Norilya Minerals Pty Ltd v Easterday
[2009] WASC 191 (S)
•28 JULY 2009
NORILYA MINERALS PTY LTD -v- EASTERDAY [2009] WASC 191 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2009] WASC 191 (S) | |
| Case No: | CIV:2364/2007 | 16 JANUARY 2009, ON THE PAPERS | |
| Coram: | LE MIERE J | 28/07/09 | |
| 23/12/09 | |||
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application that costs be fixed and paid forthwith refused | ||
| B | |||
| PDF Version |
| Parties: | NORILYA MINERALS PTY LTD CLARK ERVIN EASTERDAY LEONARD LANCELOT IRELAND KAYLENE HOLDINGS PTY LTD (ACN 009 462 195) BRENDA ANNE EASTERDAY WEBGO PTY LTD (ACN 009 022 057) FIM PTY LTD (ACN 008 964 609) PAUL CHRISTOPHER IRELAND ADAM JONATHON IRELAND AS NAMED EXECUTOR OF THE ESTATE OF DEAN EDWARD IRELAND |
Catchwords: | Practice and procedure Application for costs Whether quantum of costs should be fixed Whether costs should be paid forthwith Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 66 |
Case References: | Pringle v Gloag (1879) 10 Ch D 676 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
DECISION : 23 DECEMBER 2009 FILE NO/S : CIV 2364 of 2007
- Consolidated by order of Justice Le Miere on 28 July 2009
- Plaintiff
AND
CLARK ERVIN EASTERDAY
LEONARD LANCELOT IRELAND
First Defendants
KAYLENE HOLDINGS PTY LTD (ACN 009 462 195)
Second Defendant
BRENDA ANNE EASTERDAY
Third Defendant
WEBGO PTY LTD (ACN 009 022 057)
Fourth Defendant
FIM PTY LTD (ACN 008 964 609)
Fifth Defendant
- PAUL CHRISTOPHER IRELAND
Sixth Defendant
- Plaintiff
AND
ADAM JONATHON IRELAND AS NAMED EXECUTOR OF THE ESTATE OF DEAN EDWARD IRELAND
CLARK ERVIN EASTERDAY
LEONARD LANCELOT IRELAND
Defendants
Catchwords:
Practice and procedure - Application for costs - Whether quantum of costs should be fixed - Whether costs should be paid forthwith - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 66
Result:
Application that costs be fixed and paid forthwith refused
(Page 3)
Category: B
Representation:
CIV 2364 of 2007
Consolidated by order of Justice Le Miere on 28 July 2009
Counsel:
Plaintiff : Mr S M Davies
First Defendants : Mr M Ryan
Second Defendant : Mr M Ryan
Third Defendant : Mr M Ryan
Fourth Defendant : Mr M Ryan
Fifth Defendant : Mr M Ryan
Sixth Defendant : Mr M Ryan
Solicitors:
Plaintiff : Deacons
First Defendants : Bostock & Ryan
Second Defendant : Bostock & Ryan
Third Defendant : Bostock & Ryan
Fourth Defendant : Bostock & Ryan
Fifth Defendant : Bostock & Ryan
Sixth Defendant : Bostock & Ryan
CIV 2232 of 1990
Counsel:
Plaintiff : Mr S M Davies
Defendants : Mr M Ryan
Solicitors:
Plaintiff : Deacons
Defendants : Bostock & Ryan
(Page 4)
Case(s) referred to in judgment(s):
Pringle v Gloag (1879) 10 Ch D 676
(Page 5)
- LE MIERE J:
Introduction
1 On 28 July 2009 I delivered reasons for decision in relation to a number of interlocutory applications in CIV 2232 of 1990 and CIV 2364 of 2007 including:
1. in CIV 2232 of 1990 the defendants' application that the plaintiff not be heard until it has complied with orders made in the Court of Criminal Appeal in appeal CCA 111 - 113 of 1999 made on 28 October 2005, 8 February 2006 and 14 November 2008 respectively (the CCA orders) or alternatively that the action be stayed until the plaintiff complies with those orders;
2. in CIV 2364 of 2007 the defendants' application that CIV 2364 of 2007 be struck out as a collateral attack on the CCA orders or so much of the pleading be struck out that is a collateral attack on the CCA orders; and
3. in CIV 2364 of 2007 the defendants' application that the plaintiff not be heard until it has complied with the CCA orders or in the alternative that the action be stayed until the plaintiff complies with the CCA orders.
