Rehins Pty Ltd v Debin Nominees Pty Ltd [No 2]
[2011] WASC 168 (S)
•8 JULY 2011
REHINS PTY LTD -v- DEBIN NOMINEES PTY LTD [No 2] [2011] WASC 168 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASC 168 (S) | |
| Case No: | CIV:1562/2007 | ON THE PAPERS | |
| Coram: | MURRAY J | 8/07/11 | |
| 7/12/11 | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Final orders made | ||
| B | |||
| PDF Version |
| Parties: | REHINS PTY LTD (ACN 116 998 095) GOLDBEACH NOMINEES PTY LTD (ACN 068 766 496) DEBIN NOMINEES PTY LTD (ACN 008 810 688) FIORE CONSTRUCTIONS PTY LTD |
Catchwords: | Contract Sale of unsubdivided land by offer and acceptance Award of relief in the nature of specific performance Terms of final orders Costs Application for indemnity costs Application for special costs order Turns on own facts |
Legislation: | Nil |
Case References: | Collins v Westralian Sands Ltd (1993) 9 WAR 56 Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400 Flotilla Nominees Pty Ltd [2003] WASC 122 (S); (2003) 28 WAR 95 Heartlink Ltd v Jones [2007] WASC 254 (S) Rehins Pty Ltd v Debin Nominees Pty Ltd [No 2] [2011] WASC 168 Schmidt v Gilmour [1988] WAR 219 Whittaker v Paxad Pty Ltd [2009] WASC 47 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 7 DECEMBER 2011 FILE NO/S : CIV 1562 of 2007 BETWEEN : REHINS PTY LTD (ACN 116 998 095)
- First Plaintiff
GOLDBEACH NOMINEES PTY LTD (ACN 068 766 496)
Second Plaintiff
AND
DEBIN NOMINEES PTY LTD (ACN 008 810 688)
First Defendant
FIORE CONSTRUCTIONS PTY LTD
Second Defendant
Catchwords:
Contract - Sale of unsubdivided land by offer and acceptance - Award of relief in the nature of specific performance - Terms of final orders
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Costs - Application for indemnity costs - Application for special costs order - Turns on own facts
Legislation:
Nil
Result:
Final orders made
Category: B
Representation:
Counsel:
First Plaintiff : No appearance (on the papers)
Second Plaintiff : No appearance (on the papers)
First Defendant : No appearance (on the papers)
Second Defendant : No appearance (on the papers)
Solicitors:
First Plaintiff : Park Linfoot Legal Solutions
Second Plaintiff : Park Linfoot Legal Solutions
First Defendant : J D Finlay & Co
Second Defendant : J D Finlay & Co
Case(s) referred to in judgment(s):
Collins v Westralian Sands Ltd (1993) 9 WAR 56
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Flotilla Nominees Pty Ltd [2003] WASC 122 (S); (2003) 28 WAR 95
Heartlink Ltd v Jones [2007] WASC 254 (S)
Rehins Pty Ltd v Debin Nominees Pty Ltd [No 2] [2011] WASC 168
Schmidt v Gilmour [1988] WAR 219
Whittaker v Paxad Pty Ltd [2009] WASC 47
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1 MURRAY J: In my judgment determining this litigation I held that I would make orders and decrees in the nature of specific performance designed to secure the performance of the contract at issue in this case by the defendants, who are obliged to use their best endeavours to obtain the approval of the Western Australian Planning Commission (WAPC), in final unconditional form, to the necessary subdivision.
2 That having been done, of course the final performance of the contract for the sale of the subdivisional lot will involve the performance of obligations under the contract involving the payment for the land and its transfer from the defendants to the plaintiffs at settlement in the ordinary way: Rehins Pty Ltd v Debin Nominees Pty Ltd [No 2] [2011] WASC 168 [222] - [235] and [254]. These reasons should be read with that principal judgment.
3 As to the making of final orders, there was only limited agreement between the parties and I have received and considered the submissions of counsel on both sides. I attach the final orders which may now be extracted in their settled form.
