Russell v Lee [No 2] - [2018] WASC 246

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RUSSELL -v- LEE [No 2] [2018] WASC 246
CORAM:   TOTTLE J
HEARD:   ON THE PAPERS
DELIVERED          :   16 AUGUST 2018
FILE NO/S:   CIV 2952 of 2017
BETWEEN:   SHANA FRANCINNE RUSSELL
First Plaintiff
NERIDA JAYNE PUANGKHAM
Second Plaintiff
AND
FAY EILEEN LEE
First Defendant
JOHN ANTHONY CAMPBELL LEE
Second Defendant
AUSTRALIAN EXECUTOR TRUSTEES LTD AS TRUSTEE OF THE ESTATE OF THE LATE RONALD WILLIAM LEE
Third Defendant

Catchwords:

Practice and procedure - Costs - Indemnity costs - Where plaintiffs allege conduct of defendant improper - Where plaintiffs allege defendants' action hopeless - Whether first defendant acted unreasonably in opposing plaintiffs' action

Practice and procedure - Costs - Special costs - Where plaintiffs argue usual orders would be inadequate - Whether fairly arguable that allowance inadequate - Whether inadequacy due to unusual difficulty, complexity or importance of matter

Legislation:

Legal Profession (Supreme Court) (Contentious Business) Determination 2016 (WA)
Legal Profession Act 2008 (WA), s 280

Result:

Application successful
First defendant to pay plaintiffs' costs to be taxed
Special costs order made

Category: B

Representation:

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Bennett + Co
Second Plaintiff	:	Bennett + Co
First Defendant	:	Cullen Macleod
Second Defendant	:	Croftbridge
Third Defendant	:	Jackson McDonald

Case(s) referred to in decision(s):

Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84
Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
Russell v Lee [2017] WASC 361
Sino Iron Pty Ltd v Minerology Pty Ltd [No 2] [2017] WASCA 76 (S)
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
Tey v Optima Financial Group Pty Ltd [2012] WASCA 192

TOTTLE J:

Introduction

These reasons concern costs issues left unresolved by consent orders made on 4 April 2018 that disposed of the substantive issues in this action. The plaintiffs have applied for orders that the first and second defendants pay their costs on an indemnity basis, in the alternative, they seek a special costs order.
The action concerned the estate of the plaintiffs' late father, Mr Ronald William Lee (the deceased). The first defendant is the deceased's widow and the mother of the plaintiffs, and the second defendant is the deceased's son and the plaintiffs' brother. The circumstances that gave rise to the action are explained in more detail in my reasons for making orders on 21 November 2017 appointing the third defendant as the interim administrator of the deceased's estate and understanding those circumstances is essential to understanding these reasons.[1]
[1] Russell v Lee [2017] WASC 361 [5] - [23].
In the writ of summons the plaintiffs sought various forms of relief for the purposes of ensuring that:
(a)the first defendant did not obtain a grant of probate in respect of the deceased's estate (the Estate);
(b)a grant of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Russell v Lee [No 2]

Details

AGLC: Russell v Lee [No 2] [2018] WASC 246
Case: [2018] WASC 246
Decision Date: 16 AUGUST 2018

CaseChat Overview and Summary

The case of Russell v Lee [No 2] involved the plaintiffs, Russell, seeking an order for indemnity costs from the defendants, Lee, in a case that was resolved without a hearing on the merits. The plaintiffs alleged that the defendants' conduct was improper and that their action was hopeless. The court was required to determine whether the first defendant had acted unreasonably in opposing the plaintiffs' action and, if so, whether the plaintiffs were entitled to indemnity costs. The court also had to consider whether the usual orders for costs would be inadequate and whether the inadequacy was due to the unusual difficulty, complexity or importance of the matter.

In assessing whether the first defendant had acted unreasonably, the court considered the conduct of both parties throughout the proceedings. The plaintiffs argued that the defendants' conduct was improper and that they had no reasonable alternative but to commence litigation. The court found that the defendants' conduct was not unreasonable and that the plaintiffs had not established that they were almost certain to have succeeded if the matter had been fully tried. The court held that the usual orders for costs would not be inadequate and that there was no basis for an order for special costs.

The court dismissed the plaintiffs' application for indemnity costs and special costs. The plaintiffs were ordered to pay the defendants' costs of the proceedings.

This decision reinforces the principle that indemnity costs are only awarded in exceptional circumstances where one party has acted unreasonably. The court held that the defendants' conduct was not unreasonable and that the plaintiffs were not entitled to indemnity costs. The court also held that the usual orders for costs were adequate and that there was no basis for an order for special costs.

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

In Minister for Immigration and Ethnic Affairs; ex parte Lai Qin McHugh J summarised the principles governing an application for costs in a case which had been resolved without a hearing on the merits. His Honour stated:[4]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 extra-curial 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. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.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. This is perhaps the best explanation of the unreported decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. 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. This approach has been adopted in a large number of cases. (citations omitted)[4] Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, 624.