Oswal v Yara Australia Pty Ltd
[2011] WASC 355 (S)
•19 DECEMBER 2011
OSWAL -v- YARA AUSTRALIA PTY LTD [2011] WASC 355 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASC 355 (S) | |
| Case No: | CIV:2793/2010 | ON THE PAPERS | |
| Coram: | KENNETH MARTIN J | 19/12/11 | |
| 9/05/12 | |||
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff ordered to pay first defendant's costs on an indemnity basis | ||
| B | |||
| PDF Version |
| Parties: | PANKAJ OSWAL YARA AUSTRALIA PTY LTD YARA PILBARA HOLDINGS LTD (FORMERLY BURRUP HOLDINGS LIMITED) YARA PILBARA FERTILISERS PTY LTD (FORMERLY BURRUP FERTILISERS PTY LTD) RADHIKA OSWAL |
Catchwords: | Costs issue Resolved on papers Indemnity costs Abuse of process |
Legislation: | Nil |
Case References: | Oswal v Yara Australia Pty Ltd [2011] WASC 355 Oswal v Yara Australia Pty Ltd [No 3] [2011] WASC 255 Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
DECISION : 9 MAY 2012 FILE NO/S : CIV 2793 of 2010 BETWEEN : PANKAJ OSWAL
- Plaintiff
AND
YARA AUSTRALIA PTY LTD
First Defendant
YARA PILBARA HOLDINGS LTD (FORMERLY BURRUP HOLDINGS LIMITED)
Second Defendant
YARA PILBARA FERTILISERS PTY LTD (FORMERLY BURRUP FERTILISERS PTY LTD)
Third Defendant
RADHIKA OSWAL
Fourth Defendant
(Page 2)
Catchwords:
Costs issue - Resolved on papers - Indemnity costs - Abuse of process
Legislation:
Nil
Result:
Plaintiff ordered to pay first defendant's costs on an indemnity basis
Category: B
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance
Solicitors:
Plaintiff : Murcia Pestell Hillard
First Defendant : Clayton Utz
Second Defendant : Blake Dawson
Third Defendant : Freehills
Fourth Defendant : Norton Rose Australia
Case(s) referred to in judgment(s):
Oswal v Yara Australia Pty Ltd [2011] WASC 355
Oswal v Yara Australia Pty Ltd [No 3] [2011] WASC 255
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
(Page 3)
1 KENNETH MARTIN J: In the aftermath of my reasons for decision of 19 December 2011 granting a temporary stay in this action, the parties conferred in relation to dispositive orders.
2 The first defendant, Yara, submitted a minute of proposed orders dated 17 January 2012. Subsequently, I received Yara's written submissions of 1 March 2012 in support of orders proposed under its minute. I also received submissions on behalf of the third defendant (formerly Burrup Fertilisers Pty Ltd, which I will continue to identify as BFPL) and on behalf of the former receivers and managers appointed to BFPL. The third defendant's name is now changed to Yara Pilbara Fertilisers Pty Ltd.
3 I have also since received written submissions on behalf of the plaintiff (Pankaj) of 8 March 2012 and from the fourth defendant (Radhika) of 9 March 2012.
4 Yara's written submissions in reply were then received on 19 March 2012.
5 Yara's minute of 17 January 2012 proposed five orders. The first three orders are uncontentious. They relate to:
(a) the confidentially of an exhibit, GOS14 within the affidavit of Gregory O'Shannessy, affirmed 15 December 2011;
(b) the formalisation of Radhika's altered position as fourth defendant (see my reasons in Oswal v Yara Australia Pty Ltd [2011] WASC 355 [60]); and
(c) the temporary stay of this action pending the determination of appeals and cross-appeals in the Court of Appeal of Western Australia numbered CACV 121 of 2011.
The three uncontroversial orders can be made.
6 The fourth and fifth orders proposed under Yara's minute are problematic in parts. As formulated they seek:
4. The Plaintiff and the Fourth Defendant pay forthwith the First Defendant's costs of and incidental to the hearings in the proceeding on 14 October 2011 [corrected as to date by par 9 of Yara's submissions], 26 October 2011, 9 November 2011 and 13 December 2011 and the First Defendant's chamber summons dated 8 November 2011 except in so far as they are of an unreasonable amount or have been unreasonably incurred so that,
- subject to the above exceptions, the First Defendant will be completely indemnified by the Plaintiff and Fourth Defendant for its costs and that the amount of such costs, if not agreed, be taxed.
