O'Rourke v P & B Corporation Pty Ltd
[2008] WASC 36 (S)
O'ROURKE -v- P & B CORPORATION PTY LTD [2008] WASC 36 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 36 (S) | |
| Case No: | CIV:1930/2007 | 29, 30, 31 JANUARY & 1 FEBRUARY 2008 | |
| Coram: | MARTIN CJ | 13/03/08 | |
| 15/04/08 | |||
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiffs to pay the defendant's costs of the action | ||
| B | |||
| PDF Version |
| Parties: | DEBORAH CAROL O'ROURKE GRANT NATHAN O'ROURKE DAMIEN HARRIS RODNEY NOEL WEGNER ROBIN ANNE WEGNER GERALDINE MARY JEAN STEVENS GOLDPEAK PTY LTD (ACN 095 419 686) HILARY ANN STEVENS ANNA TERESA CARGER MADISON ENTERPRISES PTY LTD (ACN 008 961 055) ELIZABETH BAILEY ALAN RICHARD BAILEY KRYSTEN SARA LEOPARDI ANN STUART FLOWER SEAN PHILLIP LENNON WENDY GAYNOR LENNON P & B CORPORATION PTY LTD (ACN 109 365 291) |
Catchwords: | Practice and procedure Costs of trial Indemnity costs |
Legislation: | Legal Practice Act 2003 (WA), s 215 Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (WA) Rules of the Supreme Court 1971 (WA), O 66 r 1 |
Case References: | Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 Heartlink Ltd v Jones [2007] WASC 254 (S) Lo Presti v Ford Motor Company of Australia Ltd [No 2] [2008] WASC 12 (S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 15 APRIL 2008 FILE NO/S : CIV 1930 of 2007 BETWEEN : DEBORAH CAROL O'ROURKE
- GRANT NATHAN O'ROURKE
First Plaintiffs
DAMIEN HARRIS
Second Plaintiff
RODNEY NOEL WEGNER
ROBIN ANNE WEGNER
Third Plaintiffs
GERALDINE MARY JEAN STEVENS
Fourth Plaintiff
GOLDPEAK PTY LTD (ACN 095 419 686)
Fifth Plaintiff
HILARY ANN STEVENS
Sixth Plaintiff
ANNA TERESA CARGER
Seventh Plaintiff
- MADISON ENTERPRISES PTY LTD (ACN 008 961 055)
Eighth Plaintiff
ELIZABETH BAILEY
ALAN RICHARD BAILEY
Ninth Plaintiffs
KRYSTEN SARA LEOPARDI
ANN STUART FLOWER
Tenth Plaintiffs
SEAN PHILLIP LENNON
WENDY GAYNOR LENNON
Eleventh Plaintiffs
AND
P & B CORPORATION PTY LTD (ACN 109 365 291)
Defendant
Catchwords:
Practice and procedure - Costs of trial - Indemnity costs
Legislation:
Legal Practice Act 2003 (WA), s 215
Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (WA)
Rules of the Supreme Court 1971 (WA), O 66 r 1
Result:
Plaintiffs to pay the defendant's costs of the action
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Category: B
Representation:
Counsel:
First Plaintiffs : Mr D J Garnsworthy
Second Plaintiff : Mr D J Garnsworthy
Third Plaintiffs : Mr D J Garnsworthy
Fourth Plaintiff : Mr D J Garnsworthy
Fifth Plaintiff : Mr D J Garnsworthy
Sixth Plaintiff : Mr D J Garnsworthy
Seventh Plaintiff : Mr D J Garnsworthy
Eighth Plaintiff : Mr D J Garnsworthy
Ninth Plaintiffs : Mr D J Garnsworthy
Tenth Plaintiffs : Mr D J Garnsworthy
Eleventh Plaintiffs : Mr D J Garnsworthy
Defendant : Ms W F Buckley
Solicitors:
First Plaintiffs : Karp Steedman Ross-Adjie
Second Plaintiff : Karp Steedman Ross-Adjie
Third Plaintiffs : Karp Steedman Ross-Adjie
Fourth Plaintiff : Karp Steedman Ross-Adjie
Fifth Plaintiff : Karp Steedman Ross-Adjie
Sixth Plaintiff : Karp Steedman Ross-Adjie
Seventh Plaintiff : Karp Steedman Ross-Adjie
Eighth Plaintiff : Karp Steedman Ross-Adjie
Ninth Plaintiffs : Karp Steedman Ross-Adjie
Tenth Plaintiffs : Karp Steedman Ross-Adjie
Eleventh Plaintiffs : Karp Steedman Ross-Adjie
Defendant : Fairweather & Lemonis
Case(s) referred to in judgment(s):
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Heartlink Ltd v Jones [2007] WASC 254 (S)
Lo Presti v Ford Motor Company of Australia Ltd [No 2] [2008] WASC 12 (S)
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- MARTIN CJ:
1 (This judgment was delivered extemporaneously on 15 April 2008 and has been edited from the transcript.)
