Sino Iron Pty Ltd v Mineralogy Pty Ltd - [2022] WASC 151

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   SINO IRON PTY LTD -v- MINERALOGY PTY LTD [2022] WASC 151
CORAM:   QUINLAN CJ
HEARD:   ON THE PAPERS
DELIVERED          :   4 MAY 2022
FILE NO/S:   CIV 1915 of 2019
BETWEEN:   SINO IRON PTY LTD
First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
CITIC LTD
Third Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
CLIVE FREDERICK PALMER
Second Defendant
STATE OF WESTERN AUSTRALIA
Third Defendant

FILE NO/S: CIV 1267 of 2018
BETWEEN: MINERALOGY PTY LTD
Plaintiff
AND
CITIC LTD
First Defendant
SINO IRON PTY LTD
Second Defendant
KOREAN STEEL PTY LTD
Third Defendant

FILE NO/S: CIV 2072 of 2017
BETWEEN: CLIVE FREDERICK PALMER
First Plaintiff
MINERALOGY PTY LTD
Second Plaintiff
AND
CITIC LTD
First Defendant
SINO IRON PTY LTD
Second Defendant
KOREAN STEEL PTY LTD
Third Defendant

Catchwords:

Costs – Special costs orders – Indemnity costs – Whether appropriate case to mark court's disapproval by order for indemnity costs – Whether inadequacy under relevant costs determination – Whether inadequacy arose by unusual difficulty, complexity or importance of matter

Legislation:

Legal Profession Act 2008 (WA), s 280

Result:

Applications allowed in part

Category: B

Representation:

CIV 1915 of 2019

Counsel:

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

Solicitors:

First Plaintiff	:	Herbert Smith Freehills
Second Plaintiff	:	Herbert Smith Freehills
Third Plaintiff	:	Herbert Smith Freehills
First Defendant	:	Kane Jones
Second Defendant	:	Alexander Law
Third Defendant	:	State Solicitor's Office

CIV 1267 of 2018

Counsel:

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

Solicitors:

Plaintiff	:	Alexander Law
First Defendant	:	Herbert Smith Freehills
Second Defendant	:	Herbert Smith Freehills
Third Defendant	:	Herbert Smith Freehills

CIV 2072 of 2017

Counsel:

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

Solicitors:

First Plaintiff	:	Alexander Law
Second Plaintiff	:	Alexander Law
First Defendant	:	Herbert Smith Freehills
Second Defendant	:	Herbert Smith Freehills
Third Defendant	:	Herbert Smith Freehills

Cases referred to in decision:

EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2020] WASC 40 (S)
Quancorp Pty Ltd v MacDonald [1999] WASCA 101
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S)
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2021] WASC 170
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)

QUINLAN CJ:

Introduction

These reasons concern final orders as to costs in relation to interlocutory applications in three proceedings in the Court: CIV 2072 of 2017, CIV 1267 of 2018 and CIV 1915 of 2019. The protagonists in the various proceedings include, at one end, CITIC Ltd, Sino Iron Pty Ltd and Korean Steel Pty Ltd (CITIC parties) and, at the other, Mineralogy Pty Ltd and Clive Frederick Palmer (Mineralogy parties).
On 28 May 2021, I made orders summarily dismissing an application by the Mineralogy parties for an order staying CIV 1915 of 2019, brought by the CITIC parties, on the grounds that it was an abuse of process. A significant part of the Mineralogy parties' contention that CIV 1915 of 2019 was an abuse of process rested upon the proposition that those proceedings had been commenced in furtherance of what were defined as the 'Fulcrum Purposes', and not for the purposes of vindicating any bona fide legal position.[1]
[1] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2021] WASC 170 (Primary reasons) [53].
I concluded that the Mineralogy parties had not demonstrated that there was a reasonably arguable case for the Court to exercise its exceptional jurisdiction to stay the substantive proceedings in whole or in part.[2] In particular, I concluded that there was no basis upon which it could reasonably be argued that the CITIC parties had brought the substantive proceedings with no genuine belief in the claims, or that they did not intend to prosecute the substantive proceedings to a successful conclusion. Nor, in my view, was there a reasonably arguable basis to contend that the matters identified by the Mineralogy parties supported an inference that the CITIC parties had been conducting litigation for improper and collateral purposes.[3]
[2] Primary reasons [342].
[3] Primary reasons [314] ‑ [315].
Following my dismissal of the stay application, the parties consented to orders dismissing applications by the Mineralogy parties in CIV 2072 of 2017 and CIV 1267 of 2018 for leave to amend their statements of claim in those proceedings. Those proposed amendments also relied upon the Fulcrum Purposes and, at the hearing of the application to summarily dismiss the stay application, the Mineralogy parties accepted that they would not press the amendments if their case that CIV 1915 of 2019 was an abuse of process was unarguable.[4] As I made clear at the time of making the orders in CIV 2072 of 2017 and CIV 1267 of 2018, those orders were true consent orders; they were not merely orders 'consequent on my reasons' on the stay application. I confirmed that I had not determined the applications for leave to amend the statements of claim on their merits.[5]
[4] Ts 399 (15 April 2021).
[5] Ts 518 (28 May 2021).
In each of CIV 2072 of 2017, CIV 1267 of 2018 and CIV 1915 of 2019, the parties consented to orders that the Mineralogy parties pay the CITIC parties' costs of the applications, subject to any special costs orders to be determined on the papers. I made programming orders for the filing of submissions and affidavit material in support of special costs orders.
For a number of reasons, the final determination of these costs orders has been delayed. The parties, for example, agreed to extend the time for compliance with a number of the programming orders. In addition, the Mineralogy parties filed an appeal from my dismissal of the stay application. That appeal was later discontinued.
While each of these matters contributed to the delay in finalising these costs orders, most of the blame for the delay rests with me. By the time that the coast was clear for me to deal with the outstanding costs issues, I confess that other demands on my time had assumed a greater priority. While it is unlikely that any of the parties' auditors have been hanging upon the content of these reasons, I regret that it has taken until now to deliver them.