I will refer to these interlocutory applications collectively as the stay applications. After hearing counsel I made a number of orders including orders in each action to the effect:
1. the defendants' stay applications be dismissed;
2. the defendants pay the plaintiffs' costs of the stay applications including the costs of 20 October 2008 and 25 November 2008; and
3. the parties have leave to file and serve any submissions and affidavits in support of or opposition to the plaintiffs' applications that the costs be fixed and be paid forthwith.
The plaintiff subsequently filed submissions that the defendants should pay the plaintiff's costs of the stay applications fixed in the sum of $7,500 in each action to be paid within 14 days. The plaintiff's submissions were supported by an affidavit sworn on 12 August 2009 by Jennifer Mary Hill, the plaintiff's solicitor. The defendants submit that the costs should be
(Page 6)
- fixed in the sum of $8,000 for both applications and the costs should be payable in any event rather than forthwith or within 14 days.
Security for costs application
2 In CIV 2364 of 2007 on 28 July 2009 I made orders in relation to the defendants' application for security for costs. I ordered the plaintiff to pay the defendants' costs of the application in any event. On 25 August 2009 the defendants filed written submissions that the plaintiff should pay the defendants' costs fixed in the sum of $1,188 within 14 days. The plaintiff filed written submissions in response submitting that the court should fix the costs of the defendants' application at $405 and order the costs be the defendants in any event.
3 The costs of the defendants' application for security for costs were dealt with on 28 July 2009. I ordered that the plaintiffs pay the defendants' costs of the application in any event. The defendants did not seek, and I did not grant, leave to the defendants to apply for any further order in relation to those costs or to file any submissions in support of any application that costs be fixed and paid forthwith. I will say nothing further about the submissions of either party that the defendants' costs of its security for costs application be fixed and paid forthwith.
The issues
4 There are two issues concerning the appropriate order in relation to the costs of the defendants' stay applications. The first is whether the costs should be paid forthwith or in any event. The second is whether the costs should be fixed and if so in what sum should they be fixed?
Should the costs be paid forthwith?
5 Order 66 r 10(1) of the Rules of the Supreme Court 1971 (WA) provide that costs may be dealt with by the court at any stage of the proceedings and the court may order the costs to be paid forthwith notwithstanding that the proceedings are not concluded.
6 Consolidated Practice Direction 4.7.1 relates to the costs of interlocutory applications. Paragraph 3 of the practice direction provides that as 'a general rule, where an order for costs is to be made against a party in interlocutory proceedings, the costs will be fixed and ordered to be paid forthwith or by a particular date'. The practice direction states three reasons for that general rule. In my opinion the first and third reasons stated in the practice direction are reasons for fixing the costs
(Page 7)
- rather than reasons for ordering the costs to be paid forthwith. The second reason stated for the general rule is that
the historical practice of ordering costs to be paid 'in any event' does not sufficiently serve the purpose of discouraging ill-considered or needless interlocutory applications. The overwhelming majority of actions settle and the orders are not enforced. The apparent benefit to parties in whose favour such orders are made is illusory.
8 The general rule is that all costs in the same matter or proceeding can be set off against each other: Pringle v Gloag (1879) 10 Ch D 676, 679 (Jessel MR). Order 66 r 59 provides that
where a party who is entitled to be paid costs is also liable to pay costs, the Taxing Officer may, subject to any direction of the court, tax the costs which the party is liable to pay and set off the amount allowed against the amount he is entitled to be paid and direct payment of any balance.
