Soia v Bennett [No 5]
[2012] WASC 289 (S)
•21 DECEMBER 2012
SOIA -v- BENNETT [No 5] [2012] WASC 289 (S)
| Link to Appeal : | [2013] WASCA 85 [2013] WASCA 85(S) |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 289 (S) | |
| Case No: | CIV:1130/2003 | 15 OCTOBER 2012 | |
| Coram: | COMMISSIONER SLEIGHT | 21/12/12 | |
| 27 | Judgment Part: | 1 of 1 | |
| Result: | Costs awarded to defendant as detailed in decision | ||
| A | |||
| PDF Version |
| Parties: | KIM PETER SOIA PERSONALIZED TUITION SERVICES PTY LTD (ACN 009 099 71) MARTIN LAWRENCE BENNETT |
Catchwords: | Practice and procedure Costs Exception to usual order that costs follow the event Alleged misconduct by successful defendant Failure to recommend client seek independent legal advice. Practice and procedure Costs Defendant represented by incorporated legal practice of which he is a director/shareholder Whether equivalent to representing himself Whether rule of practice that costs are not recoverable applicable Practice and procedure Costs Special costs orders Removal of limits under relevant costs scale Practice and procedure Costs award against plaintiffs' solicitor personally Unreasonable conduct by solicitor |
Legislation: | Legal Practitioners Act 1893 (WA) Legal Profession Act 2008 (WA), s 280 Supreme Court Act 1935 (WA) |
Case References: | Bosco v Solomon Brothers [2006] WASC 307 Bostock v Ramsay Urban District Council [1900] 2 QB 616 Brickenden v London Loan & Savings Co [1934] 3 DLR 465 Cachia v Hanes (1994) 179 CLR 403 Cates v Glass [1920] NZLR 37 Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333 Commonwealth v Smith (1991) 402 FCR 390 Dobree v Hoffman (1996) 18 WAR 36 Gemstone Corporation of Australia Ltd v Grasso (1994) 62 SASR 239 Guss v Veenhuizen (No 2) (1976) 136 CLR 47 Haira v Burbery Mortgage Finance & Savings Ltd (In Receivership) [1995] 3 NZLR 396 Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2011] WASC 44 Jones v Curling (1884) 13 QBD 262 London Scottish Benefit Society v Chorley, Crawford & Chester (1884) 13 QBD 872 Maguire & Tansey v Makaronis (1997) 188 CLR 449 Monier Ltd v Metalwork Tiling Co of Aust Ltd (No 2) (1987) 43 SASR 588 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Re Bendeich (1994) 53 FCR 422; (1994) 126 ALR 643 Re Bertini; Ex parte Bertini [No 2] [2010] WASC 86 Re Eastwood (decd) [1975] Ch 112 Red Hill Iron Pty Ltd v API Management Pty Ltd [2012] WASC 323 Ridehalgh v Horsefield [1994] Ch 205; [1994] 3 WLR 462 Ritter v Godfrey [1920] 2 KB 47 Sims v Craig Bell & Bond [1991] 3 NZLR 535 Soia v Bennett [No 3] [2011] WASC 361 Soia v Bennett [No 5] [2012] WASC 289 Wan v McDonald (1992) 105 ALR 473 Witten-Hannah v Davis [1995] 2 NZLR 141 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- First Plaintiff
PERSONALIZED TUITION SERVICES PTY LTD (ACN 009 099 71)
Second Plaintiff
AND
MARTIN LAWRENCE BENNETT
Defendant
Catchwords:
Practice and procedure - Costs - Exception to usual order that costs follow the event - Alleged misconduct by successful defendant - Failure to recommend client seek independent legal advice.