Orders sought

Orders sought in CIV 1915 of 2019

In CIV 1915 of 2019, the CITIC parties seek indemnity costs with respect to their costs of, and incidental to:
(a)the Mineralogy parties' application for a permanent stay filed on 5 January 2021 (stay application);
(b)the Mineralogy parties' application for discovery in support of the stay application filed on 5 March 2021 (discovery application); and
(c)the CITIC parties' application to strike out the permanent stay application filed on 26 February 2021 (strike out application).[6]
[6] Plaintiffs' Outline of Submissions on Costs dated 11 June 2021 [1].
In the alternative, the CITIC parties seek orders, pursuant to s 280 of the Legal Profession Act 2008 (WA), that the costs of those applications be taxed on the basis that the costs allowable under the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020 (2020 Determination) be varied by:
(a)removing the limits imposed by Item 10 (proceedings in Chambers) and Item 27 (conferral) on time, total costs, number of legal practitioners and experience of fee earners; and
(b)removing the maximum hourly and daily rates for solicitors and senior counsel.[7]
[7] Plaintiffs' Outline of Submissions on Costs dated 11 June 2021 [23].
Item 10 of the 2020 Determination provides for a maximum amount for proceedings in chambers of $20,460 (senior counsel) and $13,530 (counsel), $495 for attending a reserve judgment, and $528 for consent orders. The relevant limit in Item 27, is simply determined by reference to the hourly scale rates for senior practitioners, senior counsel and counsel.
The Mineralogy parties submitted that the appropriate costs orders in relation to the stay application and the strike out application were that the costs be taxed on a party/party basis, without any special costs order.[8] They also proposed that the costs of the stay application be payable until 25 February 2021 and the costs of the strike out application be payable thereafter. This was said to be on the basis that the stay application was 'effectively subsumed by and within, and was contingent upon, the strike out application'.[9]
[8] First and Second Defendants' Outline of Submissions on Costs dated 25 June 2021 [9], [25].
[9] First and Second Defendants' Outline of Submissions on Costs dated 25 June 2021 [8].
The Mineralogy parties also submitted that each party should bear its own costs in relation to the discovery application, apparently forgetting that they had already consented to pay the costs of that application.[10]

Orders sought in CIV 2072 of 2017 and CIV 1267 of 2018

[10] First and Second Defendants' Outline of Submissions on Costs dated 25 June 2021 [6].

In CIV 2072 of 2017 and CIV 1267 of 2018, the CITIC parties sought orders pursuant to s 280(2) of the Legal Profession Act 2008 that:
(a)the costs to be paid to the defendants by the plaintiffs pursuant to Order 2 of the Orders made by this Court on 28 May 2021 be taxed without regard to the limits imposed by:
(i)the maximum allowable hourly and daily rates for senior counsel and senior practitioners fixed under Table A of the 2020 Determination; and
(ii)the maximum allowances for time, number of legal practitioners and total costs or by the classification of the experience of the fee earner under Item 10 of Table B of the 2020 Determination; and
(b)any taxation be performed on the basis that allowance be made for the costs of:
(i) one senior counsel and two junior counsel to prepare written submissions and settle the supporting affidavit;
(ii) one senior practitioner to assist counsel with preparation for the hearing; and
(iii) one senior practitioner to attend the hearing.
The Mineralogy parties submitted that the appropriate costs orders in relation to the applications in CIV 2072 of 2017 and CIV 1267 of 2018, were that there be no special costs orders.

