Mammoth Investments Pty Ltd v Donaldson
[2024] WASCA 71
•24 JUNE 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: MAMMOTH INVESTMENTS PTY LTD -v- DONALDSON [2024] WASCA 71
CORAM: QUINLAN CJ
HEARD: 19 JUNE 2024
DELIVERED : 19 JUNE 2024
PUBLISHED : 24 JUNE 2024
FILE NO: CACV 99 of 2021
BETWEEN: MAMMOTH INVESTMENTS PTY LTD
First Appellant
NAVARAC PTY LTD in its own capacity and as trustee for CARCHILD UNIT TRUST
Second Appellant
BELLA GUARDA FARM PTY LTD
Third Appellant
AND
GRANT RICHARD DONALDSON
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
Citation: MAMMOTH INVESTMENTS PTY LTD v DONALDSON [2021] WASC 175
File Number : CIV 1860 OF 2020
Catchwords:
Courts and judges - Contempt of court - Contempt by disobedience of a court order - Order requiring provision of itemised bill of costs - Whether contempt proved - Whether alleged contemnor disobeyed order - Turns on own facts
Legislation:
Civil Judgments Enforcement Act 2004 (WA), s 98, s 104
Legal Profession Act 2008 (WA), s 252, s 292
Supreme Court (Court of Appeal) Rules 2005 (WA), rule 65
Result:
Application dismissed
Appellants pay the respondent's costs
Category: B
Representation:
Counsel:
| First Appellant | : | M L Bennett |
| Second Appellant | : | M L Bennett |
| Third Appellant | : | M L Bennett |
| Respondent | : | S Penglis SC |
Solicitors:
| First Appellant | : | Hotchkin Hanly |
| Second Appellant | : | Hotchkin Hanly |
| Third Appellant | : | Hotchkin Hanly |
| Respondent | : | Fletcher Law |
Cases referred to in decision:
Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564
Australasian Lawyers Group Pty Ltd (trading as Butlers Barristers & Solicitors) v Morgan [2018] WASC 69
Caratti v Boban Pty Ltd (Administrators Appointed) [No 2] [2015] WASC 139
ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248
Mammoth Investments Pty Ltd v Donaldson [2022] WASCA 144
Perpetual Trustees Victoria Ltd v Allen [2012] WASC 258
Piper Alderman v Smoel [2017] VSCA 42
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S)
Swansdale v Whitcrest [2010] WASC 129 (S)
The Owners of the Wills Building Strata Plan 38579 v Coleman [2018] WASC 219
The State of Western Australia v Galati [No 4] [2017] WASC 162
Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41
Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525
QUINLAN CJ:
(This judgment was delivered extemporaneously and has been edited to correct grammar and infelicities of language and to include the references to relevant evidence and authorities.)
Introduction
On 4 November 2022, this Court allowed an appeal by the appellants in relation to a dispute over costs between the appellants and the respondent, a barrister who had acted as senior counsel for the appellants in trial proceedings in the Court in 2019.[1]
[1] Mammoth Investments Pty Ltd v Donaldson [2022] WASCA 144 (appeal decision) (Quinlan CJ, Beech JA & Bleby AJA).
The orders made on 4 November 2022 included an order, being order 4(a), that was in the following terms (the Order):
within 21 days of the date of this order the [respondent] must provide to the [appellants] itemised bills for the following invoices issued by the [respondent] to Hotchkin Hanly:
(a) invoice number 1797 dated 4 September 2019;
(b) invoice number 1804 dated 31 October 2019;
(c) invoice number 1807 dated 2 December 2019; and
(d) invoice number 1811 dated 22 December 2019,
in the manner and form they are required to be provided, in response to a request made for them, pursuant to section 292 of the Legal Profession Act 2008 (WA).
In allowing the appeal, this Court concluded that the four invoices referred to in the Order (the four invoices) did not meet the description of an 'itemised bill' within the meaning of s 252 of the Legal Profession Act 2008 (WA) (Legal Profession Act), namely: 'a bill that specifies in detail how the legal costs are made up in a way that would allow them to be assessed under Division 8'.
In that regard, the four invoices totalled just over $800,000 and contained 52 entries, comprising a total of 36 days and 70 hours populated only by the words 'getting up'. We concluded, to that extent:[2]
the invoices did not show clearly the necessary particulars of the services charged. How the costs for those entries were made up was not specified in detail. The extent of deployment of the item 'getting up', absent any particulars, rendered the bills opaque as to the work done by the respondent.
[2] Appeal decision [128] (Quinlan CJ, Beech JA & Bleby AJA).
On 25 November 2022, in purported compliance with the Order, the respondent provided four 'itemised bills' (the Bills) in relation to the invoices the subject of the appeal. The 'Description of work performed' on the entries in the Bills provided significantly greater detail than the entry 'getting up' that had appeared in the four invoices.
The appellants were not content with the detail in the Bills. They maintained that the Bills were not in assessable form. The parties corresponded in relation to their differing positions in that regard.
The appellants now apply for the respondent to be dealt with by the Court for contempt of court, alleging that the respondent has disobeyed the Order (contempt application). The application is brought pursuant to s 98 and s 104 of the Civil Judgments Enforcement Act 2004 (WA) (Civil Judgments Enforcement Act).
The orders sought in the contempt application are:
1.A declaration that the respondent has failed to comply with paragraph 4 of the order of this Court made 4 November 2022; and
2.A direction requiring the respondent to provide to the appellants itemised bills in compliance with paragraph 4 of the order of this Court made 4 November 2022, save that they be provided within 30 days of the date of this order.
As I will come to, the second order sought, which was a proposed direction under s 104 of the Civil Judgments Enforcement Act, was not pursued at the hearing of the contempt application.
The appellants contend that the 'purported itemisations' provided in the Bills are not 'sufficiently itemised' so as to satisfy the requirements of the Legal Profession Act and the Order.
The contempt application came before me today. As a judge of appeal, I have jurisdiction, sitting alone, to make any order, and to issue any warrant or other document, to enforce an order made by the Court of Appeal (Supreme Court (Court of Appeal) Rules 2005 (WA), rule 65(1)).
Before turning to the factual background and context, I can briefly summarise the law in relation to contempt by disobedience of court orders.
Legal principles
While previously the exclusive province of the common law, contempt by disobedience of a court order is now a form of contempt provided for by statute. In that regard, s 98(1) of the Civil Judgments Enforcement Act provides that '[if] a natural person disobeys a judgment to which this Division applies the person is guilty of a contempt of court'. A 'judgment to which this Division applies' includes an order requiring a person to do an act.[3]
[3] Civil Judgments Enforcement Act, s 3 (definition of 'judgment'), s 97.
