JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : BROOME CITATION : RODWELL & ANOR -v- HUTCHINSON [2009] WADC 180 CORAM : GOETZE DCJ HEARD : 8 SEPTEMBER 2009 DELIVERED : 20 NOVEMBER 2009 FILE NO/S : BRO APP 1 of 2008
MATTER : IN THE MATTER of an appeal brought pursuant to Part 6 of the District Court Rules 2005 BETWEEN : ALAN STANLEY RODWELL JAN ALETHEA ROBERTSON
Appellants
AND
ANTHONY JOHN HUTCHINSON
Respondent
Catchwords: Appeal from Magistrate's decision not to award indemnity costs to successful plaintiffs following trial - Statutory power to award indemnity costs against the defendant - Exercise of discretion to award indemnity costs
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Legislation: District Court of Western Australia Act 1969
Legal Practice Act 2003, s 215
Magistrates Court (Civil Proceedings) Act 2004
Supreme Court Act 1935 Result: Appeal dismissed Representation: Counsel:
Appellants : Mr D J Garnsworthy
Respondent : Mr R L Eagle
Solicitors:
Appellants : Not applicable
Respondent : Eagle & Partners
Case(s) referred to in judgment(s):
Collins v Westralian Sands Ltd (1993) 9 WAR 56
Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR 95
Murcia & Associates (a firm) v Grey & Ors [2001] WASCA 240
Naidoo v Williamson (2008) 37 WAR 516
Nathan v Western Atlas International Inc [2006] WADC 70
Schmidt v Gilmour [1988] WAR 219
Stobbart v Mocnaj & Ors [1999] WASC 252
Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190
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Introduction 1 Mr Rodwell and Ms Robertson were successful plaintiffs against the defendant, Mr Hutchinson, at trial in the Magistrates Court at Broome. His Honour Magistrate W Tarr ordered that judgments be entered for Mr Rodwell and Ms Robertson in the sums of $30,550.58 and $15,200 respectively and for their costs of the claim and counterclaim to be paid by Mr Hutchinson to be assessed. 2 After trial, Mr Rodwell and Ms Robertson had sought an order for indemnity costs, but this was refused. They now appeal that refusal.
The trial and the costs order 3 Mr Rodwell and Ms Robertson made claims for work undertaken by each of them for Mr Hutchinson, who counterclaimed from them the alleged costs of shared rental of his property over a given period. 4 His Honour had "no hesitation" in finding in favour of Mr Rodwell and Ms Robertson both on their claims and in dismissing the counterclaim. The reasons for decision can be found in Magistrates Court file BM166 of 2005. 5 His Honour determined that he was bound by the Magistrates Court (Civil Proceedings) Act 2004 in relation to costs, such that he could not order indemnity costs. He said that: "It's my view that I have no inherent jurisdiction to make an order for indemnity costs and probably that is by design because I don't believe the situation would be appropriate in this jurisdiction for courts to be making orders for indemnity costs." 6 Without specific reference to it, his Honour no doubt had in mind s 25 of the Act which, relevantly, provides as follows: (Page 4)
… (7) The amount of any costs to be paid is to be determined by the Court unless the parties concerned agree on the amount; (8) The amount of any costs to be paid in respect of work done by a lawyer in conducting any proceedings in the case is to be determined under the applicable costs determination; …" 7 The reasons for the application for indemnity costs in this case are that Mr Hutchinson caused Mr Rodwell and Ms Robertson a great deal of legal work by reason of his persistent delinquent conduct during the course of the action. They also say that they entered into a costs agreement with their solicitor enabling that solicitor to charge fees greater than the applicable costs determination. By a letter dated 10 January 2008 from their solicitor, Mr Rodwell and Ms Robertson sought costs from Mr Hutchinson totalling $55,857.57.