- 5. The Plaintiff and the Fourth Defendant pay forthwith:
(a) the Third Defendant's; and
(b) Ian Carson, David McEvoy and Simon Theobald's, the receivers and managers of certain shares in Burrup Holdings Ltd,
costs of and incidental to the hearings in the proceeding on 26 October 2011 and 13 December 2011 and the First Defendant's chamber summons dated 8 November 2011 and that the amount of such costs, if not agreed, be taxed.
8 I say at the outset that I am not persuaded that any orders as to costs either on a taxed or indemnity basis should be made against Radhika. In my assessment Pankaj was the protagonist upon all applications, albeit supported by his wife, first as his co-plaintiff, then subsequently as, in effect, a fourth defendant. She was in these applications separately represented by solicitors and counsel. Her own interests, as a BHL shareholder, were plainly distinct to those of Pankaj. On my assessment briefly expressed support she provided through independent counsel towards positions advocated by Pankaj from time to time did not to any significant extent result in any extra costs being incurred in the proceedings.
9 So the residual question finally presents as to whether, by Yara's proposed order 4, an order for indemnity costs against Pankaj should be made in favour of Yara. As I observed, Pankaj by written submissions would accept an order against him for taxed costs i.e. costs orders on a party and party basis; but not for indemnity costs.
10 The fifth proposed order of Yara's minute also relates to legal costs. It addresses a claim to legal costs by BFPL (third defendant), plus a distinct further claim to costs by Ian Carson, David McEvoy and Simon Theobald personally, made as the individual non-parties who were formerly appointed receivers and managers to BFPL as well as the
(Page 5)
- appointed receivers and managers over all of Pankaj's and some of Radhika's shares held in BHL (second defendant).
11 As regards such costs under proposed order 5, Pankaj submits by par 2 of his written submissions that, 'The plaintiff does not oppose the order sought by Messrs Carson, McEvoy and Theobald as the former receivers and managers of certain shares in the third defendant … in par 18 of the third defendant's submissions'.
12 Paragraph 18 of BFPL's submissions had said:
The receivers request that the Court exercise its broad discretion and order that the first plaintiff … pay the receivers costs of and incidental to the hearings of 26 October 2011, the chamber summons of 8 November [2011] and the hearing of 13 December 2011 to be fixed in the amount of $3,000.
13 As to the three receivers and managers personally, I will make an order in due course that picks up this concession by Pankaj. But the proposed order 5 by Yara has wider dimensions.
14 Since it is the minor part of the controversy, I will first resolve the balance of proposed order 5, beyond what is effectively conceded by Pankaj at par 2 of his written submissions as regards the receivers and managers personally. I reiterate I do not think it appropriate that there be costs orders against Radhika.
15 The remaining issue as regards proposed order 5 concerns BFPL's claim for party and party costs under proposed order 5(a) in respect of hearings before me on 26 October and 13 December 2011 and of Yara's chamber summons of 8 November 2011. As I read Pankaj's submissions, he does not accept this part of the costs claim.
16 As BFPL's written submissions correctly observe, BFPL's attendance was requested by me, for 26 October 2011. That was essential, I thought, bearing in mind an urgent need then for the court to assess the potential utility (if any) in setting down for urgent hearing a construction exercise concerning the Shareholders Deed, mooted at the instigation of Pankaj.
17 On 26 October 2011, I was assisted by information provided by counsel for BFPL concerning the status of the sale process and surrounding matters. The like scenario applied on 13 December 2011, as regards a need for counsel for BFPL's attendance that day.
(Page 6)
18 I am of the view that BFPL's costs of those exercises ought be borne by the ultimately unsuccessful party, Pankaj, as the relevant protagonist plaintiff. That should also be the case in respect of any costs incurred by BFPL, as regards Yara's chamber summons of 8 November 2011, seeking orders (including for the stay) that were opposed by Pankaj (but which I ultimately granted).
19 Accordingly, with its components addressed, order 5 will be:
The plaintiff pay forthwith:
(a) the third defendant's; and
(b) Ian Carson, David McEvoy and Simon Theobald's, the former receivers and managers of certain shares in Burrup Holdings Ltd,
costs of and incidental to the hearings in the proceeding of 26 October 2011 and 13 December 2011 and the first defendant's chamber summons dated 8 November 2011, which will be:
(i) as to the third defendant, its taxed costs if not agreed; and
(ii) as to the costs of Carson, McEvoy and Theobald, an amount fixed at $3,000.
20 With order 5 resolved I return to the disputed indemnity costs order sought against Pankaj by Yara under proposed order 4.