9 If the defendants are successful at trial and costs are awarded in their favour they may be entitled to set off those costs against the costs of the stay applications for which they are liable. If the costs of the stay applications for which the defendants are liable are ordered to be paid forthwith then they may not be able to recover those costs. That is because the evidence before the court is that the plaintiff has not paid the amounts it has been ordered to pay under the CCA orders because it cannot do so. The plaintiff does not carry on any business and has not carried on any business since 1990. The ultimate holding company of the plaintiff, Xstrata Plc, has provided funds from time to time to the plaintiff to enable it to prosecute this action. However, there is no agreement between Xstrata and the plaintiff which requires Xstrata to fund the litigation or to provide the plaintiff with sufficient funds to comply with any order to make any payment. The plaintiff's capacity to meet any future order for costs is dependent upon Xstrata being willing to advance the necessary funds to the plaintiff.
10 Unfairness may result if the defendants are required to pay the plaintiff's costs of the stay applications forthwith but are subsequently unable to recover any order for costs which might subsequently be made in their favour. Furthermore, the plaintiff is presently obliged under the CCA orders to pay substantial sums to the defendants but has failed to do so because it does not have the funds. In those circumstances it would be
(Page 8)
- unfair to require the defendants to pay the plaintiff's costs of the stay applications forthwith.
11 The policy of ordering costs to be fixed and ordered to be paid forthwith, or by a particular date, serves the purpose of discouraging ill-considered or needless interlocutory applications. That is a consideration in favour of ordering the defendants to pay the costs of the stay applications forthwith or by a particular date. However, that factor must be weighed against the unfairness, or potential unfairness, to which I have referred of requiring the defendants to pay the plaintiff's costs forthwith. On balance, it is not appropriate to order the defendants to pay the costs of the stay applications forthwith or within 14 days.
Should the quantum of costs be fixed?
12 The practice direction to which I have referred provides that as a general rule where an order for costs is to be made against a party in interlocutory proceedings the costs will be fixed [3]. The practice direction states two reasons why costs should be fixed. First, 'as an action progresses, parties have an interest in knowing the quantum of costs awarded to or against them' [4]. Second, 'where actions do proceed to judgment and an order for costs, the subsequent taxation [will] be simplified if the costs of interlocutory procedures [have] already been dealt with' [6].
13 There are a number of reasons why the costs should not be fixed in this case. First, I have declined to order that the costs be paid forthwith or by a particular date. Accordingly, the costs will not be paid until judgment or other finalisation of the case.
14 Second, the practice direction provides that judicial officers can be expected, in the usual run of routine matters, to fix the costs payable by reference to the schedule attached to the practice direction rather than ordering them to be taxed [8]. That provision of the practice direction reflects the general approach that judges should fix costs by reference to the global amounts set out in the schedule rather than assessing the costs as a taxing officer does on a taxation. In general, it is inconsistent with the objective of the practice direction that the costs be fixed after the detailed scrutiny normally reserved for formal taxations. The plaintiff claims $15,000, that is $7,500 for the stay application in each action. The basis of that claim is set out in a schedule contained within Ms Hill's affidavit. The schedule is drawn by reference to each work item. The practice direction schedule allows $1,650 plus $500 per extra hour of hearing time for a special appointment and $320 for a brief appearance in
(Page 9)
- judge's chambers. Where, as here, the plaintiff seeks costs many times in excess of the amount provided for in the schedule and by reference to detailed work items it will often be more appropriate that the assessment of those costs be left to a formal taxation.
15 Third, the stay applications were heard together with a number of other interlocutory applications. The costs of those applications will be determined, if not agreed, at a formal taxation. The assessment of the costs of the stay applications at the same time as the costs of the other interlocutory applications would be convenient. If the assessments take place separately it will be more difficult for the parties, and the taxing officer, to ensure that there is no duplication of costs or failure to allocate costs to the appropriate application.
16 For the above reasons I decline to fix the costs of the stay applications.
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