The elements required to establish contempt by disobedience to a court order have been set out in many previous decisions of this Court.[4] They may relevantly be summarised as follows:
(a)an order was made by the court;
(b)the terms of the order were clear, unambiguous and capable of being complied with;
(c)the alleged contemnor had knowledge of the terms of the order, or at least its substance; and
(d)the alleged contemnor 'disobeyed' the order.
[4] Caratti v Boban Pty Ltd (Administrators Appointed) [No 2] [2015] WASC 139 (Caratti v Boban) [19] ‑ [21], [84] ‑ [86] (Mitchell J); Perpetual Trustees Victoria Ltd v Allen [2012] WASC 258 [26] ‑ [28] (Beech J); The State of Western Australia v Galati [No 4] [2017] WASC 162 [25] (Tottle J); The Owners of the Wills Building Strata Plan 38579 v Coleman [2018] WASC 219 (Owners of the Wills Building v Coleman) [23] (Archer J).
The notion of 'disobedience' is important. The conduct alleged to be a contempt must be 'deliberate' or 'voluntary', although it is not necessary to prove that the alleged contemnor knew that their conduct was in breach of the order. It is sufficient that the alleged contemnor is aware of facts that make their conduct a breach of the order.[5]
[5] Caratti v Boban [80] (Mitchell J); Owners of the Wills Building v Coleman [25] (Archer J).
In this context, I adopt the following observations of Mitchell J (as his Honour then was) in Caratti v Boban:[6]
When the reference to disobedience of a court order in s 98 of the CJE Act is considered against the background of the common law, the reference to disobedience should be taken to involve more than a mere failure to comply with an order. In this context, the observations of Keane JA in Lade & Co as to the common law are apposite:
There must, of course, be actual disobedience. There cannot be disobedience if the alleged contemnor does not know of the order which he or she is alleged to have breached. Nor could there be disobedience where the breach of the order occurs by reason of circumstances outside the control of the alleged contemnor. But if the facts of the case enable one fairly to conclude that the alleged contemnor has disobeyed the order or undertaking then that is sufficient to constitute a contempt.
I note that different considerations might arise in a case where it is alleged that a person has disobeyed an order which requires a person to take action, as opposed to cases where the order prohibits certain conduct. In cases where positive action is required, an allegation that a person has failed to act may entail an inquiry as to whether the person had the capacity to act in the manner required by the order. If a person is required by an order to do an act on land but does not have any lawful means of gaining access to the land, for example, then a failure to do the act cannot be regarded as disobedience of the court's order. The failure to comply with such an order in those circumstances would be a product of the alleged contemnor's lack of capacity to do the act rather than any disobedience. Similarly, if an act which was prohibited by an order was not voluntarily done, then it could not be said that the doing of the act amounted to disobedience of the order. It is essential that the conduct which is said to constitute the offence be shown to be voluntary if it is to constitute 'disobedience'.
[6] Caratti v Boban [82] ‑ [83] (Mitchell J); see also Owners of the Wills Building v Coleman [24] (Archer J).
Unless the alleged disobedience involves deliberate defiance or is contumacious, disobedience of a court order involves a civil (rather than a criminal) contempt. Nevertheless, the criminal standard of proof applies to both civil and criminal contempt.[7] That is, the onus of establishing the conduct which amounts to a contempt of court lies on the person alleging the contempt, and the facts demonstrating that the contempt has been committed must be established on admissible evidence beyond reasonable doubt.[8]
[7] Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 (Witham v Holloway) 530, 534 (Brennan, Deane, Toohey & Gaudron JJ).
[8] Witham v Holloway, 534 (Brennan, Deane, Toohey & Gaudron JJ); Caratti v Boban Pty Ltd [85] (Mitchell J).
Turning then to the background to the making of the Order and the evidence before me on the application.
The appeal decision
The appeal decision concerned two broad questions:
(a)whether, in circumstances in which the respondent was instructed by the appellants' solicitors to provide legal services for the benefit of the appellants, the Legal Profession Act permitted the appellants, as the lay clients, to request the respondent to give them an itemised bill; and
(b)whether the four invoices issued by the respondent satisfied the definition of 'itemised bill' in s 252 of the Legal Profession Act.
The Court, in essence, answered those two questions 'yes' and 'no', respectively.
Relevant to the second issue, the four invoices issued by the respondent were in broadly the same form. The invoice rendered on 31 October 2019, for example, read as follows:[9]
[9] Appeal decision [6] (Quinlan CJ, Beech JA & Bleby AJA).
ACCOUNT WITH GRANT DONALDSON
Mammoth - Rural Bank
I enclose my tax invoice in respect of the above matter being:
For the period from 5 September 2019 to 31 October $149,380.00
Being my professional fee of $126,000.00 plus GST and Mr Sippe's fee of $9,800.00 plus GST.
Being in respect of:
·Advice on expert report - 2 days (September)
·Getting up - day (1 October)
·Getting up - 2 hours (2 October)
·Getting up - day (10 October)
·Getting up and conference - 2 hours (14 October)
·Getting up - day (17 October)
·Getting up and conference - 4 hours (18 October)
·Getting up - day (21 October)
·Getting up - day (22 October)
·Getting up - 6 hours (23 October)
·Getting up and attending court - day (24 October)
·Getting up - day (29 October)
·Getting up - day (30 October)
·Getting up - day (31 October)
This is a total of 11 days and 16 further hours.
In addition, I have paid the account of Mr Sippe, whose work was indispensable to the preparation of the pleadings. I attach a copy of his account. I have included this as a disbursement in my account.
Thank you for your instructions in this matter.
Regards
Grant Donaldson
As I have already observed, the four invoices totalled just over $800,000 and contained 52 entries, comprising a total of 36 days and 70 hours, populated only by the words 'getting up'.
In reaching the conclusion that the four invoices were not 'itemised bills' within the meaning of s 252 of the Legal Profession Act, the Court in the appeal decision adopted the reasoning of the Victorian Court of Appeal in Piper Alderman v Smoel.[10] The Court in that case said:[11]
Given the statutory language in the LPA, it is perhaps better to express as an overarching requirement for an itemised bill that it include sufficient detail so that, if the bill proceeded to a review, the parties would have enough information to understand what work has been charged for, the amount charged for the work performed, whether any particular charge is sustainable and to make submissions to the judicial officer presiding in the Costs Court. To give that more content however, it is necessary to look to the context and purpose of the provisions.
[10] Piper Alderman v Smoel [2017] VSCA 42 (Piper Alderman v Smoel).
[11] Piper Alderman v Smoel [37], referred to with approval in the appeal decision at [113], 127] ‑ [128] (Quinlan CJ, Beech JA & Bleby AJA).
In that context, it should be noted, as reflected in the appeal decision, that the application of the overarching requirement referred to in Piper Alderman v Smoel is always 'context specific'[12] and that 'regard must be had to all of the circumstances' in determining whether a particular descriptor is sufficient'.[13] Those circumstances will include the expected knowledge of the recipient of the bill, including the instructing solicitors.[14]
[12] Appeal decision [119] (Quinlan CJ, Beech JA & Bleby AJA).