2 These proceedings were determined by a judgment delivered by me on 14 March 2008 in which I dismissed the plaintiffs' claims against the defendant. Following publication of the reasons for my judgment, each of the parties has made elaborate and detailed submissions with respect to the costs orders that should follow that event. In the case of the defendants, who were successful at trial, they seek a number of orders, some of which are contentious. I will refer in these reasons only to those orders that are contentious.
3 The first contentious order sought was an order that the plaintiffs pay the defendants' costs of the action on an indemnity basis. In the alternative, specific costs orders are sought, including costs orders lifting the limits on items 16 and 19 of the scale of costs annexed to the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (WA) (the Scale) (relating to getting up for trial and trial), and lifting the hourly rate applicable to the work of the legal practitioners involved in the case, including the work of counsel.
4 On the plaintiffs' part, they resist an order that the entire costs of the proceedings should follow the event but propose that the plaintiffs should only receive 60% of their costs because of what the plaintiffs assert is their success on some of the issues that were ventilated at trial and ultimately determined by me.
5 Disputes of this kind relating to costs of the parties to a trial are sometimes described in other jurisdictions as 'satellite litigation'. I must confess to a preference for the rather more pejorative description of disputes of this kind as 'parasitic litigation'. I use that term because litigation of this kind in relation to costs has the distinct tendency to sap the energy of the parties and their legal advisers and the court, and to distract legal advisers and the court from getting on with the other more important issues including the resolution of substantive disputes.
6 I think it is important that a robust approach be taken to the resolution of costs issues of this kind and that the practice of making elaborate and detailed submissions with respect to costs, supported by elaborate and detailed evidence and oral argument, should be actively discouraged by the court. With that in mind, the reasons that I will give in relation to these applications will be brief.
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7 I will deal, firstly, with the application for indemnity costs. The principles relating to the grant of indemnity costs are fairly well established and were not challenged by either party to these proceedings. It is clear that indemnity costs are only awarded in exceptional circumstances (Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95), generally being circumstances in which the conduct of the party against whom the order is sought is of a kind that calls for a form of admonition. In Lo Presti v Ford Motor Company of Australia Ltd[No 2] [2008] WASC 12 (S) at [11], Beech J noted that:
[T]he rejection by a defendant of an offer of compromise which subsequently proves to be more favourable to the defendant than the result of the trial does not necessarily or presumptively lead to an award of indemnity costs for the plaintiff.
8 In this case, the defendant moves for an order for indemnity costs based on a combination of matters, rather than any single matter. Those matters are said to be:
(a) the pre-proceedings correspondence between the parties in which it is said that the defendant pointed out to the plaintiffs the futility of their cause;
(b) a number of deficiencies that are said to have attended the briefing of Mr Maiorana, the plaintiffs' expert witness;
(c) the plaintiffs' rejection of the defendant's offers of compromise; the first in October 2007, the second in December 2007, well before the parties began their preparations for trial; and the third in late January 2008; and
(d) a miscellaneous catalogue of conduct on the part of the plaintiffs that is said to have magnified the costs of conducting the litigation.
9 That catalogue of conduct referred to in (d) above includes the lodging of caveats; an application for an injunction; the ventilation of an issue relating to the payment of stamp duty on the contracts that were the subject of the proceedings; an issue relating to the evidence to be led from a freedom of information officer employed by the Western Australian Planning Commission; the fact that less than comprehensive witness statements were prepared by a solicitor who was also a party interested in the proceedings; an issue concerning the admissibility of the evidence of the precontractual negotiations, and then the subsequent pressing of that evidence; a foreshadowed issue that was not ultimately ventilated at trial
(Page 6)
- about the admissibility of expert evidence; a foreshadowed issue about the defendant's pleading that was not ultimately ventilated; and the fact that the plaintiffs filed supplementary written submissions that went well beyond the topics that had been identified in oral argument as being the appropriate subject of such written submissions.