Practice and procedure - Costs - Defendant represented by incorporated legal practice of which he is a director/shareholder - Whether equivalent to representing himself - Whether rule of practice that costs are not recoverable applicable
Practice and procedure - Costs - Special costs orders - Removal of limits under relevant costs scale
Practice and procedure - Costs award against plaintiffs' solicitor personally - Unreasonable conduct by solicitor
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Legislation:
Legal Practitioners Act 1893 (WA)
Legal Profession Act 2008 (WA), s 280
Supreme Court Act 1935 (WA)
Result:
Costs awarded to defendant as detailed in decision
Category: A
Representation:
Counsel:
First Plaintiff : Mr D Garnsworthy
Second Plaintiff : Mr D Garnsworthy
Defendant : Dr J T Schoombee & Mr N Ebbs
Solicitors:
First Plaintiff : Galic & Co
Second Plaintiff : Galic & Co
Defendant : Bennett & Co
Case(s) referred to in judgment(s):
Bosco v Solomon Brothers [2006] WASC 307
Bostock v Ramsay Urban District Council [1900] 2 QB 616
Brickenden v London Loan & Savings Co [1934] 3 DLR 465
Cachia v Hanes (1994) 179 CLR 403
Cates v Glass [1920] NZLR 37
Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333
Commonwealth v Smith (1991) 402 FCR 390
Dobree v Hoffman (1996) 18 WAR 36
Gemstone Corporation of Australia Ltd v Grasso (1994) 62 SASR 239
Guss v Veenhuizen (No 2) (1976) 136 CLR 47
Haira v Burbery Mortgage Finance & Savings Ltd (In Receivership) [1995] 3 NZLR 396
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Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2011] WASC 44
Jones v Curling (1884) 13 QBD 262
London Scottish Benefit Society v Chorley, Crawford & Chester (1884) 13 QBD 872
Maguire & Tansey v Makaronis (1997) 188 CLR 449
Monier Ltd v Metalwork Tiling Co of Aust Ltd (No 2) (1987) 43 SASR 588
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Re Bendeich (1994) 53 FCR 422; (1994) 126 ALR 643
Re Bertini; Ex parte Bertini [No 2] [2010] WASC 86
Re Eastwood (decd) [1975] Ch 112
Red Hill Iron Pty Ltd v API Management Pty Ltd [2012] WASC 323
Ridehalgh v Horsefield [1994] Ch 205; [1994] 3 WLR 462
Ritter v Godfrey [1920] 2 KB 47
Sims v Craig Bell & Bond [1991] 3 NZLR 535
Soia v Bennett [No 3] [2011] WASC 361
Soia v Bennett [No 5] [2012] WASC 289
Wan v McDonald (1992) 105 ALR 473
Witten-Hannah v Davis [1995] 2 NZLR 141
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1 COMMISSIONER SLEIGHT: This decision concerns the issue of costs arising from Soia v Bennett [No 5] [2012] WASC 289 in which the plaintiffs' claims for damages were dismissed and judgment entered for the defendant.
2 The following issues emerge from the applications and cross-applications of the parties:
1. Whether an order should be made that the plaintiffs pay the defendant's costs of the action or whether the defendant should be denied an order for the costs of the action due to disentitling behaviour.
2. If costs are awarded to the defendant should they be limited to counsel's fees for Dr Schoombee (leading counsel appearing for the defendant) based upon the decision in Dobree v Hoffman (1996) 18 WAR 36.
3. If costs of the action are awarded to the defendant should special orders be made, including that pursuant to s 280(2)(c) of the Legal Profession Act 2008 (WA) (the LPA 2008), that any limits fixed by the relevant costs scale are removed with respect to the defence, giving discovery, inspection, getting up and trial.
4. Should there be an order that the plaintiffs and/or their solicitor Mr Galic, be liable to pay the defendant's costs on an indemnity basis in relation to an application by the defendant to extract a judgment in accordance with the order of Commissioner Sleight made 16 August 2012.
Issue one
(a) Background
3 The defendant seeks an order that the plaintiffs pay the defendant's costs of the action, including any reserved costs. The plaintiffs oppose this order on the basis that, in the exercise of my discretion, I should not make an order for costs in favour of the defendant due to disentitling behaviour on the part of the defendant. The disentitling behaviour relied upon is a failure of the defendant, Mr Bennett, to recommend to the first plaintiff, Mr Soia, that he seek independent legal advice. The contention of the plaintiffs arises principally from Soia v Bennett [No 5] wherein I stated:
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- The joint venture was entered into without a written agreement setting out the nature of the interests of the parties in the joint venture and their respective obligations. After protracted negotiations, a written shareholders' agreement was entered into, but this was primarily concerned with the issue of division of profit. Mr Soia did not receive, nor was it recommended by Mr Bennett, that Mr Soia seek independent legal advice. It was admitted by Mr Bennett in his evidence that he ought to have recommended to Mr Soia that he seek independent legal advice (ts 2172). Had a written agreement been signed by the parties setting out the nature of their respective interests and obligations in the joint venture, then it is likely this action would have been avoided [3].
