Muriale v Hoghton
[2022] WASC 22
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MURIALE -v- HOGHTON [2022] WASC 22
CORAM: REGISTRAR GRIFFIN
HEARD: ON THE PAPERS
DELIVERED : 1 FEBRUARY 2022
FILE NO/S: CIV 2013 of 2021
BETWEEN: ANGELA MARISSA MURIALE
Plaintiff
AND
DANIEL JOHN HOGHTON
First Defendant
KRISTY MICHELLE HOGHTON
Second Defendant
DANIEL JOHN HOGHTON
KRISTY MICHELLE HOGHTON
Plaintiff by counterclaim
ANGELA MARISSA MURIALE
Defendant by counterclaim
Catchwords:
Application for costs - Strike Out Application - Conferral process - Costs order when no decision on the merits - Costs thrown away
Legislation:
Rules of the Supreme Court 1971 (WA)
Supreme Court Act 1935 (WA)
Result:
Defendants are entitled to their costs of the Strike Out Application and this application for those costs
Category: B
Representation:
Counsel:
| Plaintiff | : | No Appearance |
| First Defendant | : | No Appearance |
| Second Defendant | : | No Appearance |
| Plaintiff by counterclaim | : | No Appearance |
| Defendant by counterclaim | : | No Appearance |
Solicitors:
| Plaintiff | : | Chalmers Legal Studio Pty Ltd |
| First Defendant | : | Fletcher Law |
| Second Defendant | : | Fletcher Law |
| Plaintiff by counterclaim | : | Fletcher Law |
| Defendant by counterclaim | : | Chalmers Legal Studio Pty Ltd |
Case(s) referred to in decision(s):
Chaffey Services Pty Ltd As Trustee For Cataby Services Trust, t/a Cataby Services v Doble [2021] WASC 391
Dudley v Reece Australia Pty Ltd [2021] WASC 240
Palamara v City of Perth (1995) WAR 235
Sobey v Commission of Taxation [2008] FCA 1621
The Liberal Party of Australia (Western Australia Division) Inc v City of Gosnells [2013] WASC 267
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd & Ors [2006] WASC 161
REGISTRAR GRIFFIN:
This is the defendants' application for the costs of an application to strike out the plaintiff’s statement of claim (Strike Out Application).
Background
The application is being determined on the papers. Pursuant to orders made by consent on 10 November 2021, the parties have filed affidavits and submissions. The defendants filed an affidavit of Bushra Tariq affirmed 19 November 2021 (Tariq Affidavit 1), submissions dated 3 December 2021 and 17 December 2021 (which were responsive submissions) and an affidavit of Bushra Tariq affirmed 17 December 2021 (Tariq Affidavit 2). The plaintiff filed submissions dated 10 December 2021 and did not file any affidavit evidence.
Pursuant to order 4(c) of the orders of 10 November 2021, the defendants had leave to file any affidavit evidence purely responsive to the plaintiff's affidavit evidence. The plaintiff did not file any affidavit evidence so on the face of it, the defendants did not have leave to file Tariq Affidavit 2.
In a footnote to the responsive submissions the defendants sought leave to rely upon Tariq Affidavit 2, on the basis that the content of the affidavit was not contentious, and it was not anticipated that the plaintiff would suffer any prejudice if leave was granted.[1] The plaintiff has not taken issue with Tariq Affidavit 2. The affidavit annexes correspondence between the parties commencing 3 December 2021 and a screenshot of the eCourts portal. I do not consider that the plaintiff is prejudiced by this material and accordingly grant leave to the defendants to rely upon Tariq Affidavit 2.
[1] Defendants' Submission in Reply filed 17 December 2021 [1.1.3].
Admitting evidence as to conferral
Tariq Affidavit 1 refers to the substance of conversations between the plaintiff's and defendants' solicitors, and annexes correspondence with respect to that conferral. Pursuant to Consolidated Practice Direction 4.3.2(9) (CPD):
Affidavits filed in connection with the proceedings should not contain any reference to the conferral without leave of the court. In the past the practice of including this material in affidavits has discouraged the making of concessions in the course of those communications.
It is not clear to me whether leave to refer to conferral was sought or granted. The programming orders made on 10 November 2021 were made by consent so there is no transcript which might assist in this regard. Neither party has addressed this issue in their submissions.
