Samsung C&T Corporation v Loots

[2016] WASC 330 (S)

JURISDICTION	:	SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS
CITATION	:	SAMSUNG C&T CORPORATION -v- LOOTS [2016] WASC 330 (S)

CORAM	: BEECH J
HEARD	:  ON THE PAPERS
DELIVERED	:  24 OCTOBER 2016
FILE NO/S	:  CIV 1185 of 2016
BETWEEN	: SAMSUNG C&T CORPORATION

Applicant

AND

PHILIP CORNELIUS LOOTS

Respondent

DURO FELGUERA AUSTRALIA PTY LTD

Other Party

FILE NO/S	:	CIV 1257 of 2016
BETWEEN	:	DURO FELGUERA AUSTRALIA PTY LTD Applicant
AND
SAMSUNG C&T CORPORATION Respondent

[2016] WASC 330 (S)

FILE NO/S	:	CIV 1596 of 2016
BETWEEN	:	DURO FELGUERA AUSTRALIA PTY LTD Applicant
AND
SAMSUNG C&T CORPORATION Respondent
FILE NO/S	:	CIV 1773 of 2016
BETWEEN	:	DURO FELGUERA AUSTRALIA PTY LTD Applicant
AND
SAMSUNG C&T CORPORATION Respondent
FILE NO/S	:	CIV 1899 of 2016
BETWEEN	:	DURO FELGUERA AUSTRALIA PTY LTD Applicant
AND
SAMSUNG C&T CORPORATION Respondent
FILE NO/S	:	CIV 1255 of 2016
BETWEEN	:	DURO FELGUERA AUSTRALIA PTY LTD Applicant
AND
SAMSUNG C&T CORPORATION Respondent

[2016] WASC 330 (S)

FILE NO/S : CIV 1284 of 2016

BETWEEN : SAMSUNG C&T CORPORATION

Applicant

AND

RICHARD MACHELL

Respondent

DURO FELGUERA AUSTRALIA PTY LTD

Other Party

FILE NO/S : CIV 1719 of 2016

BETWEEN : SAMSUNG C&T CORPORATION

Applicant

AND

PHILIP CORNELIUS LOOTS

Respondent

DURO FELGUERA AUSTRALIA PTY LTD

Other Party

FILE NO/S : CIV 1809 of 2016

BETWEEN : SAMSUNG C&T CORPORATION

Applicant

AND

JOHN PATRICK FISHER

Respondent

DURO FELGUERA AUSTRALIA PTY LTD
Other Party

[2016] WASC 330 (S)

FILE NO/S : CIV 1905 of 2016

BETWEEN : SAMSUNG C&T CORPORATION

Applicant

AND

CHIDAMBARA RAJ CHIDAMBARANADAR
BASKARAN

Respondent

DURO FELGUERA AUSTRALIA PTY LTD

Other Party

Catchwords:

Practice and procedure - Costs - 10 applications heard together - Appropriate costs orders - Turns on own facts

Legislation:

Nil

Result:

Costs orders made

Category: B

Representation:

CIV 1185 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance
Other Party	:	No appearance

[2016] WASC 330 (S)

Solicitors:

Applicant	:	Herbert Smith Freehills
Respondent	:	No appearance
Other Party	:	Jones Day

CIV 1257 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance

Solicitors:

Applicant	:	Jones Day
Respondent	:	Herbert Smith Freehills

CIV 1596 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance

Solicitors:

Applicant	:	Jones Day
Respondent	:	Herbert Smith Freehills

CIV 1773 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance

Solicitors:

Applicant	:	Jones Day
Respondent	:	Herbert Smith Freehills

[2016] WASC 330 (S)

CIV 1899 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance

Solicitors:

Applicant	:	Jones Day
Respondent	:	Herbert Smith Freehills

CIV 1255 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance

Solicitors:

Applicant	:	Jones Day
Respondent	:	Herbert Smith Freehills

CIV 1284 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance
Other Party	:	No appearance

Solicitors:

Applicant	:	Herbert Smith Freehills
Respondent	:	No appearance
Other Party	:	Jones Day

[2016] WASC 330 (S)

CIV 1719 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance
Other Party	:	No appearance

Solicitors:

Applicant	:	Herbert Smith Freehills
Respondent	:	No appearance
Other Party	:	Jones Day

CIV 1809 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance
Other Party	:	No appearance

Solicitors:

Applicant	:	Herbert Smith Freehills
Respondent	:	No appearance
Other Party	:	Jones Day

CIV 1905 of 2016

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance
Other Party	:	No appearance

