MacDonald v Woolworths Group Limited
[2019] WADC 66
•10 MAY 2019
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: MACDONALD -v- WOOLWORTHS GROUP LIMITED [2019] WADC 66
CORAM: GETHING DCJ
HEARD: 5 APRIL 2019
DELIVERED : 10 MAY 2019
FILE NO/S: CIV 3335 of 2012
BETWEEN: STANLEY ALLAN MACDONALD
Plaintiff
AND
WOOLWORTHS GROUP LIMITED
First Defendant
ADINI HOLDINGS PTY LTD
Second Defendant
EMAD HASSAN MOHAMED HUSSEN
Third Defendant
Catchwords:
Costs - Special costs orders - Whether a District Court registrar has the jurisdiction to lift or remove scale limits - Whether inadequacy under relevant costs determinations - Whether inadequacy arose by reason of the unusual difficulty, complexity or importance of the matter
Legislation:
District Court of Western Australia Act 1969 (WA), s 21, s 26, s 53, s 64, s 68, s 88
District Court Rules 2005 (WA), r 8, r 11
Legal Profession Act 2008 (WA), s 280(2)
Legal Profession (Supreme and District Courts)(Contentious Business) Determination 2018 (WA)
Motor Vehicle (Third Party Insurance Act) 1943 (WA), s 27A
Result:
Special costs orders made
Representation:
Counsel:
| Plaintiff | : | Mr F A Robertson |
| First Defendant | : | Ms M L Coulson |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | McAuliffe Legal |
| First Defendant | : | HBA Legal |
| Second Defendant | : | Moray & Agnew Lawyers |
| Third Defendant | : | HWL Ebsworth Lawyers |
Case(s) referred to in decision(s):
Alpine Holdings Pty ltd v Warwick Entertainment Centre Pty Ltd [2003] WASC 53
Atwell v Roberts [2013] WASCA 37 (S)
Beasley v Ocean Foods International Pty Ltd [2005] WASC 116
Brocx v Havilah Legal [2012] WASC 153
Brocx v Mounsey [2009] WADC 113
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S)
Cifuentes v Fugro Spatial Solutions Pty Ltd [2009] WASC 316 (S)
Corp v Robinson [2012] WASC 490 (S)
Divjakoski v Boral Window Systems [No 2] [2010] WADC 166
Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd [2014] WASC 469 (S)
Ellis v East Metropolitan Health Service [2018] WADC 36 (S)
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Feaver v Smith [2008] WADC 72; (2008) 58 SR (WA) 204
Forrest-Moore v Belswan (Mandurah) Pty Ltd [No 2] [2011] WADC 217
HAR v The State of Western Australia [No 2] [2015] WASCA 249
Heartlink Ltd v Jones as Liquidator of HL Diagnostics Ltd (in liq) [2007] WASC 254 (S)
Maas v O'Neill [2013] WASC 379
Maio v City of Stirling [No 2] [2016] WASCA 45 (S)
McGlinn v Joondalup Hospital Pty Ltd [2013] WADC 105
McGlinn v Joondalup Hospital Pty Ltd [No 2] [2014] WADC 3
Minister for Aboriginal Affairs v Peko‑Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
Re City of Joondalup; Ex parte Mullaloo Progress Association Inc [2003] WASCA 293 (S)
Rowe v Stoltze [2013] WASCA 92
Santos Offshore Pty Ltd v Apache Oil Australia Pty Ltd [2015] WASC 242 (S)
Sino Iron Pty Ltd v Mineralology Pty Ltd [No 2] [2017] WASCA 76 (S)
Terravision Pty Ltd v Black Box Control Pty Ltd [No 5] [2018] WASC 340
Wainright v Barrick Gold of Australia [2014] WASCA 15 (S)
Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [No 11] [2011] WASC 74
GETHING DCJ:
This action was commenced by writ of summons filed on 23 October 2012 by the plaintiff against the first defendant, Woolworths Limited. The claim was for damages for personal injuries which the plaintiff says he sustained in a slip and fall which he alleged was caused by water on the floor near where the trolleys were stored at the Woolworths supermarket at Floreat Forum. The trolley retrieval contractor and sub‑contractor were ultimately brought into the proceedings both as additional defendants and third/ fourth parties. Liability and quantum were in issue.
The action was listed for trial in September 2018. On 20 August 2018 the court made orders by consent vacating the trial, dismissing the plaintiff's claim against the defendants and dismissing the cross claims between the defendants. The consent order also provided that the defendants were to pay the plaintiff's costs to be taxed if not agreed and reserved liberty to the plaintiff to apply for special orders as to costs.
By chamber summons filed 8 October 2018 (Application) the plaintiff sought orders pursuant to Legal Profession Act 2008 (WA) (LPA) s 280(2) that the costs payable to the plaintiff be taxed without regard to the limits imposed by the applicable scale limits in the Legal Profession (Supreme and District Courts)(Contentious Business) Determination 2018 (WA) (2018 Determination) and its 2016, 2014, 2012 and 2010 predecessors.[1]
[1] Legal Profession (Supreme Court)(Contentious Business) Determination 2016 (WA), Legal Profession (Supreme Court)(Contentious Business) Determination 2014 (WA), Legal Practitioners (Supreme Court)(Contentious Business) Determination 2012 (WA) and Legal Practitioners (Supreme Court)(Contentious Business) Determination 2010 (WA). I will collectively refer to these as 'the Determinations'.
Programming orders were made for the hearing of the Application. The plaintiff filed three affidavits in support of the Application, each of which were sworn by Mark McAuliffe, his solicitor, being affidavits dated 4 October 2018, 2 January 2019 and 7 February 2019.[2] The plaintiff also filed submissions dated 18 January 2018 in support of the Application.[3]
[2] Which I will refer to as the 'First McAuliffe Affidavit', 'Second McAuliffe Affidavit' and 'Third McAuliffe Affidavit' respectively.
[3] Which I will refer to as the 'Plaintiff's Submissions'.
The defendants filed one affidavit in opposition to the Application, being that of Matthew Thickett, sworn 4 December 2018.[4] Mr Thickett is a partner of the defendants' solicitors. The defendants also filed submissions in opposition to the Application, dated 4 February 2019 and 2 April 2019.[5] The Defendants' Submissions refer to the fact that the Application was not brought within the time period specified in Rules of the Supreme Court 1971 (WA) (RSC) O 66 r 51(3)(a) and that no application had been brought to extend this time pursuant to RSC O 3 r 5.[6]
[4] Which I will refer to as the 'Thickett Affidavit'.
[5] Which I will refer to as the 'Defendants' Submissions' and 'Defendants Supplementary Submissions' respectively.
[6] Defendants' Submissions, pars 3 to 7.