[13] Appeal decision [111] (Quinlan CJ, Beech JA & Bleby AJA).
[14] Appeal decision [114], [119] (Quinlan CJ, Beech JA & Bleby AJA).
Thus, in the appeal decision, we said that, in reaching our conclusion, we had considered:[15]
the number of days and hours in respect of which the item 'getting up' was deployed in the invoices, the period of time to which these invoices related, the prevalence of the items 'getting up' as a proportion of the total time billed in the invoices and the apparent inability of the solicitors to make a judgment about the reasonableness of the hours.
[15] Appeal decision [130] (Quinlan CJ, Beech JA & Bleby AJA).
Turning then to the evidence adduced in the contempt application.
Factual context of the contempt application
The evidence in relation to the contempt application consisted of the following.
The appellants relied upon:
(a)an affidavit of Jessie Claire Lee sworn on 22 March 2024 (Ms Lee's first affidavit); and
(b)an affidavit of Jessie Claire Lee sworn on 26 April 2024 (Ms Lee's second affidavit).[16]
[16] The appellants did not read or rely upon paragraph 7 of Ms Lee's second affidavit.
The respondent relied upon:
(a)an affidavit of Paul Francis Fletcher affirmed on 26 March 2024 (Mr Fletcher's first affidavit);
(b)an affidavit of Paul Francis Fletcher affirmed on 18 April 2024 (Mr Fletcher's second affidavit);
(c)an affidavit of the respondent affirmed on 19 April 2024 (the respondent's affidavit); and
(d)an affidavit of Paul Francis Fletcher affirmed on 16 May 2024 (Mr Fletcher's third affidavit).
None of the parties sought leave to cross-examine the deponents of the affidavits.
The evidence reveals the following primary facts, which I find to be established on the evidence.
The respondent attempts to retrieve the original brief
Approximately an hour after the Court made the Order on 4 November 2022, the respondent sent the following email to Mr Mistilis, of the appellants' solicitors, under the subject heading 'Mammoth taxation':[17]
Would you please arrange for all of the papers that were provided to me as part of the brief to be returned to me. This includes the first chronological bundle and the trial bundle; all pleadings including all versions and drafts of pleadings, all statements of all witnesses and proposed witnesses (including drafts), all expert reports.
[17] Mr Fletcher's second affidavit, Annexure PFF-1, page 6.
On 10 November 2022, Mr Mistilis responded, by email, to the effect that he was seeking instructions in relation to the respondent's request.[18] The respondent replied, almost immediately (namely nine minutes later):[19]
You don't need instructions. I need the papers to comply with a court order so get them to me.
[18] Mr Fletcher's second affidavit, Annexure PFF-1, page 5.
[19] Mr Fletcher's second affidavit, Annexure PFF-1, page 5.
On 14 November 2022, Mr Mistilis responded to that email in the following terms:[20]
Please identify, by reference to relevant authority, the legal basis on which the request is made and we or our clients are required to comply with it.
In whatever form the documents exist, they are our clients' property.
We are instructed to not comply with your request, to the extent we are able, unless you can satisfy us that we or our clients are under a legal obligation to do so.
[20] Mr Fletcher's second affidavit, Annexure PFF-1, page 4.
Thereafter there was an exchange of letters between the appellants' solicitors and the respondent's solicitors in relation to the respondent's request for documents forming part of his brief to assist in his preparation of itemised bills.[21]
[21] Mr Fletcher's second affidavit, Annexure PFF-1, pages 7 - 11.
No quarter was given by the appellants or their solicitors. The final letter in the exchange of correspondence, from the appellants' solicitors dated 23 November 2022, reiterated:[22]
We are instructed not to comply with any of your client's requests for documents, to the extent we are able, unless you can satisfy us that we or our clients are under a legal obligation to do so.
The respondent provides the Bills to the appellants
[22] Mr Fletcher's second affidavit, Annexure PFF-1, pages 10 ‑ 11.
On 25 November 2022, the respondent forwarded four separate letters to the appellants' solicitors, each of which included one of the four invoices, together with an 'Itemised Bill' in relation to each invoice.
Each of the covering letters was in substantially the same form and concluded with the following statement:[23]
As you know, I returned my Brief to your firm following the termination of my retainer. I requested that your firm provide me with access to various documents forming part of my Brief for the purpose of preparing itemised bills in as much detail as possible. Your firm has not provided me with access to the requested documents. Accordingly, the itemised bill has been prepared without the benefit of those documents.
[23] Mr Fletcher's first affidavit, Annexure PFF-1, pages 4, 12, 16, 22.
The 'Description of work performed' on the entries in the Bills provided greater detail than the entry 'getting up' that had appeared in the four invoices. By way of example, the 'Itemised Bill' provided in relation to the invoice rendered 31 October 2019 (namely that reproduced at [21] above) was as follows:[24]
[24] Mr Fletcher's first affidavit, Annexure PFF‑1, pages 14 ‑ 15.
Date
Description of work performed
Time
Between 4 to 30 Sept 2019
Considering drafts of the expert report of Mr Barton and instructions given to him and emailing Rachael Young and Michael Mistilis in respect of it.
Exceeding but capped at 20h
1 Oct 2019
Reading draft of pleading re limitation and considering law in relation to Limitation Act, meeting with Rachael Young and Michael Mistilis. Considering 4 emails and attachments and the matters raised in them.
Exceeding but capped at 10h
2 Oct 2019
Settling pleading re limitation and considering law in relation to Limitation Act. Considering 9 emails and attachments and the matters raised in them.
2h
10 Oct 2019
Considering Bank's minute of orders and other documents filed and served by Bank's solicitors in relation to striking out and refusal of leave to adduce expert evidence, preparing to resist all applications including consideration of responses and submissions. Reading and seeking to understand the draft expert report. Considering 8 emails and attachments and the matters raised in them.
Exceeding but capped at 10h
14 Oct 2019
Meeting with Rachael Young and Michael Mistilis and John Caratti. Considering 2 emails and attachments and the matters raised in them.
2h
17 Oct 2019
Considering Bank's minute of orders and other documents filed and served by Bank's solicitors in relation to striking out and refusal of leave to adduce expert evidence; Bank' s submissions re this; Allen Caratti parties' proposed orders and affidavit and submissions, preparing to resist all applications including consideration of responses and submissions. Considering 4 emails and attachments and the matters raised in them.
Exceeding but capped at 10hI
18 Oct 2019
Considering Bank's minute of orders and other documents filed and served by Bank's solicitors in relation to striking out and refusal of leave to adduce expert evidence, Allen Caratti parties' proposed orders affidavit and submissions, preparing to resist all applications including consideration of responses and submissions. Considering email and attachments and the matters raised in them.