4 I would make only the following brief comments. The declarations in pars 2 and 3 are, in my view, convenient expressions of the general conclusion to which I have come and are appropriate to give effect to the award of specific performance in this case, involving, as it does, the need for the defendants to complete the process of obtaining unconditional approval of the proposed subdivision from the WAPC, a process finding its final expression by the orders made in pars 4 and 5.
5 I accept that the order made by par 6 will be helpful to ensure that the plaintiffs have the capacity to monitor the due performance of the clearance of conditions and obtaining final approval from the WAPC. I have replaced the plaintiffs' proposed par 7, which I think to be unnecessary, with that suggested by the defendants in par 8 of their minute. The provision of general liberty to apply in a case of this kind requires no comment.
Indemnity costs
6 The plaintiffs seek to have the court exercise its discretion with respect to costs by making an order that the defendants pay the plaintiffs' costs on an indemnity basis or, alternatively, that a special costs order should be made, removing the limits applicable under the relevant Legal Practitioners (Supreme Court) Contentious Business Determinations in
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- relation to the plaintiffs' pleadings, discovery, getting the case up for trial and counsel fees.
7 Again, as I have mentioned, I invited agreement in relation to the question of costs, failing which I asked the parties to provide written submissions in support of and opposing any special orders for costs which might be sought. That process of the exchange of submissions concluded on 18 November.
8 During that process, a number of affidavits were filed by which the plaintiffs, particularly, sought to support their claim for indemnity costs. On 5 October, the plaintiffs filed an affidavit sworn on 9 September by Mr Greaney. A supporting affidavit sworn on 15 September by Dr Franklin was filed on the same day. Mr Taylor, a partner in the firm of the plaintiffs' solicitors, swore and filed an affidavit on 5 October. It traced the development of changes made to the pleadings of the defendants which, it was said, necessitated changes to the statement of claim and the plaintiffs' reply.
9 Mr Finlay, the defendants' solicitor, filed a largely responsive affidavit sworn on 11 November. Again, it sought to trace the history of exchanges between the lawyers for the plaintiffs and the defendants, with a view to putting before the court the way in which various issues at trial had arisen in the course of the litigation.
10 There was, finally, a further affidavit by Mr Greaney, dated 18 November 2011, concerned to set out, at some length, the plaintiffs' views about the development of various issues of fact and law which were litigated at trial and, generally, to support the proposition that the defendants should properly be considered to have conducted themselves in such a way as to create delay and to create a multiplicity of issues found ultimately to be without merit and which were productive of expense.
11 That was said to be so in respect of the obtaining and tendering of expert and other evidence which, at trial, was led upon a number of issues: the process of application for WAPC approvals and the time which might be taken to complete that process, the cost and the work required to clear the conditions of the Town of Kwinana in respect of the sealing of parts of the land and the work required, evidence in respect of the value of the land concerned with the possible award of damages and factual evidence about the financial capacity of the plaintiffs to perform their part of the contract.
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12 I have read all the affidavits and considered carefully the arguments raised on both sides, before coming to the conclusion that the question of costs, as in the case of the terms of the final orders made, could be conveniently dealt with on the papers.
13 Against that background I turn first to the question of indemnity costs. Such an order is only made as an exercise of the discretion as to costs, so as to take the taxation process out of the limitations in a relevant costs determination, in exceptional circumstances.
14 In Flotilla Nominees Pty Ltd [2003] WASC 122 (S); (2003) 28 WAR 95, 101 [25], Pullin J succinctly summarised the position adopted by the courts in relation to indemnity costs orders. His Honour said that they:
will be appropriate in cases where there has been improper or unreasonable conduct on the part of a party or his legal advisors. An order for indemnity costs is a mark of disapproval on the part of the Court about the improper or unreasonable conduct of litigation, even though there should not be much difference in the costs recovered under such an order compared with recovery under a properly formulated special costs order.
