Mineralogy Pty Ltd v Sino Iron Pty Ltd
[2015] WASC 454 (S)
•18 JANUARY 2016
MINERALOGY PTY LTD -v- SINO IRON PTY LTD [2015] WASC 454 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 454 (S) | |
| Case No: | CIV:2303/2015 | ON THE PAPERS | |
| Coram: | CHANEY J | 18/01/16 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Indemnity costs order made | ||
| B | |||
| PDF Version |
| Parties: | MINERALOGY PTY LTD SINO IRON PTY LTD KOREAN STEEL PTY LTD CITIC LTD |
Catchwords: | Practice and procedure Costs Indemnity costs Exceptional circumstances Abuse of process |
Legislation: | Supreme Court Act 1935 (WA), s 37(1) |
Case References: | Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 Mineralogy Pty Ltd v Sino Iron Pty Ltd [2015] WASC 454 Re Malley SM; Ex Parte Gardner [2001] WASCA 83 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
SINO IRON PTY LTD
First Defendant
KOREAN STEEL PTY LTD
Second Defendant
CITIC LTD
Third Defendant
- Plaintiff
AND
SINO IRON PTY LTD
First Defendant
KOREAN STEEL PTY LTD
Second Defendant
CITIC LTD
Third Defendant
Catchwords:
Practice and procedure - Costs - Indemnity costs - Exceptional circumstances - Abuse of process
Legislation:
Supreme Court Act 1935 (WA), s 37(1)
Result:
Indemnity costs order made
Category: B
Representation:
CIV 2303 of 2015
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Solicitors:
Plaintiff : Kilmurray Legal
First Defendant : Allens
Second Defendant : Allens
Third Defendant : Allens
CIV 2368 of 2015
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Solicitors:
Plaintiff : Kilmurray Legal
First Defendant : Allens
Second Defendant : Allens
Third Defendant : Allens
Case(s) referred to in judgment(s):
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2015] WASC 454
Re Malley SM; Ex Parte Gardner [2001] WASCA 83
1 CHANEY J: By substantive reasons published on 27 November 2015, I determined that the institution of each of these actions constituted an abuse of process, and directed that both actions should be permanently stayed: see Mineralogy Pty Ltd v Sino Iron Pty Ltd [2015] WASC 454 (Stay Decision). I indicated that I would hear from the parties as to the precise form of the orders to be made, and on the question of costs. The parties have subsequently filed written submissions on the question of costs, and have agreed that the proceedings be permanently stayed and that the question of costs should be dealt with on the papers. Accordingly, on 22 December 2015, in each of these actions I ordered that the proceedings be permanently stayed and the question of costs is to be dealt with on the papers.
2 There is no dispute that the plaintiff should pay the defendants' costs of the proceedings. The defendants contend that those costs should be paid on an indemnity basis or alternatively that there should be special costs orders pursuant to s 280 of the Legal Profession Act 2008 (WA) removing limits on costs allowable under the Legal Profession (Supreme Court) (Contentious Business) Determination 2014 (WA) in relation to each action. The plaintiff contends that the appropriate order is for the costs to be taxed if not agreed.
Legal principles
3 The legal principles in relation to indemnity costs orders are well settled. The costs of and incidental to proceedings in the court are in the discretion of the court (Supreme Court Act 1935 (WA) s 37(1)).
4 An order for indemnity costs is a departure from the ordinary principle that costs are awarded on a party party basis. There must be some special or unusual feature in the case to justify the court exercising its discretion to depart from the ordinary practice: Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [8] (Pullin J).
5 An order for indemnity costs is a mark of disapproval on the part of the court about the improper or unreasonable conduct of a party in the litigation: Flotilla Nominees [9] (Pullin J).
6 An indemnity costs order will only be made in exceptional circumstances: Re Malley SM; Ex Parte Gardner [2001] WASCA 83 [2] (Malcolm CJ).