The appeal 8 By the amended notice of appeal, Mr Rodwell and Ms Robertson seek an order for indemnity costs against Mr Hutchinson and for the appropriate sum to be fixed by the court on submissions by the parties or in the alternative, to be taxed on a full indemnity basis as between solicitor and client. 9 The grounds of appeal, in summary, are that: The usual costs order 10 Ordinarily, the costs of a successful party at trial are ordered to be paid by the unsuccessful party. However, that is not always so. This is reflected by s 25(1) and s 25(2) of the subject Act which I have set out above. (Page 5)
The legislative scheme in Western Australia 11 The Legal Practice Act 2003 created the Legal Costs Committee which is empowered to make a determination regulating the remuneration of legal practitioners in respect of contentious work carried out in each of the Supreme, District and Magistrates Courts. This power is granted under s 210 of that Act. Section 215 of the same Act provides as follows: "215 Effect of determination (1) Subject to sections 221 and 241 of this Act and section 14 of the Legal Aid Commission Act 1976 — is regulated by a legal costs determination in force under section 210. (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 (Page 6)
in the determination to be ordered or taxed." 12 Section 215(2) thus enables a court dealing with costs to make a special costs order. It is similar to the former Rules of the Supreme Court O 66 r 12(1), which, prior to its repeal, enabled the Supreme and District Courts to provide for costs on a higher scale for the same reasons now reproduced in s 215(2) and also for "any other good or sufficient reason". That phrase was held to include the amount of work required to be done: Schmidt v Gilmour [1988] WAR 219 and Collins v Westralian Sands Ltd (1993) 9 WAR 56. However, that phrase is now excluded from s 215(2) and it is not in any way suggested that the subject matter in the present case was of unusual difficulty, complexity or importance. On this basis, a special costs order was not open to Mr Rodwell and Ms Robertson in this case.
The nature of an indemnity costs order 13 It is now well established that the meaning of an order for costs to be taxed on an indemnity basis is that all costs shall be allowed except insofar as they are of an unreasonable amount or have been unreasonably incurred: Stobbart v Mocnaj & Ors [1999] WASC 252 at [6]. 14 Further, before an indemnity costs order can be made, the justice of the case must require such an order and when that occurs, the court has a discretion as to whether the order should be made. Most cases involve some element of improper, or at least unreasonable, conduct on the part of a party against whom the order is sought, or the party's legal advisers, in relation to the conduct of the action. However, an indemnity costs order will not be made if the costs would be covered by an order for party and party costs or by a special costs order under s 215(2) of the Legal Practice Act: Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR 95, at [8], [9] and [11]. 15 Section 215(1) of the Legal Practice Act is subject to s 221 of the same Act. By this latter mentioned section, a legal practitioner may make a written agreement with any client enabling that practitioner to charge fees to that client at an amount greater than that allowed under the relevant legal costs determination. 16 As noted above in Stobbart, indemnity costs do not include costs of an unreasonable amount or costs which have been unreasonably incurred. This was confirmed in Flotilla at [28]. Thus, the order for indemnity costs will usually provide for all costs so as to provide a complete (Page 7)
indemnity to a litigant who has entered into a costs agreement with his or her solicitor, but such indemnity will not include those costs unreasonably incurred or, which are of an unreasonable amount, so that the requirement of reasonableness necessarily overrides a costs agreement.
Appellants' submissions
Statutory power to grant indemnity costs 17 Mr Garnsworthy, counsel for Mr Rodwell and Ms Robertson, relied primarily upon s 25 of the Magistrates Court (Civil Proceedings) Act, which I have set out above. He contends that this is a statutory power to grant an indemnity costs order and that such power "is not materially different" to the power granted to the Supreme Court to make indemnity costs orders under s 37 of the Supreme Court Act. Herelies upon the decision in Stobbart to support that contention. He referred to the reasons for decision at [5] in which Parker J said: "The power to make these (orders) may be identified as conferred by s 37 of the Supreme Court Act 1935 but, quite apart from that provision, the power is inherent in the Court being in the exercise of the Court's authority over the conduct of its own officers for a breach of duty to the Court." 18 In Stobbart, Parker J made indemnity costs orders against solicitors because of their delinquent action. Parker J made it clear, that: "In the exercise of this power the Court is not acting inter partes but is exercising its disciplinary authority over the conduct of its own officers." 19 Apart from indicating that there is power in the Supreme Court pursuant to s 37 of its Act to order indemnity costs, Stobbart does not assist Mr Rodwell and Ms Robertson. Parker J was clearly exercising the inherent jurisdiction of the Supreme Court to discipline its own officers, namely, the legal practitioners acting for one of the parties involved in Stobbart. The Magistrates Court, being a creature of statute, does not have such an inherent jurisdiction or any powers when exercising its jurisdiction, save for those that are expressly conferred on it by statute and those that are "an ancillary or auxiliary power to be exercised in the determination of claims otherwise within the jurisdiction of the court": Murcia & Associates (a firm) v Grey & Ors [2001] WASCA 240 at [19]. (Page 8)
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20 To determine whether s 25 of the Magistrates Court (Civil Proceedings) Act "is not materially different" to s 37 of the Supreme Court Act, it is appropriate to examine the legislation relating to costs in the various courts.