15 In Whittaker v Paxad Pty Ltd [2009] WASC 47, Blaxell J usefully made the point that in determining whether improper or unreasonable conduct of a kind which might justify an order for indemnity costs had occurred, the court ought to be careful not to approach the matter with the benefit of the hindsight gained as a result of the outcome of the trial. Such matters as were raised ought to be dealt with in the circumstances applicable when they occurred during the course of the preparation for, or the conduct of, the trial.
16 I do not propose to rehearse the multiplicity of matters raised in the plaintiffs' submissions. They are set out in 47, sometimes repetitious, paragraphs in part 4 of the plaintiffs' outline. The matters raised are concerned with issues introduced by the defendants, particularly during the course of the amendment of the proceedings, which then had to be addressed by the plaintiffs, or they are matters concerned with the stance adopted by the defendants and their legal advisers in relation to the contest offered in the trial of issues necessarily raised by the plaintiffs' claim.
17 The argument presented of those matters says that the conduct of the defendants by their legal advisers caused loss of time and added expense in the trial process and the need for the court to deal with a multiplicity of
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- issues of fact and law. The plaintiffs assert that the defendants may be seen to have commenced or continued with proceedings in disregard of known facts or clearly established law.
18 As I have said, I do not propose to canvass in detail the matters raised. There were, in this litigation, as is often the case, issues raised which seemed to be plainly without merit. The plaintiffs' estoppel argument is perhaps a good example. The defendants raised initially, and then abandoned at trial, reliance upon frustration of the contract and unconscionability. The fact that that occurred does not of itself, of course, raise the prospect of an indemnity costs order in respect of the claim and counterclaim.
19 There were, apparently, efforts to reduce the issues between expert witnesses consulted on both sides which were ultimately unsuccessful. It would not be appropriate, in my view, for me to consider, in relation to the possible making of an indemnity costs order, whether, on either or both sides, that process might have been better handled, with the result that the time taken at trial in leading and testing expert witnesses might have been reduced. I do think, however, that there is no prospect that the issues which required expert evidence to be led would have fallen away as a result of a process of consultation between experts.
20 In view of the number of issues of fact and law which needed to be litigated, the process of trial was, I think, to the credit particularly of counsel, conducted with relative expedition. The parties readily complied with my directions and wishes in relation to the presentation of evidence and the order of witnesses. Certainly no criticism of the defendants can be advanced in relation to their participation in the trial.
21 In short, although, in some respects, the conduct of the defendants through their solicitors might be criticised upon the ground of the multiplicity of issues raised, nothing in that regard in any way approaches the sort of impropriety which, in my view, would justify the court expressing its disapproval of the defendants' conduct generally in their defence of the claim and pursuit of the counterclaim by making an order for indemnity costs.
22 The plaintiffs do not advance the proposition that their claim was unanswerable in the sense that it should not have been defended. They place their reliance upon particular matters which they say, to the extent that they may be made out, have the cumulative effect that I should
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- express my disapproval by an order for indemnity costs. I decline to exercise my discretion in that way.
Special costs orders
23 As I have said, the other aspect of the submissions advanced by the plaintiffs is a claim for special costs orders modifying the application of the relevant costs determinations. As I understand the position, this aspect of the application is advanced under s 215(2) of the Legal Practice Act 2003 (WA). Section 215(1) provides that the taxation of costs is regulated by the relevant legal costs determination in force from time to time under s 210. Section 215(2) provides:
(2) Despite subsection (1), if 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 all or any of the following -
(a) order the payment of costs above those fixed by the determination;
(b) fix higher limits of costs than those fixed in the determination;
(c) remove limits on costs fixed in the determination;
(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or taxed.
- Section 280(2) of the Legal Profession Act 2008 (WA) is in precisely the same terms.
24 Of course, the Legal Profession Act was proclaimed to come into operation on 1 March 2009, before this matter went to trial (Government Gazette, 27 February 2009, page 511). By s 616(1) of the 2008 Act, the current provisions in relation to costs which are contained in Pt 10 of the Act only apply where the client first instructs the law practice on or after the commencement day. Otherwise, as in this case, Pt 13 of the 2003 Act continues to apply, as will the provisions of the relevant legal costs determinations made from time to time under that Act.
