Mineral Crushing Services (WA) Pty Ltd v Edna May Operations Pty Ltd [No 2]
[2016] WASC 184
•15 JUNE 2016
MINERAL CRUSHING SERVICES (WA) PTY LTD -v- EDNA MAY OPERATIONS PTY LTD [No 2] [2016] WASC 184
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 184 | |
| Case No: | CIV:1958/2014 | 15 JUNE 2016 | |
| Coram: | MARTINO J | 15/06/16 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Security ordered to be provided | ||
| B | |||
| PDF Version |
| Parties: | MINERAL CRUSHING SERVICES (WA) PTY LTD EDNA MAY OPERATIONS PTY LTD |
Catchwords: | Practice and procedure Security for costs |
Legislation: | Nil |
Case References: | Brocklebank & Co v King's Lynn Steam Ship Co (1878) 3 CPD 365 Brundza v Robbie & Co [No 2] [1952] HCA 49; (1952) 88 CLR 171 Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 Crawley Investments Pty Ltd v Noble Group Ltd [No 2] [2015] WASC 16 Donaldson v The State of Western Australia [2005] WASCA 196; (2005) 31 WAR 122 Mineral Crushing Services (WA) Pty Ltd v Edna May Operations Pty Ltd [2016] WASC 57 Procon (Great Britain) Ltd v Provincial Building Co Ltd [1984] 1 WLR 557 Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
EDNA MAY OPERATIONS PTY LTD
Defendant
Catchwords:
Practice and procedure - Security for costs
Legislation:
Nil
Result:
Security ordered to be provided
Category: B
Representation:
Counsel:
Plaintiff : Ms E C Hensler
Defendant : Mr M Gerus
Solicitors:
Plaintiff : Minter Ellison
Defendant : Gilbert & Tobin Lawyers
Case(s) referred to in judgment(s):
Brocklebank & Co v King's Lynn Steam Ship Co (1878) 3 CPD 365
Brundza v Robbie & Co [No 2] [1952] HCA 49; (1952) 88 CLR 171
Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497
Crawley Investments Pty Ltd v Noble Group Ltd [No 2] [2015] WASC 16
Donaldson v The State of Western Australia [2005] WASCA 196; (2005) 31 WAR 122
Mineral Crushing Services (WA) Pty Ltd v Edna May Operations Pty Ltd [2016] WASC 57
Procon (Great Britain) Ltd v Provincial Building Co Ltd [1984] 1 WLR 557
Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114
1 MARTINO J: By a summons dated 4 November 2014 the defendant applied for an order that the plaintiff provide security for costs in the sum of $241,489 or in such other sum as the court saw fit. That application was supported by an affidavit of Simon Mark Le Messurier made 31 October 2014. On 18 February 2015 Master Sanderson made the following orders by consent pursuant to O 43 r 16 of the Rules of the Supreme Court 1971 (WA) (RSC):
1. Within 14 days of this order the plaintiff do give security for the defendant's costs of the action up to and including particulars, discovery, inspection and mediation in the sum of $23,000 by payment of that amount into court, and that in the meantime all further proceedings be stayed.
2. The defendant be granted leave upon 72 hours' notice in writing seeking to relist the defendant's application for security for costs commenced by summons dated 4 November 2014 for orders in relation to the provision of further security by the plaintiff after mediation.
3. The plaintiff pay the costs of the defendant's application for security for costs commenced by summons dated 4 November 2014 fixed at $3,333 and to be paid forthwith.
2 The defendant applies for further security for costs. The defendant submits that it is now appropriate to consider its application for further security for costs. It submits that the provision of particulars, discovery and inspection is now completed and that mediation between the parties has occurred but was unsuccessful. It points to orders made on 18 May 2016 for the provision of expert and non-expert witness statements.
3 The plaintiff submits that there is a question as to whether the relisting of the application is premature as the mediation was adjourned rather than completed. However, the defendant does not oppose orders for further security. Its submissions go only to the amount of security for costs.
4 The defendant seeks further security of $100,387 in relation to costs incurred by the defendant in providing further discovery and costs up to and including entry for trial. The plaintiff submits that the appropriate amount of further security is $45,000.
The defendant's evidence and submissions
5 The further security that the defendant seeks relate to costs already incurred by it in providing discovery and inspection of documents and to costs to be incurred by it up to and including entry for trial, including the provision of expert evidence.
Discovery and inspection of documents
6 The defendant submits that although the sum of $23,000 paid into court pursuant to the order of Master Sanderson includes provision for discovery and inspection of documents, the further security that it seeks should include further provision for security for the cost of discovery and inspection because of the large number of documents discovered by it.