At the hearing of the Application on 7 February 2019 before a legally qualified registrar, counsel for the plaintiff raised the issue as to whether an application pursuant to LPA s 280(2) could be determined by a registrar. The Application was stood over to the following day. At the reconvened hearing, the registrar ordered that the issue as to whether a District Court registrar (or deputy registrar) has the power to make an order for the payment of costs above that fixed by a determination pursuant to the LPA s280(2) be referred to a judge in chambers on 5 April 2019. The registrar further ordered that, in the event that a registrar does not have jurisdiction, the Application also be referred to the judge for decision, and that otherwise it be adjourned back to a registrar for decision.
The issue raised by the registrar was heard by me on 5 April 2019. Prior to the hearing, I had, through my Associate, advised the parties that, whatever the outcome was on the jurisdiction issue, to avoid further expense and delay, I would determine the Application (rather than send it back to a registrar). This is what occurred.
Three issues arise for determination:
•Does a registrar of the District Court have jurisdiction to determine an application pursuant to LPA s 280(2)
•Should the time within which the plaintiff may bring the Application be extended?
•Should orders be made pursuant to LPA s 280(2) in the circumstances of the Application?
Does a registrar have jurisdiction?
The power to make special costs orders contained in LPA s 280(2) is in the following terms:
… if 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.
The issue of whether a District Court registrar has jurisdiction to determine an application pursuant to LPA s 280(2) has been obliquely considered in two decisions following the trial, with contrary outcomes. The first is the decision of Master Sanderson in Brocx v Havilah Legal.[7] This decision concerned a review of the taxation of a solicitor/client bill of costs in the Supreme Court. The bill related to a District Court trial. Following delivery of reasons for decision after the trial, the parties filed a consent order pursuant to RSC O 43 r 16 one of the terms of which was that the 'plaintiff's costs of the action be taxed without regard to the limit relating to getting up (the scale limit) in relation to the relevant determinations of the legal costs committee applicable to the plaintiff's costs and without admission that the costs of getting up do exceed the scale limit'. An order was made by a registrar in terms of the consent.
[7] Brocx v Havilah Legal [2012] WASC 153 (Brocx (SC)).
The District Court action was one in which the plaintiff claimed damages for injuries she sustained in a motor vehicle accident.[8] Motor Vehicle (Third Party Insurance) Act 1943 (WA) s 27A provides that, in cases of this type, any agreement by which the solicitor is able to receive a reward greater than the costs provided for in an applicable costs determinations is void. A Supreme Court registrar accepted that the terms of this section do not prohibit recovery of an uplifted amount where an order has been made pursuant to LPA s 280(2).[9] The Supreme Court registrar then went on to express the view that an order pursuant to LPA s 280(2) could not be made by consent:
… having regard to section 215 of The Legal Practice Act 2003 (the applicable provision at the relevant time) the limits can only be lifted if a court, or a judicial officer, is of the opinion that the amount of costs allowable in respect of a matter is inadequate and should be lifted. A consent order does not fulfil the requirements of section 215. Every authority cited by Counsel for the Practitioner in support of the position that the consent order entitles the Practitioner to charge in excess of the limits is one where a Judge has so determined, A judge has not turned his or her mind to this issue.
[8] See generally: Brocx v Mounsey [2009] WADC 113.
[9] The registrar's position is set out in a letter which is annexed to the reasons in Brocx (SC). See also: McGlinn v Joondalup Hospital Pty Ltd [No 2] [2014] WADC 3 [99] - [102].
As to this issue, the Master made the following observations:[10]
Finally, there is the question of the operation of O 43 r 16. In my view, the approach taken by the learned registrar was entirely correct, for the reasons she gives. Counsel for the practitioner did raise the question of whether a deputy registrar is a 'judicial officer' for the purposes of s 280(2) of the Legal Profession Act 2008 (WA). I accept the issue is not free from doubt. There is no definition of the phrase in the Act itself, nor is it defined in the Supreme Court Act 1935 (WA). However, on balance I am satisfied a deputy registrar of the District Court does not fall within that definition. A deputy registrar is not a member of the court in the same way a master is a member of the Supreme Court. In my view, once that position is reached, the reasoning of the learned registrar holds good.
[10] Brocx (SC) [11].
The summons for review was dismissed.
The second is the decision of Staude DCJ in McGlinn v Joondalup Hospital Pty Ltd [No 2].[11] The central issue in that decision was at what point in time in the life of an action could, and should, a determination be made that the action was for a 'catastrophic personal injuries claim' for the purposes of the Determinations. The effect of such a declaration is to remove the upper limits on a number of specific items replacing them with an amount which is reasonable in the circumstances.[12] As the Principal Registrar I had determined that a declaration of this kind could be made at an early stage in the proceedings, after the close of pleadings and following the filing of the plaintiff's particulars of damages.[13] Staude DCJ disagreed, not being satisfied that, in the circumstances then before the court, a determination should be made before the conclusion of the action.[14]
[11] McGlinn v Joondalup Hospital Pty Ltd [No 2] [2014] WADC 3.
[12] See generally: Ellis v East Metropolitan Health Service [2018] WADC 36 (S)[54] – [76] (Gething DCJ); Burns v North Metropolitan Health Service [2019] WADC 65 [44] – [67] (Gething DCJ).
[13] McGlinn v Joondalup Hospital Pty Ltd [2013] WADC 105.
[14] McGlinn [No 2] [81] – [98]. The wording of 2018 Determinations relevantly differs from the wording of the Prior Determinations, so this conclusion may no longer hold: Burns [54] – [60].
Staude DCJ also held that a registrar had the power make a determination that an action was a catastrophic personal injuries claim.[15] In the course of this analysis, His Honour commented:[16]
The plaintiff referred to Brocx v Havilah Legal [2012] WASC 153 where Master Sanderson observed that a District Court registrar was not a judicial officer for the purposes of s 280(2) of the LPA. In that case a registrar had merely entered a consent order in relation to costs pursuant to RSC O 43 r 16. There was no adjudication. The observation was obiter. It does not bear on my decision.
[15] McGlinn [No 2] [65] – [80].
[16] McGlinn [No 2] [77].
I respectfully agree that the observations in Brocx (SC) were obiter. Moreover, for the purposes of determining the Application, it is not necessary for me to determine whether a registrar has the power to make an order pursuant to LPA s 280(2) upon the parties filing a memorandum of consent orders pursuant to RSC O 43 r 16.