In any event, the letter from the plaintiff's solicitors to the defendants' solicitors dated 15 October 2021 concludes '[f]or these reasons our client will not be amending her Statement of Claim and will rely on this letter on the question of costs should your clients make any application under Order 20 Rule 19 of the Rules of Court'.[2] The plaintiff contemplated that conferral material would be relevant in determining the issue of costs of the Strike Out Application.
[2] Tariq Affidavit 1, Annexure 'BT-2' - Letter (15 October 2021).
Notwithstanding that leave has not apparently been sought or granted, matters raised in conferral are clearly relevant to the issue of costs, and leave is given for the defendants to rely upon the affidavit material filed.[3]
[3] See, for example Chaffey Services Pty Ltd As Trustee For Cataby Services Trust, t/a Cataby Services v Doble [2021] WASC 391 [26] (Allanson J).
Conferral prior to Strike Out Application
The plaintiff did not file any affidavits regarding the conferral process. The only evidence before the court as to the conferral with respect to the Strike Out Application is contained in Tariq Affidavit 1. Accordingly, I will proceed on the basis that the evidence in that affidavit is uncontroversial and may be accepted by the court.
Conferral commenced by way of email from the defendants’ solicitors to the plaintiff's solicitors dated 13 October 2021, which identified deficiencies in the statement of claim, foreshadowed a strike out application, asked whether the plaintiff would amend her statement of claim and concluded '[p]lease take this as the commencement of conferral for the purpose of the foreshadowed strike out application'.[4]
[4] Tariq Affidavit 1, Annexure 'BT-1' - Email (13 October 2021).
The plaintiff's solicitor responded by way of substantive letter dated 15 October 2021, contesting the defendants' position regarding the statement of claim, and concluding '[f]or these reasons our client will not be amending her Statement of Claim and will rely on this letter on the questions of costs should your clients make any application under Order 20 Rule 19 of the Rules of Court'.[5]
[5] Tariq Affidavit 1, Annexure 'BT-2' - Letter (15 October 2021).
This was followed by a 'lively' telephone conversation between the two solicitors on 27 October 2021 during which both the substance of the dispute (the adequacy of the statement of claim) and the application were discussed.[6] Significantly, during that discussion the plaintiff's solicitor reiterated that his client would not amend her statement of claim.[7] The defendants' solicitor said to the plaintiff's solicitor words to the effect that the time for the 'strike out application expires tomorrow, and that my clients would proceed to make the strike out application'.[8] The solicitors agreed programming orders for the Strike Out Application.[9]
[6] Tariq Affidavit 1 [9] - [10].
[7] Tariq Affidavit 1 [9].
[8] Tariq Affidavit 1 [10].
[9] Tariq Affidavit 1 [10].
Strike Out Application
The Strike Out Application was filed on 28 October 2021, the last day this could be done without leave.
On 29 October 2021, the plaintiff filed an amended statement of claim pursuant to O 21 r 3 Rules of the Supreme Court 1971 (WA) (RSC). The amendments addressed the deficiencies identified by the defendants in the conferral process and rendered the Strike Out Application otiose.
The Strike Out Application did not proceed to a substantive hearing; indeed, by reason of amendment to the statement of claim, it did not proceed at all and the defendants were able to serve only an unsealed copy of the chamber summons. The defendants have not been able to access a sealed copy of the Strike Out Application. [10]
[10] Tariq Affidavit 2 [6].
The defendants served the plaintiffs with an unsealed chamber summons for the Strike Out Application on 3 December 2021.[11]
[11] Tariq Affidavit 2, Annexure 'BT-1' - Email (3 December 2021).
I do not propose to consider the merits of the Strike Out Application, as the plaintiff effectively conceded it (although she had not been served with it) by filing the amended statement of claim.
The defendants contend that they are entitled to the costs of the Strike Out Application, despite it not having been issued by the court (although it was e-lodged) due to the plaintiff's conduct during conferral.[12]
[12] Defendants' Submission filed 3 December 2021 [23] - [24].
The plaintiff makes limited submissions in response. The plaintiff relies upon the observations of the Full Court in Palamara v City of Perth (1995) WAR 235,[13] regarding the application of O 59 r 5 RSC which provides:
(1)Subject to subrule (2) a summons (other than an originating summons) must be served 7 days before the return day of the summons, unless the Court or these rules allow a shorter period of service.
(2)A summons asking only for the extension or abridgement of any period of time may be served on the day previous to its return.
(3)Unless the Court otherwise orders -
(a)an affidavit in opposition to a summons must be filed and a copy served upon the applicant not less than 2 days before the return day of the summons; and
(b)a party who wishes to bring on for further hearing a summons that has been adjourned must give 2 days’ written notice to the registrar and to all other parties.