4h
21 Oct 2019I
Considering Bank's minute of orders and other documents served by Bank's solicitors in relation to striking out and refusal of leave to adduce expert evidence, Allen Caratti parties' proposed orders affidavit and submissions, drafting and settling affidavit of John Caratti (and annexures) resisting applications, settling affidavit of Michael Mistilis and reading annexures, re resisting applications. Considering 10 emails and attachments and the matters raised in them.
Exceeding but capped at 10h
22 Oct 2019
Conferring with Rachael Young and Michael Mistilis; preparing for the hearing on 24 October, which included; considering Bank's minute of orders and submissions; Allen Caratti parties' proposed orders, affidavit and submissions; John Caratti affidavit (and annexures) resisting applications; Mrs Caratti's affidavit and annexures, re resisting applications; drafting submissions in reply. Considering 6 emails and attachments and the matters raised in them
Exceeding but capped at 10h
23 Oct 2019
Conferring with Rachael Young and Michael Mistilis; preparing for the hearing on 24 October, which included; considering Bank's minute of orders and submissions; Allen Caratti parties' proposed orders, affidavit and submissions; John Caratti's affidavit (and annexures) resisting applications; Michael Mistilis' affidavit and annexures, re resisting applications; drafting submissions in reply. Considering 12 emails and attachments and the matters raised in them.
6h
24 Oct 2019
Conferring with Rachael Young and Michael Mistilis; attending the hearing of the applications; preparing for the hearing on 24 October, which included; considering Bank's minute of orders and submissions; Allen Caratti parties' proposed orders, affidavit and submissions; John Caratti's affidavit (and annexures) resisting applications; Mrs Caratti's affidavit and annexures, re resisting applications; affidavits that were filed that day of Arthur Metaxas and Ben Caratti. Considering 5 emails and attachments and the matters raised in them.
Exceeding but capped at 10h
29 Oct 2019
Conferring with Rachael Young, commencing the drafting of Closing Submissions and Opening Submissions and preparation for cross examination of Bank's witnesses and witnesses to be called for the Allen Caratti parties. Reading and seeking to understand the draft expert report. Considering 8 emails and attachments and the matters raised in them.
Exceeding but capped at 10h
30 Oct 2019
Conferring with Rachael Young, considering draft affidavit of Mrs Caratti; drafting of Closing Submissions and Opening Submissions, undertaking research and consideration of documents from the 26 Volume chronological bundle and witness outlines and all affidavits and pleadings filed in the proceeding to that date necessary for this. Reading and seeking to understand the draft expert report and conferring with Rachael Young about this. Considering 5 emails and attachments and the matters raised in them.
Exceeding but capped at 10h
31 Oct 2019
Conferring with Rachael Young in particular in relation to the draft expert report, drafting of Closing Submissions and Opening Submissions, undertaking research and consideration of documents from the 26 Volume chronological bundle and witness outlines and all affidavits and pleadings filed in the proceeding to that date necessary for this. Considering 3 emails and attachments and the matters raised in them.
Exceeding but capped at 10h
As is apparent from this example, there are numerous entries in the Bill in relation to which the respondent provided the same, or substantially the same, description of the work performed. So, for example, the same description of the work performed – namely that of (broadly speaking) considering and preparing for applications concerning striking out and refusal of leave to adduce expert evidence – appears for 10 October 2019, 17 October 2019, 18 October 2019 and 21 October 2019.
Similar repetition of the 'descriptions of work performed' appear in the other Bills. For example, the entry for 19 August 2019 in the invoice rendered on 4 September 2019 described the work for a period 'exceeding but capped at' 10 hours as follows:
Drafting rejoinder and amendments to the defence and counterclaim having regard to the 26 Volume chronological bundle provided to me and first to third defendants' documents that I was instructed did not exist, the Bank's amended pleadings, the Bank's witness outlines, seeking to reconcile all of these with the first to third defendants' case and discovered documents and evidence of Mrs Caratti and John Caratti; considering drafts of first to third defendants witness outlines of Mrs Caratti, John Caratti, Aaron Caratti and proofs of each. Research into law relevant to the expert evidence to be led re loss and damage in particular swaps cases. Considering the evidence given by Mrs Caratti and John Caratti in Esperance Cattle Company Pty Ltd -v- Granite Hill Pty Ltd [2014] WASC 279 having regard to judgment and transcript. Considering 6 emails and attachments and the matters raised in them.
Substantially similar descriptions of work also appear for the entries in that invoice for 20 August 2019 to 30 August 2019, for a total period of time 'exceeding but capped at' 82 hours.
The appellants respond to the Bills
For a number of months following provision of the Bills by the respondent, there appears to have been no communication between the parties.
The silence was broken when, by letter dated 17 April 2023, the appellants' solicitors wrote to the respondent's solicitors in relation to the Bills.[25]
[25] Mr Fletcher's first affidavit, Annexure PFF-2, pages 26 - 29.
The letter dated 17 April 2023 opened as follows:
As you are aware, Mr Donaldson purported to provide itemisation of his bills on 25 November 2022 (Bills). They are plainly not in assessable form, as required by Part 10 of the Legal Profession Act 2008 (WA), in that it is not possible to assess the reasonableness of the charges for each task. In particular, of the 79 entries with respective charges, 77 of them combined different work tasks, so it is impossible to know how much time was spent on each task. Of the other two entries, one is so general that it is not even possible to determine the work task or tasks for which payment is claimed.
The letter went on to state that '[in] the absence of any proper itemisation, we have endeavoured to make our own assessment, based on our records, in an effort to identify what we consider to be a reasonable sum to have charged our mutual clients'. Notwithstanding that the appellants' solicitors stated that they '[were] unable to form a view, and advise [their] clients, that Mr Donaldson's charges were reasonable', the balance of the letter sets out in detail why, according to their assessment, they were not.
In particular, the appellants' solicitors advised that they had had regard to the following matters (for which the appellants' solicitors gave examples):
(a)as the respondent had 'kept inadequate, or no, contemporaneous records of his time spent on this matter at all, let alone in respect of specific tasks, there is inherently likely to be a degree of inaccuracy from his attempt at reconstruction of his time on events now some 3 years ago';
(b)'a great deal of time has apparently been charged in respect of tasks which we have inferred from our records must have been undertaken by junior counsel who itemised those tasks'; and
(c)the respondent's time was spent on issues which ultimately caused unnecessary expense.
The letter then set out, again in some detail, the appellants' solicitors' reasons for concluding that they considered a reasonable amount for the work performed by the respondent to be $260,000 exclusive of GST. The letter concluded with the following:[26]
[26] Mr Fletcher's first Affidavit, Annexure PFF‑2, pages 28 ‑ 29.