The jurisdiction of the District Court in relation to costs is set out in District Court of Western Australia Act 1969 (WA) (DCA) s 64. This section provides that the 'costs of any action or proceeding shall be in accordance with any costs determination (as defined in the Legal Profession Act 2008 s 252) and shall be paid by or apportioned between the parties in such manner as the District Court judge directs and in default of such a direction shall abide the event'.[17] A 'District Court judge has the same power in relation to the payment of costs by any party as a judge of the Supreme Court has'.[18] Among many other things, this means that a District Court judge has the power to consider an application pursuant to LPA s 280(2) for an action within the substantive jurisdiction of the court. This conclusion is also apparent in the terms of LPA s 280(2). Neither the terms 'court' or 'judicial officer' are defined in the LPA. However, given the cross reference by Parliament to the LPA in DCA s 64, it is clear that the District Court is a 'court' for the purposes of LPA s 280(2).[19] Moreover, where Parliament intended jurisdiction in the LPA to be able to be exercised only by the Supreme Court, it has made this explicit.[20]
[17] DCA s 64(1), there being no relevant provision of the DCA to the contrary.
[18] DCA s 64(3), again there being no relevant provision of the DCA to the contrary.
[19] See for example: Ellis [77] – [95]; Feaver v Smith [2008] WADC 72; (2008) 58 SR (WA) 204 (Schoombee DCJ).
[20] See LPA s 288.
The next issue is whether this jurisdiction can be exercised by a registrar.
The DCA in s 6(1) provides that the functions of a registrar are as set out in the DCA and in the rules of court.
The DCA and District Court Rules 2005 (WA) (DCR) draw the distinction between a legally qualified registrar and a lay registrar.[21] As a matter of practice, 'lay registrars' are employees of the Department of Justice who perform functions for the District Court in country registries. The jurisdiction given to 'lay registrars' pursuant to DCR r 8(2) is in limited terms, and does not, on its face, purport to give a lay registrar jurisdiction pursuant to LPA s 280(2). So the issue only arises in relation to legally qualified registrars (currently all Perth based registrars). There is no relevant distinction between the jurisdiction given to a legally qualified registrar based on whether the registrar has the formal title of Principal Registrar, Registrar or Deputy Registrar. In the remainder of these reasons, I will use the term 'registrar' to refer to a legally qualified registrar, regardless of formal title.
[21] DCA s 53; DCR s 8.
The DCA by s 53(1) relevantly provides that a registrar who is or has been a legal practitioner has in 'all actions … within the jurisdiction … in addition to the powers and authorities conferred [by the DCA]… all the powers and authorities of the master… of the Supreme Court'. A master of the Supreme Court has 'the same jurisdiction that a judge sitting in chambers has under' the Supreme Court Act 1935 (WA) (SCA) or the RSC 'unless it is expressly stated otherwise'.[22] Neither the SCA nor the RSC explicitly states that a Supreme Court master does not have jurisdiction to determine an application pursuant to LPA s 280(2). It follows that a Supreme Court master has jurisdiction to determine an application pursuant to LPA s 280(2) and thus, by DCA s 53, so does a legally qualified registrar of the District Court.
[22] RSC O 60.
There is a second avenue by which a registrar has jurisdiction to determine an application pursuant to LPA s 280(2), being by delegation under the DCR.
So far as is relevant, the delegated jurisdiction of a registrar (that is, a legally qualified registrar) is set out DCR r 8(1):
(1) A legally qualified registrar may deal with any proceedings that a judge may deal with in chambers other than —
(a) proceedings involving a review of the taxation of costs; and
…
(d) proceedings that under rules of court are to be dealt with by a judge; and
(e) proceedings that the Chief Judge directs are to be dealt with by a judge.
An application pursuant to LPA s 280(2) is one that a District Court judge may deal with in chambers.[23]
[23] DCA s 21.
The DCR do not explicitly provide that an application for orders pursuant to LPA s 280(2) is to be dealt with by a judge. Nor is this a proceeding which the Chief Judge has directed be dealt with by a judge.
If a party is dissatisfied with a decision of a registrar the party may appeal to a judge.[24] The appeal is to be by way of a new hearing of the matter that was before the registrar.[25]
[24] DCR r 15(1).
[25] DCR r 15(6).
With limited exceptions, a proceeding that may be dealt with by a registrar is not to be listed before a judge.[26] One exception is 'in the case of an application in an action or matter that is made after the action or matter is listed for trial'.[27] The Application was made after the present action was been listed for trial. However, the effect of DCR r 11 is not to deprive the registrar of jurisdiction after an action is listed for trial, merely to permit the application to be administratively listed before a judge without the necessity to formally obtain leave.
[26] DCR r 11.
[27] DCR r 11(e).
The net effect of these provisions is that, pursuant to both the DCA and DCR, an application for orders pursuant to LPA s 280(2) is a proceeding which may be determined by a registrar.
There are two further issues. The first is whether the purported delegation of jurisdiction to a registrar to determine an application pursuant to LPA s 280(2) is outside the rule making power of the District Court. This inquiry is somewhat theoretical given the effect of DCA s 53.
The power to delegate jurisdiction to a registrar is contained in DCA s 88. Relevantly there is a broad power to make rules, not inconsistent with the DCA, regulating and prescribing the 'practice and procedure' to be followed in the court.[28] The rules may provide 'for a registrar or any particular registrar to have power, either generally or in particular cases and under such conditions as are prescribed, to do such things, to transact such business, and to exercise such authority and jurisdiction as a judge of the Court sitting in chambers may, by virtue of a statute, custom, or rule or practice of the Court, do, transact, or exercise, and to tax costs'.[29]
[28] DCA s 88(1).
[29] DCA s 88(2).
The term 'practice and procedure' is defined in the DCA to include 'matters relating to costs'.[30] More generally, the composite term 'practice and procedure' is well-understood to refer to the method by which a legal right is established or enforced, as distinct from the law which gives or defines that right.[31] In my view, a determination pursuant to LPA s 280(2), at least in so far as it relates to an action otherwise within the civil jurisdiction of the District Court, is a matter relating to the practice and procedure of the District Court.[32] This conclusion is reinforced by my earlier conclusion that a registrar has this jurisdiction directly under the DCA by DCA s 53.
[30] DCA s 6(1).
[31] Rowe v Stoltze [2013] WASCA 92 [43] (Newnes JA, with whom Pullin and Murphy JJA agreed).
[32] The caveat is necessary as a determination pursuant to LPA s 280(2) may also be made as between solicitor and client, and it is an open issue as to the extent to which the District Court has this jurisdiction. See generally: Burns [38].
The second issue is whether there is anything in the terms of LPA s 280(2) which mandates that the power in LPA be exercised by a judge, and thereby either prevents a registrar exercising a power pursuant to DCA s 53 or restrains the judges of the District Court making a rule to delegate this power to a registrar.