7 The defendant's solicitor, Guy Simon Greer, has deposed in his affidavit of 17 May 2016 that, on 28 August 2015, the defendant filed an affidavit verifying the defendant's list of documents which list contained 380 documents. Since that date the defendant has provided discovery of a further 1,242 documents. Mr Greer estimates that the defendant has incurred legal fees of $32,756 in providing that further discovery. That estimate is based on the information in the following table contained in his affidavit:
| Lawyer | Hours | Rate per hour ($) | Total scale fees incurred ($) |
| Mark Gerus | 12 | 473 | 5,676 |
| Guy Greer | 36 | 430 | 15,480 |
| Claudia Henfry | 58 | 200 | 11,600 |
8 Mr Greer has deposed that, by letter dated 9 October 2015, the plaintiff's solicitors requested further discovery of seven categories of documents. On 27 October 2015 the defendant informally provided a supplementary list of documents to the plaintiff. On 12 November 2015 the defendant provided a list of further documents, copies of the documents in that list and copies of the documents identified in the list provided on 27 October 2015. On 20 November 2015 the defendant provided a list of further documents and copies of the documents in that list to the plaintiff.
9 Mr Greer has also deposed that, as a result of the amended statement of claim, the plaintiff filed on 10 December 2015 (it was in fact filed on 11 December 2015) further classes of documents became discoverable. On 18 December 2015 the plaintiff filed an application for further discovery. In response to that application the defendant provided a list of further documents and copies of those documents to the plaintiff on 22 December 2015. In accordance with an order for further discovery made by me on 22 February 2016 (Mineral Crushing Services (WA) Pty Ltd v Edna May Operations Pty Ltd [2016] WASC 57), the defendant provided further documents to the plaintiff on 21 March and 12 April 2016. Mr Greer has deposed:
31. On all occasions, a request by the plaintiff for the defendant to discover further documents required:
(a) Gilbert + Tobin to relay and explain the request to employees of the defendant;
(b) employees of the defendant to locate the documents for the period of the contract from electronic databases or hard copy archives at the Edna May mine site;
(c) the documents to be emailed or couriered to Gilbert + Tobin;
(d) lawyers at Gilbert + Tobin to review the documents for relevance, request further documents and to promptly prepare the discovered documents in a form suitable for inspection by the plaintiff.
27. The amount of security sought for the costs incurred in providing further discovery is $32,756. This amount relates to the actual amount that has been incurred by the defendant but it has been reduced from the actual amount to accord with the maximum hourly rates specified in section 8 of the Schedule in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2014. An order that the plaintiff pay an amount of $32,756 as security for costs incurred by the defendant in relation to the provision of further discovery would not be a full indemnity for the costs incurred by the defendant in providing that discovery.
Entry for trial and preparation of case
11 Annexed to Mr Greer's affidavit is an estimated bill of costs up to and including the costs of providing further discovery as set out in the table that I have quoted earlier in these reasons, entry for trial and preparation of case. The estimated bill of costs provides as follows:
| Estimated Bill of Costs | ||||
Item | Time | Fee Earner | $ | |
7 & 8 |
Giving discovery of documents & giving inspection of discovered documents | 48 hours 58 hours | SP JP | 21,156 11,600 |
16 |
(a) Advising on, and preparing, documents required to be filed by the Rules of the Supreme Court | 2 hours | SP | 946 |
| 5 hours | C | 1,925 | |
17 |
Preparation of case for trial (includes work reasonably and necessarily undertaken prior to commencement of proceedings) | 120 hours | SP | 56,760 |
34 |
Preparation of expert witness statement (expert fees) | 8,000 | ||
Total | 100,387 | |||
Expert evidence
13 Mr Greer deposes that in a minute of proposed directions dated 16 May 2016 the plaintiff has proposed an order for the filing of expert evidence. At this stage the defendant is unaware of the nature of the expert evidence sought to be led by the plaintiff. In its outline of submissions on the application for further security, the defendant points to the order I made on 18 May 2016 giving leave to both parties to adduce expert evidence at trial. The plaintiff has foreshadowed that it intends to call expert evidence at trial therefore it is expected that the defendant will provide expert evidence in response. The solicitors for the defendant submit that $8,000 for the provision of expert evidence is a reasonable and conservative amount, given that the defendant is not yet aware of the volume, detail or precise subject matter of the plaintiff's expert evidence, which makes it more difficult for the defendant to estimate the cost of obtaining expert evidence in response.