Doing the best we can in that respect, we consider that $260,000 (ex. GST) was a reasonable amount for our clients to have been charged, as follows:
No Description Amount ($)
(excl. GST)1. Court Appearances (15 occasions) 60,000 2. Settling Documents (drafted by junior counsel) 15,000 3. Conferences, conferrals and meetings with solicitors and with junior counsel (total 100 hours) 100,000 4. Court preparation 90,000 Sub-Total
265,000 Allow a contingency of 15% for any under‑estimate of time
($39,750 but rounded up to $40,000)305,000 Total 305,000 Whilst we accept that litigation invariably involves correction and amendment, and different exercises of judgment in that respect, we regrettably consider that the pleading failures and the preparation of submissions which were not open to be made ought be deducted as costs from that sum. In our view, they would reasonably amount to $20,000 (ex. GST).
By reason of the above matters, our view is that the sum which your client should properly have been paid is $285,000, yet our clients have paid your client $689,400 (ex. GST). Rounding those numbers out, one may deduct $290,000 from $690,000, leaving an over‑charge of $400,000 (ex. GST). In order to resolve this matter without the need for further applications to the Court regarding the inadequate provision of assessable Bills, our clients would accept payment by Mr Donaldson of the sum of $400,000 (ex. GST).
The respondent's solicitors responded the following day by letter dated 18 April 2023. They rejected the assertion that the Bills were not itemised bills within the meaning of the Legal Profession Act and did not agree to make payment of $400,000 (ex GST).[27]
[27] Mr Fletcher's first affidavit, Annexure PFF-3, page 30.
The respondent's solicitors concluded the letter dated 18 April 2023 by suggesting that the appellants should list for directions the assessment application they had already filed. In that regard, the evidence establishes that, on 4 February 2021, the appellants commenced an application in the General Division of the Court in which they sought assessment of five invoices (which included the four invoices the subject of the appeal decision), namely LPA 4 of 2021.[28]
Further correspondence between the parties
[28] Ms Lee's first affidavit [7].
The battlefield between the parties again fell silent for a further three months, until, on 21 July 2023, the appellants' solicitors wrote to the Court seeking to have LPA 4 of 2021 relisted for directions.[29] The respondent's solicitors confirmed, by email dated 24 July 2023, that they had no objection to LPA 4 of 2021 being listed for directions.[30]
[29] Mr Fletcher's first affidavit, Annexure PFF-4, pages 31 - 32.
[30] Mr Fletcher's first affidavit, Annexure PFF-5, pages 59 - 60.
The next matter revealed by the evidence is that the parties attended before Registrar Whitbread on 14 March 2024, in respect of LPA 4 of 2021, at which time this application was foreshadowed by the appellants.[31] At that hearing, the respondent sought and obtained an order to file a further bill of costs in relation to the five invoices the subject of LPA 4 of 2021.
[31] Ms Lee's first affidavit, Annexure JCL-3.
Thereafter, the parties engaged in another round of correspondence in which the respondent's solicitors requested that the papers that formed part of his brief be returned to him 'for the purposes of determining what (if any) further detail may be added to the bills of costs already provided and for use at taxation' and the appellants' solicitors, again, declined to do so (unless satisfied that they or the appellants were legally obliged to do so).[32]
[32] Mr Fletcher's second affidavit, Annexure PFF-2, pages 12 - 17.
The parties also exchanged correspondence as to the merits of this contempt application.[33]
The respondent's evidence
[33] Mr Fletcher's second affidavit, Annexure PFF-2; Ms Lee's first affidavit, Annexure JCL-4; Mr Fletcher's third affidavit, Annexure PFF-1.
The respondent's affidavit deposes to the following:[34]
2.Upon termination of my retainer in or about February/March 2020, I returned (what to the best of my knowledge were) all papers comprising my Brief to the Appellants' solicitors, Hotchkin Hanly.
3.I did not record for each specific item of work undertaken on each day (such as phone calls, reading emails, sending emails, reading documents, drafting documents, conferences, etc.) the amount of time spent on each such item.
4.Without access to the papers that formed part of my Brief, I therefore could not at then and cannot now provide any further detail than that which is already contained in the itemised bills provided to Hotchkin Hanly on 25 November 2022.
[34] The respondent's affidavit [2] - [4].
There was no challenge to this evidence by way of cross‑examination, although the appellants' counsel submitted that I should not accept the evidence at paragraph 4 of the respondent's affidavit, on the basis that the respondent could have taken other steps such as conferring with junior counsel who had been briefed in the original matter. The appellants relied upon, at least implicit, assertions to that effect in the letter from the appellants' solicitors dated 17 April 2023.
There is, however, no evidence either way as to whether the respondent had taken, or has taken, those other steps and there was, as I have said, no application to cross-examine the respondent on this evidence.
In those circumstances, I accept the respondent's evidence that he has provided as much detail in the Bills as he was able at the time of providing the Bills, and is now presently able. In any event, having regard to the onus and standard of proof, I would need to be satisfied beyond reasonable doubt that the respondent's evidence was not true before I could properly reject it and not take it into account. I am not so satisfied.
I turn then to the elements of the alleged contempt in the present case.
An order was made by the Court
There is no dispute that the Order was made by the Court on 4 November 2022.
I am satisfied beyond reasonable doubt that an order was made by the Court in the present case, and was a judgment within the meaning of s 98(1) of the Civil Judgments Enforcement Act.
The respondent had knowledge of the terms of the Order
There is also no dispute, and I am satisfied beyond reasonable doubt, that the respondent had knowledge of the terms of the Order.
In that regard, when the appeal decision was delivered, while there was a dispute as to the appropriate costs orders in the appeal, the parties were agreed as to the terms of the substantive orders allowing the appeal, including the terms of Order 4(a). In addition, the respondent's correspondence with the appellants' solicitors following the making of the Order demonstrates that he was aware of the Order.
The terms of the order are clear, unambiguous and capable of compliance
The next element is that the terms of the Order are clear, unambiguous and capable of being complied with. This is a question as to the proper construction of the Order. The proper construction of the Order is a question of law.[35]
[35] Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41 (Universal Music) [19] (Branson J).
In this context 'capable of being complied with' should be understood as relating to the form of the order in question; that is, it is a question of the construction of the Order, namely whether the Order is 'so ambiguous that it is devoid of any legal meaning and incapable of giving rise to liability on a charge of contempt'.[36] The appellants did not submit otherwise.
[36] Universal Music [23] (Branson J).
Whether circumstances outside of the control of the respondent prevented compliance with the Order, in such a way that it could not be said that the respondent 'disobeyed' the order is a separate ‑ factual ‑ question relevant to the final element of any alleged contempt.
There was some debate before me as to what was required by the Order, on its proper construction, and in particular the phrase 'itemised bills'. Debate as to the proper construction of the Order, of course, does not mean that the Order is ambiguous in the relevant sense.
Nor does the fact that the Order on its proper construction might, in its application in a particular case, involve questions of fact and degree – including qualitative questions of fact and degree – mean that it is relevantly 'unclear' or 'ambiguous'.