There is limited guidance in the LPA as to the meaning of the terms 'court' and 'judicial officer'. The term 'court' in LPA div 5 (which includes s 280) is defined in LPA s 274 to include 'an arbitrator, tribunal, or person, having power to require the production of documents or the answering of questions'. As I have observed, the term includes the District Court.[33] The LPA s 280(3) provides that nothing in LPA s 280(1) is to be construed as limiting the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court or judicial officer the amount of costs allowed'. This suggests that a 'taxing officer' is neither a 'court' nor a 'judicial officer', otherwise there would not have been a need to separately identify a 'taxing officer'.
[33] See [17] above.
There is one instance in the LPA in which a power is expressed to be one which may only be exercised by a judge. This is in LPA s 521 which deals with the issue of summonses for the purposes of a complaint investigation. In this context, LPA s 521(8) provides that '[o]bedience to, or non‑observance of, a summons issued under this section may be enforced and punished by a judge in chambers in the same manner as in the case of obedience to, or non‑observance of, a subpoena issued by the Supreme Court'. Further, as I have already indicated, certain jurisdiction in the LPA is reserved to the Supreme Court.[34] LPA s 280(2) is not so limited. This again suggests a broad interpretation of the word 'court' in LPA s 280(2).
[34] See LPA s 288.
There is an analogous approach in the DCA in relation to transfers. The power to transfer an action in the District Court to the Magistrates Court is vested in 'the Court'.[35] By contrast, the power to transfer an action in the District Court to the Supreme Court is vested in 'a District Court judge'.[36] The power to challenge the place where an action is commenced is vested in 'the Court or a District Court judge'[37], whereas the power to change the venue of a trial is vested only in 'a District Court judge'.[38]
[35] DCA s74.
[36] DCA s 77.
[37] DCA s71.
[38] DCA s72.
The approach to identifying applications which must be determined by a judge in both the LPA and the DCA leads to the conclusion that had Parliament intended the jurisdiction in LPA s 280(2) to only be exercised by a judge, it would have expressly provided to this effect. More specifically, had Parliament intended that the power in LPA s 280(2) only be exercised by a 'judge in chambers', it would have used the same language as it used in LPA s 521(8). It did not use this language in LPA s 280(2), with the effect that there is no basis to infer an equivalent limitation. The use of the phrase 'court or judicial officer' in LPA s 280(2) supports this conclusion, in particular given the expansive definition of the term 'court' in LPA s 274. Nor is there any basis to imply such a limitation from the subject matter, scope and purpose of the LPA as a whole.[39] In my view, there is no basis to infer a limitation in LPA s280(2) to the effect that this power cannot be exercised by a registrar pursuant to DCA s 53 or that it cannot be delegated to a District Court registrar by rules of court.
[39] Minister for Aboriginal Affairs v Peko‑Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39 – 40 (Mason J); HAR v The State of Western Australia [No 2] [2015] WASCA 249 [96] (Buss JA with whom Mazza JA & Hall J agreed).
Accordingly, there is nothing in the terms of LPA s 280(2) to prevent the both DCA s 53 and the DCR applying according to their terms to empower a registrar to deal with an application pursuant to that subsection.
I find that a legally qualified registrar of the District Court has the power to deal with an application pursuant to LPA s 280(2).
Should leave be given to bring the Application out of time?
The Defendants' Submissions refer to the fact that the Application was not brought within the time period specified in RSC O 66 r 51(3)(a) and that no application had been brought to extend this time pursuant to RSC O 3 r 5.[40]
[40] Defendants' Submissions, pars 3 to 7.
The RSC by O 66 r 51(2) provides that the court may make an order pursuant to LPA s 280(2) on its own motion or on an application by a party. The RSC by O 66 r 51(3)(a) provides that an application by a party must be brought within 30 days after the date of the relevant judgment or other time fixed by the court. Judgment was awarded on 20 August 2018. The Application was not commenced until 8 October 2018. No other time has been fixed by the court.
An initial issue arises as to whether the time limit in RSC O 66 r 51(3)(a) applies. The orders finalising the action reserved to the plaintiff liberty to make an application for a special costs order. This meant that the Application was not made in reliance on the 'deemed grant of liberty' pursuant to RSC O 66 r 51(2), but in reliance on a court order.[41] The consent order could have, but did not, provide a time limit within which any application was to be made.[42] In identical circumstances in Maas v O'Neill Pritchard J held that no extension of time was required.[43] I am of the same opinion.
[41] Maas v O'Neill [2013] WASC 379 (S) [42] – [43].
[42] See for example: Corp v Robinson [2012] WASC 490 (S) [3] (Kenneth Martin J).
[43] Maas [43].
In the event that I am wrong in this conclusion, the defendant accepts that the court has the power to extend the time period within which the Application may be brought pursuant to RSC O 3 r 5.[44]
[44] Re City of Joondalup; Ex parte Mullaloo Progress Association Inc [2003] WASCA 293 (S) [2] (Pullin J); Alpine Holdings Pty ltd v Warwick Entertainment Centre Pty Ltd [2003] WASC 53 [43] (Roberts-Smith J); Feaver [28] – [30];
The relevant factors in determining whether to exercise discretion under RSC O 3 r 5 include:[45]
(a)the extent of the delay, in particular given that granting an extension where there has been an excessive delay would tend to bring the administration of justice to disrepute;
(b)any explanation provided for the delay;
(c)any prejudice suffered by the other party; and
(d)the merits of the application.
[45] See generally: Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400, 406 ‑ 409 (Malcolm CJ); Alpine Holdings [43] – [54]; Maas [44]; Re City of Joondalup [4]; Feaver [71] – [72].
The Application was commenced 19 days out of time. The delay was not long, and certainly not excessive. The First McAuliffe Affidavit contained a detailed bill of costs which would have taken some time to prepare. The defendants did not draw my attention to any specific prejudice which they suffered as a result of the delay. As will be apparent, the merits of the Application favour the plaintiff. In the event that it had been necessary for me to extend the time within which the Application could have been brought to 8 October 2018, I would have done so.
Should the costs limits be removed?
In the Application the plaintiff seeks an order that the costs payable to the plaintiff be taxed without regard to the limits imposed by the identified scale limits in the Determinations.
In Sino Iron Pty Ltd v Mineralology Pty Ltd [No 2] the Court of Appeal made the following comments as to the regime in LPA s 280 which provide an instructive frame within which to determine the Application:[46]
By s 280(1) of the Act, a party's recoverable costs are confined, in effect, by the scale limits. To that extent, s 280(1) is protective of the party charged and, more generally, serves the due administration of justice by limiting the allowable scope for legal costs. Section 280(2) operates as an exception to s 280(1) of the Act. Section 280(2) of the Act operates to give the successful party the opportunity to recover those costs which have been reasonably and properly incurred where, in the court's opinion, the scale is inadequate because of the unusual difficulty, complexity or importance of the matter. To that extent, s 280(2) of the Act is protective of the successful party to the litigation and, on that account, also serves the administration of justice by facilitating, within the limits imposed by the statutory criteria, the operation of the general principle that a successful party is entitled to its costs of the litigation.