The defendants' contentions
7 In this case the defendants contend that special circumstances exist warranting the award of indemnity costs by reason of the following (paragraph references are to paragraph numbers in the Stay Decision):
(a) the Plaintiff's conduct in commencing two additional sets of proceedings (the MPR Proceeding and the MRSLA Termination Proceeding), being proceedings which had no chance of success in circumstances where:
(i) the Plaintiff 'accepted that there is a substantial overlap' between the new proceedings and the Main Proceeding and 'could hardly have contended otherwise'; [2]
(ii) the Plaintiff by its conduct 'accepted that the matters sought to be raised in the new actions were capable of being raised' in the Main Proceeding; [21], [25]
(iii) the new proceedings were therefore a prima facie abuse of process; [21] and
(iv) the Plaintiff provided no legitimate justification for its decision to commence new proceedings; [22]
(b) the Plaintiff's conduct in commencing the MPR Proceeding and MRSLA Termination Proceeding without conferral or prior consultation with the Defendants; [28]
(c) the Plaintiff's unreasonable insistence that the Defendants prepare and file defences in the MPR Proceeding and MRSLA Termination Proceeding, notwithstanding the Defendants notifying the Plaintiff of their intention to apply to strike out or permanently stay both proceedings;
(d) the Plaintiff's conduct in refusing the Defendants' requests (communicated very shortly after the proceedings were instituted) [24], [28] to withdraw their claim on the basis that it constituted an abuse of process;
(e) the Plaintiff's motivation for commencing the MPR Proceeding and the MRSLA Proceeding, which 'tended to reinforce rather than displace the prima facie conclusion of abuse of process', being: [22], [25], [29]
(i) to circumvent orders of this Honourable Court in the Main Proceeding that leave be required for further amendments; [14] and
(ii) to avoid the need to obtain an extension of time to seek summary judgment in the Main Proceeding; [15]
(f) that, in commencing the MPR Proceeding and MRSLA Termination Proceeding, the Plaintiff disregarded known facts and established law by:
(i) assuming, unilaterally and without justification, that procedural requirements and the exercise of the Court's discretion concerning pleadings amendments would ultimately be resolved in the Plaintiff's favour, allowing the introduction or reintroduction of the relevant claims; [27] - [29]
(ii) inappropriately asking the Court to adopt the Plaintiff's assumption that it would have been granted leave to amend its pleading to raise the claims in the Main Proceeding, without the Defendants having any proper opportunity to address the Court on that question, either by filing material with the Court or being heard during argument; [28] and
(iii) bringing the consequences of any additional delay and expense upon itself by taking a course (namely, commencing the MPR Proceeding and the MRSLA Termination Proceeding) which it should have been obvious would consume at least as much (if not more) expense and time than the alternative course (namely, applying for leave to amend in the Main Proceeding); [28] and
(g) …
The plaintiff's contentions
8 Mineralogy submits that, although it has been found that it should not have commenced the two sets of subsequent proceedings, there is no suggestion that it has made allegations which should never have been made or cannot be made. It further contends that there was 'one further aspect' of its reasons for commencing the new proceedings namely that, if there had been any basis to refuse leave in CIV 1808 of 2013 (CIV 1808), it is strongly arguable that that basis would not preclude Mineralogy from commencing fresh proceedings on any such aspect of its claims.
9 Finally, Mineralogy submits that it could rationally take the view that all claims would end up in the same court managed together.
Consideration
10 The matters identified by the defendants amount to exceptional circumstances that support the making of an indemnity costs order. I accept Mineralogy's submission that simply because proceedings may attract the description 'abuse of process' an order for indemnity costs will not necessarily follow. It is necessary to examine the circumstances of each particular case. In this case, Mineralogy was put on notice immediately after instituting these two proceedings as to the defendants' contention that they were an abuse of process. It nevertheless chose to pursue the proceedings in order to circumvent procedural requirements which it would have to meet if it were to seek to bring the claims in CIV 1808. Those circumstances justify the making of an indemnity costs order.
11 None of the contentions raised by Mineralogy displace that conclusion. The fact that the allegation could have been made in CIV 1808 does not justify the commencement of duplicated proceedings.
12 Nor does the fact that some residual capacity to commence a fresh action might exist, if leave to amend in CIV 1808 is refused, justify the course taken by Mineralogy. Mineralogy's position was that there is no basis to refuse leave in CIV 1808. Its primary position therefore supports the proposition that an application for leave to amend should have been made in CIV 1808 rather than the commencement of fresh actions.
13 Nor does the argument that Mineralogy could rationally take the view that all claims would end up managed together in the same court justify the commencement of separate actions.
14 There should be orders in terms sought by the defendants, namely that, in CIV 2303 of 2015:
1. The plaintiff pay the defendants' costs of the proceeding, including the costs of the defendants' application by chamber summons dated 14 September 2015, on an indemnity basis.
And in action CIV 2368 of 2015:
1. The plaintiff pay the defendants' costs of the proceeding, including the costs of the defendants' chamber summons dated 25 September 2015 and amended chamber summons dated 2 October 2015, on an indemnity basis.
4
1