Maas v O'Neill

[2013] WASC 379 (S)

MAAS -v- O'NEILL [2013] WASC 379 (S)

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2013] WASC 379 (S)
Case No:	CIV:2038/2010	Heard:	11 FEBRUARY 2014
Coram:	PRITCHARD J	Delivered:	7/08/14
No of pages:	21	Judgment Part:	1 of 1
Result:	Special costs order made
Category:	B
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Parties:	DEBRA LORRAINE MAAS as Next Friend of MATTHEW JAMES MAAS HELEN MARY O'NEILL in her capacity as the Executrix of the estate of the late MICHAEL O'NEILL HELEN MARY O'NEILL
Catchwords:	Costs Special costs order Whether extension of time required Whether special costs order can be made when costs previously agreed by consent and extracted Whether application to vary costs order
Legislation:	Family Provision Act 1972 (WA) Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) Legal Profession Act 2008 (WA) Rules of the Supreme Court 1971 (WA)
Case References:	Atwell v Roberts [2013] WASCA 37 (S) Benfield v Australian National Railways Commission (1992) 8 WAR 285 Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S) Cockburn Cement Ltd v Minister for Environment (WA) [2011] WASC 260 (S) Corp v Robinson [2012] WASC 490 (S) Debra Lorraine Maas as next friend of Matthew James Maas v O'Neill [2012] WASC 379 EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400 Feaver v Smith [2008] WADC 72 Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S) Friedman v Barfield (Unreported, WASC, Library No 9760472, 13 November 1997) Frigger v Lean [2012] WASCA 66 Gould v Vaggelas (1985) 157 CLR 215 Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) Stowe v Stowe (unreported, WASC (FC), Library No 950556, 14 June 1996) Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : MAAS -v- O'NEILL [2013] WASC 379 (S) CORAM : PRITCHARD J HEARD : 11 FEBRUARY 2014 DELIVERED : 7 AUGUST 2014 FILE NO/S : CIV 2038 of 2010 BETWEEN : DEBRA LORRAINE MAAS as Next Friend of MATTHEW JAMES MAAS

Plaintiff

AND

HELEN MARY O'NEILL in her capacity as the Executrix of the estate of the late MICHAEL O'NEILL
First Defendant

AND

HELEN MARY O'NEILL
Second Defendant

Catchwords:

Costs - Special costs order - Whether extension of time required - Whether special costs order can be made when costs previously agreed by consent and extracted - Whether application to vary costs order

Legislation:

Family Provision Act 1972 (WA)

Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA)
Legal Profession Act 2008 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Special costs order made

Category: B

Representation:

Counsel:

Plaintiff : Mr G A Rabe
First Defendant : No appearance
Second Defendant : Ms J McKenzie

Solicitors:

Plaintiff : Stables Scott
First Defendant : No appearance
Second Defendant : MDS Legal

Cases referred to in judgment:

Atwell v Roberts [2013] WASCA 37 (S)
Benfield v Australian National Railways Commission (1992) 8 WAR 285
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S)
Cockburn Cement Ltd v Minister for Environment (WA) [2011] WASC 260 (S)
Corp v Robinson [2012] WASC 490 (S)
Debra Lorraine Maas as next friend of Matthew James Maas v O'Neill [2012] WASC 379
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S)
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Feaver v Smith [2008] WADC 72
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S)
Friedman v Barfield (Unreported, WASC, Library No 9760472, 13 November 1997)
Frigger v Lean [2012] WASCA 66
Gould v Vaggelas (1985) 157 CLR 215
Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)
Stowe v Stowe (unreported, WASC (FC), Library No 950556, 14 June 1996)
Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2)




1 PRITCHARD J: These proceedings concerned an application brought by Ms Maas, as the next friend of Matthew Maas, pursuant to the Family Provision Act 1972 (WA) (the FP Act). The parties reached a settlement of Matthew's claim (the settlement), and I approved the compromise of the claim reached on Matthew's behalf pursuant to O 70 r 10(1) of the Rules of the Supreme Court 1971 (RSC).1 These reasons should be read in conjunction with my reasons in relation to the compromise.

2 On 15 October 2013, I made orders, by consent, to resolve these proceedings, and related proceedings in CIV 1403 of 2012 (the related proceedings). Those orders included an order concerning the payment of the parties' costs of these proceedings and in the related proceedings (the Agreed Costs Order), and an order granting liberty to apply. The Agreed Costs Order was in the following terms:

The costs of all parties to be taxed in these Proceedings and in CIV 1403 of 2012 (with costs to be taxed in these Proceedings as if in an action begun by writ of summons), such costs to be paid from the Estate, but should the funds in the Estate be insufficient to meet the costs after the terms of clauses 2.1 to 2.4 of Order 1 hereto are given effect, and the balance of the liabilities of the Estate are met, then the taxed costs be proportionally capped between the parties so as not to exceed the remaining funds in the Estate. Notwithstanding that costs are to be proportionately capped in those circumstances, the disbursements which form part of the parties' taxed costs are to be reimbursed in full.