Relevant legal principles

The principles in relation to the grant of costs on an indemnity basis are well established and were outlined in Swansdale Pty Ltd v Whitcrest Pty Ltd[11] in the following terms:
[11] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) (Swansdale Pty Ltd v Whitcrest Pty Ltd) [10] (Pullin JA & Kenneth Martin J).
1.A superior court, in its inherent jurisdiction, may make an indemnity costs order (see also Supreme Court Act 1935 s 37, and Legal Profession Act 2008 s 280).
2. An indemnity costs order departs from the usual costs disposition order, whereby costs are awarded on a party/party basis: EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59.
3. The court's discretion as to the making of an indemnity costs order is a discretion that must be exercised judicially. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397, 400 Woodward J said:
Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases, where 'there is some special or unusual feature in the case to justify the court exercising its discretion in that way'. (emphasis added)
4. To obtain an indemnity costs order, it is not the case that the successful party needs to show a collateral purpose, or establish some species of fraud against the unsuccessful party. In J‑Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 303 French J by reference to the observations of Woodward J in Fountain Selected Meats, said:
It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.
5. Furthermore, in Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (Unreported, FCA, 3 May 1991) (referred to by Ipp J in Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190, 191) French J observed:
The categories in which the discretion may be exercised are not closed.
6. Competing principles need to be balanced in assessing the making of a potential award of indemnity costs. In Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7], Wheeler J observed:
On the one hand, a party should not be discouraged, by the prospect of an unusual costs order, from persisting in an action where its success is not certain. Uncertainty is inherent in many areas of law, and the law changes with changing circumstances. It is inappropriate that a case be too readily characterised as 'hopeless' so as to justify an award of indemnity costs to the successful party. However, where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear that increased cost. Persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct gave rise to the costs should bear them in full.
7. An indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers: see Colgate‑Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, 233 (Sheppard J), referred to by Pullin J in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9].
8. A properly crafted special costs order may obviate the need for an indemnity costs order, where components of cost scale items are allowed above the applicable scale ceiling: see Flotilla [20] ‑ [24].
9. An indemnity costs order may not be appropriate if the claimed costs would be likely to be recovered under the standard order for party and party costs, or under a special order raising or removing a scale ceiling allowance: Flotilla [11]. In Unioil (No. 2) (193), Ipp J observed:
However, counsel for the plaintiffs was unable to identify any costs so incurred that would not be covered by an order for party and party costs. An order for indemnity costs on this ground is therefore not warranted.
10. Nonetheless, an indemnity costs order will constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct: see Brookvista Pty Ltd v Meloni [2009] WASCA 180 [32], Flotilla [25]. In Flotilla Pullin J said [26]:
A solicitor should not, in my view, resort to an application for an indemnity costs order merely to secure the recovery which could be achieved by a properly formulated special costs order, unless the unsuccessful party's conduct is genuinely to be impugned by the successful party.
In support of their claim for indemnity costs in CIV 1915 of 2019, the CITIC parties submitted that the special circumstances applicable in the present case were that:[12]
(a)the stay application had been commenced and continued in circumstances where the Mineralogy parties, properly advised, should have known that they had no chance of success (that is, that the stay application was 'hopeless'); and
(b)serious or scandalous allegations were made without proper evidentiary foundation.
[12] Plaintiffs' Outline of Submissions on Costs dated 11 June 2021 [7].
The principles in relation to the application of s 280(2) of the Legal Profession Act 2008 are also well established. In Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2][13] the Court summarised those principles as follows:
By s 280(1) of the Act, a party's recoverable costs are confined, in effect, by the scale limits. To that extent, s 280(1) is protective of the party charged and, more generally, serves the due administration of justice by limiting the allowable scope for legal costs. Section 280(2) operates as an exception to s 280(1) of the Act. Section 280(2) of the Act operates to give the successful party the opportunity to recover those costs which have been reasonably and properly incurred where, in the court's opinion, the scale is inadequate because of the unusual difficulty, complexity or importance of the matter. To that extent, s 280(2) of the Act is protective of the successful party to the litigation and, on that account, also serves the administration of justice by facilitating, within the limits imposed by the statutory criteria, the operation of the general principle that a successful party is entitled to its costs of the litigation. Even where orders are made under s 280(2) of the Act, it nevertheless remains the task of the taxing officer to consider the reasonableness of and necessity for the work undertaken, and to make a judgment about the remuneration reasonably required.
Before such a power will be exercised, the court must form an opinion that has two components. First, the court must form the view that the maximum amount allowable under the relevant scale item is inadequate in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the relevant cost determination. Secondly, the court must also form the opinion that the inadequacy of the costs allowable under a costs determination arises because of the 'unusual difficulty, complexity or importance of the matter'. Issues of the kind which arise are addressed as matters of impression, rather than as matters of detailed evaluation, precision or science.
For the purposes of exercising the powers conferred by s 280(2) of the Act, it will not ordinarily be necessary for the court to determine what amount should be allowed on taxation, but only whether there is a fairly arguable case that a greater amount should be allowed than that which is allowable under the relevant determination: Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd.
A fairly arguable case to that effect will not be established merely because a party incurred greater costs than those allowable under the relevant determination. However, depending on the particular case and all the circumstances, the fact that a party has applied significantly greater legal resources to each step in the litigation than those for which allowance is made under items of the relevant determinations, when viewed in the context of the difficulty, complexity or importance of the matter, may sustain the conclusion that there is a fairly arguable case that each of the items identified is inadequate (and thereby the amount of costs allowable in respect of the matter is inadequate) because of the unusual difficulty, complexity or importance of the matter.
The word 'unusual' in s 280(2) of the Act qualifies only the 'difficulty' of the matter, and not its 'complexity' or 'importance'. The word 'unusual' in this context means unusual having regard to what one might describe as the usual run of civil cases determined in the court. That essentially involves the making of a value judgment by the court, having regard to the court's experience of the particular case when compared with the usual run of cases: Wainwright v Barrick Gold of Australia Limited. Also, the reference to 'importance' in this context allows the court to have regard to the significance of the issues that arose in the litigation. Significance can arise either because of the significance of the issues to the parties, or because of the significance of the issues to other prospective parties, or to the public or community generally: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq).
In Kidd v The State of Western Australia, this court observed, with reference to Electricity Generation, that the question of unusual difficulty, complexity or importance arises in respect of the proceedings as a whole and not in respect of each individual item in the relevant costs determination. In Electricity Generation, Martin CJ observed:
[T]here are no words within [s 280(2)] which suggest that the court is required to assess the difficulty, complexity or importance of the work done in respect of each and every item in the relevant determination before exercising the power conferred by s 280(2). The natural and ordinary meaning suggested by the words used is that the 'matter' is the matter in respect of which legal services were provided.
[13] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) (Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2]) [11] ‑ [16] (Buss P, Murphy & Beech JJA) (footnotes omitted).