25 I know this action was commenced by a writ issued on 1 June 2007, and so I will presume that the relevant determinations are the 2006 determination which operated from 1 July 2006 to 30 June 2008, and the 2008 determination operating after that date.
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26 They are similarly constructed. They fix maximum hourly and daily rates of remuneration for senior practitioners of more than 5 years standing, junior practitioners, counsel and senior counsel. A table is provided which sets out various items of work. Generally speaking, no distinction is made between solicitor/client costs and party/party costs. Maximum allowances are fixed. They combine a period of time, supposed to be the maximum required to perform the particular task, multiplied by the rate applicable to the particular fee earner hypothetically involved in the performance of the work.
27 Otherwise, of course, the fixing of reasonable costs will be a matter for the taxing officer, and I do not need to enter into that process in any way for the purposes of determining the application before me.
28 As to that application, there are self-evidently two stages in the application of s 215(2). The first is that I must arrive at an opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate. I do that by having regard to what is put before me in relation to the work required to be done and its likely remuneration. As I have said, I do that without entering into the realm of the taxing officer: Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400, 404; Collins v Westralian Sands Ltd (1993) 9 WAR 56, 64, 68.
29 I am therefore concerned with a broad-brush approach which must cause me to be of the opinion that the reasonable allowance of costs in relation to particular items or under a particular determination might lead to costs being fixed, so as to provide reasonable compensation to the successful party, in a sum above the relevant maximum sum under the determination.
30 If I arrive at that view, I must then go on to the second stage of the inquiry. I must find that the likely inadequacy of taxation under the relevant legal costs determination is caused by, 'the unusual difficulty, complexity or importance of the matter'. In this case, it is not contended that the matter presented 'unusual difficulty'. Reliance is placed upon its complexity and importance.
31 The complexity of which the subsection speaks may be legal and/or factual complexity. The court making the essentially preliminary and provisional assessment of the adequacy of the costs determination may find, having regard to the amount of work required to be done and the seniority of the practitioner who may be reasonably required to do it,
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- measured against the limits provided by the costs determination, not only inadequacy in terms of s 215(2), but also that the inadequacy is caused by the complexity of the matter: Schmidt v Gilmour [1988] WAR 219, 220, a case concerned with this question as it arose under the scale of costs laid down under O 66 of the Rules of the Supreme Court, prior to the introduction of the process of making costs determinations.
32 For myself, I always have more difficulty with the establishment of a link between the inadequacy under a determination to make an award of costs which will properly compensate the successful party, and the importance of the case. In relation to this aspect of the matter, I accept that the importance of the matter may be established by showing some aspect of general importance to the law, or the community, beyond the interests of the parties. Such a consideration may reasonably justify more work being done by more senior practitioners than might otherwise be reasonably required, and the causal link may be demonstrated.
33 On the other hand, I accept that the court may have regard, in relation to the importance of the matter, to the parties involved: Heartlink Ltd v Jones [2007] WASC 254 (S), per Martin CJ [19].
34 In this case, the plaintiffs rely upon the complexity of the matter and its importance to them. They adduce evidence by affidavit that the acquisition of the subdivided lot was regarded by the people behind the plaintiffs, Mr Greaney and Dr Franklin and their families, as an important investment opportunity which had a synergy, in relation to this particular land, with their business activities. I accept that evidence, but do not think that, on that ground, it is demonstrated that the outcome of taxation under the relevant costs determinations would be likely to be inadequate to properly compensate the plaintiffs for their costs incurred in pursuit of their claim.
35 On the other hand, as the matter went to trial and, therefore, as it had to be got up for trial, there was undoubtedly a multiplicity of issues of fact and law which required determination. That circumstance created a considerable element of complexity and, having regard to my involvement in the trial and what I know of the case in that way, I am satisfied that the complexity of the matter was considerable, so as to require the employment of one or more senior practitioners in getting the case up and considerable work by counsel in its preparation and presentation at trial.
