Moodle Pty Ltd v Lambda Solutions Inc [No 2]
[2024] WASC 111 (S)
•17 JUNE 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MOODLE PTY LTD -v- LAMBDA SOLUTIONS INC [No 2] [2024] WASC 111 (S)
CORAM: ACTING MASTER MCDONALD
HEARD: 12 SEPTEMBER 2023
DELIVERED : 17 JUNE 2024
FILE NO/S: CIV 2157 of 2020
BETWEEN: MOODLE PTY LTD
Plaintiff
AND
LAMBDA SOLUTIONS INC
Defendant
Catchwords:
Costs - Special costs order - Legal Profession Uniform Law Application Act 2022 (WA), s 141(3) - Whether there is inadequacy of the relevant item in costs determination - Application to strike out statement of claim not of unusual difficulty, complexity or importance - Costs to be fixed - No new principle
Legislation:
Legal Profession Uniform Law Application Act 2022 (WA)
Result:
The defendant pay the plaintiff's cost of the application fixed in the sum of $13,000
Representation:
Counsel:
| Plaintiff | : | C Chenu |
| Defendant | : | T O'Leary |
Solicitors:
| Plaintiff | : | Corrs Chambers Westgarth |
| Defendant | : | Gilbert + Tobin |
Case(s) referred to in decision(s):
Bolt v Bolt [2023] WASC 162 (S)
Heartlink v Jones [2007] WASC 254 (S)
Moodle Pty Ltd v Lambda Solutions Inc [No 2] [2024] WASC 111
Sino Iron Pty Ltd v Mineralogy (No 2) [2017] WASCA 76 (S)
ACTING MASTER MCDONALD:
On 4 April 2024, I published my reasons for decision in relation to an application brought by the defendant to strike out the plaintiff's statement of claim in its entirety or in the alternative, various paragraphs of the statement of claim. I dismissed the application: Moodle Pty Ltd v Lambda Solutions Inc [No 2] [2024] WASC 111 (Reasons).
The parties filed competing minutes of proposed orders to give effect to the Reasons. In terms of costs, the plaintiff sought the costs of and incidental to the strike out application to be assessed if not agreed and paid forthwith. The defendant proposed orders that the defendant pay the plaintiff's costs of the strike out application in any event.
I referred the parties to Supreme Court Consolidated Practice Direction (CPD) 4.7.1. I requested the parties to confer about fixing costs and if the parties could not agree, indicated that the court will fix the costs in accordance with CPD 4.7.1 [11]. The parties were given the opportunity to file consent orders in respect of the amount of costs by Monday, 22 April 2023 or to provide brief submissions in relation to the amount of costs to be fixed, or, alternatively, as to why there should not be an order for fixed costs.
The plaintiff sought an order that the costs be fixed in the sum of $30,000 or that the costs be taxed and the limits provided by the relevant scale be removed. The defendant submitted that the costs should be fixed in the sum of no more than $4,000 or that the costs be ordered to be taxed and paid in any event.
In my view and for the following reasons, I am of the view a special costs order is not warranted and the plaintiff's costs of the application should be fixed in the sum of $13,000.
Relevant Principles
The Court has the power to make a special costs order pursuant to s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) (Uniform Act). Section 141 of the Uniform Act is, relevantly, in the following terms:
141.Effect of costs determinations
(1) The following are regulated by an applicable costs determination -
(a)the taxation of bills of law practices;
(b)any other aspect of the costs charged by law practices.
…
(3)Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do any or all of the following -
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
(4)Subsection (1) does not limit the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court, judicial officer or taxing officer the amount of costs allowed.
…
The relevant principles applicable to making a special costs orders were set out in Sino Iron Pty Ltd v Mineralogy (No 2) [2017] WASCA 76 (S) and summarised by Vandongen J (as his Honour then was) in Bolt v Bolt [2023] WASC 162 (S) (and which I adopt):[1]
Where a special costs order is sought, the court is required to consider two questions, namely:
(a)Are the maximum amounts allowable under the relevant items in the applicable costs determination inadequate in the sense that there is a fairly arguable case that, on taxation, costs may properly be allowed in an amount greater than the maximum amounts?
(b)Does the inadequacy of the costs allowable under the costs determination arise because of the unusual difficulty, complexity, or importance of the matter?
If the answer to both of those questions is 'yes', then the court may do all or any of the things referred to in s 141(3)(a) - (d) of the Uniform Act. In this case the plaintiff submits that the court should exercise the power provided for in s 141(3)(c) by removing the limits that are fixed under item 10(a) of the Costs Determination, namely, costs relating to proceedings in chambers.
[1] Bolt v Bolt [2023] WASC 162 (S) [10] - [11].