3 Ms Maas now seeks a special costs order pursuant to s 280(2) of the Legal Profession Act 2008 (WA) (the LP Act), and in the alternative, an order to vary or amend the Agreed Costs Order on the basis of the 'slip rule' (the Application).

4 The Application was opposed by Mrs O'Neill, in her capacity as a beneficiary under Mr O'Neill's will (the Will). She opposed the making of a special costs order on six bases. First, it was submitted that the Agreed Costs Order constituted a special costs order and it is not open to Ms Maas to seek a further special costs order. Secondly, it was submitted that the Court's jurisdiction to make a special costs order after costs orders have been made is limited to those situations in which special costs orders have been overlooked, and this is not a case in which the making of a special costs order was overlooked. Thirdly, it was submitted that the Application is made out of time and no extension of time should be granted. Fourthly, it was submitted that the Agreed Costs Order was made by consent as part of an agreed compromise, and it would not be in the public interest for the Court to vary that consent order. Fifthly, it was submitted that the evidence before the Court does not support the making of a special costs order in this case. Finally, it was submitted that this is not a case for the application of the 'slip rule'.

5 For the reasons outlined below, I have concluded that a special costs order should be made. In those circumstances, it is unnecessary to deal with that part of the Application which was said to rely upon the 'slip rule'.

6 In order to explain my reasons for this conclusion, I deal with the following matters:

1. The Court's power to make a special costs order;

2. The Application and some relevant aspects of the history of the proceedings;

3. What the Application is not about;

4. Whether the grounds for a special costs order are made out in this case;

5. Whether Ms Maas requires an extension of time within which to bring the Application;

6. Whether the Agreed Costs Order constitutes a special costs order, or whether the Agreed Costs Order otherwise militates against the exercise of discretion to make a special costs order;

7. Whether the order now sought should be made given that the Agreed Costs Order was made by consent, and has been extracted; and

8. Conclusion and orders.

1. The Court's power to make a special costs order

7 Ordinarily the taxation of a bill of costs charged by a legal practice is regulated by costs determinations made by the Legal Costs Committee established under the LP Act.2 However, the applicable limits under the scale of costs approved by such costs determinations are able to be raised or removed by the Court pursuant to the power in s 280(2) of the LP Act, which provides:

[I]f a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following -

(a) order the payment of costs above those fixed by the determination;

(b) fix higher limits of costs than those fixed in the determination;

(c) remove limits on costs fixed in the determination;

(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.

8 The application for a special costs order in this case relies upon s 280(2)(c) of the LP Act.

9 The relevant determination in this case is the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) (the Determination). The Supreme Court Scale of Costs 2012, which is contained in Table B of the Determination (the Scale), sets out the relevant allowances.

2. The Application and some relevant aspects of the history of the proceedings

10 In the Application, Ms Maas initially sought an order lifting all of the limits in the Scale, and an order that counsel's fees be treated as a disbursement, and alternatively, an order pursuant to O 21 r 10 RSC (the 'slip rule') to vary the Agreed Costs Order to achieve those objectives.

11 In so far as the Application sought an order that counsel's fees be treated as a disbursement, that part of the Application was abandoned at the hearing.3

12 Furthermore, at the hearing, the relief sought from the Court was clarified. Ms Maas now seeks an order in the following terms:

The limit on costs allowable under the applicable Legal Practitioners (Supreme Court) (Contentious Business) Determinations in regard to scale item 17 (getting up or preparation for trial) be varied by removing the limit on the number of hours that may be allowed in the scale for that item of work.

13 Ms Maas relied on affidavits of her solicitor, Mr Goldfinch, sworn on 20 December 2013 and 11 February 2014, in support of the Application.

14 As I have already mentioned, Mrs O'Neill opposed the Application. She relied on affidavits sworn by her solicitor, Ms McKenzie, on 10 February 2014 and 11 February 2014.

3. What the Application is not about

15 The genesis for the Application appears to have been a breakdown in the parties' discussions about the quantum of their costs which should be paid from the estate. The affidavits filed by the parties disclosed some of the communications which passed between the parties' solicitors, both after the settlement had been reached and before the Court made orders (including the Agreed Costs Order), and in the period after the Court made those orders on 15 October 2013, prior to the filing of the Application. It is not necessary for present purposes to set out the detail of those communications. It suffices to say that the correspondence annexed to the affidavits filed in respect of the Application revealed that the parties had different assumptions about the way in which the Agreed Costs Order would operate and the likely outcome of its operation. The parties' different assumptions occupied a significant proportion of the content of the affidavits relied upon by the parties, and of their written and oral submissions. Save in one respect, which I deal with below at [59] - [60], those assumptions were irrelevant to the determination of the Application. It is appropriate to explain why that it so.