[46] Sino Iron Pty Ltd v Mineralology Pty Ltd [No 2] [2017] WASCA 76 (S) [11] (reasons of the court).
If an order is made removing the limits on costs fixed for certain items in the applicable determination, 'it nevertheless remains the task of the taxing officer to consider the reasonableness of and necessity for the work undertaken, and to make a judgment about the remuneration reasonably required'.[47]
[47] Sino Iron [11].
The court can either remove the scale limits generally[48] or for specific items.[49]
[48] Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [No 11] [2011] WASC 74 [102] (Murray J).
[49] Cifuentes v Fugro Spatial Solutions Pty Ltd [2009] WASC 316 (S) [54] (Murray J).
The principles for making an order pursuant to LPA s 280(2) are well established:[50]
(a)the court must first form an opinion that the costs otherwise allowable would be inadequate and second form an opinion that such inadequacy arises because of the unusual difficulty, complexity or importance of the matter;
(b)the requirement of inadequacy will be demonstrated if the applicant shows that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant costs determination;
(c)because the determination would ordinarily be made in advance of taxation, it is a matter of impression, rather than a matter of detailed evaluation, precision or science;
(d)the word 'unusual' in LPA s 280(2) qualifies 'difficulty' only and not 'complexity' or 'importance';
(e)the characteristics of unusual difficulty, complexity or importance qualify the matter before the court, rather than the work done or services provided in respect of each applicable item of the costs determination; and
(f)there must be a causal connection between the unusual difficulty, complexity or importance of the matter brought before the court and the inadequacy of the costs allowable under the relevant determination.
[50] Sino Iron [12] - [16]; Maio v City of Stirling [No 2] [2016] WASCA 45 (S) [25] - [29] (reasons of the court); Atwell v Roberts [2013] WASCA 37 (S) [15] – [17] (judgment of the court); Wainright v Barrick Gold of Australia [2014] WASCA 15 (S) [7] – [9] (judgment of the court); Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S) [3] (judgment of the court); Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd [2014] WASC 469 (S) [4] (Martin CJ).
It is instructive to begin the analysis by reviewing the issues in dispute in the action.
On the pleadings, both liability and quantum were in issue, with the defendant also asserting contributory negligence.[51]
[51] Defence dated 4 February 2019 (folio 252), par 31.
The plaintiff pleaded that he sustained four injuries as a result of a 'slip and fall':[52]
(a)a prolapse of the L5/S1 disc;
(b)soft tissue injury to the right knee;
(c)extensive bruising to the calf; and
(d)soft tissue injuries to the lumbar sacral spine, hip and right leg.
[52] Statement of Claim dated 5 December 2012 (folio 4), par 7.
The disabilities said to flow from these injuries are particularised as:[53]
(a)the inability to attend to usual duties, leading to past and future economic loss including a loss of opportunity as a mining company director and entrepreneur;
(b)pain and suffering;
(c)loss of amenity of life; and
(d)a requirement of assistance to attend to usual employment, domestic and recreational activities.
[53] Statement of Claim dated 5 December 2012 (folio 4), pars 8 - 9.
The defendant asserted that, in addition to the injuries alleged to have directly resulted from the slip and fall, the plaintiff had a number of other medical conditions:[54]
(a)osteoporosis;
(b)lower end plate oedema at L5;
(c)L5/S1 disc and facet joint pain;
(d)osteoarthritis in the left knee, requiring arthroscopy surgery;
(e)T12 Osteoporotic insufficiency compression fracture, requiring a fusion procedure;
(f)high grade B-cell lymphoma;
(g)L4 osteoporotic insufficiency facture, requiring a fusion procedure; and
(h)back injuries from carrying a bed base, and being hit by a cyclist.
[54] Thickett Affidavit, par 29.
The defendants identified the following 25 further conditions which were alleged to have caused or contributed to the plaintiff's incapacity:[55]
[55] First McAuliffe Affidavit, par 10; Second defendant's minute of proposed substituted defence, 17 November 2017 (folio 127), par 16.
(a)gastroesophageal reflux diseases;
(b)urinary symptoms;
(c)low bone density/osteoporosis;
(d)basal cell carcinomas;
(e)left eye pain;
(f)right head discomfort radiating to neck;
(g)tinnitus;
(h)bilateral hearing loss;
(i)chest pain;
(j)irritable bowel;
(k)subacromial bursitis and impingement of right shoulder;
(l)left epistaxis;
(m)thoraco lumbar pain;
(n)right renal pain;
(o)vitreous detachment in right eye;
(p)stress;
(q)right inguinal hernia;
(r)hypertension;
(s)headaches;
(t)low lumbar sacral back pain;
(u)cardio vascular symptoms;
(v)right knee pain and twisting injury with earlier femoral fracture;
(w)excessive alcohol intake;
(x)anxiety; and
(y)depression.
The plaintiff's particulars of damages itemised a claim of nearly $37.5m plus interest and an allowance for general damages.[56] Past economic loss was particularised at $17.25m and future economic loss estimated at $20m.
[56] Particulars of Damages filed 6 July 2018 (folio 192).
Between all the parties over 40 subpoenas were issued during the claim, to 17 different parties, resulting in the production of 4,153 pages of documents.[57] The plaintiff discovered 13,564 pages of documents.[58] The defendants discovered approximately 2,000 pages of documents.[59]
[57] First McAuliffe Affidavit, par 12; Thickett Affidavit, pars 30 - 31.
[58] Second McAuliffe Affidavit, par 15.
[59] First McAuliffe Affidavit, par 24.
Mr McAuliffe deposes that the issue of economic loss consumed a 'vast amount of time' and required a detailed analysis of the plaintiff's history of 'wheeling and dealing in mining'.[60] The case was not one in which the economic loss could be calculated by a comparison between the pre and post-accident taxation returns. Both parties secured expert evidence on economic loss. Mr McAuliffe details the processes involved:[61]
17.An analysis of the evidence with the Plaintiff and with the witnesses quickly identified that it was necessary to understand the way in which the Plaintiff had developed his career and the particular skills and attributes that he had possessed and the impact of the accident upon them. It must be understood that the Plaintiff's success has been as one of the most highly successful entrepreneurs in the Western Australian resource market. At his peak the Plaintiff had sold his company, Giralia Resources Limited to Atlas Iron for in excess of $1 billion. The Plaintiff and the Plaintiff's family's own share of that transaction was approximately $100 million. Other transactions, such as the Red Hill Iron transaction, were also measured in tens of millions of dollars.