Costs in the Supreme Court 21 Section 37 of the Supreme Court Act provides that: "Subject to the provisions of this Act and to the rules of court and to the express provisions of the Magistrates Court (Civil Proceedings) Act 2004, or any other Act, the costs of and incidental to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the Court or judge, and the Court or judge shall have full power to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid." 22 Further, Rules of the Supreme Court, O 66 r 1 provides that generally, a successful party will recover costs and O 66 r 11(1) provides that "except when otherwise ordered", costs are to be calculated in accordance with the Legal Costs Committee determination relevant to the Supreme Court. An exception relates to a legal costs agreement. 23 It can be seen immediately, that, subject to the Supreme Court Act and Rules, orders for costs in the Supreme Court are: "… in the discretion of the Court or judge, and the Court or judge shall have full power to determine by whom … and to what extent such costs are to be paid." 24 The Supreme Court can also order that costs not be paid in accordance with the determination relevant to the Supreme Court. 25 The discretion given to the Supreme Court as to costs is therefore very wide, fettered only by the Supreme Court Act and Rules. The discretion is to be exercised judicially and has been held to extend to an award of costs in favour of a party against a non-party and in favour of a non-party against a party: Naidoo v Williamson (2008) 37 WAR 516 at [39] and [42]. (Page 11)
26 The Supreme Court therefore has undoubted power under s 37 of its Act to order indemnity costs. Further, and quite separately from that statutory power, the Supreme Court also has an inherent jurisdiction to supervise its own officers, including a power to order indemnity costs against legal practitioners. 27 For the sake of completeness, it is to be observed that RSC O 66 r 5(1) enables the Supreme Court to make costs orders against legal practitioners, including indemnity costs.
Costs in the District Court 28 Mr Garnsworthy also relied on the authority of Nathan v Western Atlas International Inc [2006] WADC 70, in which indemnity costs were ordered to a successful party in proceedings in the District Court. However, that case was decided on the basis of a provision in a contract of insurance allowing for indemnity costs, but not by reason of any purported exercise of any statutory power in the District Court as to costs. 29 It is however relevant to examine the statutory provision for costs in the District Court. The District Court of Western Australia Act provides as follows: "64. (1) Except as hereinafter provided in this Act, the costs of any action or proceeding shall be in accordance with any costs determination (as defined in the Legal Profession Act 2003) and shall be paid by or apportioned between the parties in such manner as the District Court judge directs and in default of such a direction shall abide the event. 30 Thus, by s 64(1), the District Court's power regarding costs is limited to an award of costs in accordance with any costs determination, but by s 64(3), a District Court judge is granted "the same power in relation to the payment of costs by any party as a judge of the Supreme Court has". (Page 12)
31 The power granted to a District Court judge under s 64(3) of its Act includes power to order indemnity costs against a party as might a judge of the Supreme Court and, arguably, it also empowers a judge of the District Court to order costs against a legal practitioner served with a notice of a proceeding because, if for no other reason, s 6 of the District Court Act defines "party" to include a person served with a notice of, or attending, a proceeding, although not named in the record. It is not necessary to determine this now, but, I make the point, because below I will deal with s 25(10) of the Magistrates Court (Civil Proceedings) Act regarding costs powers against legal practitioners in proceedings before the Magistrates Court. 32 Further, Naidoo v Williamson (supra), was an appeal against a decision from the District Court. Steytler P referred only to s 37 of the Supreme CourtAct and the costs power of a Supreme Court judge in his reasons for decision as to costs. Pullin JA and Murray AJA agreed with him. It appears to have been assumed in those reasons that a District Court judge has the same power in relation to the payment of costs as a judge of the Supreme Court has, as provided by s 64(3) of the District Court of Western Australia Act, so that Mazza DCJ properly awarded costs against a party in favour of a non-party. 