Solicitors:

Applicant	:	Herbert Smith Freehills
Respondent	:	No appearance
Other Party	:	Jones Day

[2016] WASC 330 (S)

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

Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186

CLR 622

Samsung C&T Corporation v Loots [2016] WASC 330
Souter v Condor Developments Pty Ltd [2012] WASCA 227

[2016] WASC 330 (S)

BEECH J

BEECH J:

Introduction

1              On 14 October 2016, I published reasons for decision on the ten

applications before me.[1] The applications concerned five determinations under the Construction Contracts Act 2004 (WA). Samsung made five applications, each an application to set aside one of the determinations on grounds of jurisdictional error. Duro made five applications, each an application for leave to enforce one of the determinations.

[1] Samsung C&T Corporation v Loots [2016] WASC 330 (Primary Reasons).

2              Samsung succeeded in its applications to set aside the second and

third determinations. It failed in relation to the first, fourth and fifth determinations. I granted leave to Duro to enforce the first, fourth and fifth determinations.

3              On 14 October 2016, I made orders to that effect. I also ordered that

the parties file written submissions on the question of the costs of the
applications, with those costs to be determined on the papers.

The parties' contentions

1. Samsung submits that orders to the following effect should be made:

(1)	The costs of initiating the ten applications should be dealt with individually, with, in each application, those costs following the event.
(2)	Otherwise, Duro pay 50% of Samsung's costs of Samsung's applications, such costs to be taxed as one set of costs.
(3)	Samsung pay Duro's costs thrown away by reason of Samsung's abandonment of grounds (a) to (c).
(4)	Subject to (1), Samsung pay Duro's costs of Duro's applications for leave to enforce.

1. Duro seeks orders that:

(1)	Samsung pay 80% of the costs incurred by Duro in the period prior to 27 July 2016;
(2)	Samsung pay 60% of Duro's costs incurred on 27 July and 28 July 2016; and
(3)	Samsung pay Duro's costs incurred after 28 July 2016.

[2016] WASC 330 (S)

BEECH J

6              The parties agree that, whatever costs orders are made, costs should

be taxed without regard to the limits in the relevant items of the applicable
scales.

7              Duro also seeks orders that its costs include its costs of the

transcripts of the hearings on 25 May 2016 and 27 and 28 July 2016, as
well as the costs of two instructing solicitors on 27 and 28 July 2016.

The appropriate costs orders

8              I begin with the broad question of the approach to be taken to costs

in circumstances where ten applications were heard on 27 and 28 July 2016, and both parties had some success. There are many cases explaining the approach to be taken to questions of costs in an action where the ultimately successful party failed on some claims and issues in the action. For example, in Souter v Condor Developments Pty Ltd,[2] Newnes JA set out a helpful outline of the approach to be taken in such circumstances. The fact that there were ten applications in these proceedings adds a complicating factor: it cannot be assumed that, because the applications were heard together, they can be treated in all respects and for all purposes as one action.

[2] Souter v Condor Developments Pty Ltd [2012] WASCA 227 [28] - [30].

9              In the circumstances of these ten applications, I do not think justice

as to costs would be served by treating them as if they are, in substance, one action, and then seeking to identify the successful party in that action. Nor, at the other extreme, would it be appropriate to assess the costs of each application in isolation, with costs following the event in each. The nature and subject matter of the applications, the issues that arose in them, and the course of the applications call for a more nuanced approach that will better reflect the many and varied considerations relevant to the exercise of the costs discretion. Moreover, individual costs orders in each application would give rise to significant practical difficulties on a taxation.

10            From an early stage, on Samsung's application, and with the

concurrence of Duro, the various applications were dealt with together by way of both evidence and submissions. In its written submissions on its applications, Samsung articulated its grounds, some of which related to more than one determination. Samsung put its written and oral submissions in the framework of those grounds, not in the framework of its individual applications to set aside the determinations. The orders for costs should reflect that position.

[2016] WASC 330 (S)

BEECH J

11            I think separate costs orders should be made in relation to Duro's

applications for leave to enforce, on the one hand, and Samsung's applications to set aside the determinations, on the other. That position is adopted in Samsung's written submissions on costs and was adopted by Duro at the hearing on 14 October 2016.[3] Separate submissions and evidence were filed on the enforcement applications.

[3] ts 184.