18.The Plaintiff undertook much of his work on behalf of various entities controlled by himself and/or his immediate family, and so it was necessary to analyse each of these entities, including Creekwood Pty Ltd, the Challenger Trust, Breamlea Pty Ltd, the Jason and Emilee MacDonald Trust and Ashbridge Pty Ltd.
19.In undertaking the approach to trying to present to the Court a clear picture of how Mr MacDonald had progressed his career from his early days through to trial, it was necessary to review each of the major transactions to determine the actual activities undertaken by Mr MacDonald in securing that particular deal or transaction. This required an exhaustive number of meetings with Mr MacDonald, which at times were difficult due to his inability to sit and converse for long periods of time. He would often be uncomfortable and restless and meetings would have to be cut short. At times meetings were restricted to a few minutes, whereas on other occasions they may extend over some hours, with breaks in between, as the Plaintiff struggled to cope with his discomfort.
20.Further, an analysis of Mr MacDonald's history required identifying and discovering an extensive number of documents that were still available. The period of time that the proof of evidence was trying to cover was some 40-50 years of entrepreneurial activity. Much of the documentation on earlier transactions had long since been lost. The Plaintiff did however have boxes and boxes of old records where myself and my staff were able to painstakingly sort through and identify individual transactions in order that these documents could be discovered and that Mr MacDonald could relate the history of the transaction in his proof of evidence.
21.During the course of preparing the case and undertaking discovery I identified in excess of 13564 pages of relevant documentation. Each of these transactions had to be reviewed, the full story had to be pieced together if it was not adequately reflected in the documentation, and it had to be written into Mr MacDonald's proof. A number of these transactions, such as the sale of Giralia, also had to be subject of discussions with other witnesses. Mr MacDonald's specific actions in securing these transactions, and the ability of Mr MacDonald to repeat such types of activities post-accident, were the subject of detailed analysis.
22.As the analysis of these transactions progressed, often it led to the identification of other transactions. The sheer volume of transactions in the end was such that a decision has to be made to limit the proof to core transactions, otherwise the volume of material would be excessive. In the end a statement was prepared from Mr MacDonald comprising 389 detailed paragraphs with multiple exhibits encompassing in total 2384 pages.
23.Discovery was a major component of the preparation of the case. As noted above, extensive documentation was identified during the preparation of case phase. Discovery was given early on in the piece and then added to on numerous occasions. By the time the matter was approaching trial the Plaintiff had produced some 34 lever arch volumes of discoverable documents comprising 13564 pages. Relevant documentation that was a necessary part of the chronology of events had to be written into the proofs of evidence.
[60] First McAuliffe Affidavit, par 13.
[61] First McAuliffe Affidavit, pars 17 – 23.
Mr McAuliffe goes on to detail the extent of the discovery by each defendant.[62] He concludes by observing that, in his experience, the present matter 'rates with the most complex that I have seen'. In particular, the claim was novel in that it involved a claim for personal injuries by an 'entrepreneur'. Consequently, he sought and received assistance from an experienced counsel.[63]
[62] First McAuliffe Affidavit, par 24.
[63] First McAuliffe Affidavit, par 25 -27.
As to the scope of discovery required, Mr Thickett observes:[64]
32.In relation to paragraphs 21, 23 and 24 of Mr McAuliffe's Affidavit, although the Plaintiff's discovery was voluminous, it was largely irrelevant to the issues in dispute and did not assist in calculating losses (further than being the primary material for the expert witnesses to consider). This is because it was unnecessary for a detailed analysis to be undertaken of the history of the Plaintiff's earning capacity given the history of earnings demonstrated earnings in excess of the capped entitlement, and further because the Plaintiff's own accountant, Mr Purkiss, ultimately said 'There can be no determination made from the financial information alone as to whether the Plaintiffs [sic] income was directly affected as a result of the accident or not'.
[64] Thickett affidavit, par 32.
In addition, the plaintiff proposed to lead evidence from five medical and allied health practitioners.[65] The defendants proposed to lead evidence from seven medical and allied health practitioners.[66]
[65] Second McAuliffe Affidavit, par 8.
[66] First defendant's certificate of counsel, dated 18 November 2016 (folio 127), par 3; Second defendant's certificate of counsel, dated 18 November 2016 (folio 126), par 3.
The trial was listed for 10 days.[67]
[67] Order Registrar Kinglsey 11 December 2017 (folio 213).
Turning back to LPA s 280(2), the first issue is whether the plaintiff can show that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant costs determination.
There is a draft bill of costs annexed to the First McAuliffe Affidavit (Draft Bill). The following table sets out the specific items in each of the Determinations which the plaintiff seeks to have removed, along with the maximum amount for each item:
Item
Description
Scale maximum
Amount claimed
Item 7(b)
Giving discovery
$4,840.00 (2016)
$31,435.80
Item 10(c)
Consent orders
$506.00
$4,382.40
Item 16(b)
Preparation of schedules required by District Court Rules 45C and 45D
(Particulars of damage dated 14 March 2014; 16 May 2017; 4 July 2017)
$3,872.00 (2016)
$16,828.90
Item 17
(2010 – 2016)
Item 18 (2018)
Preparation of Case
$59,400.00 (2018)
$259,832.10
Item 20(a)(i) (2016)
Item 21(a)(i) (2018)
Counsel fee on brief i.e. first day of trial and preparation (including submissions)
$18,810.00 (2018)[68]
$23,639.00
[68] Plus 1 additional day ($3,960) for each five hearing days after the first five.
It is apparent that the work was done over a period of time in which multiple determinations applied. The amount available to a party for preparation of a case for trial and counsel fees is the amount specified in the relevant item as at the date the bill is taxed.[69] Where work is done over the span of multiple determinations, it 'may be that the taxing officer, mindful that most of the work of getting up was done at a time when the determination provided a lower amount for getting up than presently applied would take that into account in taxing the bill'.[70] The maximum hourly rates in each determination apply to costs incurred in the period to which that determination applies.[71] The LPA 'clearly intends that clients be charged rates which correspond to the scale in force at the relevant time not some scale which might be introduced some years after the relevant work was undertaken'.[72] Where the cost for a particular item is fully incurred within the time frame of a determination (for example, drafting a statement of claim), the limit is that which applied when the work was completed.[73]
[69] Beasley v Ocean Foods International Pty Ltd [2005] WASC 116 [14]; Ellis [87]; Forrest-Moore v Belswan (Mandurah) Pty Ltd [No 2] [2011] WADC 217 [3] (DR Hewitt).
[70] Beasley [14].
[71] 2018 Determination cl 3(c): 'This Determination does not apply to the remuneration of law practices for costs incurred before 1 July 2018'. There are equivalent provisions in the Prior Determinations. See generally: Forrest-Moore [3] – [12].