33 It follows that the power of a District Court judge to order indemnity costs relates not only to costs determined in accordance with the costs determination applicable in the District Court, but also, where appropriate, in accordance with the liability of the indemnified party under a valid costs agreement made pursuant to s 221 of the Legal Practice Act, subject to the two requirements that those costs have been reasonably incurred and that they are of a reasonable amount. 34 Further, by r 6(1) of the District Court Rules, the Rules of the Supreme Court apply to and in respect of any action in the District Court, unless otherwise excluded. RSC O 66 r 5(1) is not excluded from the District Court Rules. Thus, the District Court also has power to order costs against a legal practitioner by such rule. 35 For present purposes, the District Court has the same powers as to costs as the Supreme Court, save that it does not have the inherent jurisdiction of the Supreme Court over its own officers, as exercised by Parker J in Stobbart. (Page 13)
Costs in the Magistrates Court 36 As noted, costs in the Supreme Court shall be in the discretion of the court or judge with full power to determine by whom and to what extent such costs are paid. RSC O 66 r 1(1) does not seek to limit that general discretion, but it provides that generally, the successful party will recover costs. Further, O 66 r 11(1) enables costs to be ordered which are not in accordance with the relevant determination. 37 This is to be contrasted with s 25 of the Magistrates Court (Civil Proceedings) Act. There, subsection (2) provides that a successful party is entitled to a costs order, unless relevantly, there is good reason not to make such an order under subsection (1) for the whole or part of that party's costs. There are two inherent limitations to this power: (i) Subsection (1) is limited by its terms to the Magistrates Court making an order that "a party to a case pay the whole or part of another party's costs in the case" (underlining added). This limitation is not imposed on the Supreme Court, which by s 37 of its Act, has a discretion "by whom" costs are to be paid. The discretionary power is wide and permits costs orders, for example, both in favour of and against both a party and a non-party, as I have noted above from Naidoo v Williamson. (ii) Subsections (1) and (2) must be read subject to s 25(7) and (8) requiring that "the amount of any costs to be paid … is to be determined under the applicable costs determination" (underlining added). There is no power in the Magistrates Court to go beyond that determination, but the Supreme Court or judge is not so limited, because the discretion in s 37 of the Supreme Court Act extends to "what extent such costs are paid" and O66 r 11(1) enables costs to be calculated otherwise than in accordance with the relevant legal costs determination. 38 For these reasons alone, it can be seen that the costs power granted to the Magistrates Court under s 25 is not as wide as the discretionary power granted to the Supreme Court or a judge pursuant to s 37 of the Supreme Court Act. 39 By s 64(3) of its Act, a judge of the District Court has been granted the same power in relation to the payment of costs by any party as the Supreme Court or judge. The Magistrates Court has not been granted that same power by s 25 of its Act. (Page 14)
40 When his Honour Magistrate Tarr exercised jurisdiction to enter judgment for Mr Rodwell and Ms Robertson in specified sums, as claimed, against Mr Hutchinson, he was empowered to only grant a costs order in terms specified by, and limited by, s 25. Those terms are not as wide as those set forth in s 37 of the Supreme Court Act. They are "materially different" therefrom, contrary to Mr Garnsworthy's contention. 41 Further, it is to be observed that s 25(10) of the Magistrates Court (Civil Proceedings) Act provides as follows: "(10) If the Court is satisfied that due to the acts or omissions of a legal practitioner, whether personally or through an employee or agent — (a) costs have been incurred improperly or without reasonable cause; or (b) costs have been wasted by undue delay or by any misconduct or default, the Court may order all or any of the following — (c) the legal practitioner to be wholly or partially disentitled to costs from the legal practitioner's client; (d) the legal practitioner to repay to the legal practitioner's client the whole or a part of any costs that the legal practitioner has been paid by the client for items other than disbursements; (e) the legal practitioner to pay to the legal practitioner's client the whole or a part of any costs that the client is ordered to pay to another party; (f) the legal practitioner personally to indemnify any party other than the lawyer's client against the whole or a part of the costs payable by the indemnified party." 42 There is therefore a statutory power in the Magistrates Court to grant an indemnity costs order in favour of a party against the other party's legal practitioner. However, the power to order indemnity costs does not extend to such an order against a party. (Page 15)
