North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust Trading as Port Hedland Pilots v Daniel [No 2] - [2023] WASC 85

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   NORTH WEST PILOTS PTY LTD AS TRUSTEE FOR THE PORT HEDLAND PILOTS UNIT TRUST TRADING AS PORT HEDLAND PILOTS -v- DANIEL [No 2] [2023] WASC 85
CORAM:   HILL J
HEARD:   20 MARCH 2023
DELIVERED          :   20 MARCH 2023
PUBLISHED           :   22 MARCH 2023
FILE NO/S:   COR 27 of 2023
BETWEEN:   NORTH WEST PILOTS PTY LTD AS TRUSTEE FOR THE PORT HEDLAND PILOTS UNIT TRUST TRADING AS PORT HEDLAND PILOTS
Plaintiff

AND

HEATH DANIEL
Defendant

Catchwords:

Costs - Application for costs by interested party - Whether costs should be ordered in favour of interested party - Whether special costs order should be made - Whether relevant item in costs determination is inadequate - Whether inadequacy arises because of unusual difficulty, complexity or importance of matter - Turns on own facts

Legislation:

Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA)
Legal Profession Uniform Law Application Act 2022 (WA) s 141
Supreme Court Act 1935 (WA) s 37

Result:

Plaintiff to pay interested party's costs of the application
Application for special costs allowed in party

Category: B

Representation:

Counsel:

Plaintiff	:	P Ward
Defendant	:	K de Kerloy & J Parkinson
Interested Party	:	A Oakes

Solicitors:

Plaintiff	:	Squire Patton Boggs
Defendant	:	Kingston Reid
Interested Party	:	Corrs Chambers Westgarth

Cases referred to in decision:

Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S)
Frigger v Lean [2012] WASCA 66
North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust trading as Port Hedland Pilots v Daniel [2023] WASC 73
Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S)
Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd [2009] WASCA 31 (S)

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript.)

On 14 March 2023, I delivered my reasons for decision on the application by the plaintiff for an interlocutory injunction.[1] At that time, orders were made for the parties and the Pilbara Ports Authority (PPA) to file submissions and any affidavits in support of the costs orders they contend should be made.
[1] North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust trading as Port Hedland Pilots v Daniel [2023] WASC 73.
The costs order as between the plaintiff and defendant is agreed. Both parties agree that costs should be in the cause, although the defendant has reserved the right to seek a special costs order.
The remaining dispute is between the plaintiff and the PPA, who sought and was granted leave to be heard as an interested party on the application. The plaintiff contended that there should be no order as to the costs of the PPA. In contrast, the PPA sought an order for its costs of the application, as well as a special costs order, both as to the maximum hourly rates and the maximum allowances fixed under the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA) (Costs Determination). In support of its application, the PPA filed an affidavit of Kirsty Honor Louise Sutherland, the partner with the conduct of the matter at the PPA's solicitors.

General principles

Costs orders

Under s 37 of the Supreme Court Act 1935 (WA), the court has a wide discretion to award costs. However, the discretion is not unfettered and must be exercised judicially.[2]
[2] Frigger v Lean [2012] WASCA 66 [53].
In Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd,[3] the Court of Appeal summarised the principles that govern the consideration of the awarding of the costs of an intervener in the following terms:
An intervener (unlike a party) will ordinarily be allowed only to support or oppose a position contended for by one of the parties to the proceedings, and will not be permitted to expand the issues to be decided. In that sense, an intervener takes the action as he or she finds it.
The position of an intervener in relation to costs was considered in some detail by Debelle J in City of Burnside v Attorney-General of South Australia (1994) 63 SASR 65, 67 ‑ 68. His Honour concluded that in the probate and admiralty jurisdiction, and at general law, as a general rule an intervener was not awarded separate costs even if successful. A successful intervener would be entitled to his or her costs only if the intervention was necessary to protect his or her rights, as would be the case if no party contended for the position adopted (successfully) by the intervener.
In Liverpool City Council v Weir (1984) 58 ALJR 213, 216 the High Court (Gibbs CJ, Murphy, Wilson, Deane and Dawson JJ) observed that an intervener cannot expect, as of course, that the unsuccessful party to the litigation in which he has intervened should bear the extra burden of his costs, even if the intervention was well‑intentioned and proved to be of assistance to the court.

Special costs orders

[3] Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd [2009] WASCA 31 (S) [7] ‑ [9].

Section 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) gives the court power to make special costs orders. This section is in identical terms to the now repealed s 280 of the Legal Profession Act 2008 (WA). Given the identical language of these provisions, it is my view that the principles that govern the making of special costs orders, which are well established, continue to apply.
There are two questions for the court in considering an application for special costs are:
(a)Is the maximum amount allowable under 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 that maximum amount?
(b)Does the inadequacy of the costs allowable under the costs determination arise because of the unusual difficulty, complexity, or importance of the matter?
Each of these questions is addressed as a matter of impression, rather than matters of detailed evaluation, precision, or science.[4]
[4] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) [12].
The effect of s 141(1) of the Legal Profession Uniform Law Application Act 2022 (WA) is to confine the costs recoverable by a successful party to the limits imposed by the relevant Costs Determination then in force. As was noted by the Court of Appeal in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2], in referring to the identical provision in the previous act, this provision is 'protective of the party charged and, more generally, serves the due administration of justice by limiting the allowable scope for legal costs'.[5]
[5] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [11].
In considering whether a party has established there is a fairly arguable case that a greater amount will be allowed on taxation than that which is allowable under the relevant costs determination, it is not sufficient for a party to show that it incurred costs greater than the limit in the costs determination. However, the fact that a party has incurred significantly greater costs in each step of the litigation, when viewed in the context of the difficulty, complexity or importance of the matter, may enable the court to conclude there is a fairly arguable case that each of the items identified is inadequate.[6]
[6] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [14].
The court's discretion on an application for special costs must be exercised judicially as the interests of justice in each case require. As was noted by Quinlan CJ in Sino Iron Pty Ltd v Mineralogy Pty Ltd, the interests of justice include 'the need to keep the costs of litigation generally within reasonable bounds'.[7]
[7] Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151 [20].

