Smith v Marshall

[2014] WASC 185 (S)

JURISDICTION	:	SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS
CITATION	:	SMITH -v- MARSHALL [2014] WASC 185 (S)
CORAM	:	KENNETH MARTIN J
HEARD	:	ON THE PAPERS
DELIVERED	:	4 SEPTEMBER 2014
FILE NO/S	:	CIV 2505 of 2013

BETWEEN : EDWARD SCOTT SMITH

Plaintiff

AND

BROOKE MARSHALL

First Defendant

JOHN LLOYD KANE MARSHALL

Second Defendant

Catchwords:

Costs - Indemnity costs application - Strikeout application dismissed - Taxed costs awarded with scale limit removed

Legislation:

Nil

Result:

Taxed costs order

[2014] WASC 185 (S)

Category: B

Representation:

Counsel:

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

Solicitors:

Plaintiff	:	Lavan Legal
First Defendant	:	Bennett + Co
Second Defendant	:	Bennett + Co

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

Heartlink Ltd v Jones [2007] WASC 254 (S)
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)

[2014] WASC 185 (S)

KENNETH MARTIN J

1. KENNETH MARTIN J: In the aftermath of my reasons for decision in this action of 6 June 2014 rejecting the defendants' application to dismiss the plaintiff's defamation action, the successful plaintiff now moves on the papers for costs orders assessed on an indemnity basis.

2              The principles applicable to an application for indemnity costs are

seen in the Court of Appeal decision Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10]. Essentially, the plaintiff contends that the defendants' application to dismiss his defamation action was always hopelessly misconceived, that this had been expressly pointed out to the defendants' solicitors well prior to the application being argued, and that the ultimately successful result favouring the plaintiff resisting the application has vindicated his position that the application was always hopeless. So, it is argued the court now ought, by an indemnity costs order, sanction the defendants: see principle 10 from Swansdale and par 12 of the plaintiff's written submission of 27 June 2014.

3              By agreement of the parties the costs application is determined on

the papers. To that end, I received the plaintiffs' written submissions on costs of 27 June 2014 (filed in accordance with [78] of my reasons of 6 June 2014). Those submissions were responded to by the defendants' written submissions of 18 July 2014, essentially resisting the contention that their unsuccessful application was hopeless, arguing instead that there had been a reasonable basis to bring it. The defendants correlatively submit (ambitiously) that the appropriate dispositive orders as regards the unsuccessful application ought be that 'there is no order as to costs'.

4              The plaintiff's application for indemnity costs, from an evidentiary

perspective, is supported by an affidavit of Nicholas Robert Stagg sworn 27 June 2014. This is essentially a solicitor's affidavit appending some correspondence passing between the respective solicitors for the parties in the period between 16 October and 15 November 2013.

5              From an evidentiary perspective, I have also considered the affidavit

of Nicola Emma Randall, affirmed 31 October 2013 and which had been relied upon by the defendants in respect of the substantive dismissal application.

6              I have evaluated this material in a context of considering the

appropriate dispositive costs order for the application, bearing in mind the court's discretion in respect of the costs order, the prima facie presumption that a successful party will ordinarily be entitled to receive its taxed costs of the application, and a governing criterion that a court's discretion in

[2014] WASC 185 (S)

KENNETH MARTIN J

respect of the appropriate costs order must be exercised judicially in

accord with established principle.

Disposition

7              Evaluating the parties' submissions as regards costs in the aftermath

of the plaintiff's ultimate success in resisting the defendants' strikeout application, I am of the view the plaintiff should receive an award for his taxed costs in respect of resisting the application which, after ascertainment on a taxation, should be payable immediately. However, correlatively, I am not persuaded from the materials and my personal insights having determined the application as case manager that the deficiencies in the defendants' application as ultimately ascertained rise to the level of supporting sanction by an award of indemnity costs. In summary, I would assess the defendants' dismissal application as mildly supported under aspects of a line of case authority that warranted some evaluation. In the end, the defendants' dismissal arguments towards the action were not accepted by me but, even with the benefit of hindsight, I would not evaluate them as so hopeless as to support adverse costs orders at the level of solicitor/client indemnification.

8              Nevertheless, I am satisfied that the dimensions of this interlocutory

application were important and potentially fatal to the plaintiff's action if accepted. They need to be treated seriously. The amount of diverse case law canvassed in the process would alone support an increase in the amount of costs potentially recoverable by the successful plaintiff on a taxation of its costs. In other words, I assess the dual limbs of the Heartlink formulation (see the decision of Martin CJ in Heartlink Ltd v Jones [2007] WASC 254 (S) [11] - [12]) demonstrates both inadequacy in the level of the current scale and fulfilment of the second limb in terms of unusual difficulty and complexity in respect of the argument to be met. Accordingly, the scale limit under item 10(a) of the Supreme Court Scale of Costs in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) should be lifted for the purposes of a taxation. The consequence is simply that a taxation may proceed before a taxing officer without the intrusion of that scale limit being a limiting consideration. In my view, orders in those terms are appropriate in the circumstances.