As will be apparent from the statements of principle in both Swansdale Pty Ltd v Whitcrest Pty Ltd and Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2], the considerations relevant to whether an indemnity costs order is appropriate and whether an order should be made under s 280(2) of the Legal Profession Act 2008 overlap and bear upon each other. As those principles reveal, for example, the availability of the latter may, in a particular case, obviate the need or justification for the former.
Nevertheless, there remain important differences between an order for indemnity costs and an order under s 280(2), including as to the ultimate task to be undertaken by the taxing officer, as to which see EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59, [71] to [72] (Sir Robert McGarry VC). In that regard, an order for indemnity costs must always be regarded as an exceptional order and an unusual step for the Court to take.[14]
[14] Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [8] (Pullin J).
Ultimately, of course, the discretion, whether in relation to indemnity costs or under s 280(2), is just that, a discretion to be exercised judicially as the interests of justice in each case require. The principles discussed above are not rules to be applied formulaically, but are intended to guide that judicial discretion. In that context, the interests of justice include the need to keep the costs of litigation generally within reasonable bounds. As the Court said in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2], s 280(1) of the Legal Profession Act 2008, is not only protective of the party charged but 'more generally, serves the due administration of justice by limiting the allowable scope for legal costs'.[15] That broader interest, in my view, is applicable to any discretion concerning costs.
[15] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [11].

Evidence

The CITIC parties filed affidavit evidence in support of their proposed costs orders in each of CIV 1915 of 2019, CIV 2072 of 2017 and CIV 1267 of 2018. To put that evidence in context, the CITIC parties' representation may be briefly summarised.
The CITIC parties' solicitors of record in each matter are Herbert Smith Freehills, although it is apparent that there are separate, albeit overlapping, teams in each matter. The CITIC parties have also instructed Allens in relation to each matter. How many individual practitioners across the two firms are involved in each matter is not clear, although at least one of the affidavits refers to senior practitioners, junior practitioners, restricted practitioners and paralegals.
In CIV 1915 of 2019, counsel briefed for the CITIC parties were Mr J H Karkar QC, Mr J H Kirkwood and Mr T B Maxwell. In CIV 2072 of 2017 and CIV 1267 of 2018, the CITIC parties briefed Mr S K Dharmananda SC and Mr J Sippe. Again, however, there was some overlap. On 28 May 2021, Mr Dharmananda SC and Mr Sippe appeared for the CITIC parties in all of the matters.