The distinction between 'ambiguity' in an order and 'uncertainty' in its operation or application, was usefully illustrated by Lindgren J in Universal Music as follows:[37]
If an order restrains a person from doing something 'in daylight' and the person does the thing at midday in broad daylight, it is no answer to a charge of contempt that the order might have had an uncertain application requiring a dismissal of the charge if the evidence had shown that the person did the thing at twilight. The facts hypothesised would have suggested that the potential uncertainty of operation could have been avoided if the order had been expressed in terms of hours of the day, rather than in terms of 'in daylight'. This does not signify, however, that 'the nature and terms' of the order were such that a charge of contempt was always destined to fail.
[37] Universal Music [55] (Lindgren J).
Similarly in Universal Music Branson J said that:[38]
To describe a court order as 'equivocal' or 'ambiguous' is to assert (at least) one of two possible things; either that its intended meaning is unclear or that, although its intended meaning is clear, its application in particular circumstances is uncertain.
[38] Universal Music [29] (Branson J)
The respondent accepted that the present case was an example of the latter case referred to by Branson J, namely that, while the intended meaning of the Order was clear, its application in particular circumstances is uncertain.
As to the proper construction of the Order, it is significant that the phrase 'itemised bill' directly uses a defined phrase in the Legal Profession Act s 252, namely:
a bill that specifies in detail how the legal costs are made up in a way that would allow them to be assessed under Division 8.
There can be little doubt that by incorporating the statutory language, on its proper construction, the Order imposed an obligation at a high level of generality and incorporated the qualitative standard inherent in the statutory formula.
Consistent with the Court's conclusion in the appeal decision, that qualitative requirement can be more fully described in terms of the passage in Piper Alderman v Smoel that was set out in the appeal decision at [113] (and which I set out at [23] above).
I therefore find, on its proper construction, that the Order, clearly and unambiguously, required the provision of bills meeting the qualitative description, in the statutory language, as explained in that passage from Piper Alderman v Smoel.
As a matter of construction, the Order did not require the Bills to be in any particular form in order to meet that qualitative description. In particular, the Order did not require, either in its terms or on its proper construction, that the Bills identify each particular work activity, such as drafting an affidavit, either in time or cost.[39]
[39] cf Appellants' submissions [6] ‑ [7].
Of course, in a particular case, it may be necessary, in order for a bill to meet that qualitative description, that the bill in question identifies particular work activity in that form. That, however, is simply to recognise that the determination of whether a bill meets the description of an 'itemised bill' is a question of fact that is context dependent, and may be affected by a variety of matters, including, in the case of a bill from a barrister, the nature of the services, the involvement of the instructing solicitor and the knowledge of that instructing solicitor. So much is clear from our conclusion in the appeal decision that, in some cases and depending upon the circumstances, a generalised description of 'getting up' may well be a sufficient itemisation in a bill. It all depends upon the facts in the particular case.
The decision of Allanson J in Australasian Lawyers Group Pty Ltd (trading as Butlers Barristers & Solicitors) v Morgan,[40] upon which the appellants relied, does not lead to a different conclusion. Allanson J did not, in that case, express any a priori conclusions as to what an itemised bill should contain, or even as to the particular detail required in the circumstances of that case. His Honour was rather concerned with an assessment of costs by a taxing officer that had not considered particular work tasks at all but had, rather, formed a view as to the reasonableness of a 'gross amount' of the entirety of the bills (which the taxing officer had reduced by 5% for reasons that were, in any event insufficient).[41]
[40] Australasian Lawyers Group Pty Ltd (trading as Butlers Barristers & Solicitors) v Morgan [2018] WASC 69 (Butlers v Morgan) .
[41] Butlers v Morgan [57], [74] (Allanson J).
I am therefore satisfied that the Order was clear, unambiguous and capable of being complied with, in the manner I have described.
Did the respondent 'disobey' the Order?
As Mitchell J said in Caratti v Boban, the reference to disobedience in s 98 of the Civil Judgments Enforcement Act should be taken to involve more than a mere failure to comply with an order. The element of disobedience, in the circumstances of this case, therefore, logically raises two questions:
(a)did the respondent fail to comply with the Order; and
(b)if so, did that failure amount to 'disobedience'?
It is appropriate to address those issues separately. As to both matters, however, it is important to bear in mind the onus and standard of proof and the issues before me.
I am not concerned in this application with whether the Bills were reasonable or whether they were unreasonable and excessive.
I am not concerned with whether the Bills contained demonstrable errors, as the appellants submitted was evident from the fact that the respondent included reference to an attendance at a mediation that did not occur.
Indeed, I am not concerned with reaching a conclusion, in the abstract, as to what a properly 'itemised bill' would contain in the circumstances of this case. That is, the issue before me is not, what should the Bills have looked like, or what should the Bills have included?
Even if I were required to answer those questions, it would be impossible for me to do so on the evidence before me. Other than what I can glean from the Bills themselves and the correspondence of the parties, there is no evidence before me as to the nature of the issues in the proceedings in which the respondent was engaged to act for the appellants, the involvement of the appellants' solicitors in those proceedings or their knowledge of the work required to be done in those proceedings.
The questions before me are, rather, whether:
(a)having regard to the Bills that the respondent in fact provided in response to the Order, am I satisfied beyond reasonable doubt that those Bills failed to meet the description of 'itemised bills' (as I have construed that term in the Order); and
(b)if I am so satisfied, am I satisfied beyond reasonable doubt that, by providing Bills that failed to meet that description, the respondent thereby 'disobeyed' the Order?
Turning to the first matter.
Did the respondent fail to comply with the Order?
The appellants, in submitting that the Bills did not 'include sufficient detail so that, if the bill proceeded to a review, the parties would have enough information to understand what work has been charged for, the amount charged for the work performed [and] whether any particular charge is sustainable',[42] placed great emphasis on the combination of multiple separate work tasks in particular entries and the repetition, over a number of days, of the same description of work tasks undertaken.
[42] Piper Alderman v Smoel [37].
The appellants, for example, referred to the entries in the Bill dated 4 September 2019 for the period 19 August 2019 to 30 August 2019 (reproduced at [38]), which had substantially the same description of the work performed, for a total period exceeding 82 hours. The particular work described in those entries may be summarised as:
(a)drafting rejoinder and amendments to the defence and counterclaim;
(b)considering drafts of the first to third plaintiffs' witness outlines of Mrs Caratti, John Caratti, Aaron Caratti and proofs of each;
(c)research into law relevant to the expert evidence to be led regarding loss and damage in particular swaps cases;
(d)considering the evidence given by Mrs Caratti and John Caratti in Esperance Cattle Company Pty Ltd v Granite Hill Pty Ltd [2014] WASC 279 having regard to judgment and transcript; and
(e)considering emails and the matters raised in them.
