Sandy v Yindjibarndi Aboriginal Corporation RNTBC [No 3]
[2020] WASC 88
•18 MARCH 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: SANDY -v- YINDJIBARNDI ABORIGINAL CORPORATION RNTBC [No 3] [2020] WASC 88
CORAM: LE MIERE J
HEARD: ON THE PAPERS
DELIVERED : 18 MARCH 2020
FILE NO/S: CIV 2883 of 2017
BETWEEN: JOHN SANDY
PAUL AUBREY
Plaintiffs
AND
YINDJIBARNDI ABORIGINAL CORPORATION RNTBC
Defendant
Catchwords:
Costs - Special costs order - Indemnity principle - Retrospective legal costs agreement
Costs - Special costs order - Costs incurred exceed scale rates - Inadequate by reason of the importance, complexity and unusual difficulty of the matter
Legislation:
Legal Practitioner (Supreme and District Courts) (Contentious Business) Determination 2018 (WA)
Legal Profession Act 2008 (WA), s 280
Supreme Court Act 1935 (WA), s 37
Result:
The defendant's application for orders in relation to the plaintiffs' special costs application be dismissed
The defendant pay the plaintiffs' costs of the abuse of process application
The defendant pay the plaintiffs' costs of the subpoena application
Category: B
Representation:
Counsel:
| Plaintiffs | : | No appearance |
| Defendant | : | No appearance |
Solicitors:
| Plaintiffs | : | Bennett + Co |
| Defendant | : | HWL Ebsworth Lawyers |
Case(s) referred to in decision(s):
Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555
Cachia v Hanes (1994) 179 CLR 403
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [No 3] [2016] WASC 366
Marsh v Baxter [No 2] [2016] WASCA 51
Sandy v Yindjibarndi Aboriginal Corporation RNTBC [2019] WASC 322
Sandy v Yindjibarndi Aboriginal Corporation RNTBC [No 2] [2019] WASC 328
LE MIERE J:
Summary
By chamber summons dated 21 February 2019 the defendant applied for orders that the plaintiffs' originating summons be struck out on the ground that the proceeding is an abuse of process of the court and the proceeding be dismissed (the abuse of process application). On 11 September 2019 I published my reasons for deciding that the abuse of process application should be dismissed[1] and ordered that the abuse of process application be dismissed.
[1] Sandy v Yindjibarndi Aboriginal Corporation RNTBC[No 2] [2019] WASC 328.
On 13 May 2019 the defendant applied for leave to issue subpoenas to Wirlu‑Murra Yindjibarndi Aboriginal Corporation RNTBC (WMYAC), Integra Legal Pty Ltd and Bennett + Co (the subpoena application). On 11 September 2019 I published my reasons for deciding that the defendant's application be dismissed[2] and ordered that the subpoena application be dismissed.
[2] Sandy v Yindjibarndi Aboriginal Corporation RNTBC [2019] WASC 322.
The plaintiffs apply for orders that the defendant pay their costs of each application and that there be a special costs order pursuant to s 280(2) of the Legal Profession Act 2008 (WA).
The defendant seeks a stay of the plaintiffs' application for special costs orders. The defendant submits that the court should not order the defendant to pay the plaintiffs' costs because the plaintiffs' costs have been paid by WMYAC and the plaintiffs are under no liability to pay their legal fees or reimburse WMYAC for those fees. Alternatively the defendant says that the court should make a limited special costs order in relation to the abuse of process application and should make no special costs order in relation to the subpoena application.
For the reasons which follow I will order:
1.the defendant's application for orders in relation to the plaintiffs' special costs application be dismissed;
2.the defendant pay the plaintiffs' costs of the abuse of process application to be assessed pursuant to s 280(2) of the Legal Profession Act 2008 (WA) without regard to:
(a)the maximum hourly and daily rates in Table A to cl 12 of the Legal Practitioner (Supreme and District Courts) (Contentious Business) Determination 2018 (WA) (Determination) in respect of work done by Mr Martin Bennett;
(b)the limits imposed by items 10(a) and 10(b) of Table B of the Determination; and
3.the defendant pay the plaintiffs' costs of the subpoena application, including reserved costs, to be assessed pursuant to s 280(2) of the Legal Profession Act 2008 (WA) without regard to the maximum allowable hourly and daily rates in Table A to cl 12 of the Determination in respect of work done by Mr Martin Bennett.
Plaintiffs' application for special costs orders
By minute of proposed orders dated 11 September 2019 the plaintiff seeks the following special costs orders:
1.…
2.The defendant pay the plaintiffs' costs of the Subpoena Application, including reserved costs, to be assessed if not agreed and pursuant to section 280(2) of the Legal Profession Act 2008 (WA) those costs be assessed without regard to the maximum allowable hourly and daily rates in Table A to clause 12 of the Legal Practitioner (Supreme and District Courts) (Contentious Business) Determination 2018 (WA);
3.…
4.The defendant pay the plaintiffs' costs of the Abuse of Process Application to be assessed, if not agreed and pursuant to section 280(2) of the Legal Profession Act 2008 (WA), those costs be assessed without regard to the:
4.1maximum allowable hourly and daily rates in Table A to clause 12 of the Determination; and
4.2limits imposed by items 10(a) and 10(b) of Table B of the Determination.