Evidence in CIV 1915 of 2019

In support of its application for special costs orders in CIV 1915 of 2019, the CITIC parties filed an affidavit sworn by David William John on 11 June 2021 (Mr John's affidavit), the solicitor with conduct of the proceeding.
Mr John's affidavit deposes to the seniority of the various counsel appearing in the course of the stay application, the strike out application and the discovery application and compares their actual rates with those that appear in the 2020 Determination.[16]
[16] Mr John's affidavit [8] ‑ [11].
Mr John deposes, for example, that Mr Karkar QC and Mr Dharmananda SC charged $17,600 and $12,870 per day, respectively, compared with the 2020 Determination rate of $6,820 per day. Junior counsel for the CITIC parties, Messrs Kirkwood, Maxwell and Sippe, at $4,000, $4,400 and $3,850 per day respectively, actually charged less than the 2020 Determination rate of $4,510 per day. The apparent economy of junior counsels' daily and hourly rates was, however, counterbalanced by Mr John having confirmed that for almost all appearances, including directions hearings, Mr Karkar QC was assisted by two juniors.[17]
[17] Mr John's affidavit [14] ‑ [17].
A similar (albeit anonymous) comparison is made in Mr John's affidavit between the rates of the other practitioners from Herbert Smith Freehills and Allens involved in the matter with the rates in the 2020 Determination.[18] Mr John's affidavit does not reveal how many instructing solicitors were involved or attended each hearing. Given the number of persons in attendance at the hearings before me, it would be safe to assume that it was more than a few.
[18] Mr John's affidavit [9] ‑ [10].
Mr John also deposes that solicitors and law graduates of both Herbert Smith Freehills and Allens undertook a review of the invoices rendered by counsel and the time recorded by the solicitors in relation to the stay application, the strike out application and the discovery application.[19] Based on these reviews, Mr John deposed that
for work undertaken in respect of a scale item for the purposes of the permanent stay, discovery and strike out applications, Herbert Smith Freehills, Allens, senior counsel and junior counsel have billed or will bill an amount that exceeds the limits imposed by Item 10(a) of the 2020 Determination by several multiples.[20]
[19] Mr John's affidavit [20].
[20] Mr John's affidavit [22].
I am not surprised. Indeed, even a cursory familiarity with the approach that the CITIC parties and the Mineralogy parties take to litigation in this, and other courts, is enough to support the inference that there has probably never been an occasion upon which either of them have taken a step in litigation that did not exceed the limits of the relevant cost scales.
Under the heading, 'unusual difficulty and complexity of the applications', Mr John's affidavit lists all of the materials filed by the parties in relation to the stay application, the strike out application and the discovery application.[21]
[21] Mr John's affidavit [12] ‑ [13].
Mr John's affidavit does not depose as to the actual costs incurred by the CITIC parties in the applications nor indeed to the particular hours or days spent by individual practitioners. Based on the numbers of practitioners apparently involved and the daily rates charged by the solicitors and counsel, I can infer that they are likely to be massive. Otherwise I cannot put a figure on them. I would probably blush if I tried.