The aggregation of these separate activities over such a significant period of time does not, I accept, enable the recipient to understand how much time was said to have been spent on each of those individual activities. It would not be possible to conclude from the Bills, for example, how much time was spent on drafting the rejoinder and amendments to the defence and counterclaim. It may therefore be open to infer, on all of the evidence before me, that the recipient of the Bill would not be able to understand whether the work performed over those 82 hours as a whole was justified or sustainable. It might even be the most likely inference to draw from the material before me.
Nevertheless, applying the standard of proof, I would need to be satisfied that the only reasonable inference from the primary facts as I have found them, is that the entries do not meet that qualitative requirement of an itemised Bill.
On the whole of the evidence, I am not satisfied that it is the only reasonable inference.
In that regard, the following matters are, in my view, significant.
While the work activities described by the respondent in a number of entries in the Bills were aggregated in the manner I have described, those entries nevertheless described confined sets of particular activities, the reasonableness of which may be compared against the total time spent on those particular activities, so as to enable submissions to properly be made to a Registrar on an assessment. It may be the case that a recipient of the Bill, for example, having a knowledge of the pleadings, witness statements, proofs and other material referred to in the Bills could conclude that, whatever was involved in the five matters set out in the entries in the Bill dated 4 September 2019 for 19 August 2019 to 30 August 2019, those matters could not reasonably have required in excess of 82 hours.
Indeed, it is significant, in my view, that the appellants, through their solicitors, have done precisely that. That is, having been provided with the Bills, the appellants' solicitors have been able to make their own assessment as to whether the respondent's charges were reasonable and have, evidently, concluded that they were not. And not by a small margin. As I have set out above, according to the appellants, the respondent's fees exceed well over twice the amount that the appellants' solicitors have assessed as being reasonable for the work performed.
Insofar as the appellants placed emphasis on the requirement that an itemised bill 'allows the recipient to make a decision as to the reasonableness of the charges, whether to have the bill taxed and to take advice in that regard',[43] it could not seriously be suggested that the appellants have been unable to make those decisions. The appellants have concluded that the Bills are unreasonable and have sought an assessment of the Bills.
[43] Applicants' submissions [8].
In addition, it is not possible for me to exclude as a reasonable inference that the Bills, such as they are, are not specified in a way that would allow them to be assessed, particularly in circumstances in which, as I have said, there is no evidence before me as to the nature of the issues in the proceedings in which the respondent was engaged to act for the appellants or direct evidence as to the nature of the work required to be done in those proceedings.
For these reasons, I am not satisfied beyond reasonable doubt that the respondent failed to comply with the Order.
Did any failure to comply with the Order amount to 'disobedience?
In any event, and in all of the circumstances, I am not satisfied beyond reasonable doubt that, insofar as the Bills are inadequate in their detail, that the respondent has 'disobeyed' the Order.
The fact of the matter is, and I find, that the respondent could not, and cannot, provide greater detail in the Bills than that which he has already provided. The respondent's inability to do so may well be, and I accept was, a result of the fact that he did not make any record of each specific item of work on each day or the amount of time spent on each specific item.
On the assumption that the Bills are not 'itemised bills', the respondent might therefore be legitimately criticised for not having kept any such records and, insofar as he was not, and is not, able to provide itemised bills within the meaning of the Legal Profession Act (some years after the four invoices were rendered), that might, as the appellants submitted, reflect upon the extent of the respondent's compliance with his statutory and professional duties.[44] It might also affect the extent to which he can satisfy the taxing officer that the Bills were fair and reasonable. I make no findings in that regard.
[44] Applicants' submissions [23].
Those matters do not, however, have the consequence that the respondent has disobeyed the Order. If the respondent was unable because of his lack of records, as at 25 November 2022, to provide itemised bills within the meaning of the Legal Profession Act, he was ex hypothesi unable, for the same reason, to comply with the Order at the time that it was made.
The appellant submits that the respondent did not inform the Court when the Order was made that there was any inability to comply with the proposed order and submits that the respondent was bound to inform the Court and the appellants immediately of any inability to comply with the Order and apply to cancel the Order. The appellants submitted that it was unprofessional for the respondent not to do so.[45]
[45] Applicants' submissions [19].
Whether that is the case, particularly in circumstances in which the respondent evidently took the view that he had complied with the Order, is a separate question. It does not alter the fact that, as I have found, the respondent can do no more than he has already done to comply with the Order.
In those circumstances, I cannot find that the respondent 'disobeyed' the order within the meaning of s 98 of the Civil Judgments Enforcement Act.
For these reasons, the contempt application must be dismissed.
Relief
In the event that I am wrong as to whether the respondent was guilty of a contempt by disobedience of the Order, I will briefly address the relief sought by the appellants.
The appellants originally sought a direction under s 104 of the Civil Judgments Enforcement Act that the respondent comply with the Order. That order was not pursued at the hearing of the application. In that regard, even if I had found that the respondent had failed to comply with the order, such that it was a contempt, given, as I accept to be the case, the respondent cannot provide more detail than he already has, a further direction in those terms could not have been made because it would have been futile. I have proceeded on the basis that that is the reason why the coercive order was not sought or not pursued in the hearing before me.
Ultimately the dispute in relation to relief was whether I should grant declaratory relief, absent a consequential coercive order. In that regard, I note that the declaration that was sought in the application was not, in fact, a declaration in terms that the respondent was in contempt of court but, rather, a declaration that the respondent had failed to comply with paragraph 4 of the Order, which, given the need for disobedience to establish a contempt, is a somewhat different declaration.
If I had been satisfied that the respondent was guilty of a contempt, the appellants relied upon Professor Rolph's text, Contempt, to the effect that a declaration is a way in which a court can record a contemnor's conviction. In that context, Professor Rolph concluded that:[46]
Where a court finds a contemnor is liable for contempt, it is not obliged to make a declaration. A declaration remains a discretionary remedy.
[46] Rolph, D, Contempt (2023), 817.
This is consistent with the authorities of the High Court, including Ainsworth v Criminal Justice Commission,[47] concerning declaratory relief generally. In that regard, the discretion to be exercised in relation to declarations will necessarily take into account questions of utility.
[47] Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564.
As the High Court in Witham v Holloway confirmed, whether a criminal contempt or civil contempt is involved, all contempt proceedings are essentially 'punitive', whether imposed for vindication of the court's authority or for remedial or coercive purposes.[48] In that regard a declaration might, in an appropriate case, be the proper mechanism for vindicating the court's authority. In circumstances in which I am not satisfied that the respondent 'disobeyed' the Order, I do not express a view as to whether it would, otherwise, have been appropriate to make a declaration of contempt in order to vindicate the Court's authority.
[48] Witham v Holloway, 534 (Brennan, Deane, Toohey & Gaudron JJ).
I will, however, make the following observations in relation to three matters concerning the utility of the proceedings that were raised by the appellants in their submissions in reply.