12            In my view, the orders proposed by Samsung in relation to Duro's

applications for leave to enforce are the appropriate costs orders. Duro succeeded on the contests regarding leave to enforce. However, (of course) leave was not granted to enforce the determinations which were set aside. I accept, as Samsung submits, that:

(1)	Duro should have its costs of initiating the applications for leave to enforce the first, fourth and fifth determinations;
(2)	Duro should bear its own costs of initiating the applications for leave to enforce the second and third determinations, in respect of which leave was not given (because the determinations were set aside); and
(3)	otherwise, Duro should have its costs of the applications for leave to enforce, taxed as one set of costs and without regard to the relevant scale limits.

1. The substantial issues between the parties relate to the costs of Samsung's applications.

2. Both parties assert that they were substantially successful on Samsung's applications.

3. Samsung submits that it should be awarded 50% of its costs of its applications.[4] In summary, it submits that:

   [4] Samsung's costs submissions [20] - [22].

(1)	it substantially succeeded on the factual issues about what work was construction work, on which there was substantial evidence and conferral;[5]
(2)	it was substantially successful in commercial terms, as it set aside determinations with a dollar value of 80% of the total value of the five determinations;[6] and

[5] Samsung's costs submissions [10] - [11], [19], [20].

[6] Samsung's costs submissions [5], [20].

[2016] WASC 330 (S)

BEECH J

(3) it was substantially successful on the legal issues, apart from those
[7] Samsung's costs submissions [12], [13], [20]. relating to ground (i).[7]

16            I do not accept that Samsung was substantially successful on its

applications, and do not accept the first and third supporting submissions
summarised in [15] above.

17            I do not accept Samsung's submission that the exercise of the costs

discretion should be substantially influenced by its contention that it was successful on the factual issues concerning construction work.[8] In more detail, Samsung submits that:

[8] Samsung's costs submissions [19], [20].

(a)	in relation to grounds (a) to (c), there was considerable competing evidence and conferral about whether the Duro Works were construction work;[9]
(b)	in that context, Duro maintained that all the work at the site of the process plant was construction work;[10]
(c)	some of Duro's contentions were 'tenuous';[11]
(d)	when Samsung abandoned grounds (a) to (c) and added ground (i), the issue narrowed to whether particular Determined Items were construction work. In that context, Duro maintained its earlier approach;[12]
(e)	Duro was unsuccessful on this factual issue;[13] and
(f)	not all of the work done in relation to grounds (a) to (c) was thrown away by the abandonment of those grounds, since some of it was relevant to ground (i);[14]

[9] Samsung's costs submissions [10] and annexure.

[10] Samsung's costs submissions [10].

[11] Samsung's costs submissions, annexure [2].

[12] Samsung's costs submissions [11].

[13] Samsung's costs submissions [11], [20].

[14] Samsung's costs submissions [11], [14].

18            In my view, the starting point is that, since Samsung abandoned

grounds (a) to (c) and failed on ground (i), it should be liable for Duro's costs in relation to all aspects of those grounds, including costs associated with the evidence led by the parties on those grounds, and related conferral. To my mind, given the way in which these proceedings were framed around the grounds, the well-known caution about the severing of

[2016] WASC 330 (S)

BEECH J

issues and claims within an action for the purposes of costs applies to each ground. Breaking up a ground into sub-issues, so that a party who was unsuccessful on the ground but successful on a sub-issue can have their costs of that sub-issue, is an exceptional course that requires clear and cogent justification. I am not persuaded that this course is appropriate in the circumstances of these applications. In my view, the parties' costs relating to each ground, encompassing the costs of submissions and evidence, should follow the event of the abandonment or dismissal of the ground.

19            Moreover, in circumstances where Samsung abandoned grounds (a)

to (c), it seems to me to be inappropriate to enter into an assessment of the merits of the factual issues involved in those grounds.[15] That is what Samsung's submissions call for. For example, those submissions raise questions as to whether and how findings made in relation to particular Determined Items indicate what the court's assessment of the overall character of the Duro Works would have been. They also invite a comparative analysis of Duro's submissions and evidence on grounds (a) to (c) and those on ground (i). Further, Samsung's submissions invite attention to whether some (and if so which) of Duro's contentions in relation to grounds (a) to (c) were 'tenuous'.

[15] See, by analogy, Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622,

20            As to Samsung's sixth proposition, set out in [17(f)], insofar as any

costs incurred in relation to grounds (a) to (c) were not thrown away, they were relevant to ground (i) and no other ground. Given that Samsung failed on ground (i), I have given I think Duro should have those costs.

21            For the reasons I have given, I do not accept that Samsung's success

on the provisional factual findings I made in relation to ground (i) in section 13.4 of the Primary Reasons justifies any costs order in favour of Samsung. In my view, the cost orders should be framed on the footing that Duro should have the costs of grounds (a) to (c) and (i).