The defendants' stay application and proposed alternative special costs order
By minute of proposed orders dated 14 October 2019 the defendant seeks the following orders:
1.…
2.The Plaintiffs' application for special costs orders be stayed pending the determination of the Plaintiffs' liability for those costs.
3.…
4.In the alternative, the following orders be made in relation to the Plaintiffs' application for special costs orders:
4.1In relation to the Strike Out Application:
4.1.1.The Defendant pay the Plaintiffs' costs of the Strike Out Application, to be assessed if not agreed.
4.1.2.The costs be assessed without reference to the limit (though with reference to the rates, save as for Mr Bennett's rate as contained in the order below) provided for in respect of item 10(a) of the Legal Practitioners (Supreme and District Courts) (Contentious Business) Reports and Determination 2018 ('the Scale').
4.1.3.Mr Martin Bennett be allowed at the maximum hourly rate specified for senior counsel in the Scale, namely $682 per hour, when acting in his capacity as senior counsel for the Plaintiffs.
4.2.In relation to the Subpoena Application:
4.2.1.The Defendant pay the Plaintiffs' costs of the Subpoena Application, to be assessed if not agreed.
4.2.2.The Plaintiffs' application for special costs orders be dismissed.
The indemnity principle
The defendant says that in the absence of evidence establishing that the plaintiffs are liable for their solicitor's costs, the plaintiffs' special costs application should be stayed and the costs orders I made on 11 September 2019 should be vacated.
The defendant says that the indemnity principle precludes the plaintiffs recovering their costs.
Subject to the provisions of the Supreme Court Act 1935 (WA) and to the Rules of Court and to the express provisions of any other Act, the costs of and incidental to all proceedings in the court shall be in the discretion of the court and the court shall have full power to determine by whom and to what extent such costs are to be paid.[3]
[3] Supreme Court Act 1935 (WA) s 37(1).
The Legal Profession Act 2008 s 3 defines 'legal costs' to mean amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services. That definition reflects the indemnity rule ‑ costs are awarded by way of partial indemnity for professional legal costs actually incurred in the conduct of litigation.[4]
[4] Cachia v Hanes (1994) 179 CLR 403, 410; Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555 [22], [60].
In Marsh v Baxter,[5] the Court of Appeal considered whether a successful party was entitled to his costs in circumstances where he had been indemnified for his costs by a third party. President McLure, Newnes and Murphy JJA set forth the following principles. First, as costs are awarded by way of indemnification, a party who does not have a liability to their solicitors for costs cannot recover costs against an unsuccessful party to the litigation.[6] Secondly, the indemnity principle will permit recovery of costs by a successful party who is under a legal liability to his solicitors to pay them even though the likelihood of being called upon to do so is remote.[7] Thirdly, the position is no different because at the time the costs order is sought the costs of the successful party have already been paid by a third party.[8] Fourthly, the onus of establishing that the successful party had no liability to his solicitors for their costs lies on the unsuccessful party.[9] Fifthly, in the absence of proof of an agreement to the contrary, a solicitor who acts on instructions for a party on the record is taken to be entitled to look to that party for costs, even if the instructions have come to the solicitor from another party or from some non‑party interested in the litigation.[10]
[5] Marsh v Baxter [No 2] [2016] WASCA 51.
[6] Marsh v Baxter [No 2] [31].
[7] Marsh v Baxter [No 2] [35].
[8] Marsh v Baxter [No 2] [36].
[9] Marsh v Baxter [No 2] [37].
[10] Marsh v Baxter [No 2] [37].
Plaintiffs are entitled to recover their legal costs
Bennett + Co was instructed by the plaintiffs to act on their behalf. The defendant is liable for their costs in the absence of an agreement between the plaintiffs and Bennett + Co, or an agreement between WMYAC and Bennett + Co, that Bennett + Co were not entitled to recover any part of their costs from the plaintiffs. There is no evidence of any such agreement. To the contrary, the plaintiffs have produced a legal costs agreement between themselves and Bennett + Co.
The legal costs agreement is not dated. It may be retrospective in the sense that it was executed after Bennett + Co had performed the legal services. That does not render the agreement unenforceable or of no effect. A retrospective legal costs agreement may create a liability to pay costs or quantify the costs payable. It is a question of construction of the agreement.[11] The legal costs agreement in this case provides that the terms of the agreement will apply as at the date that Bennett + Co was first instructed in the matter and where Bennett + Co has already commenced acting, the client acknowledges that has been in anticipation of and subject to the costs agreement being entered into.