10 Without going into detail in respect of each of the matters relied upon, it seems to me that they are all matters of a kind that are within the ordinary pull and push, thrust and parry of litigation of this kind. These events and the various events that have been identified are, in my experience, not out of the ordinary in proceedings of this kind, and I do not detect in any of the matters identified any conduct on the part of the plaintiffs or their legal advisers that is so far out of the ordinary as to warrant an admonition in the form of the award of indemnity costs. So for those short reasons I am not persuaded that this is an appropriate case in which to order indemnity costs.
11 Before dealing with the specific costs orders sought by the defendants, I will also deal with the plaintiffs' contention that there should be an apportionment of the defendant's costs of the trial because of the issues upon which the plaintiffs were successful at trial.
12 Again, for the general policy reasons that I have developed, it is my view that a court should be cautious before apportioning costs on the basis of allegations of success in relation to particular issues. The general rule enunciated in O 66 r 1 of the Rules of the Supreme Court 1971 (WA) is that a successful party is to be compensated for the costs of their success.
13 While there will be cases in which it is appropriate to depart from that principle by reference to identifiable and discrete issues upon which the successful party has failed, that course is, in my view, one that should not be followed unless it is clear that those issues were significantly discrete, raised costs that can be separately and specifically determined, and were issues upon which the unsuccessful party has demonstrably failed.
14 The issues that the plaintiffs rely upon in this case are issues essentially relating to the leading of the oral evidence with respect to the precontractual negotiations. In the way in which the question of the admissibility of that evidence emerged at trial, it is my view that both parties in the end were responsible for that evidence being led.
15 Despite the disavowal of the relevance of that evidence by counsel for the plaintiffs, the view which I formed and enunciated during the
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- course of argument on the subject was that, by reason of certain paragraphs of the plaintiffs' pleading, the evidence was plainly relevant to the case which the plaintiffs wished to advance. The defendant also contended that the evidence was relevant and admissible and, as a result, the evidence was led and ruled upon by me. So it seems to me that that evidence on that issue was clearly within the scope of the matters which both parties sought to ventilate at trial.
16 In relation to the determinations of what actually took place at the meeting on 28 February 2007 at the Royal Perth Yacht Club, I do not think it can be said that one party was substantially successful and another substantially unsuccessful in relation to those issues. I think each party had a measure of success in relation to the findings which I made. In any event, that evidence was part and parcel of the general evidence introduced at trial and did not pertain to a sufficiently discrete issue to warrant apportionment pursuant to the principles I have identified.
17 I return then to the application for specific costs orders made by the defendant. Dealing only with the contentious orders, the first is an application for an order that there be a reasonable allowance, not limited by the limit imposed by item 23(b) of the Scale for an informal conference that took place two working days before the commencement of the trial, and which counsel and solicitors for the parties attended, and which occupied several hours.
18 It is my view that conferences of the kind, which I understand took place before the trial commenced, are advantageous, both to the parties, and to the Court, in order to encourage the smooth running of the trial. I understand from the evidence before me that amongst the issues that were discussed at such a conference were issues relating to the admissibility of evidence. The discussion of those issues between counsel and responsible solicitors is something that I have encouraged both in this case and generally. I think it would be consistent with the approach that underpins the encouragement of conferences of that kind to make the orders sought and to indicate to the taxing officer that the amount to be allowed should include attendance by both counsel and solicitor, because the range of matters discussed involved a role for both practitioners. So orders will be made in the terms sought in relation to this item.
19 The next specific order sought is an order that the limits imposed by items 16 and 19 of the Scale, being the items relating to getting up for trial and the trial itself, be removed. Section 215 of the Legal Practice Act 2003 (WA) provides that:
(Page 8)
- [i]f a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer …
- may do a number of things, including the removal of limits on costs fixed in the determination.