16 Counsel for Ms Maas expressed concern that if his client's costs were limited to those permitted under the Scale, there may ultimately be a residue remaining in the estate, which would be paid to Mrs O'Neill under the terms of Mr O'Neill's will. He submitted that this was contrary to the spirit of the settlement, and might warrant reconsideration of the settlement itself. Nothing in the Application requires a consideration of whether the operation of the Agreed Costs Order will have the result that there will be a residue remaining in the estate. Nor would such an assessment be possible: there is no information before the Court as to the likely quantum of all of the parties' taxed legal costs, or as to the precise amount remaining in the estate after the payment of outstanding liabilities and disbursements.

17 In addition, it appears that there is a difference of view between the parties as to the how the Agreed Costs Order should operate. Ms Maas' solicitors clearly envisaged that the parties' costs should be agreed without the need for the parties to incur further costs in a taxation. Again, this was an issue irrelevant to the determination of the Application. It suffices to say that it may be possible for the parties to agree on the quantum of the legal costs which should be paid out of the estate pursuant to the Agreed Costs Order without the need for those costs to be taxed. But if an agreement cannot be reached, then there may be no alternative but to proceed to a taxation before the terms of the Agreed Costs Order may be given effect. I need only add that it would be highly regrettable if the parties were to expend further funds litigating about the division of a portion of the estate which they had already acknowledged may not ultimately be paid to them directly, but which may be directed to the payment of legal fees.

18 I turn, then, to consider the issues which require resolution in order to determine whether a special costs order should be made.

4. Whether the grounds for a special costs order are made out in this case

The principles in relation to applications under s 280(2) of the LP Act

19 The principles governing an application under s 280(2)(c) of the LP Act are well established. The Court must form an opinion which has two components. First, the Court must determine that the upper limit of the costs allowable in respect of a matter pursuant to the relevant costs determination is inadequate. Secondly, the court must form the opinion that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter.4 The term 'unusual' in s 280(2) qualifies only the term 'difficulty' and not the terms 'complexity' or 'importance'.5

20 The Court will usually be able to form these opinions as a matter of impression, rather than of science or mathematics, because it has heard the matter and is familiar with the way in which the case was conducted, and will be in a position to take account of the issues involved.6 The judicial officer does not engage in a quasi taxation exercise, but will act on experience and upon impressions gained from what has been placed before the court during arguments or at trial.7

21 Accordingly, the Court will not form an opinion that the costs allowable under the relevant determination are in fact inadequate. It is sufficient if the Court considers that it is fairly arguable that that the taxing officer might properly allow costs at an amount greater than the amount allowable under the relevant determination.8

22 The appropriateness of lifting or removing the limits on individual items in the relevant determination should be assessed individually and not on a global basis.9

23 Ideally, the affidavit filed in support of a special costs application should annex a draft bill of costs that specifies the amounts proposed to be claimed under each discrete sub-item of the determination and the total amount proposed to be claimed.10 Although the provision of a draft bill of costs will ordinarily be the best guide to whether the limits imposed by the applicable scale are inadequate, the conclusion that it is fairly arguable that the taxing officer might properly allow costs at an amount greater than the amount allowable under the relevant determination does not always require evidence of the costs actually incurred.11 In some cases it will be apparent, on the basis of the number of hours apparently worked, and the maximum hourly rates permitted under the relevant scales, that the total amount which would be sought in a bill presented to the taxing officer would be likely to exceed the limit under the relevant determination.12

The evidence relied upon in support of the Application

24 In this case, no draft bill of costs specifying the amounts which were likely to be claimed under each item of the Scale was annexed to either of Mr Goldfinch's affidavits in support of the Application. Instead, Mr Goldfinch simply deposed to the total number of hours of attendances by the solicitors for Ms Maas on this matter, and the total cost of that legal work (presumably calculated by reference to the hourly rates set out in a costs agreement signed by Ms Maas). Mr Goldfinch also annexed a copy of the bills rendered by each of Ms Maas' counsel, which itemised the work carried out by those counsel in both these proceedings, and in the related action.

25 In his affidavit sworn 20 December 2013 Mr Goldfinch deposed that the time expended by both the solicitors and counsel for Ms Maas largely comprised preparation of the matter for trial,13 notwithstanding that the matter was ultimately settled. Mr Goldfinch deposed that '[a]side from Court appearances which will be covered under other items of the relevant scale, the large majority of attendances would be covered by Item 17' of the Scale.14

Is it fairly arguable that the taxing officer might properly allow costs at an amount greater than the amount allowable under Item 17 of the Scale?

26 The allowance under item 17 of the Scale is $54,120, which represents 120 hours of work by a senior practitioner. The total number of hours of legal work undertaken by Ms Maas' counsel and solicitors vastly exceeds the total number of hours allowed under Item 17 of the Scale. Mr Goldfinch deposed that solicitors in his firm had undertaken over 440 hours of work (totalling more than $180,00015), while it appears that counsel did approximately 190 further hours of work (totalling approximately $84,000).16 I note that Ms Maas' solicitors have not billed her for their services, and Ms Maas' solicitors have also paid the disbursements for filing fees and expert reports, which total in excess of $22,000.

27 Counsel for Mrs O'Neill submitted that the Application should not be granted because a draft bill of costs had not been placed before the Court. As I have already noted, while the provision of a draft bill of costs is preferable, its absence is not fatal to an application for a special costs order.