22            I do not accept Samsung's submission that a consideration weighing

in its favour in the exercise of the costs discretion is that it was successful on the legal issues in its applications, apart from those in relation to ground (i). In short, that is because, apart from ground (i), I do not think that Samsung's applications gave rise to or turned upon any substantial legal issues. Rather, the grounds on which Samsung succeeded turned upon the proper analysis and characterisation of what the adjudicator had, in each case, done and, in relation to ground (f), an analysis of the

[2016] WASC 330 (S)

BEECH J

evidentiary material and submissions before the adjudicator, and what findings that material was capable of sustaining. Leaving aside ground (i) (and grounds (a) to (c)), I do not think the parties joined issue to any substantial degree on the applicable legal principles.

23            I accept that, in broad terms, Samsung enjoyed substantial

commercial success in its applications. The applications concerned the validity of five determinations worth approximately $65 million. The two determinations in respect of which Samsung succeeded totalled about $52 million and thus approximately 80% of the total value of the five determinations. I accept that this commercial success is relevant to the exercise of the costs discretion. However, I do not think it has anything like the same significance in the present context, in which there were five different applications and determinations and nine grounds advanced, six of which were pressed, as it would in a context where there was one proceeding in which a party obtained relief worth 80% of the relief it claimed.

24            I accept Samsung's submission that its costs of initiating each of its

five applications are discrete and readily identifiable, and are appropriately the subject of specific orders reflecting the outcome of each particular application. Consequently, I would order that Duro pay Samsung its costs of initiating its applications to set aside the second determination and the third determination, and that Samsung bear its own costs of initiating the first, fourth and fifth determinations. The 'costs of initiating' a proceeding refers to the costs of preparing, filing and serving the initiating application and the accompanying affidavit. As I have said, a like approach should be taken in relation to Duro's costs of initiating the enforcement applications.

25            Thereafter, the costs of Samsung's five applications should be dealt

with globally. It seems to me that separate costs orders should be made in relation to three phases of the proceedings: prior to the hearing; the two days of the hearing; and after the hearing. That is because in the period prior to the hearing grounds (a) to (c) loomed large, Samsung abandoned those grounds on the second day of the hearing, and the appropriate apportioning of costs should reflect that. After the hearing, the only costs incurred were Duro's costs in relation to ground (i). For the reasons I have given, I think Duro should have those costs. Thus, distinct orders for these three phases will better reflect the justice of the parties' claims to costs. Such orders will not unduly complicate the taxation process.

[2016] WASC 330 (S)

BEECH J

1. I turn to the question of the appropriate costs orders for the period prior to the hearing of Samsung's five applications.

27            Samsung's five applications were heard together substantially, if not

entirely, because grounds (a), (b) and (c) were common to all of them. I think it can fairly be said that a substantial majority of Samsung's written submissions, both in chief and in reply, and a very substantial proportion of the evidence it filed, related to grounds (a), (b) and (c). A substantial part of Duro's primary written submissions related to grounds (a), (b) and (c). Further, after a request from the court, Duro filed supplementary submissions[16] relating to those grounds. Given that it was not until the second day of the hearing that Samsung abandoned grounds (a) to (c), it can safely be inferred that a substantial part of Duro's preparation for the hearing would have been concerned with those grounds.

[16] Duro's submissions on effect of Samsung's interpretation of 'construction contract' dated 12 July 2016.

28            As I have said, in circumstances where Samsung abandoned

grounds (a) to (c), I think the costs of those grounds should be accounted
for in favour of Duro.

29            Ultimately, Samsung succeeded in relation to grounds (e),

(f) and (h), and failed on grounds (d), (g) and (i). Ground (i) is not relevant to the prehearing phase. Each of grounds (d) to (h) occupied a relatively confined portion of the parties' written submissions. Ground (f) involved evidence of all the material before the relevant adjudicator.

30            In its costs submissions, Duro estimates that grounds (e), (f) and (h)

occupied about 20% of the preparation of the proceedings.[17] It then submits that it should be awarded 80% of its costs of the period prior to the hearing. I do not accept the logic inherent in that contention. Samsung succeeded on grounds (e), (f) and (h). Samsung should be credited with its costs in relation to those grounds. That entitlement should be netted off against the 80% on which (on Duro's estimate) Duro succeeded. So, on Duro's estimate of the proportion of time taken up with the preparation of grounds (e), (f) and (h), Duro should have 60% of its costs, not 80%.

[17] Duro's costs submissions [9].