[72] Forrest-Moore [11].
[73] Again based on 2018 Determination cl 3(c) and its equivalents.
The defendant's position, in effect, is that the costs are well beyond what would be expected to be allowed on a taxation. The defendants point out that, notwithstanding the scale of the plaintiff's discovery, he only proposed to tender 192 documents at trial. This, to Mr Thickett, suggested 'that the bulk of the documents held were not relevant to the matters in question'.[74] The defendant also points out that a significant amount was claimed for preparation of witness statements which were filed. Mr Thickett is critical of the decision by the plaintiff to file witness statements, viewing it as being 'entirely unnecessary'.[75] However, in my view, these issues of necessity and reasonableness are more appropriately determined by the taxing officer.
[74] Thickett Affidavit, par 39.
[75] Thickett Affidavit, pars 33 to 38.
The defendants then submit that the hourly rate claimed by counsel for the plaintiff was in excess of the applicable maximum rates.[76] The 2018 Determination scale limit for the counsel fee on brief is $18,810 based on 3.5 days preparation and the first day of trial (item 21(a)(i)). The maximum hourly rate able to be charged by counsel (not senior counsel) is $418 ($4,180 per day). The amount identified in the Draft Bill is $23,639, being 30.7 hours at $770 per hour. The counsel fee claimed is over the current maximum. At the current maximum rate of $418, the maximum able to be claimed is $12,832.60 (30.7 x $418), which is well under the current limit (not taking into account that the maximum rate will be lower for work done in the periods covered by earlier Determinations). It was common ground that the taxing officer would take into account the fact that the action did not in fact proceed to trial. Notwithstanding this, on the material before the court, I am not satisfied that there is a fairly arguable case that the amount for counsel fees on brief may tax at an amount which is greater than the limit that would be imposed by the relevant determinations.
[76] Thickett Affidavit, par 40.
This issue of the rate at which counsel is entitled to charge does arise in relation to the other items claimed (for example preparation of the case for trial), but only at a level which makes a more marginal difference in the overall amounts claimed.
In view of the matters set out at [51] to [62], and as a matter of impression rather than detailed evaluation, other than the issue identified at [67], I am satisfied that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant determinations. I agree with the assessment by Mr Thickett that the primary issues in dispute were determining which injuries and losses asserted by the plaintiff were accident related and the quantification of the plaintiff's economic loss as a self-employed entrepreneur.[77] In particular circumstances of this case, these issues involved collating and reviewing a large amount of documentary material (including medical records) which may well take the assessments beyond the limits imposed by the limits in the relevant determinations. Accordingly, I am satisfied that the costs otherwise allowable would be inadequate.
[77] Thickett Affidavit, par 14.
I turn then to the issue of whether the inadequacy identified in the preceding paragraph arises because of the unusual difficulty, complexity or importance of the matter.
The plaintiff relies on each of unusual difficulty, complexity and importance.
The word 'unusual' in the context of LPA s 280(2) 'means unusual having regard to what one might describe as the usual run of civil cases determined in the court'.[78] This 'essentially involves the making of a value judgment by the court, having regard to the court's experience of the particular case when compared with the usual run of cases'.[79]
[78] Sino [15].
[79] Sino [15]; Wainwright [9].
A case of the profile set out at [51] to [62], would, in my view, be an unusually difficult one compared to the usual run of civil cases in the court. As I have observed, the primary issues in dispute were determining which injuries and losses were accident-related, in the context of extensive other medical issues, and the quantification of the plaintiff's economic loss as a self-employed entrepreneur. In my experience, these two issues are among the more difficult which arise in District Court personal injuries cases. In addition, as a broad measure of the usual run of civil cases in the District Court, the average length of the 47 civil trials conducted in the District Court in 2017 was four days.[80] This action was listed for a 10 day trial.
[80] District Court of Western Australia, Annual Review 2017, pages 14.
For the same reasons, a case of the profile set out at [51] – [62] would also be a complex case in the District Court. In particular, the two issues identified at [73] raise complex factual and legal issues.[81]
[81] Terravision Pty Ltd v Black Box Control Pty Ltd [No 5] [2018] WASC 340 [15].
As to the 'importance' of the matter, in Heartlink v Jones as Liquidator of HL Diagnostics Ltd (in liq) the then Chief Justice observed:[82]
It seems to me that by reference to 'importance' in this context, the legislature is allowing the court to have regard to the question of whether the work done was appropriate to the significance of the issues that arose in the litigation. Significance can arise either because of the significance of the issues to the parties or because of the significance of the issues to other prospective parties or to the public or to the community generally.
[82] Heartlink Ltd v Jones as Liquidator of HL Diagnostics Ltd (in liq) [2007] WASC 254 (S) [19]; Sino [15].
In Corp v Robinson Kenneth Martin J observed:[83]
Every action at some level can be regarded as being personally important to a participant plaintiff or defendant. There must be something more shown to establish the general importance of the matter.
[83] Corp [14]. See also: Divjakoski v Boral Window Systems [No 2] [2010] WADC 166 [21] (Fenbury DCJ).
I am not satisfied that the present action was in any way important to the public or community generally. As to its importance to the plaintiff, as at the date on which the plaintiff filed his particulars of damages he was 76 years old.[84] It is evident from the particulars of damages and the experts' reports that he is a man of substantial means. I accept that the action was personally important to him.[85] However, given his other means, I do not accept that the action was significant enough to him to be important for the purposes of LPA s 280(2). His position is very different to that of the incapacitated plaintiff in Burns v North Metropolitan Health Service.[86]
[84] Thickett Affidavit, par 35.
[85] Santos Offshore Pty Ltd v Apache Oil Australia Pty Ltd [2015] WASC 242 (S) [9] (Pritchard J); Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [17] - [19] (Martin CJ).
[86] Burns [83].
I am further of the view that there is a clear causal connection between the unusual difficulty and complexity of the issues brought before the court and the inadequacy of the costs allowable under the relevant determination.
Where the costs allowable in respect of a matter under a costs determination are inadequate because of the unusual difficulty, complexity or importance of the matter, the court 'may' make an order of the kind set out in LPA s 280(2). The court has a discretion as to whether to do so.[87]
[87] Wainwright [20] (judgment of the court); Terravision [17] – [27].
The defendant points to three factors which, it submits, suggest that the Application should not be granted as a matter of discretion.
The first factor is an assertion that the plaintiff's conduct in delaying the prosecution of the case increased the costs. The only specific instance identified was that the trial listed to commence in September 2017 was vacated as the plaintiff was having surgery, and was not relisted for trial until September 2018.[88] There may well be instances in which the conduct of a party seeking the benefit of an order pursuant to LPA s 280(2) is a consideration against the exercise of the discretion which it is enlivened. The present case is not one. The specific instance of delay cited by the defendant is not such as to suggest is it not appropriate to exercise the discretion in the plaintiff's favour.