[11] See for example Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [No 3] [2016] WASC 366.
The defendant's application for a stay of the plaintiffs' application for a costs order will be dismissed.
Defendant should pay plaintiffs' costs
In accordance with the general rule the unsuccessful party, the defendant, should pay the successful party, the plaintiffs, their costs of each application.
Abuse of process application - special costs order
The plaintiffs say that the amount allowable under the scale is inadequate. In her affidavit sworn 1 October 2019, Ms Hagan has set out the approximate costs incurred by the plaintiffs in respect of the abuse of process application and the maximum amount that would be recoverable under the relevant costs scale item ‑ item 10(a). The actual costs incurred are $39,743.03. The cost of the work done at scale rates is $38,839.90. The maximum amount allowed under the scale is $12,540.
The plaintiffs further say that the amount allowable under the scale is inadequate by reason of the importance, complexity and unusual difficulty of the matter. The plaintiffs say that defending the application was particularly important to the plaintiffs because they were concerned to ensure that their claim was not struck out and to refute the allegation that their claim constitutes an abuse of the processes of the court.
The plaintiffs say that the application was complex in that it involved a novel attempt to extend the concept of an abuse of process and consideration of issues the subject of these proceedings in conjunction with matters the subject of prior proceedings before the court and complex issues concerning the internal governance procedures of WMYAC. Further, they submit that the complexity of the matter is shown by the volume of affidavit evidence and submissions filed by the parties and the length of the hearing of the application.
The plaintiffs say that the application was unusually difficult for the reasons given in relation to the complexity of the application.
I am of the opinion that the amount of costs allowable in respect of the matter under the relevant costs determination is inadequate because of the unusual difficulty, complexity and importance of the matter.
The defendant concedes that a special costs order should be made. However, the defendant submits that the terms of the order should be that the costs be assessed without reference to the limit (though with reference to the rates, save for Mr Bennett's rate which should be allowed at the maximum hourly rate for senior counsel, namely $682 per hour) provided for in respect of item 10(a)) of the Scale.
It is appropriate to make an order that the plaintiffs' costs be assessed without regard to the limits imposed by items 10(a) and 10(b) of Table B of the Determination.
Mr Bennett is a very experienced practitioner with expertise in conducting litigation and appearing as counsel in matters in this court. Mr Bennett charged a counsel fee commensurate with his experience and expertise. It was appropriate for the plaintiffs to engage Mr Bennett because of the unusual difficulty, complexity and importance of the matter. I will order that the costs be assessed without regard to the maximum allowable hourly and daily rates in the scale in respect of work done by Mr Bennett. I am not satisfied that the limits on the maximum allowable hourly and daily rates should be removed for the other practitioners engaged by the plaintiffs.
Subpoena application
The affidavit of Ms Hagan sworn 1 October 2019 sets out the amounts that the plaintiffs would seek to claim on a taxation in respect of the Subpoena Application if the plaintiffs were not constrained by the limits imposed by the relevant scale. The actual amount incurred by the plaintiffs is $13,780.10. The amount incurred by the plaintiffs at scale rates is $10,950.50. The maximum amount allowed under the scale is $12,540.
The defendant opposes any special costs order. The defendant says that the amount of costs allowable in respect of the matter under the relevant costs determination is not inadequate.
The principal reason the actual costs incurred by the plaintiffs exceeds the scale limit is that the plaintiffs were represented by Mr Bennett whose hourly rate exceeds the rate allowed for junior counsel under the scale. Mr Bennett is a very experienced practitioner with expertise in the practice and procedure of the court including matters relating to subpoenas. Mr Bennett charged a counsel fee commensurate with his experience and expertise.
The defendant sought leave to issue the subpoenas to obtain documents to prepare and present its abuse of process application.[12] The relevant 'matter' is the abuse of process application. For the reasons I have stated the matter was important, complex and unusually difficult. It was reasonably necessary for the plaintiffs to engage a practitioner of Mr Bennett's experience and expertise because of the unusual difficulty, complexity and importance of the matter.
[12] Sandy v Yindjibarndi Aboriginal Corporation RNTBC [2019] WASC 322 [2].
I am satisfied that the amount of costs allowable in respect of the matter under the relevant costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter. The inadequacy arises from the maximum allowable hourly and daily rates for Mr Bennett. The appropriate order is that the plaintiffs' costs be assessed without regard to the maximum hourly and daily rates in relation to Mr Bennett. I am not satisfied that it is appropriate to remove or raise the limits imposed by items 10(a) and 10(b) of Table B of the Determination or the maximum allowable hourly and daily rates for the other practitioners engaged by the plaintiffs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
GG
Research Orderly to the Honourable Justice Le Miere18 MARCH 2020
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