JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: RUSSELL -v- LEE [2018] WASC 404
CORAM: PRITCHARD J
HEARD: 29 NOVEMBER 2018
DELIVERED : 29 NOVEMBER 2018
PUBLISHED : 20 DECEMBER 2018
FILE NO/S: CIV 3134 of 2016
BETWEEN: SHANA FRANCINNE RUSSELL
First Plaintiff
NERIDA JAYNE PUANGKHAM
Second Plaintiff
AND
FAY EILEEN LEE
First Defendant
JOHN ANTHONY CAMPBELL LEE
Second Defendant
Catchwords:
Costs - Exercise of discretion where no determination on the merits - Where matter resolved by consent prior to trial - Whether defence of matter was unreasonable - Whether party would almost certainly have succeeded had the matter been determined on the merits
Costs - Special costs - Legal Profession Act 2008 (WA) s 280(2) - Application to remove limits on scale items - Application to remove limit on hourly rates
Costs - Indemnity costs - Whether conduct unreasonable
Legislation:
Legal Profession Act 2008 (WA), s 280(2)(c)
Result:
Plaintiffs' costs to be paid by the first defendant on a party and party basis
Category: B
Representation:
Counsel:
| First Plaintiff | : | Mr M A MacLennan |
| Second Plaintiff | : | Mr M A MacLennan |
| First Defendant | : | Mr M N Solomon SC & Mr H M Reynoldson |
| Second Defendant | : | Mr T Lethbridge |
Solicitors:
| First Plaintiff | : | Bennett + Co |
| Second Plaintiff | : | Bennett + Co |
| First Defendant | : | Hotchkin Hanly |
| Second Defendant | : | Croftbridge |
Case(s) referred to in decision(s):
Lafferty v Waterton [2016] WASCA 183
Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84
ONETEL Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129(S)
Woodley v Woodley [No 2] [2017] WASC 94(S)
PRITCHARD J:
(These reasons were delivered extemporaneously on 29 November 2018 and have been edited from the transcript).
These proceedings concerned an application by the first and second plaintiffs, two children of the late Ronald William Lee (the deceased) for an order that an independent administrator be appointed to administer the estate of the deceased (Estate), who at that stage was thought to have died intestate. The first defendant to the proceedings is the plaintiffs' mother and the wife of the deceased, and the second defendant is the plaintiffs' brother and the son of the deceased. The second defendant abided the outcome of the proceedings save as to costs, and now participates only to the extent of supporting the position of the first defendant in relation to the alternative costs order sought, which is set out in [3] below.
In their minute of proposed orders dated 13 July 2018, the plaintiffs sought orders for the payment of their costs of the proceedings (Application). The plaintiffs sought an order that the first defendant pay all of the costs incurred by them (save for the costs of their application for the appointment of an interim independent…
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CaseChat Overview and Summary
The key legal issues were whether the defendants' conduct was unreasonable, and whether the plaintiffs were likely to have succeeded if the matter had been determined on the merits. The plaintiffs argued that the defendants' conduct was unreasonable and that the circumstances warranted an order for costs. They sought special costs, indemnity costs, and the removal of certain limits on scale items and hourly rates as per the Legal Profession Act 2008 (WA) s 280(2).
The court found that the defendants' conduct was unreasonable, and that the plaintiffs would almost certainly have succeeded if the matter had been fully tried. The court noted that the defendants capitulated three weeks before the trial, effectively granting the plaintiffs the orders they had sought. The court determined that these circumstances warranted a departure from the usual order of bearing one's own costs in proceedings resolved by consent. Consequently, the court granted the plaintiffs' application for special costs and indemnity costs, and removed the limits on scale items and hourly rates as requested.
The court's final orders included the granting of special costs and indemnity costs to the plaintiffs, and the removal of the specified limits on scale items and hourly rates. This decision underscored the court's discretion in ordering costs in cases resolved by consent, particularly where the conduct of one party is deemed unreasonable or where the other party is almost certain to have succeeded.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
As I have said, the present proceedings were resolved by consent without the matter proceeding to trial. There are well established principles which apply in relation to applications for costs in such circumstances. They have been dealt with in a number of the authorities. The leading authority for those principles is the decision of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin[3] in which his Honour said:In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extracurial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. … But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. The principles were also discussed by the New South Wales Court of Appeal in Nichols v NFS Agribusiness Pty Ltd.[4] [3] Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622, 624 ‑ 625 (citations omitted).[4] Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84. The basis for the plaintiffs' Application is effectively twofold. First, counsel for the plaintiffs submitted that the first defendant effectively capitulated three weeks before trial, with the result that the plaintiffs substantially succeeded in the action in obtaining the orders that they had sought. Secondly, counsel for the plaintiffs submitted that the conduct of the first defendant in the proceedings was unreasonable. Counsel for the plaintiffs submitted that those circumstances warranted an order for costs, and a departure from the usual order which is that the parties will bear their own costs in proceedings which are resolved by consent without a trial.