28 Counsel for Mrs O'Neill also submitted that the information before the Court as to the legal costs which had been incurred by Ms Maas did not include any indication as to whether those costs were party/party costs or solicitor/client costs, nor did that information permit any assessment to be made as to whether there had been any duplication of the legal work performed by virtue of the fact that the solicitor with the conduct of the matter for Ms Maas became ill, which necessitated counsel undertaking work which might ordinarily have been performed by that solicitor. Furthermore, counsel for Mrs O'Neill submitted that it was not possible to ascertain the extent of the work done which would exceed the limit in Item 17 of the Scale, bearing in mind that some of the legal work done would be accounted for under other items in the Scale, such as for the cost of attending the mediation (Item 24), the cost of chambers appearances (Item 10) and the preparation of affidavits and so on, which might be taxable as other work 'reasonably spent by a legal practitioner … but not covered by any other item' (Item 33).

29 There is some merit in these submissions. There is no doubt that the absence of a draft bill of costs in a case such as the present makes it more difficult to reach the conclusion that it is fairly arguable that the limit in Item 17 of the Scale is inadequate, for four reasons. First, the matter did not proceed to trial. It was listed for trial in 2012, but it became necessary to vacate the trial date, and the parties reached a settlement in mid-2013. Secondly, the matter was not intensively case managed. Consequently, this is not a case where the Court has had the opportunity, over a period of weeks or months in advance of a trial, to see the amount of work involved in preparing the matter for trial. Thirdly, although Mr Goldfinch deposed that most of the legal work undertaken by the solicitors and counsel for Ms Maas would likely constitute preparation for trial, under Item 17, a brief perusal of the detailed account of the fees of counsel for Ms Maas indicated that a large number of hours of work undertaken by counsel may well be taxed under items other than Item 17. Finally, the total number of hours of work undertaken by a solicitor gives no indication of the number of hours of legal work which can properly be taxed as party/party costs.

30 In the end, however, I have reached the view, as a matter of impression, that there is a fairly arguable case that a bill presented to the taxing officer by Ms Maas' solicitors may be taxed at an amount which is greater than the limit imposed by Item 17 of the Scale, and accordingly, that the amount allowable under Item 17 is inadequate. I have reached that view for three reasons.

31 First, it is apparent that a substantial proportion of the legal work undertaken by one of Ms Maas' counsel was in the nature of 'getting up' for trial. A brief perusal of counsel's memorandum of fees indicates that the number of hours of work likely to fall within Item 17 may well approach the total number of hours allowed under Item 17. If the taxing officer allowed even a relatively small number of hours of work for preparation for trial by Ms Maas' solicitors, it is apparent that the limit in Item 17 is likely to be exceeded.

32 Secondly, having regard to the material put before the Court on the application for leave to compromise, it is apparent that a not insignificant volume of work would have been required to be undertaken to get the matter ready for trial. That work clearly involved obtaining the opinions of a variety of experts: medical experts in relation to Matthew's extent of disability and his needs arising from his disability, expert opinions in relation to how his needs would need to be met over the course of his life (for example in relation to accommodation, equipment and transport, therapy, and medical treatment), and expert opinions in relation to the likely cost of meeting Matthew's needs over the course of his life (particularly the cost of a home for Matthew, and including the cost of modifications which would be required in view of his disabilities). In addition, expert opinion was sought on the best means of structuring the financial arrangements for Matthew to take account of any provision for him out of the Will, and the availability of government assistance for him.

33 Finally, I have also taken into consideration the fact that the limit under Item 17 of the Scale on the hours spent in the preparation of a case for trial does not apply in relation to claims declared by the Court to be catastrophic personal injury claims. In those claims, the amount allowed under Item 17 is the amount considered reasonable in all of the circumstances. Although this case was not a catastrophic personal injury claim, the extent of Matthew's disabilities, and his needs arising from those disabilities, give rise to some similarities with cases of that kind, particularly in relation to the evidence required to be obtained to make out a claim for damages, or in this case, to establish Matthew's needs and the cost of meeting those needs.

Is inadequacy of the Scale limit attributable to the unusual difficulty, or complexity, or importance of the matter?

34 Counsel for Mrs O'Neill submitted that the plaintiff had not produced evidence of unusual difficulty, complexity or importance which might support the special costs order sought in this case. She noted that there were no pleadings or interlocutory proceedings, no trial of any issues of fact or law, and the matter did not go to trial. Counsel for Mrs O'Neill submitted that the courts routinely dealt with plaintiffs with disabilities, and that alone did not give rise to particular complexity. In the present case, she submitted that Matthew's disabilities were so profound that there was little dispute as to their extent or the care he required.