36 The question then is, should I be of the opinion that the complexity of the matter in those ways leads to the result that the amount of costs
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- allowable, under the relevant determinations, is inadequate in the sense that it may be insufficient upon taxation to enable the taxing officer to provide the plaintiffs with reasonable compensation by way of an award of legal costs and reasonably allowed disbursements.
37 The plaintiffs place before me the costs agreements which they have entered into with their solicitors and with counsel. They place before me a table providing a summary of costs incurred to solicitors and counsel which also refers to the disbursements paid to expert witnesses.
38 Taking a broad-brush approach to the provisional assessment I am to make, I am satisfied that the costs determinations are inadequate, in the relevant sense, in that in relation to getting the matter up for trial and the work of counsel, a reasonable allowance on taxation may require the fixing of amounts greater than the maximum amounts allowable under the determinations.
39 I am therefore prepared to make an award of costs which would involve the special order that the limits on the costs fixed in the determination in respect of getting the case up for trial and counsel's fees should be removed in the exercise of the power under s 215(2)(c).
40 Otherwise, including in respect of the costs incurred in the preparation and presentation of the submissions and evidence as to costs and the making of final orders, the relevant scales are to continue to have their effect at taxation.
41 The defendants sought the costs of the present applications. But, of course, that application now falls away. They also sought express provision for the costs of transcript and reasonable witness costs. The taxing officer has power to allow such costs reasonably incurred, and these days no particular certification for the payment of those amounts is required.
42 Finally, the defendants sought an order that the costs recoverable by the plaintiffs should be reduced by 10% because of their introduction of the estoppel plea which, as has been seen, I concluded was without merit and, in so concluding, I observed that I could not understand the plea: judgment [53] - [59].
43 However, in terms of leading evidence and the time taken to debate the matter at trial, the disposition of this plea occupied a relatively minor expenditure of effort by the parties. It would be inappropriate, in my
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- view, to deny the plaintiffs' part of their properly determined costs on this ground.
44 Having regard to those matters I add, to the attached minute of orders, orders that the defendants shall pay the plaintiffs' costs of the action and the counterclaim, including reserved costs, to be taxed as one bill if not agreed, and that in the taxation, the limits fixed by any relevant determination upon the costs recoverable in respect of getting up for trial and the fees of counsel are removed.
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Minute of proposed orders
1. There be judgment for the Plaintiffs in the action.
2. There be a declaration that the contract of sale between the Plaintiffs and the Defendants of 18 November 2005 for the purchase and sale on conditions of an unsubdivided lot, being part of the land situated at 31 Office Road, Kwinana and being part of the land in Certificate of Title Volume 1937 Folio 616, remains in force and effect and has not been terminated by the Defendants.
3. There be a declaration that the Defendants remain bound by their contractual obligation to use their best endeavours to secure subdivisional approval from the Western Australian Planning Commission so as to create a new subdivided lot to accord with the dimensions specified in the diagram accompanying the contract of sale and as submitted to the Western Australian Planning Commission on 19 January 2006 and upon the approval being obtained to proceed to settlement of the sale.
4. The Defendants shall do all that is necessary on their part to be performed to obtain the aforesaid approval of the Western Australian Planning Commission and the subdivision of the land and upon the approval being obtained and upon the payment of the purchase monies to settle the performance of the contract of sale.
5. The Defendants shall apply for the subdivision of the land pursuant to the preceding Order by lodging such application with the Western Australian Planning Commission within fourteen days of service of this Order.
6. The Defendants shall provide to the solicitors of the Plaintiffs, within fourteen days of service of this order, a written authority for the Plaintiffs to enable them to obtain information as to the progress of the subdivision application from all government departments which are involved in the process, including the Town of Kwinana.
7. The contract be otherwise performed according to its terms.
8. General liberty to apply is reserved to both parties upon seven days notice.
9. The Defendants' Counterclaim is dismissed.
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- 10. The Defendants shall pay the Plaintiffs' costs of the claim and counterclaim, including any reserved costs, to be taxed as one bill, if not agreed.
11. The limits of the costs fixed in a relevant Costs Determination in respect of getting up for trial and counsel's fees are removed.
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