Ralmana Pty Ltd v BGC Contracting Pty Ltd
[2016] WASC 131 (S)
•30 JUNE 2016
RALMANA PTY LTD -v- BGC CONTRACTING PTY LTD [2016] WASC 131 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 131 (S) | |
| Case No: | CIV:1156/2015 | 30 JUNE 2016 | |
| Coram: | KENNETH MARTIN J | 30/06/16 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff pay the defendant's costs on an indemnity basis | ||
| B | |||
| PDF Version |
| Parties: | RALMANA PTY LTD BGC CONTRACTING PTY LTD |
Catchwords: | Costs Application for indemnity costs order Application for special costs order Whether conduct of plaintiff warranted making indemnity costs order |
Legislation: | Nil |
Case References: | Quancorp Pty Ltd v MacDonald [1999] WASCA 101 Ralmana Pty Ltd v BGC Contracting Pty Ltd [2016] WASC 131 Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161; (2006) 33 WAR 1 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
BGC CONTRACTING PTY LTD
Defendant
Catchwords:
Costs - Application for indemnity costs order - Application for special costs order - Whether conduct of plaintiff warranted making indemnity costs order
Legislation:
Nil
Result:
Plaintiff pay the defendant's costs on an indemnity basis
Category: B
Representation:
Counsel:
Plaintiff : Ms S Hotton
Defendant : Ms C J Robinson
Solicitors:
Plaintiff : HopgoodGanim
Defendant : King & Wood Mallesons
Case(s) referred to in judgment(s):
Quancorp Pty Ltd v MacDonald [1999] WASCA 101
Ralmana Pty Ltd v BGC Contracting Pty Ltd [2016] WASC 131
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161; (2006) 33 WAR 1
- KENNETH MARTIN J:
(This judgment was delivered extemporaneously on 30 June 2016 and has been edited from the transcript.)
1 Today I am dealing with the question of costs in respect of the strike out application which I determined, and which are the subject of my reasons in Ralmana Pty Ltd v BGC Contracting Pty Ltd [2016] WASC 131, which was delivered on 28 April 2016, after it was argued on 23 February 2016.
Costs orders sought by the defendant
2 In the aftermath of that application, upon which the defendant was successful in striking out that version of the statement of claim, both of the parties have filed written submissions in respect of the costs of that application, on the basis that the issue of costs be decided on the papers.
3 The defendant under its two sets of written submissions, the first of 9 June 2016, and then the second under its responsive submissions of 22 June 2016, effectively moves for an order that the plaintiff pay the costs of that application on an indemnity cost basis, in accordance with par 1 of its minute of proposed orders of 9 June 2016.
4 In the alternative, it seeks an order in effect lifting the limits in relation to Scale Item 10(a) (for proceedings in chambers other than proceedings to which Scale Item 11 applies) as found in the Legal Profession (Supreme Court) (Contentious Business) Determination 2014 (WA) (2014 Costs Determination), and an allowance made as for the involvement of Senior Counsel and two practitioners. The terms of the two orders as sought are:
1 Upon taxation of the costs referred to in Order 2 of the Orders of the Honourable Justice Kenneth Martin dated 25 May 2016, pursuant to section 280(2)(c) of the Legal Profession Act 2008 (WA), any limit fixed by any applicable costs determination, including any limits with respect to hourly rates, be removed on the basis that the Defendant shall be entitled to an indemnity in respect of costs incurred, except to the extent that such costs were unreasonably incurred.
2 In the alternative to order 1: Upon taxation of the costs referred to in Order 2 of the Orders of the Honourable Justice Kenneth Martin dated 25 May 2016, pursuant to section 280(2)(c) of the Legal Profession Act 2008 (WA), a special costs order be made in favour of the Defendant, namely that the limits imposed in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2014 be removed in relation to item 10(a) (Proceedings in Chambers) and an allowance be made for the involvement of Senior Counsel, a senior practitioner and a junior practitioner.
5 Both of those alternative costs orders approaches are firmly opposed by the unsuccessful plaintiff. I have the plaintiff's submissions of 17 June 2016 indicating why orders in those terms are opposed.
6 The question, essentially, then, is whether the successful party on the application (ie the defendant) should simply receive an ordinary award of the taxed costs of its successful application, or whether there should be the grant of an order, in effect, for costs of the application assessed on an indemnity basis, as sought under par 1 of the defendant's minute of 9 June 2016. The lesser alternative costs outcome sought by the defendant is the order under par 2 of its minute in respect of removing the relevantly applicable limits in relation to Scale Item 10(a) and also an allowance made for the involvement of Senior Counsel, a senior practitioner and a junior practitioner.
7 In relation to the special costs orders which are sought, the defendant's position is supported by two affidavits sworn by Michael Lundberg. The first is of 9 June 2016, in which he exhibits some conferral correspondence passing between the defendant's previous solicitors and the plaintiff's solicitors. Then there is, next, the second affidavit of Mr Lundberg sworn on 22 June 2016, effectively attempting to answer the written submissions filed on behalf of the plaintiff in resisting the application.
Evaluation
8 There has been no argument in respect of the underlying principles of law that are applicable in respect of costs applications of this kind. They have been heavily traversed by judgments, both at first instance and by the Court of Appeal, in recent times. The authorities are comprehensively collected in the parties' respective submissions and it is not necessary for me to traverse those principles yet again.
9 I am persuaded that a basis for a lifting of the limits under the scale of costs as regards Scale Item 10(a) in respect of the 2014 Costs Determination is appropriate and that an allowance should be made for the involvement of Senior Counsel, a senior practitioner and a junior practitioner.