21 Principles applicable to the making of indemnity costs orders were summarised by Pullin JA and I in Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10]. We identified 10 principles. Relevantly, principles 4 and 10 were these:
4. To obtain an indemnity costs order, it is not the case that the successful party needs to show a collateral purpose, or establish some species of fraud against the unsuccessful party. In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 303 French J by reference to the observations of Woodward J in Fountain Selected Meats, said:
It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.
…
(Page 7)
- 10. Nonetheless, an indemnity costs order will constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct: see Brookvista Pty Ltd v Meloni [2009] WASCA 180 [32], Flotilla [25]. In Flotilla Pullin J said [26]:
A solicitor should not, in my view, resort to an application for an indemnity costs order merely to secure the recovery which could be achieved by a properly formulated special costs order, unless the unsuccessful party's conduct is genuinely to be impugned by the successful party.
22 Here, I did ultimately grant the temporary stay as sought by Yara, for a number of reasons. The significant reason identified at [54], [55] and [84] was that in pursuing a contention that the Shareholders Deed was globally void, Pankaj would be advancing a position that would be fundamentally inconsistent with an earlier position that he and Radhika had advanced (essentially as between the same parties), on the preliminary issue I determined in September 2011: see Oswal v Yara Australia Pty Ltd [No 3] [2011] WASC 255 (where Radhika sought declaratory relief supported by Pankaj as to their rights under that Shareholders Deed).
23 At [84] I identified that an abuse of process would arise, were I to allow Pankaj (or Radhika) to advance inconsistent arguments, as regards his and Radhika's management rights under the Shareholders Deed. The position then sought to be advanced by Pankaj in this action - that the Shareholders Deed was void - was wholly at odds, in my assessment, with the earlier stance by Pankaj and Radhika in CIV 3078 of 2010.
24 Written submissions of Yara filed in support of its present application for indemnity costs show that the inconsistency of position by Pankaj had been clearly pointed out by Yara as far back as 13 June 2011. But no response of any kind, let alone the obvious concession, was ever received in response.
25 Yara then put Pankaj (and Radhika) on notice that indemnity costs orders would be sought, if they persisted. Notwithstanding all that, Pankaj's application was still pressed. Ultimately Yara's stance as regards a potential abuse of process by Pankaj has been vindicated by its success in obtaining the temporary stay.
26 The stance of Pankaj in first advancing in this action, then pressing, an inconsistent position that I ultimately assessed would be an abuse of process, supports here an invocation of principle 10, as explained in
(Page 8)
- Swansdale. There has been, as I assess it, unreasonable conduct by Pankaj in adhering to a stance which was inconsistent, particularly so after the very problem was clearly pointed out, but then essentially ignored. So it is appropriate the court mark its disapproval of what followed in consequence. The legal costs of participants drawn into unnecessary disputation should be the subject of an indemnity costs order against Pankaj.
27 But, as indicated, the adverse costs order should only be directed against Pankaj, as the operative unsuccessful protagonist.
28 Accordingly, there will be an order in terms of par 4 of the minute as proposed, save that I will excise its proposed references to Radhika (the fourth defendant).
29 I now make orders in those adjusted terms by reference to the minute submitted, as follows:
1. Exhibit GOS14 to the affidavit of Gregory O'Shannessy affirmed 15 December 2011 be placed in a sealed envelope and not be available for inspection by any person not a party to the proceeding other than officers of the court.
2. Radhika Oswal be granted leave to:
(a) cease being a co-plaintiff in this proceeding; and
(b) be joined as a fourth defendant to the proceeding.
3. The proceeding be stayed until:
(a) the determination of the appeal and cross-appeals in Supreme Court of Western Australia Court of Appeal proceeding numbered CACV 121 of 2011; or
(b) further order of the court.
4. The plaintiff pay forthwith the first defendant's costs of and incidental to the hearings in the proceeding on 14 October 2011, 26 October 2011, 9 November 2011 and 13 December 2011 and the first defendant's chamber summons dated 8 November 2011, except insofar as they are of an unreasonable amount or have been unreasonably incurred so that, subject to the above exceptions, the first defendant will be completely indemnified by the plaintiff for its costs and that the amount of such costs, if not agreed, be taxed.
(Page 9)
- 5. The plaintiff pay forthwith:
(a) the third defendant's; and
(b) Ian Carson, David McEvoy and Simon Theobald's, the former receivers and managers of certain shares in Burrup Holdings Ltd,
costs of and incidental to the hearings in the proceeding of 26 October 2011 and 13 December 2011 and the first defendant's chamber summons dated 8 November 2011, which will be:
(i) as to the third defendant, its taxed costs if not agreed; and
(ii) as to the costs of Carson, McEvoy and Theobald, an amount fixed at $3,000.
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