subject of a challenge by Madden. If Lew Footwear had proceeded with its writ and statement of claim in the form filed and served, it would have failed in resisting Madden’s application to set aside the writ or to have the proceeding stayed. In other words, Madden would have been wholly successful.
Significantly, that outcome in favour of Madden, would have remained even if the court had applied the test set out in paragraph 135 of the Principal Judgment, rather than the approach applied, as set out in Schib Packaging Srl v Emrich Industries Pty Ltd.[4]
[4](2005) 12 VR 268, 271 [10] (Charles JA, with whom Ashley JA agreed); see Principal Judgment [112] and [118].
Lew Footwear was ultimately successful because it was given the opportunity to file further affidavit material and amend its claim. Before 8 August 2014, the evidence relied upon by Lew Footwear was totally inadequate on the issues of reliance and causation.
A.4 The decision
In the circumstances, given Lew Footwear ultimately succeeded, it should have its costs of the hearing on 17 October 2014 and the attendance for judgment on 30 October 2014; that is, the costs of those days. Otherwise, in light of the procedural history of this matter, it is my view that Lew Footwear should pay the costs of and incidental to both summonses dated 10 October 2013 and 31 March 2014.
B. Certification of senior counsel’s appearance fees
Upon delivery of the above ruling, the solicitors for Madden made application for an order, pursuant to item 19(k) of Appendix A to the Supreme Court Rules,[5] that fees in excess of the scale amount be awarded to Madden in respect of its senior counsel’s daily appearance fee.
[5]Item 19(a) of the Supreme Court Rules presently provides that senior counsel’s daily appearance fee be capped at $7,928, unless the court otherwise orders.
The application was put on the sole basis that Madden had saved costs by briefing senior counsel only, without junior counsel. It was submitted that, if both senior and junior counsel had been briefed, the costs of attendance would have been recoverable on scale, the total of which would have exceeded the cap on scale costs for senior counsel only.
No submissions were made by Lew Footwear on this issue.
With respect, and without making too broad or sweeping a statement, I think a ruling on the sole basis that costs are ultimately saved by not briefing junior counsel is a very unfortunate, and probably factually erroneous, precedent to set.
Although there is no requirement for a party to brief junior counsel together with senior counsel, the role of junior counsel is a very important part of the function of the bar in assisting the court. In my opinion, a practice should not be encouraged or adopted whereby solicitors brief only senior counsel because they can recover appearance costs above scale for senior counsel and at a higher rate for senior counsel than if they briefed both senior and junior counsel.
It was contended by Madden that the overarching obligations under the Civil Procedure Act 2010 (Vic) were taken into account when making the choice of briefing senior counsel alone in this matter.
It was further submitted that the court should accede to Madden’s application having regard to the overarching obligations, particularly in light of the observations made by the Court of Appeal in Yara Australia Pty Ltd v Oswal.[6] While I accept the assertion from the bar table that the overarching obligations drove the reason to brief senior counsel alone (there was no evidence to support this), in the circumstances, I do not consider the existence of such obligations to be a proper basis to justify the recovery of senior counsel’s costs beyond scale.
[6][2013] VSCA 337 (Redlich and Priest JJA and Macaulay AJA).
In any event, there was no evidence before the court to demonstrate that, overall, there had been any costs saved by briefing senior counsel alone. Although the costs of the actual appearance on behalf of Madden would undoubtedly be less given the absence of junior counsel, much of the preparatory work in a commercial case such as this could have been done by a junior at a substantially lesser rate than the rate charged by senior counsel (or a senior solicitor).
In short, I do not consider Madden’s application should be granted in circumstances where the application was put solely on the basis that costs were saved by not briefing junior counsel and where the court cannot be satisfied that any overall costs savings actually occurred.
Accordingly, Madden’s application for certification of senior counsel’s appearance fee above scale is dismissed.
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