[13] Plaintiff's Submission filed 10 December 2021 [5].
The Strike Out Application was not allocated a return day. Palamara concerned a matter which proceeded to hearing in the absence of the party which had not been served in time. Given that, Palamara is clearly distinguishable, and I accept the defendants' contention in that regard.[14]
[14] Defendants' submission in reply filed 17 December 2021 [1].
The plaintiff submits that the amendments to the statement of claim made 29 October 2021 were to avoid costs being incurred in defending an application that had not been served.[15]
[15] Plaintiff's submission filed 10 December 2021 [8].
The defendants submit in reply that 'the plaintiff has, by her own admission, effectively surrendered, or given the defendants substantially what they wanted to achieve by the Strike Out Application'.[16]
[16] Defendants' submission in reply filed 17 December 2021 [2.3].
The defendants further submit that '[f]urther, by the admission, it is self-evident that the plaintiff failed to properly confer'.[17]
[17] Defendants' submission in reply filed 17 December 2021 [2.4].
Costs thrown away
The defendants submit that they are entitled to the costs of the Strike Out Application as costs thrown away by reason of the amendment to the statement of claim.[18] Pursuant to O 66 r 1 RSC, the costs of and occasioned by any amendment made without leave in any proceeding shall be borne by the party making the amendment. The usual order when an amendment is made is that the amending party pay 'costs thrown away'.
[18] Defendants' submission in reply filed 17 December 2021 [1.5].
Findings
No determination on the merits
The Strike Out Application was not determined on the merits. The general principles with respect to the costs of matters not determined on the merits are summarised in The Liberal Party of Australia (Western Australia Division) Inc v City of Gosnells [2013] WASC 267 at [26] ‑ [27] and more recently by Strk J in Dudley v Reece Australia Pty Ltd [2021] WASC 240 at [56] - [59]:
Where costs should fall is at the discretion of the court. The discretion to order costs under the Supreme Court Act 1935 (WA) s 37 and the Rules of the Supreme Court 1971 (WA) (RSC) O 66 r 1 is very wide. The only restrictions are those provided elsewhere in the Supreme Court Act and the RSC, or in any other Act; and the fact that the discretion must be exercised judicially, in accordance with established principles and factors directly connected with the litigation. The discretion must be exercised to achieve what is fair and just between the parties according to the circumstances of the particular case.
An order for the payment of costs by one party is compensatory in nature; it is not for the purpose of punishment. Costs generally follow the event because such an order is intended, at least to the extent that the costs incurred were not unreasonable or unreasonably incurred, as compensation (and vindication) for the successful action or application.
Where there is no judgment of other final resolution on the merits, the principles that apply to an award of costs are set out in [66.10.12] of Civil Procedure Western Australia which states:
If at an interlocutory stage the parties to the litigation resolve a dispute about a hearing of the merits of an action, and if it appears that both parties have acted reasonably in the proceedings until the litigation was resolved or its further prosecution became futile, the usual consequence is that the court will make no order as to costs of the proceedings, for to do so would involve an examination of the merits of the action: Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201.
Where there has been no hearing on the merits, the court will be 'deprived' of the factor that will usually determine how the discretion as to costs is to be exercised. The court cannot try a hypothetical action between the parties to determine who should have paid the costs had there been a hearing on the merits. (footnotes omitted)
Adequacy of conferral
The court requires that substantive, meaningful conferral take place prior to the issuing of any interlocutory application. CPD 4.3.2 sets out the requirements in this regard. The observations of Martin CJ in YouldenEnterprises Pty Ltd v Health Solutions (WA) Pty Ltd & Ors [2006] WASC 161 at [3], which are referred in in CPD 4.3.2(3), should be borne in mind:
… As will be abundantly apparent from any sensible reading of its terms, its clear purpose is to reduce interlocutory disputes and avoid adverse consequences of the kind to which I have just referred by requiring the representatives of the parties to confer with a view to resolving the interlocutory dispute before the Court is called upon to entertain and resolve it.
The parties engaged in substantive oral and written conferral with respect to the substantive issues and to the Strike Out Application. In that sense, the conferral satisfies the requirements of O 59 r 9 RSC and CPD 4.3.2(6).
There is a question as to whether the conferral satisfied CPD 4.3.2(4):
Practitioners, as officers of the Court, have a duty to approach the conferral process to achieve the spirit encapsulated in par 3 of this Practice Direction and not merely to comply with the letter O 59 r 9.