31            I think other considerations come into play in determining the

appropriate apportionment of the costs of preparation. First, there is a certain amount of work of a general or introductory nature, relating to matters such as the background to the applications and the contractual

[2016] WASC 330 (S)

BEECH J

framework, that was relevant to and necessary for all of Samsung's applications and all of its grounds. Since Samsung has succeeded on some of its grounds and applications, I think there should be some allowance for Samsung's costs of this work. Secondly, there are the commercial considerations arising from the overall outcome that I have already mentioned.

1. In all the circumstances, I think it is appropriate that Samsung pay 40% of Duro's costs of Samsung's applications prior to the hearing.

33            I turn to the costs of the hearing. I think it can fairly be said that both

parties had a significant measure of success in respect of the matters argued at the hearing. The question is, upon more detailed consideration of the parties' respective successes and failures, where the balance lies. Duro's costs submissions set out a summary of the number of pages of transcript concerned with each of the various grounds, including enforcement. My analysis of the transcript differs somewhat, although not markedly, from Duro's.[18] Leaving the time taken up with enforcement to one side (as it is the subject of separate costs orders), on my assessment about 67 pages were taken up with grounds on which Duro succeeded, and about 48 pages with grounds on which Samsung succeeded. About 10 or 12 pages were taken up with general or introductory matters. As already mentioned, I think some credit should be given to Samsung in that regard. Of course, a comparison of the number of pages of transcript devoted to grounds on which each party succeeded is not of controlling significance, but it provides some broad guidance. Here, again, I would give some (but not great) weight to Samsung's overall commercial success.

[18] On my analysis, a few less pages of transcript were concerned with the grounds on which Duro succeeded than

1. In all the circumstances, I think each party should bear its own costs of Samsung's applications incurred on the hearing days.

2. For the reasons I have already given, I think there should be an order that Samsung pay Duro's costs after the hearing.

36            The parties accept that orders for costs, in whoever's favour they are

made, should be taxed without regard to the relevant items in the applicable scales. I accept that this is appropriate. These matters were complex, important to the parties, and unusually difficult. I am satisfied that there is a fairly arguable case that the bill to be presented to the taxing officer may tax in an amount greater than the limit imposed by the

[2016] WASC 330 (S)

BEECH J

applicable costs determinations, and that arises from the complexity,
importance and unusual difficulty of these matters.

37            As I would make no order as to the costs of the hearing on 27 and

28 July 2016, Duro's application for orders regarding transcript and two solicitors for that hearing does not arise for determination. I will order that Duro's costs of Samsung's applications include the costs of the transcript of 25 May 2016.

Orders

1. For the reasons I have given, I make the following orders:

CIV 1255, 1257, 1596, 1773 and 1899 of 2016 (Enforcement)

1.          Samsung pay Duro its costs of initiating applications CIV 1255, 1773 and 1899 of 2016, to be taxed if not agreed.

2.          Duro bear its own costs of initiating applications CIV 1257 and 1596 of 2016.

3.          Save for the costs referred to in orders 1 and 2 above, Samsung pay Duro its costs, including reserved costs, of each of applications CIV 1255, 1257, 1596, 1773 and 1899 of 2016, with those costs to be taxed as one set of costs, if not agreed.

CIV 1185, 1284, 1719, 1809 and 1905 of 2016 (Judicial Review)

4.          Duro pay Samsung its costs of initiating applications CIV 1284 and 1719 of 2016, to be taxed if not agreed.

5.          Samsung bear its own costs of initiating applications CIV 1185, 1809 and 1905 of 2016.

6.          Save for the costs referred to in orders 4 and 5 above, Samsung pay Duro 40% of Duro's costs, including reserved costs, of applications CIV 1185, 1284, 1719, 1809 and 1905 of 2016 incurred up to and including 26 July 2016, and all of Duro's costs incurred from and after 29 July 2016, with those costs to be taxed as one set of costs, if not agreed.

7. The costs to be paid to each party pursuant to orders 3 and 6 above be taxed pursuant to s 280(2) of the Legal Profession Act 2008 (WA), without regard to the limits (including hourly limits) on costs fixed for:

[2016] WASC 330 (S)

BEECH J

(a)	Items 11 and 28(a), (b) and (c) of the Legal Profession (Supreme Court) (Contentious Business) Determination 2014 (WA); and
(b)	Item 11 of the Legal Profession (Supreme Court) (Contentious Business) Determination 2016 (WA),

as applicable.

8.          Duro's costs under order 6 above include the costs of the transcript of the hearing on 25 May 2016.

624 - 625.

is suggested in Duro's submissions.