35 Counsel for Ms Maas submitted that a special costs order was warranted because of the unusual difficulty and complexity of this matter. I do not agree that this case involved 'unusual difficulty'. The legal issues were not difficult at all. However, I am persuaded that the case involved some complexity, because it was necessary for Ms Maas to identify as far as possible the extent of Matthew's needs into the future, and thus the extent of his claim to Mr O'Neill's bounty. The complexity arose in identifying how Matthew's needs, arising from his disabilities, would need to be met over the course of his lifetime, and at what cost, and in how any provision for him from the Will might best be structured, having regard to Matthew's anticipated life span, and to such government assistance as might also be available to him.

Should a special costs order be made in this case - discretionary considerations

36 Under s 280(2) of the LP Act, the Court has a discretion whether to make a special costs order. Counsel for Mrs O'Neill submitted that the special costs order sought should not be made, having regard to the fact that these proceedings concerned the FP Act and the Court's concern about the quantum of costs charged in such matters, as reflected in the Practice Directions. Counsel for Mrs O'Neill submitted that the Agreed Costs Order was one which would not routinely be made in FP Act matters, and orders of the kind sought by Ms Maas would rarely be justified.

37 Clause 9.2.2 of the Consolidated Practice Directions (the Directions) deals with FP Act matters. At the time the Application was made, par [15] of the Directions provided:

The Court is concerned by the cost often incurred in [FP Act] matters. The Court will ensure that the principle of proportionality applies.

38 The Directions were amended in March this year. The Court's concern in relation to the costs of FP Act matters assumes a much greater prominence in those directions - it now appears in par [2] - [5] of the Directions, and more detailed provision is made for how the Court may fix or limit costs at the commencement of, or during, the proceedings. This reflects the Court's continuing concern about the potential for disproportionately high costs to be incurred in FP Act matters.

39 While I accept that a special costs order will be unusual in a FP Act matter, it remains open to the Court to make such an order in an appropriate case. For the reasons I have already given, I am satisfied that a special costs order should be made in this case, pursuant to s 280(2)(c) of the LP Act.

40 It is, however, appropriate to make a final observation. The total sum of the legal fees referred to in Mr Goldfinch's affidavits is substantial indeed, and exceeds the limit under Item 17 of the Scale by a very considerable margin. The making of the special costs order should not be understood as indicative of an expectation by the Court that all of those fees would necessarily be allowed on the taxation. The only effect of the special costs order is to free the taxing officer of the constraint otherwise imposed by the limit under the determination.17 It will be for the taxing officer to make an assessment of what is reasonable in all of the circumstances.

5. Whether Ms Maas requires an extension of time within which to bring the Application

41 Counsel for Mrs O'Neill submitted that the Application was brought out of time, and that an extension of time should not be granted. She submitted that the application should have been brought within 30 days pursuant to the deemed liberty to apply for a special costs order pursuant to O 66 r 51(2) RSC. Counsel for Mrs O'Neill submitted that the specific rule in O 55 r 51(2) RSC overrode the general grant of liberty to apply in this case, so that any application for a special costs order in pursuit of that liberty to apply nevertheless had to be brought within 30 days. I do not agree.

42 The deemed liberty to apply under O 66 r 51 RSC applies when the question of a special costs order has not been specifically dealt with by the Court. In such cases, the deemed liberty to apply operates so that the orders made by the Court are understood as if they included an order granting liberty to apply for a special costs order.18 However, having regard to the importance of the finality of litigation, a time limit of 30 days has been set on recourse to that deemed liberty.

43 In the present case, however, the Application was not made in reliance on the deemed grant of liberty to apply pursuant to O 66 r 51(2) RSC. Rather, the Application was made pursuant to the order granting liberty to apply which I made on 15 October 2013. When that order was made, counsel for Ms Maas submitted that the reasons why an order for liberty to apply was sought included that 'there may be issues arising in relation … to costs',19 including 'the issue of the taxation of the costs'.20 That order was not subject to a time limit in which any application pursuant to that grant of liberty should be made. Accordingly, in my view, no extension of time is required within which to bring the Application.

44 I should add that had it been necessary to consider an extension of time, I would have been minded to grant that extension, having regard to the conclusion I have reached about the merits of the Application, to the matters outlined below at pars [59] to [62], and to the fact that the Application was brought approximately five weeks outside the 30 days permitted under O 66 r 51(2) RSC. Furthermore, the Application was made within the overall time frame the Court had in contemplation for the resolution of all final orders in this matter. (On 15 October 2013 the proceedings were adjourned to 4 February 2014 in anticipation that by that time, any outstanding matters, including costs, would have been addressed so that orders might be made finally disposing of the proceedings.)

6. Whether the Agreed Costs Order constitutes a special costs order, or whether the Agreed Costs Order otherwise militates against the exercise of discretion to make a special costs order

45 Counsel for Mrs O'Neill submitted that the Agreed Costs Order was itself a special costs order for the purposes of s 280(2) of the LP Act,21 because in the absence of the Agreed Costs Order, the legal costs incurred would have been taxed pursuant to Item 11 of the Scale, as work done on an originating summons.22 The allowance under Item 11 is for a maximum of two days' preparation and one day of hearing, or 50 hours of work, up to and including the first day of hearing. The effect of the Agreed Costs Order was that Ms Maas' costs would be able to be taxed under the limit of Item 17 instead, with the result that an increased maximum of 120 hours rather than 50 hours applied.