10 The threshold in respect of s 280(2) of the Legal Profession Act 2008 (WA) first requires me to conclude that the amount likely to be recouped by the successful party (ie, the defendant) would be inadequate in terms of a reflection of the work carried out in respect of the application.
11 Second, I must then be of the opinion that one of the tripartite and several criteria in respect of the unusual difficulty, complexity or importance of the matter applies here.
12 I am thoroughly persuaded of both those s 280(2) considerations, given that I heard the substantive, resisted strike out application across the whole of a day; there was a significant amount of documentary material that was put before me on that application which needed to be assimilated; the arguments put to me on both sides were complex; and it was necessary to deliver reserved reasons and publish what subsequently became my reasons in favour of the defendant on that application, being of some 27 pages and 95 paragraphs.
13 The application, therefore, was of some real difficulty and complexity. It was also plainly of importance structurally, in terms of how this matter might progress to a trial, given some underlying assumptions reflected in the statement of claim of the plaintiff which the defendant successfully took issue over, and which seemed to me to bear heavily upon how an efficient trial would run, depending on whether the plaintiff's assumptions were vindicated or not.
14 Therefore, it seems to me, at the second tier level in terms of assessing difficulty, complexity and importance, that all those criteria are satisfied here. I am also satisfied that the amount of costs allowable in respect of the strike out application under the 2014 Costs Determination would be inadequate in such circumstances.
15 The real question then which has exercised my mind after receipt of the plaintiff's submissions is whether, in the circumstances, it is appropriate, going even beyond issuing a special costs order lifting the relevantly applicable limits under the costs determination to make an order as sought in terms of indemnity costs favouring the defendant? In a practical sense, at the end of the day, the amount recoupable on an indemnity basis might actually not turn out to be numerically much different from the taxed amount allowed under an exercise where relevantly applicable limits in the costs determination are lifted.
16 The case authorities which are collected, particularly in the defendant's written submissions, summarise the relevant principles, particularly Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10]. In short, the court's discretion is not constrained.
17 However, an order for indemnity costs is quite an exceptional costs order and the court does not issue such orders in the running, unless it is thoroughly persuaded that there are sufficient and compelling reasons for issuing such a costs order.
18 In the present case, the plaintiff was unsuccessful in terms of sustaining the arguments which it put defending its pleading, and my reasons for decision indicate why that is the case. Generally speaking, orders for indemnity costs in civil applications of this kind would be made where a court wishes to indicate its disapproval of the unsuccessful party's conduct, or otherwise indicate that there has been an element of unacceptable unreasonableness overall, in terms of a party's position adopted in the conduct of the application or litigation.
19 Having reviewed the parties' respective submissions and the affidavit materials provided, I am of the view that this is a case where, in the end, there should be an order for indemnity costs upon the outcome of this application, and so an order under par 1, rather than par 2, of the defendant's minute of 9 June 2016. The reasons, essentially, for why I reach that conclusion are twofold.
20 First, I have had regard to the conferral correspondence which is seen appended to Mr Lundberg's affidavit. It seems to me this is a scenario where the plaintiff was put on significant notice through the conferral process of the conceptual deficiencies in its pleading but, in the face of that, still chose to maintain and defend a position resolutely rejecting what had been put openly on the record to it as problems.
21 As regards what is required by a conferral process, I would note the obligation to confer as expressed in Rules of the Supreme Court 1971 (WA) (RSC) O 59 r 9, and the observations about that obligation at Practice Direction 4.3.2. I respectfully adopt what was said by Martin CJ in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161; (2006) 33 WAR 1 [2] - [4]. I am troubled that the nature of the conferral that took place here was ineffective. This was a case of the defendant pointing out the deficiencies, but then a lack of engagement on the part of the plaintiff's legal representatives, who effectively said that they would not accept the propositions. I am not satisfied that there followed from the plaintiff a sufficiently rigorous intellectual engagement with the real conceptual difficulties which were being pointed out in naked terms. The plaintiff effectively offered only a 'straight bat' blocking response - rather than an act of substantive intellectual engagement with problems openly and clearly pointed out in conferral.
22 Had there been a genuine act of intellectual engagement on the part of the plaintiff, then it seems to me this strike out application could have been avoided, as the deficiencies were obvious and were clearly articulated by the defendant. On that basis, there seems to me to have been a clear lack of sufficient or effective conferral on the part of the plaintiff, and for that reason it is appropriate here for the court to indicate its displeasure with these events and do that by an order for indemnity costs in relation to the outcome of this application. I would respectfully adopt what was said by Wheeler J in Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7] (adopted by the Court of Appeal in Swansdale), that 'where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear that increased cost'.
23 That conclusion is reinforced for me here by the written costs submissions received from the plaintiff - which have articulated a de minimis attitude to the adverse strike out decision which has been rendered, indicating that the strike out application was but only a small mini-battle viewed in the scale of a greater war, so that the outcome was not all that significant - being, to invoke the analogy raised by the Black Knight in Monty Python and the Holy Grail, 'just a flesh wound' - and could therefore be brushed aside on that basis. It should not be. There was a significant defeat here, and my reasons, if they are read, indicate a stark conceptual deficiency in the plaintiff's pleaded case that needs to be frankly acknowledged and engaged with. There are elements of loser's bravado associated with the submissions that I have read on the part of the unsuccessful plaintiff, and that reaffirms me in my primary view that there ought, in this circumstance, to be an order for indemnity costs of the application favouring the defendant. On that basis, I will issue an order in terms of par 1 of the defendant's minute of 9 June 2016.
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