The plaintiff's evidence and submissions
14 The plaintiff's solicitor has deposed in her affidavit made on 25 May 2016 as to the history of the applications and requests for security for costs made by the defendant. The amount of security claimed by the defendant has varied significantly. On 2 May 2016 the solicitors for the plaintiff informed the solicitors for the defendant by email that they considered the defendant's application for further security was premature as pleadings had not closed and discovery had not been completed. The plaintiff's solicitors said that the quantum of further security would need to be worked through. On 16 May 2016 the plaintiff's solicitors lodged and served a minute of proposed directions which provided for the plaintiff to provide further security of $35,000.
15 In their outline of submissions the plaintiff's solicitors submit that while security for costs may be ordered for costs already incurred, further security should not be ordered for the provision of discovery and inspection of documents. They point to the fact that the initial discovery and inspection provided by the defendant was incomplete and that discovery and inspection was provided by the defendant on several occasions. They dispute that the amendments to the statement of claim resulted in any further documents being discoverable. The plaintiff's solicitors submit that additional security for costs should not be ordered for the provision of discovery and inspection of documents because:
(a) the amount of security for the defendant's discovery costs has already been dealt with by way of agreement, including the plaintiff's consent to orders to be made providing for security for the defendant's costs of discovery;
(b) if the cost of giving discovery has been more than the defendant anticipated, it has contributed to those costs by its manner of giving discovery; and
(c) it is unclear how the costs set out in the table of costs at paragraph 21 of Mr Greer's affidavit affirmed 17 May 2016 relate to the further discovery provided but paragraph 27 of the defendant's outline of submissions makes clear that it seeks an indemnity of its costs calculated at the scale rates.
16 The plaintiff's solicitors submit that the claim for getting up is based on the maximum scale amount, that it includes items not required of the defendant and that there is no evidence to support the claimed amount in relation to expert evidence.
Determination of the application
17 The defendant makes claim for security for costs which have already been incurred in providing discovery and inspection of documents. Security for costs can extend not only to future costs but also to costs already incurred: Brocklebank & Co v King's Lynn Steam Ship Co (1878) 3 CPD 365; Procon (Great Britain) Ltd v Provincial Building Co Ltd [1984] 1 WLR 557; Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114; Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 515; Crawley Investments Pty Ltd v Noble Group Ltd [No 2] [2015] WASC 16 at [26]. Delay in bringing an application can result in the discretion to order security for costs already incurred not being exercised, however, there has not been delay in bringing this application.
18 The order made by Master Sanderson provided for security for costs of the action up to and including particulars, discovery, inspection and mediation. That order does not preclude me considering the defendant's application for further security for the costs of discovery and inspection of documents. Nor does it prevent me considering the application generally, although the mediation was adjourned. That is because the court has the power to revisit and review interlocutory orders: Donaldson v The State of Western Australia [2005] WASCA 196; (2005) 31 WAR 122 at [17].
19 The assessment of the amount of security for costs is not an exercise in precision. The court does not seek to provide a complete and certain indemnity for the defendant's costs: Brundza v Robbie & Co [No 2] [1952] HCA 49; (1952) 88 CLR 171 at 175; Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd; Crawley Investments Pty Ltd v Noble Group Ltd [No 2].
20 Necessarily, there is a marked difference in the basis by which the defendant presents its claims for costs in the three areas it identifies. In the area of discovery and inspection, it makes the claim on the basis of time that has been spent. In the area of entry for trial and preparation of case, it makes the claim for work to be done on the basis of the maximum allowance without a special order for entry for trial and preparation of case, with a claim for five hours for an advice on evidence. In the claim for the cost of an expert witness statement, the estimate has been provided without a detailed knowledge at this stage of what that evidence will be or by whom it will be provided.
21 It is my assessment, without purporting to be precise in the manner that a taxing officer would be, that the claim for further discovery and inspection of documents is extremely high in all the circumstances and the claim for preparation of case is high in the circumstances. While I do have power to order that further security be provided for discovery and inspection of documents, it seems to me that the costs that have been incurred in that area are unnecessarily high. This appears to be the result of the manner in which the discovery and inspection was provided, in several stages. I am not satisfied that it was necessary to give discovery and inspection of documents in that fragmented way, even allowing for any further enquiry that might have been required by reason of the amendment to the statement of claim on 11 December 2015. I have decided that I should not order that further security for costs of discovery and inspection of documents should be provided.
22 In relation to the costs up to and including entry for trial, including disbursements for expert evidence, I assess the amount of further security applying the principles that I referred to in the previous paragraphs. That is, it is not an exercise in precision and the court does not seek to provide a complete and certain indemnity for the defendant's costs. It is my assessment that the appropriate amount of further security to be provided is $55,000.
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