43 By including this statutory power to order indemnity costs against a legal practitioner in proceedings in the Magistrates Court, but not power to do so against a party, s 25(1) and (2) must be interpreted to mean that there is no such power: Gifford on "Statutory Interpretation" at pp 27 - 29. 44 If the Magistrates Court does not have power to grant an order for indemnity costs against a party, then, there is no power given to this Court, on appeal, to make such an order: see s 43(7)(b) of the Magistrates Court (Civil Proceedings) Act. 45 Further, it is to be observed, that, s 37(1) of the Supreme Court Act, is expressly subject to the provisions of the Magistrates Court (Civil Proceedings) Act 2004. Accordingly, if this appeal were to be transferred to the Supreme Court, or this decision is appealed to the Supreme Court, then, the Supreme Court itself could not make the indemnity costs order now sought.
Section 11 of the Magistrates Court (Civil Proceedings) Act 46 Mr Garnsworthy also relied on s 11 of the Magistrates Court (Civil Proceedings) Act 2004 which provides, relevantly, as follows: "(1) The Court has such powers as are incidental to and necessary for the exercise of the jurisdiction conferred on it by section 6 and of the jurisdiction referred to in section 8." 47 Mr Garnsworthy contended that s 11(1) provides the Magistrates Court with power to order indemnity costs as incidental to and necessary for the exercise of its jurisdiction on a claim before it. 48 It seems to me however, that, s 11 deals with the Magistrates Court's powers being, in terms of s 11(1), those powers which are "incidental to and necessary for the exercise of its jurisdiction" in respect of a claim within its jurisdiction and which jurisdiction is detailed in s 6 and s 8. Costs are not a matter of jurisdiction or power to be exercised as being incidental to and necessary for the exercise of the court's jurisdiction on a claim in the sense used in s 11(1), nor are costs "an ancillary or auxiliary power to be exercised in the determination of claims otherwise within the jurisdiction of the court": Murcia, in which it was further observed that there is a distinction between jurisdiction and power. (Page 16)
49 The power granted to the Magistrates Court to order costs is specifically provided for in Part 3 of the relevant Act, being quite separate from Part 2 of that Act dealing with jurisdiction and powers incidental to and necessary for the exercise of jurisdiction. 50 Mr Garnsworthy next relied on s 11(2)(b) of the Magistrates Court (Civil Proceedings) Act which provides, relevantly, that: "(2) The Court may grant any remedy or relief in respect of a claim within the jurisdiction conferred by section 6 — … (b) that the Supreme Court could grant if the claim had been made to that court." 51 Section 6 of the Magistrates Court (Civil Proceedings) Act grants jurisdiction to the Magistrates Court to deal with various types of claim for an amount of money within its jurisdiction. There is no doubt, that, the judgments awarded to Mr Rodwell and Ms Robertson by his Honour are within the Court's jurisdiction. As I understand this submission, it is to the effect that the Magistrates Court has power to grant any remedy or relief on a claim within its jurisdiction, as might the Supreme Court, and that costs are part of the remedy or relief on a claim. 52 However, Mr Rodwell and Ms Robertson have each obtained, in full, the remedy or relief sought by them in the respective judgment sums awarded to them and there is no appeal from those judgments in either case. Mr Rodwell and Ms Robertson seek nothing further in respect of their "remedy or relief", which they have each obtained. Costs are not part of the "remedy or relief in respect of a claim", as expressed in s 11(2)(b) of the Magistrates Court (Civil Proceedings) Act. 53 Costs are provided for as a matter separate from jurisdiction in each of the Supreme Court Act 1935, the District Court of Western Australia Act 1969 and the Magistrates Court (Civil Proceedings) Act2004. The three courts are each granted such statutory power as the Parliament of Western Australia deemed necessary for them to have in order to make costs orders when determining matters within their respective jurisdictions. 54 Section 11 does not therefore assist Mr Rodwell and Ms Robertson. (Page 17)