46 Counsel for Mrs O'Neill submitted that it was not open to the Court to make a further special costs order once a special costs order has been made. In this respect she relied upon Friedman v Barfield,23 andupon observations made by Edelman J in Cockburn Cement Ltd v Minister for the Environment (WA).24I do not accept these submissions, for the following reasons.

47 First, the Agreed Costs Order was not (at least expressly) sought pursuant to s 280(2) of the LP Act. The better view is that the Agreed Costs Order was made in the exercise of the Court's general jurisdiction to award costs. That jurisdiction is not excluded by s 280 of the LP Act.25 In this case, although the proceedings were commenced by Originating Summons, the number of issues involved, and the way in which the litigation proceeded, was in some respects more analogous to proceedings commenced by a writ of summons, and it was appropriate to treat them as such for costs purposes.

48 Furthermore, the Agreed Costs Order did not deal solely with the manner in which the costs might be determined. It also permitted those costs to be paid from Mr O'Neill's estate, subject to a fixed overall limit, and made provision for a proportionate reduction of all parties' costs in the event that the total costs and disbursements exceeded that limit. In that respect, clearly the Agreed Costs Order cannot be characterised as a special costs order pursuant to s 280(2) of the LP Act.

49 Even if I am wrong in my conclusion that the Agreed Costs Order was not a special costs order for the purposes of s 280(2) of the LP Act, there is no bar to making a special costs order if such an order has already been made. Considerations such as the public interest in the finality of litigation suggest that it would be very unusual to see a further application made under s 280(2) of the LP Act when an order had already been made in the exercise of that power. But nothing on the face of s 280(2) prohibits the possibility. Further, the authorities to which counsel for Mrs O'Neill referred do not establish any contrary principle.

50 Counsel for Mrs O'Neill also submitted that a special costs order should not be made because this was not a case in which such an order was overlooked when final orders were made, and accordingly the Application did not fall within the scope of O 66 r 51(2) RSC. In this respect, she also relied upon observations made by Edelman J in Cockburn Cement.26The deemed liberty to apply in O 66 r 51(2) RSC is premised on the assumption that costs have been sought and ordered but that no special costs order has been made.27 However, as I have already noted, in this case the Application is not brought pursuant to the deemed grant of liberty to apply in O 66 r 51(2) RSC.

7. Whether the order now sought should be made given that the Agreed Costs Order was made by consent, and has been extracted

51 Counsel for Mrs O'Neill submitted that the Court should not grant the Application because to do so would involve varying a costs order which was made by consent, as part of an agreed compromise.28 Counsel for Mrs O'Neill submitted that the Agreed Costs Order was specifically agreed between the parties as part of the settlement and that the orders sought were inconsistent with the terms of the settlement agreement.29 Counsel for Mrs O'Neill also submitted that it was not in the public interest to permit a plaintiff to secure a defendant's consent to enter judgment and, having obtained judgment, to come back to the Court to try and vary agreed costs orders in a way that would detrimentally affect the defendant's interests.

52 In my view, the Application in this case should not be viewed as one which seeks to vary the Agreed Costs Order. The Agreed Costs Order, particularly as it was accompanied by an order granting liberty to apply, should not be understood as precluding the parties from seeking any further order or direction necessary to enable the Agreed Costs Order to be worked out or to facilitate the taxation pursuant to the liberty to apply.30 Viewed in that context, the Application should be understood as an application made pursuant to the grant of liberty to apply to facilitate the taxation of costs so as to ensure that the solicitors for the parties were paid their proper costs.

53 Similar issues to these were raised in Benfield v Australian National Railways Commission.31In that case,the District Court granted leave to compromise a personal injuries claim. Judge Keall made orders by consent relating to the payment of the compromise amount, and in relation to the payment of costs, and granting liberty to apply with respect to costs. Those costs orders provided that the defendant would pay the plaintiff's costs of the action to be taxed on the basis that the limits to costs imposed by O 66 r 16 RSC would not apply. In the course of the taxation of the costs some months later, a question arose regarding the fact that the amount claimed for getting up exceeded the limit under Item 13 of the applicable scale. The plaintiff then brought an application pursuant to the grant of liberty to apply, seeking orders that costs be taxed irrespective of the limits imposed by Item 13 and the costs of various pre-trial conferences. Judge Gunning refused the application. The Full Court allowed an appeal against that decision.