Evidence in CIV 2072 of 2017 and CIV 1267 of 2018

The parties each filed affidavits in CIV 2072 of 2017 and CIV 1267 of 2018. The contents of the affidavits in each proceeding were relevantly identical.
The Mineralogy parties' solicitor, Sameh Morris Iskander swore an affidavit dated 4 June 2021 (Mr Iskander's affidavit) in each matter. Those affidavits attached an email from Mr Iskander to the CITIC parties' solicitors dated 15 April 2021 (that is, the date of the hearing listed before me) proposing that the applications for leave to amend the statements of claim should await the outcome of the strike out application.
The CITIC parties filed affidavits from Michael Keith Hamilton Pryse, the solicitor with conduct of CIV 2072 of 2017 and CIV 1267 of 2018, sworn on 5 June 2021 (Mr Pryse's affidavit).
Mr Pryse deposed that the orders made by Kenneth Martin J, listing the applications for leave to amend the statements of claim on 15 April 2021 included an order that the Mineralogy parties file any reply submissions by 24 March 2021. The Mineralogy parties did not file any reply submissions.[22] Mr Pryse's affidavit annexes a series of emails between himself and Mr Iskander regarding the reply submissions from 25 March 2021 to 15 April 2021, the final email being the email annexed to Mr Iskander's affidavit.
[22] Mr Pryse's affidavit [8] ‑ [10].
It is apparent from the correspondence attached to Mr Pryse's affidavit that the parties were agreed prior to 15 April 2021 that the Mineralogy parties accepted that if the strike out application in CIV 1915 of 2019 succeeded that the Mineralogy parties would not pursue the applications to amend.[23] Indeed, so much appeared to be accepted at a directions hearing on 26 February 2021, when the leave applications were still, to use counsel for the CITIC parties' expression, 'embryonic'.[24]
[23] Mr Pryse's affidavit Annexure KHP‑8.
[24] Ts 115, 132 ‑ 133 (26 February 2021).
Mr Pryse deposes that
although I have not undertaken a comprehensive analysis and prepared a detailed bill of costs, on the basis of the information provided to me, I estimate the CITIC Parties' costs in respect of the Applications to be significantly higher than the fixed costs provided for in item 10(a) of Table B of the 2020 scale and at least a multiple of three times that provision.'[25]
[25] Mr Pryse's affidavit [15].
Again, consistent with what I have said at [28] above, I have no doubt that what Mr Pryse says is true and that the CITIC parties' costs of the leave applications were well in excess of the 2020 Determination, notwithstanding that they did not proceed to a substantive hearing. Of course, whether costs in the order of multiples of scale items is justified or not is a different matter.