The aim of the conferral process is to identify the real issues in dispute. The plaintiff's solicitor maintained both in written and oral conferral a clear position with respect to amendment of the statement of claim and gave no indication that his instructions might change, or indeed that instructions would be sought with respect to the matters raised by the defendants. The defendants acted reasonably in issuing the Strike Out Application based upon the conferral. The plaintiff's stated position, and subsequent capitulation within a very short time after the completion of conferral, were inconsistent with each other and with the spirit encapsulated in CPD 4.3.2(3). Amending the statement of claim was acknowledgement that there was in fact no issue in dispute.
It was clear that the defendants were intending to file the strike out application on 28 October 2021 and the plaintiff was aware of the complaints which would be made in that application. The defendants were under time constraints if they were to comply with the Rules of the Supreme Court and particularly with the principles of positive case flow management embodied in O 1 r 4A RSC. Issuing the Strike Out Application without leave had the dual effect of reducing interlocutory applications and progressing the matter timeously, both of which outcomes are consistent with those case management principles.
The plaintiff submitted that the statement of claim was amended to avoid the costs in defending an application 'that had not been filed'.[19] I would find this submission more persuasive had the plaintiff informed the defendants during conferral that this outcome would be considered or was likely. If that indication had been given, and the defendants went ahead with the Strike Out Application anyway, the situation would be different. Given the discussions during conferral, the defendants could not reasonably have anticipated that the plaintiff would make the amendments that were made.
[19] Plaintiff's submission filed 10 December 2021 [8].
I find that the plaintiff did not engage in meaningful conferral pursuant to the requirements of CPD 4.3.2(3). The purpose of such conferral is to identify matters in dispute. The plaintiff's conduct - not 48 hours after the conclusion of conferral - showed that there were no issues in dispute. The plaintiff did not at any stage say to the defendants that the Strike Out Application was not required or might not be required. The plaintiff could have said 'let me think about it'. Instead, the plaintiff maintained a firm position throughout conferral, as she was entitled to do. Conferral is not expected to resolve all issues in dispute. However, as it turns out, there were no issues in dispute. As a result, the defendants wasted time and money issuing the Strike Out Application. Further time, expense and court resources have been consumed determining the costs of the Strike Out Application.
In these circumstances I consider it fair and just that the defendants should have the costs of the Strike Out Application. This is not a case where both parties have 'acted reasonably in the proceedings until the litigation was resolved'; the plaintiff maintained a position during conferral and without notice to the defendants reversed that position. This is not 'acting reasonably'.
Costs thrown away
'Costs thrown away', whilst not a defined term, has been interpreted to mean those costs that 'have been reasonably incurred that relate to work done and wasted'.[20]
[20] Sobey v Commission of Taxation [2008] FCA 1621 at [21] as cited in RSC Commentary at 66.10.8.
An amendment to a pleading may require the responding party to re-do work or undertake fresh work. That may include re-proofing an existing witness, reviewing new documents or reconsidering documents already examined. That means that work already done in the proofing or document review has been wasted. In this case, part of the work reasonably incurred prior to the amendment was the conferral in relation to, and filing of, the Strike Out Application. The plaintiff was aware that the Strike Out Application would be filed and aware that costs would be incurred defending it.[21]
[21] Plaintiff's Submission filed 10 December 2021 [8].
I accept the defendants' submission regarding costs thrown away. The costs of the Strike Out Application were costs reasonably incurred that relate to work done and wasted. Although the Strike Out Application was not served it does not follow that the defendants should not be entitled to the costs. It was filed. The defendants had informed the plaintiffs of the substance of their complaints regarding the statement of claim and had told the plaintiff when it would be filed. The defendants did all that they could reasonably be expected to do with respect to having the application filed, sealed, and served. Costs thrown away by reason of an amendment need not only be the costs of consequential amendments to responsive pleadings. They are the costs for work done and wasted. The work with respect to the Strike Out Application was clearly wasted.
Disposition
The defendants are entitled to their costs of the Strike Out Application and this application for those costs.
Accordingly, orders will be made in terms of the defendants' minute of proposed orders dated 3 December 2021:
The plaintiff do pay the defendants' costs of the strike out application made by chamber summons filed on 28 October 2021 including the costs of the defendants’ application for a costs order with respect to the application to be taxed if not agreed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TR
Customer Service Officer
1 FEBRUARY 2022
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