Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3]
[2015] WASC 272 (S)
•3 NOVEMBER 2015
SINO IRON PTY LTD -v- MINERALOGY PTY LTD [No 3] [2015] WASC 272 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 272 (S) | |
| Case No: | CIV:2164/2013 | ON THE PAPERS | |
| Coram: | CHANEY J | 3/11/15 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiffs to pay defendant's costs | ||
| B | |||
| PDF Version |
| Parties: | SINO IRON PTY LTD KOREAN STEEL PTY LTD MINERALOGY PTY LTD |
Catchwords: | Costs Whether conduct of successful party invited litigation Indemnity costs Special costs orders Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA) |
Case References: | Oshlack v Richmond River Council (1998) 193 CLR 72 Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3] [2015] WASC 272 Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
AND
MINERALOGY PTY LTD
Defendant
Catchwords:
Costs - Whether conduct of successful party invited litigation - Indemnity costs - Special costs orders - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Plaintiffs to pay defendant's costs
Category: B
Representation:
Counsel:
First Plaintiff : No appearance
Second Plaintiff : No appearance
Defendant : No appearance
Solicitors:
First Plaintiff : Allens
Second Plaintiff : Allens
Defendant : Kilmurray Legal
Case(s) referred to in judgment(s):
Oshlack v Richmond River Council (1998) 193 CLR 72
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S)
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3] [2015] WASC 272
Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S)
1 CHANEY J: On 30 July 2015 I delivered reasons for dismissing an application by the plaintiffs for a supplementary order in relation to the declaration made by Edelman J on 6 February 2015: see Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3] [2015] WASC 272. On 12 August 2015 I gave directions for the parties to file written submissions on the question of costs of the application for supplementary orders and directed that that question be determined on the papers.
2 The defendant seeks orders that the plaintiffs pay its costs of the plaintiffs' chamber summons for supplementary orders, and of the defendant's chamber summons seeking suspension of any supplementary orders that might be made, those costs to be taxed on an indemnity basis and paid forthwith.
3 Alternatively, the defendant seeks special costs orders in relation to those applications.
4 The plaintiffs oppose the orders sought by the defendant. They submit that no order should be made as to costs.
Should there be an order for costs?
5 The plaintiffs refer to O 66 r 1(2) of the Rules of the Supreme Court 1971 (WA) which provides that:
If the Court is of the opinion that the conduct of a party either before or after the commencement of the litigation … has resulted in costs being unnecessarily or unreasonably incurred it may deprive that party of costs wholly or in part, and may further order him to pay the costs of an unsuccessful party either wholly or in part.
6 Reference is also made to the observation by McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 to the effect that a court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation [69]. The disentitling conduct relied upon by the plaintiffs is said to be the defendant's failure to make application to transfer the status of proponent in accordance with the contractual obligation declared by Edelman J.
7 It was not necessary for me, in determining the application for supplementary orders, to make any findings as to the merits or otherwise of Mineralogy's reasons for not transferring the status of proponent following the making of Edelman J's declaration. The application for supplementary orders stood or fell on the basis of the history of this litigation and the matters which were in issue for the purpose of the substantive matter. Whether or not the defendant is justified in failing to transfer the status of proponent is not a matter which falls for determination in these proceedings, for the reasons explained in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3]. The plaintiff was unsuccessful in its application for supplementary orders, and there is no reason why the costs should not follow the event in the usual way.
8 I also consider that the plaintiffs should pay the defendant's costs of the defendant's chamber summons for suspension orders filed on 18 May 2015. That chamber summons was filed as a defensive response to the application for supplementary orders, but it was unnecessary to deal with it having regard to the conclusion I reached in relation to the application for supplementary orders. It was dealt with as part of the whole controversy, in respect of which the plaintiffs were unsuccessful.
Should costs be on an indemnity basis?
9 The defendant contends that the plaintiffs were unreasonable in pursuing the supplementary orders, when they had sought only a declaration at the trial of the substantive matter, and when Edelman J had declined to make orders of the type sought as supplementary orders (see Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [19]).