Disposition

Disposition in CIV 1915 of 2019

As noted above, the CITIC parties' case in support of its application for indemnity costs was put on the basis that the stay application was both 'hopeless' and made serious allegations without a proper evidentiary foundation.[26] The CITIC parties' submissions made extensive reference to my reasons in the Primary reasons for concluding that the Mineralogy parties had not made out a reasonably arguable case for the Court to exercise its exceptional jurisdiction to stay the substantive proceedings in whole or in part.[27] It is not necessary for me to repeat all of those references here. It is sufficient that I confirm that I was indeed satisfied that the Mineralogy did not have a reasonable basis for bringing the stay application, albeit that I accepted that the doctrine of abuse of process could not be confined to closed categories.[28] The allegation of abuse of process underpinning the stay application was also an allegation of the utmost seriousness that, upon mature reflection, ought not have been made.
[26] See above [16].
[27] The CITIC parties' submissions refer, for example, to Primary reasons [221], [226], [230], [231], [233], [248], [250], [252], [263], [262], [280], [281], [295], [298], [299], [308].
[28] Primary reasons [171].
In this regard, I accept that there is much force in the proposition that the stay application was 'hopeless' and that, reasonably advised, the Mineralogy parties ought not have persisted in the stay application. To that extent, the conditions for 'enlivening' the Court's discretion to order indemnity costs may reasonably be said to exist.
And yet, I cannot ignore the voracious appetite of both the CITIC parties and the Mineralogy parties 'to raise any and every issue that might be thought to be arguable' in their long association.[29] I referred to this 'unfortunate tendency' (borrowing a phrase from Edelman J) on the part of both parties in the Primary reasons.[30] Nor can I ignore the sheer size of the costs that the parties are prepared to incur in order to feed those appetites. It is, for example, at least passing strange that an application which the CITIC parties justifiably describe as 'hopeless' from the outset, required the teams of solicitors and counsel that were assembled by them in the applications before me. While Mr John's affidavit paints a vivid picture of what are likely to be the massive costs incurred by the CITIC parties on the stay application (and associated strike out and discovery applications), it does not reveal what proportion of those costs was actually required to be incurred in order to conclude that the application was 'hopeless'.
[29] Primary reasons [249].
[30] Primary reasons [249] ‑ [251].
As it happens, and as I observed in the Primary reasons, the Points of Claim filed by the Mineralogy parties in support of the stay application were admirably clear in identifying the basis upon which they alleged that Fulcrum Purposes could be found or inferred.[31] That clarity did enable the Court to make an assessment as to whether that allegation was arguable with relative speed and efficiency. The stay application did not, at least, have the kind of drawn out history of some of the disputes between the parties, and which are discussed in the Primary reasons.[32]
[31] Primary reasons [54].
[32] See also Mineralogy Pty Ltd v Sino Iron Pty Ltd [2020] WASC 40 (S), in which Kenneth Martin J made orders for indemnity costs in relation to actions found to be an abuse of process.
Importantly, as I have said, while I can infer that the CITIC parties' costs of the stay application (and the associated strike out and discovery applications) are likely to be massive, the evidence before me does not enable me to reach any estimate as to what that figure might be, nor how it has been incurred. I can have no real sense of the consequences (in terms of the quantum of the costs incurred) that an order for indemnity costs might have.
The parties can, of course, spend as much as they wish on legal costs. Nevertheless, in litigation of this type, it is extremely difficult to make any real assessment as to whether one party has 'by its conduct unnecessarily increased the cost of the litigation',[33] when the parties appear to be prepared to conduct the litigation with very little reference to its cost. It also rather lessens the extent to which an order for indemnity costs can operate as any sort of sanction to mark the Court's disapproval of unreasonable conduct.[34]
[33] Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7] (Wheeler J).
[34] Swansdale Pty Ltd v Whitcrest Pty Ltd) [10(10)] (Pullin JA & Kenneth Martin J).
To the contrary, an order for indemnity costs in a case such as this could well have the opposite effect. To order indemnity costs (where 'everything is included unless it is driven out by the words of exclusion'),[35] might legitimately be seen as lending the Court's imprimatur to the conduct of litigation without reference to cost, or as indicating that, for some litigants, the Court will leave it to the parties to determine what is 'reasonable' (subject only to the residual power of the taxing officer to be positively satisfied that some particular amount had been unreasonably incurred).
[35] EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59 [72] (Sir Robert McGarry VC).
As I have stated above, the discretion to order indemnity costs involves considerations broader than the interests of the parties to a particular dispute, including the need to keep costs of litigation generally within reasonable bounds. I am not satisfied that this is an appropriate case in which to mark the Court's disapproval of the stay application by an order for indemnity costs, as to do so would in turn, mark the Court's approval of the likely massive amount of costs that have been incurred, without the Court being in a position to know what those costs actually are or were.
In this case, it is preferable that I mark the Court's disapproval of the stay application, by simply saying as much.
Nevertheless, I am satisfied that this is an appropriate case to exercise the powers conferred by s 280(2) of the Legal Profession Act 2008 in relation to the stay application and the strike out application.
In particular, I am satisfied that there is a fairly arguable case that upon presentation of the bill of costs, the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the 2020 Determination and that the inadequacy of the costs allowable under the 2020 Determination arises because of the 'unusual difficulty, complexity or importance of the matter'.
Of course, it is not sufficient that, as is obviously the case, the CITIC parties will have incurred greater costs than allowable under the 2020 Determination. Nevertheless, the stay application and the strike out application did, in my view, involve greater complexity than the usual run of cases and would have required significantly greater resources than contemplated by the 2020 Determination. The hearing of the strike out application itself was heard over two (long) days and the Mineralogy parties filed affidavit evidence that ran to hundreds of pages.
The stay application and the strike out application themselves arose in the context of proceedings by the CITIC parties that are themselves complex and raise issues that may be described as novel or ambitious.[36] And, as I observed in the Primary reasons, the stakes for all parties in the litigation are enormous.[37] Whether all of the resources that the parties devote to these proceedings (or indeed to their 'litigious warfare' generally)[38] can be described as falling within the bounds of reasonableness (or even decency), there can be no doubt that the CITIC parties may reasonably be expected to incur greater costs in prosecuting these proceedings (including the stay application) than are contemplated by the usual run of cases in this Court.
[36] Primary reasons [181].
[37] Primary reasons [182].
[38] Primary reasons [1].
The strike out application itself also raised an issue of significance to the administration of justice generally. Apart from the need to consider the potential limits of the application of the doctrine of abuse of process generally, the application raised an important question as to the Court's jurisdiction to strike out interlocutory processes of the Court where the interlocutory application itself would occasion substantial hearing time, expense and potential delay.[39]
[39] Primary reasons [77] ‑ [79].
For these reasons, insofar as the stay application and the strike out application are concerned, I have concluded that this is an appropriate case to order that the limits imposed by the relevant scale items be removed. Of course, it remains the case that the taxing officer must still consider the reasonableness and the necessity for the work and to make a judgment about the remuneration reasonably required.
In relation to the hourly and daily rates for solicitors and senior counsel for those applications, I am also persuaded that it is appropriate to increase the maximum rates for senior counsel. While I would not remove the limits entirely, it is in my view reasonable to increase the maximum rates for senior counsel by 50%. I am not otherwise persuaded that I should increase the hourly or daily rates for the other practitioners. As the material filed by the CITIC parties revealed,[40] their preparation for the strike out applications consisted largely of submissions, and relatively straightforward affidavits. The complexity involved in the preparation of legal submissions is, in my view, adequately addressed by the increase in the maximum rate for counsel.
[40] Mr John's affidavit [13].
I would not make any order removing or increasing the limits imposed by the 2020 Determination in relation to the discovery application. The discovery application naturally fell away with the success of the strike out application and was not fully argued. Indeed, the affidavit evidence filed by the CITIC parties in relation to the discovery application on 12 April 2021, was to the effect that '[d]iscovery scoping and collation activities' (the first steps in the CITIC parties' discovery exercise) had not commenced in relation to the Mineralogy parties' request for discovery on the stay application.[41]
[41] Affidavit of David William John sworn 12 April 2021 [7], [16].
Finally, there is no basis, in my view, for the orders sought by the Mineralogy parties to the effect that the costs of the stay application be payable until 25 February 2021 and the costs of the strike out application be payable thereafter. Whether and to what extent the work on one application was 'subsumed' by the work on the other, and so might be allocated to one application or the other, are matters properly left to the good sense of the taxing officer.