54 Chief Justice Malcolm, with whom Pidgeon and Rowland JJ agreed, accepted that counsel for the plaintiff was clearly under the mistaken belief that the effect of the costs order made by Judge Keall would be to increase the amount for getting up the case for trial under Item 13. His Honour then observed:32

It is quite apparent that the parties were at cross-purposes on the question of costs. …

[T]he parties had agreed on a formula of words which, in effect, amounted to a consent that the first respondent would pay the appellants' costs to be taxed without regard to the limits in O 66 r 16(1), including but not limited to the specific items mentioned. … In my view, the form of order did not preclude one or other of the parties seeking any further order or direction necessary to enable the costs order to be worked out or to facilitate the taxation pursuant to the liberty to apply. In my opinion, the application made for an order increasing the limit in item 13 … was properly to be regarded as a step involved in working out or supplementing the [costs order made by Judge Keall] rather than a variation of it: cf Cristel v Cristel[1951] 2 KB 725. As the matter stands, there is a real risk that the order made by Judge Keall would not achieve the necessary purpose of ensuring that the solicitors were paid their proper costs by the respondent. … Unfortunately, Judge Gunning took the view that because the order was a consent order he did not have jurisdiction to vary it. In my view, the learned judge was in error in approaching the matter on the basis that he was being asked to vary the original order rather than make an order pursuant to the liberty to apply as to costs which had been reserved in a situation where, on the face of it, a further order was necessary to work out the original order and facilitate the taxation of costs so as to ensure that the solicitors for the appellants were paid their proper costs.

55 Further, I am not persuaded that the special costs order now sought is inconsistent with the settlement, as counsel for Mrs O'Neill contends. In so far as the Agreed Costs Order dealt with the taxation of the costs, it was confined to enabling the costs to be taxed as if the matter had been commenced by a writ. That had the effect that the costs would not be taxed by reference to Item 11 of the Scale. However, the Agreed Costs Order did not deal with raising the limits under the other items in the Scale which would then apply. In addition, the parties contemplated the possibility that the sum of their taxed costs might exceed the remaining funds in the estate. Given the nature of the matter, and the work required to be done by the parties to prepare the matter for trial, it is difficult to see how the parties could have reached that conclusion other than in anticipation that their costs (or at least Ms Maas' costs) would be taxed without the limits imposed under the Scale. To that extent, the order now sought in the Application is not inconsistent with what appears to have been the underlying premise of the Agreed Costs Order.

56 Thirdly, even if the Application should be regarded as an application to vary the Agreed Costs Order,33 in my view this is a case in which the Court has jurisdiction to vary the Order, and where that course is warranted. The Court has an inherent jurisdiction to rectify an order made by consent, even if that order has been extracted, in order to avoid injustice.34 However, having regard to the public interest in the finality of litigation, there is no doubt that this jurisdiction will be exercised sparingly.35

57 One of the circumstances in which such an injustice will arise is if the order made by the Court by consent does not reflect the true intention of one of the parties.36 I turn to consider the very limited evidence before the Court in relation to the parties' understanding of the Agreed Costs Order.

58 As I noted in my reasons for decision in relation to the compromise, it was anticipated that after effect was given to the terms of the Will there would remain just under $300,000 in the estate. The parties agreed that this sum should cover the payment of outstanding liabilities of the estate, including a tax bill (the quantum of which was not then known) and the taxed costs of the parties to the proceedings. (If any sum remained, then pursuant to the terms of the Will, that would go to Mrs O'Neill as the beneficiary of the residue of the estate under the Will.)

59 The limited evidence before the Court suggests that the parties were at cross purposes about the likely effect of the taxation of their costs, and the subsequent application of the Agreed Costs Order. It is apparent from the first affidavit sworn by Mr Goldfinch37 that Ms Maas' solicitors - apparently having regard to the actual (untaxed) quantum of the costs incurred by Ms Maas, including counsel's fees and disbursements, and including the costs of the related action - assumed that after the payment of the liabilities of the estate, the balance remaining in the estate was unlikely to cover the entirety of the parties' taxed costs, and consequently that after the parties' costs were paid from the estate, there would be no residue remaining in the estate. It is also apparent that Ms Maas' solicitors assumed that this view of the likely outcome was shared by Mrs O'Neill and her solicitors.

60 The submissions made by counsel for Mrs O'Neill at the hearing of the Application suggested that her solicitors were not as confident as Ms Maas' solicitors that the parties' legal costs would exceed the balance remaining in the estate. However, it appears that Mrs O'Neill's solicitors were concerned to ensure that if the legal costs were to be paid from the estate, and if those costs ultimately did exceed what remained in the estate, that there was a mechanism to ensure that those costs would be reduced so as not to exceed the residue in the estate.38

61 Had the parties appreciated that they held different viewpoints about the likely consequences of the taxation of costs and of the operation of the Agreed Costs Order, there can be little doubt that the matter would have been raised at the time the Agreed Costs Order was made, and at that stage Ms Maas' solicitors would have made an application to raise the limit in Item 17.

62 In considering whether an injustice would arise if the Application were not granted, I have taken into account the position of each of the parties. In agreeing to the Agreed Costs Order, the parties expressly contemplated the possibility that there may not be any residue remaining in the estate following the payment of outstanding liabilities, the parties' disbursements, and their costs. If the special costs order now sought is made, that will not change. The position will remain that Mrs O'Neill will be entitled to the residue of the estate. Whether there is any residue will still depend on what all of the parties' taxed costs are, and thus on what allowance is made by the taxing officer for the parties' costs in respect of the various items under the Determination. That outcome represents no injustice for Mrs O'Neill, having regard to what was agreed in the Agreed Costs Order.