First, it was submitted that a declaration would have utility because it would leave open the ability of the applicants to contend that absent an itemised bill, the respondent was legally unable to sue for the recovery of his fees and cannot, accordingly, recover any fees by reason of any assessment. In that regard, as I have previously said, I was not required, on this application, to determine positively whether or not the bills are, in fact, itemised bills. Rather, the question was whether or not I could be satisfied beyond reasonable doubt that they were not itemised bills and whether, if so satisfied, that failure constituted disobedience. A declaration in those circumstances may have no particular utility for civil liability in relation to the four invoices.
In any event, the four invoices have been paid. There is no evidence that there is any proceeding available, or proposed, to sue for recovery of the fees.
The second issue raised in support of the utility of declaratory relief was that the assessment of the respondent's costs could proceed on the basis that the bills submitted by the respondent were not itemised. It is not entirely clear to me how a declaration would have any practical effect upon an assessment conducted by a Registrar. The Registrar is able to conduct an assessment and employ the mechanisms available to her to determine whether or not the fees are fair and reasonable, regardless of any declaration I might make.
Finally, the appellants submitted that it was in the public interest for the Court to state general principles in relation to the itemisation of bills. In my view, a contempt application, where the issue is whether the court is satisfied beyond reasonable doubt that what has, in fact, been provided was in disobedience of the Order, would not be an appropriate case for stating any general principles beyond the Order itself.
In Universal Music, for example, Branson J referred to the observation in ICI Australia Operations Pty Limited v Trade Practices Commission by Lockhart J (with whom Gummow and French JJ agreed) that:[49]
Contempt proceedings are not appropriate for the determination of questions of construction of the injunction or the aptness of language in which they are framed.
[49] ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248; Universal Music Australia v Sharman Networks [40] (Branson J).
Similarly, in my view, contempt proceedings are not an appropriate occasion to be making, by way of obiter, statements as to what should or should not have been included in a bill, when the issue is whether or not the particular action taken in response to the Order was a contempt.
For those reasons, leaving aside the issue of vindication, I consider that there would, otherwise, have been limited utility in making any declaration, given that no further coercive order was sought.
For these reasons, I would dismiss the contempt application.
Costs
The respondent seeks an order that the appellants pay the respondent's costs of the contempt application to be assessed if not agreed. I do not understand that order to be contentious. The respondent then seeks two alternative orders:
(a)an order that the costs payable be assessed on the basis that, from 18 April 2024, the appellant do pay all costs incurred by the respondent, except insofar as they are of an unreasonable amount or have been incurred unreasonably, so that the respondent is completely indemnified with respect to his costs on and from 18 April 2024; or, alternatively
(b)that the costs be taxed without regard to the scale limits imposed under Item 25(e) of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022.
The application for indemnity costs is made on the basis that, following the filing of the contempt application, the respondent's solicitors made an open offer to resolve the application on terms that each party bear their own costs. That offer was made on the basis that the application for contempt was misconceived and doomed to fail, in the context of which the respondent's solicitors foreshadowed, as indeed occurred, that the respondent would file an affidavit substantially to the effect of that filed on 19 April 2024; and that the conduct of the appellants after that point was unreasonable in such a way as to make an indemnity costs order appropriate.
The principles in relation to the ordering of indemnity costs are well established.[50] An indemnity costs order is an exceptional order, and one of the relevant principles is that a properly crafted special costs order may obviate the need for an indemnity costs order where it allows cost scale items above the applicable scale ceiling.
[50] See Swansdale v Whitcrest [2010] WASC 129 (S) [10].
The capacity to make the alternative costs order sought by the respondent is therefore relevant to whether I should order indemnity costs.
As to the alternative order, the principles in relation to the application of s 141 of the Legal Profession Uniform Law Application Act 2022 (WA) (which replicates s 280(1) of the Legal Profession Act 2008 (WA)), are set out in Sino Iron Pty Ltd v Mineralogy [No 2].[51]
[51] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S).
The power to lift a scale item depends upon the court being satisfied as to two components.
First, the court must form the view that the maximum amount allowable under the relevant scale item is inadequate, in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax an amount which is greater than the limit which will be imposed by the relevant cost determination.
Secondly, the court must also form the opinion that the inadequacy of the costs allowable arises because of the unusual difficulty, complexity or importance of the matter. A fairly arguable case does not require the court to determine what amount should be allowed on taxation, but only whether there is a fairly arguable case that a greater amount should be allowed.
The relevant scale item in relation to an application in an appeal in this Court (item 25(e)) is $4,730, which is calculated as being 10 hours for counsel (at the rate of $473 per hour). The relevant scale rate for senior counsel is $693 per hour. Were item 25(e) to be calculated according to the senior counsel rate, the scale item would be $6,930.
In my view, it is fairly arguable that a bill presented to the taxing officer, in this case, would properly tax an amount which is greater than the limit imposed by the scale, being $4,730. I am also of the opinion that, insofar as the relevant scale item would be inadequate in that sense, it would be because of the unusual difficulty, complexity or importance of the matter.
Given that this application was a contempt application against a senior practitioner, the importance of the matter was such that I am of the opinion that incurring more than the scale item would result simply by reason of the appropriateness of having senior counsel appear for the respondent on the application.
As such I consider that a properly formulated special costs order is available in the present case, that being a matter relevant to whether to order indemnity costs.
As I made clear to the parties in the course of argument in relation to costs, I am troubled by a number of aspects of this matter, including, for example, the appellants' refusal to provide any documents to the respondent so as to potentially further the dispute in a manner that might resolve, rather than exacerbate, the dispute.
At least from the time that the respondent filed his affidavit to the effect that, no matter what the outcome of the application, it was not going to produce any practical difference for the assessment of costs, the utility of the application as a means of resolving, rather than exacerbating, the dispute between the parties was questionable. This has caused me to consider carefully whether or not I should order indemnity costs as and from 19 April 2024 when that affidavit was filed.
By the merest of margins, I have concluded that a properly crafted special costs order would, in this case, obviate the need for an indemnity costs order and I would not, therefore, order indemnity costs. The misgivings I have expressed about the maintenance of the application should be sufficient to record whatever disapproval might have been marked by an order for indemnity costs.
I am satisfied that the amount allowable under the scale would be inadequate, and will therefore make a special costs order.
Orders
The orders I make are:
1.The application in this appeal filed on 22 March 2024 be dismissed.
2.The appellants are to pay the respondent's costs of the application to be assessed if not agreed.
3.In taxing the respondent's bill of costs pursuant to order 2 herein, the taxing officer is to do so without regard to the scale limits imposed under Item 25(e) of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 as to time, and apply the scale rate for Senior Counsel of $693 per hour and $6,930 per day.
I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
MJM
Research Associate to the Hon Chief Justice Quinlan
24 JUNE 2024
4
15
3