10 I do not accept that submission. There was no dispute, when the matter came before me, as to the court's power to make supplementary orders. The issue for determination was whether, in the circumstances, supplementary orders should be made. My conclusion was that, in the circumstances of the particular matter, supplementary orders should not be made.
11 Against the background of the defendant's failure to transfer the status of proponent, and the reasons it had expressed for not doing so, I do not consider that the plaintiffs attempt to seek to procure compliance by the defendant with its declared contractual obligation through the mechanism of supplementary orders can be said to be unreasonable. No order for indemnity costs should be made.
Should there be a special costs order?
12 In its outline of submissions, the defendant asserted that, if indemnity costs were not allowed, then special costs orders are appropriate. Its submission in support of that proposition was that the issues raised by the application were complex such that two counsel were required by each party. On that basis it is contended that scale rates and allowances would be inadequate.
13 In Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S) [7] - [9], the Court of Appeal outlined the statutory framework and principles to be applied in relation to special costs orders. After referring to the broad general discretion as to costs conferred on the court by s 37(1) of the Supreme Court Act 1935 (WA) and O 66 r 1(1) of the Rules of the Supreme Court 1971 (WA), and the provisions of the Legal Profession Act 2008 (WA) relating to costs determinations, the court noted the provisions of s 280(2) of the Legal Profession Act which provides:
(2) Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following -
(a) order the payment of costs above those fixed by the determination;
(b) fix higher limits of costs than those fixed in the determination;
(c) remove limits on costs fixed in the determination;
(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
7 In Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66(S) [3], Martin CJ, McLure P and Buss JA said in relation to s 280(2):
'The section requires that before making an order pursuant to its terms the court must form an opinion which has two components. First, the court must determine that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate. Second, the court must conclude that the inadequacy arises because of the 'unusual difficulty, complexity or importance of the matter' (Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11]). Having heard the matter and being familiar with the way in which the case was conducted and the issues which were litigated, the court is in a position to form the opinions required under the section as matters of impression rather than science or mathematics: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7]; Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2) [14].'
8 Also, in Town of Port Hedland v Hodder[No 2] [2012] WASCA 212 (S) the court said:
The relevant principles to be applied in resolving this question are not contentious. Special costs orders can be made either pursuant to s 280(2) of the Legal Profession Act 2008 (WA), or pursuant to s 37(1) of the Supreme Court Act 1935 (WA). In either case, before the power will be exercised, 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 costs determination (see Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11]). If that threshold is crossed, under s 280(2) other questions arise for determination. However, until that threshold is crossed, the power will not ordinarily be exercised.
Issues of the kind which arise when special costs orders are sought are addressed as matters of impression, rather than as matters of detailed evaluation, precision or science [14] - [15].
9 The word 'unusual' in s 280(2) of the Legal Profession Act 2008 (WA) (2008 Act) qualifies only the 'difficulty' of the matter and not its complexity or importance: Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66(S) [5]. 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 Supreme and District Courts. 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: O'Rourke v P & B Corporation Pty Ltd [2008] WASC 36 (S) [23] - [25]; Red Hill Iron Pty Ltd v API Management Pty Ltd [2012] WASC 323 (S) [8].
15 I am not satisfied that either of the two components necessary before a special costs order could be made is established. All that is said by the defendant is that two counsel were required by each party. No foundation for that assertion is put forward. In any event, the relevant item of the Supreme Court Scale of Costs 2014, Item 10, provides for an allowance of two days' preparation and one day of hearing for counsel. The hearing of this matter lasted approximately one and half hours. The defendant has not established that the scale of costs is inadequate.
16 Nor do I consider that any inadequacy of the scale arises because of the 'unusual difficulty, complexity or importance of the matter'. Although an application for supplementary orders may be relatively unusual, the issues which were agitated in the application were not, in my view, of unusual difficulty, complexity or importance.
17 There should be no special costs order.
Conclusion
18 For the foregoing reasons, there should be an order that the plaintiffs pay the defendant's costs of:
(a) the plaintiffs' chamber summons for supplementary orders filed 31 March 2015; and
(b) the defendant's chamber summons for suspension orders filed 18 May 2015
to be taxed if not agreed.
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