63 On the other hand, to decline to make the special costs order on the basis that it would vary the Agreed Costs Order would be productive of injustice to Ms Maas because it will deny her the opportunity to recover her proper costs from the estate.

64 Finally, the length of time between the making of the Agreed Costs Order and the Application would not have militated against a variation of that order. For the reasons set out at [44], that interval was not so lengthy as to warrant the conclusion that the Application should be dismissed having regard to the public interest in the finality of litigation.

8. Conclusion and orders

65 There will be an order pursuant to s 280(2)(c) of the LP Act to the effect that Ms Maas' costs will be taxed without regard to the limit under Item 17 of the Scale. I will hear from the parties as to the form of that order, and as to the costs of the Application.

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1Debra Lorraine Maas as next friend of Matthew James Maas v O'Neill[2012] WASC 379.
2Legal Profession Act 2008 (WA) s 280(1); see also s 275(1).
3 ts 22 (11 February 2014).
4Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd[2013] WASCA 66 (S) [3] (the Court), citing Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11] (Martin CJ).
5Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd[2013] WASCA 66 (S) [4] (the Court), citing Grundy v Cassar [No 2] [2012] WASC 103 [50] (Simmonds J).
6Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd[2013] WASCA 66 (S) [3] (the Court), citing EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd[2008] WASC 275 (S) [7] (Martin CJ) and Verdell Pty Ltd v F & G Nominees Pty Ltd[2002] WASC 58 (S2) [14] (Wheeler J). See also Flotilla Nominees Pty Ltd v Western Australian Land Authority[2003] WASC 122 (S) [43] (Pullin J).
7Corp v Robinson[2012] WASC 490 (S) [14] (Kenneth Martin J).
8Frigger v Lean[2012] WASCA 66 [81] (Allanson J, Newnes & Murphy JJA agreeing); Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd[2013] WASCA 66 (S) [4] (the Court), citing Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq)[2007] WASC 254 (S) [16] (Martin CJ).
9Corp v Robinson[2012] WASC 490 (S) [14] (Kenneth Martin J).
10Atwell v Roberts[2013] WASCA 37 (S) [23] (the Court).
11Frigger v Lean [2012] WASCA 66 [81] (Allanson J, Newnes & Murphy JJA agreeing).
12Atwell v Roberts[2013] WASCA 37 (S) [23] (the Court).
13 Affidavit of Antony John Goldfinch sworn 20 December 2013 [19].
14 Affidavit of Antony John Goldfinch sworn 11 February 2014 [8].
15 Affidavit of Antony John Goldfinch sworn 20 December 2013 [3].
16 Exhibit A and Exhibit C to the Affidavit of Antony John Goldfinch sworn 11 February 2014.
17Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [26] (Martin CJ).
18Cockburn Cement Ltd v Minister for Environment (WA)[2011] WASC 260 (S) [46] (Edelman J).
19 ts 3 (15 October 2013).
20 ts 3 (15 October 2013).
21 Second Defendant's submissions, 10 February 2014 [12].
22 ts 12 (11 February 2014).
23Friedman v Barfield (Unreported, WASC, Library No 9760472, 13 November 1997).
24Cockburn Cement Ltd v Minister for the Environment (WA)[2011] WASC 260 (S) [47].
25 See Legal Profession Act 2008 (WA)s 280(3).
26Cockburn Cement Ltd v Minister for Environment (WA)[2011] WASC 260 (S) [47] - [48] (Edelman J).
27 See the discussion in Cockburn Cement Ltd v Minister for Environment (WA)[2011] WASC 260 (S) [48] (Edelman J).
28 Second Defendant's submissions, 10 Febraury 2014 [22].
29 ts 49 (11 February 2014).
30 Cf Benfield v Australian National Railways Commission (1992) 8 WAR 285, 292 (Malcolm CJ).
31Benfield v Australian National Railways Commission (1992) 8 WAR285.
32Benfield v Australian national Railways Commission(1992) 8 WAR 285, 292 - 293.
33 Cf Feaver v Smith[2008] WADC 72 [57] (Schoombee DCJ).
34Gould v Vaggelas(1985) 157 CLR 215, 274 - 275 (Gibbs CJ, Wilson, Brennan & Dawson JJ); Esther Investments Pty Ltd v Markalinga Pty Ltd(1992) 8 WAR 400, 407 (Malcolm CJ); Stowe v Stowe(unreported, WASC (FC), Library No 950556, 14 June 1996).
35Stowe v Stowe(unreported, WASC (FC), Library No 950556, 16 October 1995) 2 (Owen J), 7 (White J).
36Stowe v Stowe(unreported, WASC (FC), Library No 950556, 16 October 1995) 7 (Ipp J); Benfield v Australian National Railways Commission(1992) 8 WAR 285, 294 (Malcolm CJ, Pidgeon & Rowland JJ agreeing).
37 Affidavit of Antony John Goldfinch sworn 20 December 2013 [5].
38 ts 44 (11 February 2014).