[88] Defendants' Submissions, par 32.
The second factor is that the plaintiff's damages were subject to a statutory cap, so any work done to seek to prove damages in excess of the cap was unnecessary. The cap arises pursuant Civil Liability Act 2002 (WA) s 11.[89] This section provides that in 'assessing damages for loss of earnings… the court is to disregard earnings lost to the extent that they would have accrued at a rate of more than 3 times the average weekly earnings at the date of the award'.[90] Loss of earnings is defined in CLA s 11(2) to mean both 'past economic loss due to loss of earnings or the deprivation or impairment of earning capacity' and 'future economic loss due to loss of prospective earnings or the deprivation or impairment of prospective earning capacity'.[91] Mr Thickett deposes that this amount is currently just over $200,000 per annum.[92] A court cannot award damages in excess of this statutory maximum.[93]
[89] Defendants' Submissions, pars 26 to 28.
[90] CLA s 11(1).
[91] CLA s 11(2).
[92] Thickett Affidavit, par 24.
[93] CLA s 7.
It is not apparent to me the basis on which the plaintiff could have asserted at trial that the District Court could award damages in excess of the statutory maximum. Rather, the two issues at trial would be what the statutory maximum was and whether the plaintiff, as a 76-year-old, had a claim for past and future economic loss in excess of the statutory maximum, in which case damages in accordance with the statutory maximum would have been awarded. Having said that, even under the statutory yearly maximum the plaintiff could nonetheless recover well in excess of $1 million for past and future losses on the time frames identified in the particulars. This would still have raised difficult and complex issues, and so does not suggest it would be inappropriate to exercise the discretion.
The third factor is that the action settled for a fraction of the amount set out in the particulars of damages. As I have mentioned, the damages claimed were in excess of $37.5 million. The action settled for $200,000 plus $49,114.20 for special damages and costs to be taxed.[94] The draft bill is in the amount of just under $500k.[95]
[94] Thickett Affidavit, pars 6 to 8.
[95] First McAuliffe Affidavit, par 29.
The relevance of a settlement to the discretion in LPA is 280(2) was considered by Le Miere J in Terravision Pty Ltd v Black Box Control Pty Ltd [No 5].[96] In that case, the defendant argued that to accede to the plaintiff's application pursuant to LPA s 280(2) would introduce disproportionality between the settlement sum and the costs claimed. The settlement sum was around $165k, whereas the draft bill was just short of $950k.[97] His Honour made the special costs order sought.
[96] Terravision [17] – [27].
[97] Terravision [17] – [18].
Le Miere J accepted that proportionality is relevant to the making of a special costs order.[98] His Honour then observed: [99]
[T]he costs should be proportionate, amongst other things, to the value, importance and complexity of the subject matter in dispute. Proportionality should not be judged retrospectively or simply by reference to the total amount recovered. The court must have regard to the facts and circumstances as they reasonably appeared to the plaintiff and its solicitor at the time when the costs were incurred. Hindsight is not determinative when costs are being assessed. That does not mean that the court ignores the amount actually recovered, as it can provide some sort of reality check. Where the sum agreed is substantially less than the amount claimed, that may call into question the notion that the claim was genuinely or reasonably thought to be worth what it was claimed to be worth while it was being prosecuted. However, that is only one factor in assessing the value and importance of the subject matter of the claim.
The asserted disproportionality between the settlement sum and the plaintiff's claimed costs is not a reason for refusing to make a special costs order if the costs were not unreasonably incurred and are not in an unreasonable amount. I have formed the impression, based on my experience and observations as case manager, that the nature of the plaintiff's claims and the nature and extent of the defences advanced by the defendant, reasonably required the plaintiff to undertake an amount of work that is likely to have incurred costs in excess of the limits under the relevant costs determinations. That is not to say that the defendant acted unreasonably in advancing its defences, but the amount of work reasonably required to be undertaken by the plaintiff is a consequence of the nature of the case and of the defences advanced by the defendant. The defendant agreed to pay the plaintiff 'all' of its costs. In the circumstances of this case, it is appropriate to make a special costs order notwithstanding that the plaintiff recovered only a portion of the amount it claimed.
[98] Terravision [23].
[99] Terravision [25] (my emphasis).
In the present application, counsel for the defendant placed emphasis on the observation which I have italicised in the quote in the preceding paragraph. However, as Le Miere J observed:[100]
There are many reasons why a litigant may accept a compromise offer in an amount less than he considers the most likely outcome if the matter were to go to trial. For example, the risk of not obtaining the more favourable outcome than the settlement offer and consequently having to bear not only his own legal costs, but also those of his opponent may be a risk too great for the litigant to take.
[100] Terravision [20].
Indeed, it may be that a matter which is unusually difficult, complex or important may settle on very modest terms in part because it is so difficult, complex or important. I am not satisfied that the claim for economic loss was not being genuinely prosecuted or that there was no prospect at all that the plaintiff would be entitled to damages at the maximum capped amount. Again, in the particular circumstances of this case, I do not consider that the proportionality issues identified suggest that it would not be appropriate to exercise the discretion. Further, given my findings as to difficulty and complexity, I do not consider that the fact that the plaintiff settled on what may be regarded as modest terms when compared to the amount claimed is a reason, in this case, not to exercise the discretion in LPA s 280(2).
Two issues raised by the plaintiff are best considered as discretionary factors. Mr McAuliffe deposed that he had major difficulties dealing with the plaintiff during the course of the action due to his medical condition and consequent incapacitation. He sets out 15 medical procedures or incidents which the plaintiff experienced in the period from August 2012 to September 2017.[101] Mr McAuliffe also refers to the protracted nature of the matter, spanning almost six years between the commencement of the matter and its listing for trial in September 2018.[102] Neither of these factors add materially to core finding that the discretion is enlivened.
[101] First McAuliffe Affidavit, par 7.
[102] First McAuliffe Affidavit, par 7.
The reasons which I have identified as enlivening the discretion in LPA s 280(2), are, in this case, a sufficient basis to conclude that it is appropriate to exercise the discretion. I am satisfied that the plaintiff is entitled to an order pursuant to LPA s 280(2).
What are the appropriate final orders?
It is not necessary for there to be an order to the effect that a registrar has jurisdiction to hear an application pursuant to LPA s 280(2).
For the reasons set out above, the plaintiff does not require leave to bring the Application out of time.
The plaintiff is entitled to the orders removing the scale limits sought, aside from the items relating to counsel fee on brief.
I will hear from the parties as to the final form of the order and the costs of the Application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
JM
Court Officer10 MAY 2019
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