Disposition

In considering the PPA's application for costs, I note that the PPA did not seek to become a party to the proceedings on the interlocutory application. In this respect, it did not expose itself to the risk of liability of the plaintiff's costs if an interlocutory injunction had been granted or if a final injunction is granted at trial. I accept that this weighs heavily against the discretion to order that it receive its costs of the application.
However, for the following reasons, I consider that it is appropriate in the particular circumstances of this case that the PHP pay the PPA's costs of the application. First, I accept that the intervention of the PPA was necessary to protect its interest as the operator of the Port. This is not an interest that is shared with the defendant, or that could be raised by him as an employee of the PPA. Second, the evidence adduced by the PPA and the matters that were raised by it were separate to the issues raised by the defendant. Third, while both the defendant and the PPA opposed the relief sought by the plaintiff, their submissions distinguished between the interests they held. Fourth, in this case, while I accepted there was a serious question to be tried on the issues raised by the plaintiff, I did not consider the balance of convenience supported the granting of the injunction. Apart from the personal impact of the proposed injunction on the defendant, the broader issues and the impact of any relief being granted were raised by the PPA and were not grounds on which the defendant could put forward.
I turn then to the application for a special costs order. Table A of the Costs Determination provides for the following rates for practitioners: daily rates for senior counsel of $6,930 and for junior counsel of $4,730. For senior practitioners, the hourly rate is $506, for junior practitioners $374 and for restricted practitioners $319.
The relevant item under the Costs Determination is Item 10(a). This item provides that the limit for proceedings in chambers, based on 2 days' preparation and 1 day hearing is $20,790 where senior counsel is briefed, $14,190 where junior counsel is briefed, $506 for attending a reserve judgment, and $561 for consent orders. No separate allowance is made in the Costs Determination for the preparation of affidavits, preparation of the application for hearing, for senior counsel to be briefed with junior counsel, for the preparation of written submissions, or the attendance at the hearing by instructing solicitors.
The evidence before me is that the PPA has incurred costs exceeding $324,000, excluding the costs of Mr Walker SC who appeared for the PPA on the application.
I accept on the evidence before me that it is fairly arguable that the costs of the application may exceed the applicable limit in the Costs Determination. This is supported by the fact that the hearing of the application was 1.5 days, which is significantly longer than the estimate in Item 10(a).
It is, of course, not sufficient that the PPA will have incurred greater costs than allowable under the Costs Determination. However, in this case, I also accept that the application involved greater complexity than the usual application for an interlocutory injunction and that it was of broad importance not just to the parties but to broader interests including the users of the Port and the State, and that the costs of the application exceeded the limit in the Costs Determination because of these matters.
Ms Sutherland deposes to the seniority of the practitioners and counsel involved in the matter, apart from Mr Walker, and compares their actual charge out rates to the rates that are contained in the Table A of the Costs Determination. For example, Ms Sutherland deposes that Ms Cahill SC (who appeared at the initial directions hearing) charged $715 per hour and Mr Oakes $374 per hour. I note Ms Cahill's rate only slightly exceeds that of the hourly rate of senior counsel and Mr Oakes is within the hourly rate for junior counsel. In respect of the solicitors involved in this matter, the rates of each of the solicitors significantly exceed that provided in the Costs Determination, in one case by almost 100%.
In this case, notwithstanding the evidence that has been filed by Ms Sutherland, it is not possible to reach any conclusion as to what might be an appropriate limit for the costs of the application. In these circumstances, I have concluded that this is an appropriate case to order that the limits imposed by the relevant item in the Costs Determination be removed. It will then be for the taxing officer to consider the reasonableness and the necessity for the work that was undertaken and to make a judgment about the remuneration reasonably required.
In relation to the hourly and daily rates for solicitors and senior counsel for these applications, as has been previously noted by this court, the court does not lift the limit on hourly rates simply because a party chooses to engage lawyers at rates which exceed the scale. As Pullin J said in Flotilla NomineesPty Ltd v Western Australian Land Authority,[8] 'a party is always entitled to the luxury of retaining the highest paid practitioners in the conduct of their case, but they cannot always expect to recover these costs from the other party'.
[8] Flotilla NomineesPty Ltd v Western Australian Land Authority [2003] WASC 122 (S) [22].
In considering the appropriate costs that should be paid by the PHP, it is my view that it is appropriate to allow an uplift of 50% on the rate in the Costs Determination for senior counsel. The evidence before me does not justify an open-ended order. No increase in the rate for junior counsel is required and I am not otherwise persuaded that I should increase the hourly or daily rates for the other practitioners. While I accept that the rates charged significantly exceed the amounts provided in the Costs Determination, in my view this is a commercial decision that has been made by the PPA. I do not consider there is any basis on which this decision should be laid at the feet of the plaintiff, or that they should bear those costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JN
Associate to the Honourable Justice Hill
22 MARCH 2023