20 I made observations on the proper interpretation of this section in Heartlink Ltd v Jones [2007] WASC 254 (S). Included in those observations at [25] - [26] is the conclusion that the question of inadequacy is not to be determined definitively by the court from which an order is sought under s 215(2), in the sense of conducting a provisional taxation of costs and then ascertaining whether, on the basis of that provisional taxation, the amount allowed in the Scale is inadequate. That, I think, would result in the court significantly usurping the role of the taxing officer and would also result in the undesirable practice of double-handling of the assessment of costs.
21 Rather, it seems to me that all that is required of a court to which an application is made under s 215(2) is that it form a view on the question of whether there is an arguable case to be put before a taxing officer to the effect that the limit imposed by the Scale would be inadequate because of the 'unusual difficulty, complexity or importance of the matter'.
22 The next question that arises for assessment under s 215 is the question of what the word 'unusual' means in that context. In my view, that word is to be construed by reference to the practice, presumably known to the legislature at the time that it enacted the section, of fixing a scale of costs which applies to all civil proceedings of whatever kind or nature.
23 So in that context it seems to me that the word 'unusual' means unusual having regard to what one might describe as the usual run of civil cases. The question is not, for example, in this case, whether this was an unusually difficult, complex or important case for specific performance of a contract for the sale of land which at the time the contract was entered into was not subdivided. Rather, the question is whether this was an unusually difficult, complex or important case, having regard to the usual run of civil cases determined in the Supreme Court and generally in the District Court, because, of course, the Scale is generally applicable to proceedings in both courts.
24 It also seems to me that the assessment of the question of whether or not there is 'unusual difficulty, complexity or importance' is essentially a
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- value judgment to be made by the court, and which the court is particularly well qualified to make, having regard to the fact that the court has heard and determined the trial and can take into account the court's experience of the usual run of civil cases in the superior courts of the State.
25 It is therefore not a question that I think is usually assisted by elaborate or detailed argument but, rather, involves the making of a value judgment by the court, having regard to the court's experience of the particular case and compared to the usual run of cases.
26 Applying that approach to the section, it seems to me that this case was more than usually difficult, more than usually complex and, at least from the perspective of the parties, more than usually important, particularly from the defendant's perspective having regard to the scale of the tourism project upon which it was engaged.
27 I have come to that view because there were not only a raft of issues relating to factual evidence but also some quite complex issues relating to the practices and procedures relating to the subdivision of land and quite complex issues of expert evidence that in my view went beyond the usual run of issues that one encounters in the usual run of civil cases in this court or in the District Court. For those reasons, I conclude that this is a case in which there was 'unusual difficulty, complexity and importance' and that therefore the criterion that must be satisfied before I could exercise the discretion conferred by s 215 is satisfied.
28 The next question is whether I should exercise that discretion. It seems to me from the materials that I have seen relating to the work actually done that there is an arguable case to be put to a taxing officer, to the effect that the limits imposed by those items of the Scale are inadequate. For that reason, I propose to make the order sought, although of course I emphasise that it will be a question for the taxing officer to determine whether in fact the limits imposed by those items are inadequate. The taxing officer will do so after hearing full argument in relation to the work done and making an assessment of whether the work done was appropriately done.
29 The next specific order claimed is for an order that the defendant be entitled to claim for work reasonably done under item 32 of the Scale in respect of a number of items identified in the draft bill of costs that has been provided to the Court and which are summarised in the written submissions provided. The items include work done in relation to an
(Page 10)
- unregistered caveat; in relation to the stamping of the sale contracts the subject of the proceedings; work done in relation to advice to the client about the impact of proceedings on financing arrangements; work done in relation to a further caveat lodged by the fifth plaintiff; work done in relation to media reports; work done in relation to without prejudice offers; work done in relation to the objection which the defendant anticipated to the expertise of Ms Rooksby, an expert witness called on behalf of the defendant; and work done in relation to the submissions which the plaintiff foreshadowed relating to the use of expert evidence.
30 It seems to me that at least some of these items, particularly the items relating to the stamping of the sale contracts, the objection to the expertise of the prospective expert witness and the foreshadowed objection relating to the use to which the expert evidence could be put, could well come within item 16 of the Scale in relation to getting up for trial, and it is arguable perhaps that some of the others might also come within that item.
31 Where those particular items are properly within item 16 of the Scale, they will be compensable by the taxing officer if he or she adjudicates that they fall within that item and, because of the order that I propose to make lifting the limit in respect of that item, there will be no impediment to recovery of those items, to the extent that they were properly done in preparing for trial.