For these reasons, in CIV 1915 of 2019, I make the following order:
The costs payable to the plaintiffs pursuant to order 2 of the orders of Quinlan CJ made on 28 May 2021 be taxed on the basis that:
(a)the limits on costs fixed by Item 10 and Item 27 of the Legal Practitioners (Supreme and District Courts) (Contentious Business) Determination 2020 be removed; and
(b)the maximum hourly and daily rates for Senior Counsel be increased by 50%.

Disposition in CIV 2072 of 2017 and CIV 1267 of 2018

As I noted at the outset of these reasons, I made clear that the consent orders in CIV 2072 of 2017 and CIV 1267 of 2018 were true consent orders; they were not merely orders 'consequent on my reasons' on the stay application and that I had not determined the applications for leave to amend the statements of claim on their merits. That includes the orders made in relation to costs. It was, of course, appropriate that there be an order for costs in the CITIC parties' favour in relation to the leave applications, given that the Mineralogy parties did not press the amendments.
Nevertheless, the fact that the applications were not determined on their merits and indeed, did not proceed to a substantive hearing, rather limits the capacity of the Court to make determinations as to whether special costs orders are appropriate. Just as the Court cannot try a hypothetical action between parties that has been settled in order to determine how the discretion as to costs might be exercised,[42] it is difficult to conclude that the preconditions of 'unusual difficulty, complexity or importance' can be satisfied in relation to an interlocutory application the Court has not been asked to resolve.
[42] Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622, 624 (McHugh J).
In addition, while there is some ambiguity in the correspondence, it was, in my view, sufficiently clear to all of the parties that the leave applications, even if they were pressed, would not be the subject of consideration by the Court until after the strike out application in CIV 1915 of 2019.
In those circumstances, and not having determined the applications on their merits, save to the limited extent I will soon address, I would not exercise the discretion in s 280(2) of the Legal Profession Act 2008. I am not satisfied that it is appropriate to order that the limits on costs imposed by the 2020 Determination should be generally removed.
The one exception I would make relates to the CITIC parties' outline of submissions filed on 17 March 2021. Those submissions were filed by the CITIC parties pursuant to an order of the Court and, it is apparent from the submissions themselves that they raise a number of complex factual and legal matters arising out of the history between the parties. I am satisfied that that complexity bears a reasonable connection to the matters sought to be agitated by the Mineralogy parties in the leave applications and would have significantly contributed to the CITIC parties' costs beyond the allowable amounts under the 2020 Determination.
For this reason, I conclude that it is appropriate to order that, insofar as the costs associated with the preparation of the outline of submissions filed on 17 March 2021 are concerned, the limits imposed by the relevant item in the 2020 Determination be removed. I am also persuaded that it is appropriate to increase the maximum rates for senior counsel, which, as in the case of the stay application and the strike out application in CIV 1915 of 2019, I would increase by 50%.
For these reasons, in each of CIV 2072 of 2017 and CIV 1267 of 2018, I make the following order:
The costs payable to the defendants pursuant to order 2 of the orders of Quinlan CJ made on 28 May 2021 be taxed on the basis that, in relation to the costs of the preparation of the Outline of Submissions filed on 17 March 2021:
(a)the limits on costs fixed by Item 10 of the Legal Practitioners (Supreme and District Courts) (Contentious Business) Determination 2020 be removed; and
(b)the maximum hourly and daily rates for Senior Counsel be increased by 50%.

I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
SC
Associate to the Honourable Chief Justice Quinlan
4 MAY 2022