Clause 9 and Item 26 of the costs determination 55 A further argument made by Mr Garnsworthy concerns cl 9 of the legal costs determination relating to the Magistrates Court. That clause is common to both determinations relevant to this matter, being those published in 2004 and 2006, and provides in each case as follows: "9. Scale of costs Unless a practitioner has made a written agreement as to costs with a client under the provisions of section 221 of the Legal Practitioners Act 2003, the costs of or in relation to a party to an action or other proceeding (inclusive of GST and counsel fees but exclusive of other disbursements) — (a) recoverable from one party by another party; or (b) payable by a party to that party's own practitioner shall not exceed the amounts set out in the Table to this clause." 56 The contention is, that, this provision enables one party to recover costs from another party in accordance with that party's written agreement as to costs. 57 It is to be noted that the legal costs determination relating to the Supreme and District Courts also contains a cl 9, similar to that applicable to the Magistrates Court, and which is in the following terms:
(9)(1) Subject to the provisions of subclause (2) and of the Legal Practice Act 2003 permitting a practitioner to make a written agreement as to costs with a client, the costs of or in relation to a party to an action or other proceeding (inclusive of GST and counsel fees, but exclusive of other disbursements) — (Page 18)
shall not exceed the amounts set out in the Table to this clause (except as otherwise provided in Item 32 of the Table). (2) Allowances made under Item 32 of the Table to this clause are only to be awarded as between practitioner and client, or if costs are awarded on an indemnity basis and not between party and party unless the Court otherwise orders." 58 For present purposes, cl 9(2) is not relevant. However, it is not suggested by anyone, that, without more, cl 9 of the Supreme and District Courts' costs determination allows a successful party to claim costs from the unsuccessful party to be calculated in accordance with the successful party's costs agreement with that party's legal practitioner. Costs are usually recovered on a party and party basis in accordance with the determination, unless there is a special costs order or an indemnity costs order. 59 It must be the same in the Magistrates Court, so that even if a successful party to an action in the Magistrates Court has entered into a costs agreement with that party's legal practitioner, that successful party is only entitled to an order for costs in accordance with the applicable costs determination as set out in s 25(8) of the Magistrates Court (Civil Proceedings) Act, subject of course, to a special costs order being made, and which order can be obtained in the Magistrates Court under s 215 of the Legal Practice Act. The definition of "court" in s 206 thereof clearly includes the Magistrates Court. However, this is not a case in which a special costs order can be obtained as noted above. 60 Clause 9 does not help Mr Rodwell and Ms Robertson. 61 Further, Mr Garnsworthy submitted that the costs provided for by Item 26 of the Magistrates Court costs determination are costs which can only be recovered on a solicitor and client basis or on an indemnity basis. That clause provides as follows: "(a) Time reasonably spent by a practitioner on work requiring the skill of a practitioner (of the standing indicated) but not covered by any other Item. or (Page 19)
(b) Time reasonably spent by a practitioner, or by a clerk or paralegal of a practitioner, on work not covered by another item or by paragraph (a)." 62 Item 26 then lays down hourly rates covering a range of practitioners, and also clerks and paralegals. It is similar to Item 32 of the legal costs determination applicable to the Supreme and District Courts which provides as follows: "Other work (a) Time reasonably spent by a practitioner on work requiring the skill of a practitioner (of the standing indicated) but not covered by any other item … or (b) Time reasonably spent by a practitioner, or by a clerk or paralegal of a practitioner, on work not covered by any other item or by paragraph (a)." 63 Item 32 then goes on to deal with hourly rates for practitioners of varying experience, including clerks and paralegals. 