Consolidated Practice Directions
As a general rule, orders for costs made in interlocutory proceedings will be fixed and ordered to be paid forthwith[2] rather than in any event,[3] so that parties know their liability as the action progresses,[4] to ensure the benefit of a costs order is not illusory where matters resolve and the orders are not enforced[5] and to discourage ill‑considered or needless interlocutory applications.[6]
[2] CPD 4.7.1 (3).
[3] CPD 4.7.1 (7).
[4] CPD 4.7.1 (4).
[5] CPD 4.7.1 (5).
[6] CPD 4.7.1 (5).
The court may fix costs in accordance with the CPD schedule 4.7.1.1 (as updated by the relevant determination by the Legal Costs Committee).[7] The costs may be fixed in a lower sum in a simple matter or may be adjusted upward (or the court may make an order for costs to be taxed) for an unusually complex matter.[8]
[7] CPD 4.7.1 (8) and (9).
[8] CPD 4.7.1 (10).
A judicial officer fixing costs is not engaging in taxation of costs and in most cases it will be necessary for counsel to make no more that the briefest submissions as to whether there should be an order for fixed costs and the amount of the costs.[9]
[9] CPD 4.7.1 (11).
Plaintiff's submissions
The plaintiff relied upon the affidavit of Rachael Elizabeth King affirmed on 22 April 2024 in support of its submission that costs should be fixed in the sum of $30,000. Ms King is a partner of the firm of solicitors acting for the plaintiff. Ms King deposed to the fact that the plaintiff's solicitors engaged in approximately 55 hours, and the plaintiff's counsel engaged in 43 hours of work, opposing the defendant's application - that being a total of 98 hours. Ms King deposes to the large volume of materials filed by the defendant and the large number of authorities cited by the defendant in opposition to the application - matters to which the plaintiff was required to respond. The hearing of the application took approximately 4 hours.
Item 10 of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 provides for a maximum of $14,190 for proceedings in Chambers argued by Counsel based on 2 days preparation and 1 day hearing.[10] This equates to approximately 30 hours of work by counsel. The plaintiff submits that, given the work that its solicitors and counsel were required to undertake, the maximum amounts allowable under the relevant items in the applicable costs determination are inadequate because of the unusual difficulty, complexity or importance of the application.
[10] Excluding an allowance for attending on a reserved judgment and consent orders.
The plaintiff says that the application was of significant importance to the plaintiff given the defendant sought to strike out the plaintiff's claim in its entirety. The plaintiff submits that importance to the parties does not require broader importance to the public.[11]
[11] Heartlink v Jones [2007] WASC 254 (S) [17] - [19].
Defendant's submissions
The defendant relies on my findings that, notwithstanding I dismissed its application, the plaintiff's plea is ambiguous as to the plaintiff's case[12] and that the submissions did not remove the uncertainty as to the nature of the plaintiff's case and did not always seem entirely consistent[13] or reflect optimal practice.[14] I also did not accept the explanation of the plaintiff's pleaded claim by counsel for the plaintiff.[15]
[12] Moodle Pty Ltd v Lambda Solutions Inc [No 2] [2024] WASC 111 [17].
[13] Reasons [19].
[14] Reasons [20].
[15] Reasons [2].
In the circumstances, the defendant claims that, but for the court's explanation for the basis of Moodle's claim, the defendant would not understand the plaintiff's claim and therefore, costs should be ordered to be in the cause. Alternatively, the defendant submits the application was in the usual run of routine matters and costs for the special appointment and that the plaintiff's costs should be fixed at no more than $4,000.
Disposition
The first issue I must determine is who should pay the costs of the application. Although I made certain findings in relation to the uncertainty of the plaintiff's claim, the defendant, acting appropriately, did not seek to strike out the plaintiff's case on the basis of uncertainty - the defendant asserted that the plaintiff had failed to plead a reasonable cause of action. The defendant was wholly unsuccessful in the application. In these circumstances, the defendant should pay the plaintiff's costs of the application.
The second issue I must determine is whether a special costs order should be made. Given the matters deposed to in Ms King's affidavit, I am satisfied that there is a fairly arguable case that, on taxation, costs may be allowed in an amount greater than the maximum amount. However, I am not satisfied that any inadequacy would arise because of the usual difficulty, complexity or importance of the application. While the application may have been of importance to the plaintiff, I do not consider that it was of such importance as to so justify a special costs order.
In my view, for the reasons I outlined in [8] above, it is appropriate to fix the plaintiff's costs. I am best placed to do so given I heard and determined the application. In my view, having regard to the length of the hearing, the issues involved and the preparation for the hearing, the plaintiff's costs ought to be fixed in the amount of $13,000.
Final orders
I make the following orders:
(1)The defendant's application to strike out the plaintiff's statement of claim dated 11 May 2023 is dismissed.
(2)The defendant pay the plaintiff's costs of the strike out application fixed in the sum of $13,000, payable forthwith.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
LR
Associate to Acting Master McDonald
17 JUNE 2024
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