32 However, if the work done is not determined by the taxing officer to have been work properly done in preparing for trial, then, in my view, there is no basis upon which I should order that it be recoverable as if it were, in effect, part of the costs incurred in preparing for trial or part of the work done in relation to litigation. All litigation will undoubtedly give rise to a need for the parties to that litigation to receive a range of advice on matters which are related to that litigation but which do not bear directly upon the preparation of the case for trial. Neither the terms of the Scale, or the general practice of the court, encourage the recovery of costs incurred in relation to ancillary matters. Rather, the Scale suggests, consistently with established practice, that recoverable costs be limited to work properly done preparing for, and conducting, the trial. For these reasons, I do not propose to make an order in the terms sought.
33 The final contentious matter concerns the question of the rates to be applied to the work done by, in one case Mr Lemonis and in the other case, counsel. The order sought is that the costs be taxed at the maximum senior practitioner rate of $385 per hour and for counsel also at $385 per hour.
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34 In the course of argument, it has been pointed out that under cl 8 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (WA) the hourly rate to be applied in the assessment of particular items in the Scale is, in the case of a senior practitioner, who is a practitioner admitted for more than five years, $363 and, in the case of junior counsel, an amount of $286.
35 This is a case which came on at relatively short notice because of the nature of the relief sought and because of the impact which uncertainty with respect to the various contracts was having upon the defendant's proposal to develop a significant tourist resort. In those circumstances, there was understandably an apportionment of work between counsel and instructing solicitors. That apportionment was perhaps slightly different to the apportionment of work that might ordinarily be performed in that more work was done by counsel than would ordinarily be the case. In those circumstances, it would seem to me to be unfair to the defendant to require the taxing officer to apply a lower rate to the work done by counsel merely because that work was done by counsel and not done by the instructing solicitor, for whom a higher rate would have been applicable - especially given that, in this case, counsel was an experienced practitioner.
36 Having already determined that the case is one of unusual difficulty, complexity or importance, it seems to me that I have the discretion to alter the rate applicable, and I propose to exercise that discretion. However, it seems to me that increasing the rate to $385 is not appropriate and that, rather, what I should do is provide that it will be up to the taxing officer to allow, in respect of work done by counsel which is to be assessed at an hourly rate, a rate of up to $363 per hour if the taxing officer forms the view that that allowance is appropriate.
37 I do not propose to make any order in relation to the rate to be allowed in respect of work done by the solicitor, as I can see no reason why the specified maximum of $363 per hour should not apply, but I do propose to order that a limit of $286 per hour in respect of work done by counsel be raised to a limit of $363 per hour but that it, of course, be within the discretion of the taxing officer as to what rate should be allowed in respect of particular items of work.
38 I make the following orders:
1. The plaintiffs pay the defendant's costs of the action, including the costs of the plaintiffs' application for
- interlocutory injunction dated 30 November 2007 to be taxed.
- 2. That the taxation be performed on the basis that:
(a) allowance be made for counsel and a solicitor attending at the experts' conference claimed at item 9 of the draft bill of costs in accordance with item 23(a) of the Scale;
(b) allowance be made for counsel and a solicitor attending the mediation, with reasonable allowance made for counsel and solicitor preparing for the mediation under item 23(a) of the Scale;
(c) the conference between counsel and solicitors for the parties claimed in item 10(a) of the bill of costs was an informal conference which was reasonably held and a reasonable amount should be allowed under item 23(b) of the Scale and the limit of item 23(b) of the Scale be removed to allow for attendance by counsel and solicitor;
(d) the limit on items 16 and 19 of the Scale be removed;
(e) a direction be made that an appropriate amount be allowed as a disbursement for Mr Peter Webb's fees and Ms Phillida Rooksby's fees;
(f) that the limit upon the rate to be allowed for work done by counsel assessed by reference to an hourly rate be raised to $363, it being stipulated that it is within the discretion of the taxing officer as to which rate shall be allowed and applied to any particular work done by counsel; and
(g) that the defendant have a certificate for the transcript.
3. The plaintiff pay the costs of this application to be taxed as part of the overall bill.
4. The obligation to pay costs imposed upon the plaintiffs by these orders be borne jointly and severally by the plaintiffs.
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