64 I take it that the submission is, that, if after trial a party is to tax costs pursuant to the Magistrates Court legal costs determination, then all work on a party and party basis will be covered by specific items in that determination and only solicitor and client or indemnity costs will be covered by Item 26. Such costs might, for example, include counsel's fees for obtaining an opinion on the merits of the case. Hence the submission from Mr Garnsworthy that such an order for indemnity costs is in fact already within the contemplation of the relevant determination at Item 26 and that all that is required is for the indemnity costs order to be made. However I do not accept that proposition. 65 The same Legal Costs Committee which enacted cl 9 in the Magistrates Court costs determination also enacted cl 9(2) in the Supreme and District Courts costs determination and Item 26 in the Magistrates Court and Item 32 in the Supreme and District Courts. That committee did not limit Item 26 in the Magistrates Court costs determination to solicitor and client costs or costs on an indemnity basis as it did in Item 32 by cl 9(2) of the Supreme and District Court costs determination. That may be because the committee appreciated that indemnity costs cannot be provided for in the Magistrates Court. Further, Item 26 applies to both party and party and solicitor and client assessments of costs in respect of items not otherwise covered by any item in the determination. Mr Rodwell and Ms Robertson can have resort to it when claiming costs not otherwise provided for in the determination, if it is appropriate to do so. Item 26 does not contemplate the possibility of indemnity costs when read with the relevant cl 9, but Item 32 does when read with cl 9(2) of the Supreme and District Courts' costs determination.
Other matters 66 Finally, it is to be remembered, that, indemnity costs have been recognized prior to Stobbart which was decided in December 1999. Each of the Supreme Court and District Court Acts have been amended since then and the Magistrates Court (Civil Proceedings) Act was only enacted in 2004. Order 66 r 5 of the Rules of the Supreme Court has also been amended since Stobbart and the Legal Practice Act was enacted in 2003. 67 The parliamentary draftsman not only had the benefit of indemnity costs cases when drafting s 25 of the Magistrates Court (Civil Proceedings) Act, including s 25(1)(f), but the draftsman also had the benefit of amendments to these other Acts before drafting the provisions of the Magistrates Court (Civil Proceedings) Act 2004 and the Legal Practice Act 2003. The end result is, that, Parliament has enacted such Act without empowering the Magistrates Court to order indemnity costs against a party in an action in that court. 68 It follows from all this that the Magistrates Court does not have a discretion to order indemnity costs against a party to proceedings.
Exercise of discretion 69 In the event that I am wrong in the above reasons and there was a discretion to order indemnity costs, which discretion the learned Magistrate did not exercise, then, the issue is whether that discretion should have been exercised. 70 As has been noted above, the claim for indemnity costs is based on the persistent delinquent conduct of Mr Hutchinson and the fact that Mr Rodwell and Ms Robertson have entered into a costs agreement with their solicitor allowing that solicitor to charge fees greater than that set forth in the legal costs determination. Such delinquency as claimed may provide a basis for indemnity costs as noted in Flotilla. However, an order for indemnity costs can only be made if there is some special or unusual feature in the case to justify a departure from the usual order for party and party costs: Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190 at 191. 71 The first question is whether the justice of the case requires an order for indemnity costs against Mr Hutchinson, and if so, then it is necessary to decide on the need to exercise the discretion to make such an indemnity costs order: Flotilla. 72 It is not appropriate to attempt to decide these two matters on appeal. 73 On my reasoning, this appeal must be dismissed by reason of a lack of power in the Magistrates Court to order indemnity costs. If I am wrong on that, then, the matter should be remitted to his Honour Magistrate Tarr to determine whether the justice of the case requires an order for indemnity costs and if so, whether there is a need to exercise the discretion to order indemnity costs.
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