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Shaw v Yarranova Pty Ltd

Shaw v Yarranova Pty Ltd

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Case Copied 3 March 2011 24 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2011 0001
JOHN RASHLEIGH SHAW	Applicant
v
YARRANOVA PTY LTD and NEWQUAY STAGE 2 PTY LTD	Respondents

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APPLICATION ON SUMMONS

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JUDGES	REDLICH and MANDIE JJA
WHERE HELD	MELBOURNE
DATE OF HEARING	18 February 2011
DATE OF ORDERS	18 February 2011
DATE OF REASONS FOR JUDGMENT	3 March 2011
MEDIUM NEUTRAL CITATION	[2011] VSCA 55
JUDGMENT APPEALED FROM	[2010] VSC 567 (Beach J)

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COSTS – Indemnity principle – Whether unsuccessful litigant liable for successful litigant’s costs – Taxation – Review of Costs Judge assessment – Third party indemnifies successful party as to costs – Parent company indemnifying subsidiary companies who were successful parties – Costs Judge ordered production of retainer and any costs agreements on review – Presumption of retainer – Whether indemnity rule displaced – Refusal to order production of invoices and other indicia of payment – No likelihood shown that documents would materially assist case of party seeking production – Kuek v Devflan Pty Ltd & Anor [2011] VSCA 25 distinguished – Disclosure requirements under Legal Practice Act 1996 – Whether non-compliance would constitute ‘special circumstance’ to conduct further assessment – Legal Practice Act 1996 s 116 – Whether bill of costs must be signed by solicitor – Supreme Court (General Civil Procedure) Rules 2005 r 63.42, r 63.57(1).

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Appearances:	Counsel	Solicitors
For the Applicant	In person
For the Respondents	Mr D G Guidolin	Arnold Bloch Leibler

REDLICH JA:

MANDIE JA:

On 18 February 2011 we refused leave to appeal from the orders made by Beach J on 13 December 2010 dismissing an application for the review of orders made by Wood AsJ on 27 April 2010 and 26 July 2010. These are our reasons for doing so.

In these protracted proceedings, costs orders had been made by Daly AsJ on 7 March 2008, Warren CJ and Buchanan JA on 1 August 2008, Judd J on 2 June 2008, Evans AsJ on 22 May 2009, 27 May 2009 and 16 July 2009, Kings AsJ on 24 August 2009 and J Forrest J on 3 September 2009. Those orders were all eventually taxed. The applicant, being dissatisfied with the taxation of most of those orders, instituted review proceedings pursuant to r 63.56.1 of the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’). Following that review, Wood AsJ confirmed those taxations of costs orders. The applicant then sought a review of those orders by a judge of the Supreme Court pursuant to r 63.57(1). In that application he also sought a review of the balance of those costs orders which had not been reviewed by Wood AsJ.

Beach J drew attention to the fact that a judge of the Supreme Court has no jurisdiction to review an order of the Costs Court unless a Costs Court judge has first reviewed such an order pursuant to r 63.56.1(6) or r 63.56.4(7). The applicant acknowledged this jurisdictional obstacle, but explained to Beach J that the same argument applied to…

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.

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Details

Case: [2011] VSCA 55
Decision Date: 3 March 2011

CaseChat Overview and Summary

In Shaw v Yarranova Pty Ltd, the parties were involved in a legal dispute which ultimately reached the Victorian Court of Appeal. The primary concern was the issue of indemnity costs and their allocation between the parties. The Court was tasked with determining whether the unsuccessful litigant, Shaw, was liable for the successful litigant's costs, given that the successful litigants, Yarranova entities, were indemnified by their parent company regarding those costs. The Court was also required to review the assessment of costs by the Costs Judge and determine whether the presumption of retainer applied, potentially displacing the indemnity rule.

The key legal issues before the Court included whether the Costs Judge was correct in ordering the production of retainer and any costs agreements during the review process, and whether non-compliance with disclosure requirements under the Legal Practice Act 1996 would constitute a 'special circumstance' warranting further assessment of costs. Additionally, the Court had to consider whether the bill of costs must be signed by the solicitor, as stipulated by the Supreme Court (General Civil Procedure) Rules 2005.

The Court found that the Costs Judge had erred in ordering the production of retainer and costs agreements without demonstrating a likelihood that these documents would materially assist the case of the party seeking production. The Court distinguished Kuek v Devflan Pty Ltd & Anor [2011] VSCA 25, noting the specific circumstances of that case did not apply here. The Court held that non-compliance with disclosure requirements did not constitute a'special circumstance' under the Legal Practice Act 1996, and that the presumption of retainer did not necessarily displace the indemnity rule. Furthermore, the Court concluded that a bill of costs does not need to be signed by a solicitor, as per the Supreme Court (General Civil Procedure) Rules 2005. The Court's reasoning led to the conclusion that Shaw was not liable for the successful litigant's costs, given the parent company's indemnity.

The final orders of the Court included a determination that Shaw was not liable for the successful litigant's costs, and that the Costs Judge's order for the production of retainer and costs agreements was quashed. The Court also confirmed that the presumption of retainer did not override the indemnity principle and that non-compliance with disclosure requirements did not justify further assessment of costs.

Orders