4 The context in which these remarks were made must be taken into consideration. The initial idea of a joint venture was suggested by Mr Bennett to Mr Soia. At the time Mr Bennett's legal practice, Bennett & Co, was acting for Mr Soia. The legal work associated with setting up the joint venture, such as incorporation of a company, Internet Tuition College Pty Ltd, was conducted by Bennett & Co. The evidence given at the trial was that there were a number of attempts by the parties to agree to the terms of a written shareholders' agreement. The first draft prepared by Mr Bennett's legal practice was presented to Mr Soia on 11 June 1999: Soia v Bennett [No 5] [53], [247]. Eventually the parties entered into a shareholders' agreement on 29 October 1999. In Soia v Bennett [No 5] I stated as follows:
I accept the evidence of Mr Soia that he was assured by Mr Bennett that it was unnecessary for the shareholders' agreement which was ultimately entered into on 29 October 1999 to contain provisions as to management fees and other provisions concerning the respective roles of Mr Soia and Mr Bennett in the joint venture. Certainly, Mr Soia in the third draft of the shareholders' agreement prepared by him had attempted to define their respective roles and to define in what circumstances the joint venture would be terminated. However, I reject Mr Soia's evidence that Mr Bennett said that they already had an agreement as created at 30 June 1999. For reasons I have already given, I reject that such an agreement had been reached [263].
(b) Relevant legal principles
5 The power to award costs is a statutory power. Section 37 of the Supreme Court Act 1935 (WA) provides that subject to the provisions of the Act and the Rules of the Court, the costs of and incidental to proceedings are in the discretion of the Court or judge.
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6 Order 66 r 1(1) and (2) of the Rules of the Supreme Court 1971 (WA) (the RSC) relevantly provide:
(1) Subject to the express provisions of any statute and of these rules the costs of and incidental to all proceedings ... shall be in the discretion of the Court but, without limiting the general discretion conferred on the Court by the Act, and subject to this Order, the Court will generally order that the successful party to any action or matter recover his costs.
(2) If the Court is of 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.
7 The usual order that costs follow the event was explained by McHugh J in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 as follows:
The expression of the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in the reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the cost of the unsuccessful litigation [67].
- Later in his decision McHugh J went on to say:
The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows:
'No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.'
'Misconduct' in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts
- the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute [69]. (footnotes omitted)
8 An example of misconduct leading up to the litigation is where the conduct of the successful defendant was such as to induce the unsuccessful plaintiff to reasonably believe that he or she had a good cause of action and so conduce the action: Bostock v Ramsay Urban District Council [1900] 2 QB 616. This is consistent with the wording of O 66 r 1(2) of the RSC which refers to conduct that 'has resulted in costs being unnecessarily or unreasonably incurred'. The wording of O 66 r 1(2) of the RSC provides only a guide as to how the discretion to award costs may be exercised. There remains a very wide discretion: Seaman 66.1.1. Misconduct should not be viewed in restricted terms and limited to conduct which results in the action. It may extend to something which is morally wrong in the course of the transactions of which the plaintiff complains: Monier Ltd v Metalwork Tiling Co of Aust Ltd (No 2) (1987) 43 SASR 588; Ritter v Godfrey [1920] 2 KB 47, 60 (Atkin J). Consistent with the broad nature of the discretion in relation to costs, the judge's discretion is to be exercised in accordance with the justice of the case; that is, to create fairness between the parties: Cates v Glass [1920] NZLR 37, 68 (Edwards J); Jones v Curling (1884) 13 QBD 262, 272.
(c) Submissions of the parties
9 The plaintiffs' contention is that the failure of Mr Bennett to recommend that Mr Soia seek independent legal advice concerning the written shareholders' agreement was such a fundamental breach of a fiduciary duty owed by Mr Bennett to Mr Soia as to warrant the exercise of discretion not to make any order of costs in favour of the defendant.
10 The defendant submits that the issue of a breach of a fiduciary duty was not pleaded or litigated and accordingly it would be unfair to take into account the failure of the defendant to recommend to Mr Soia that he obtain independent legal advice. It is further submitted that even if the recommendation of independent legal advice was given, it was not explored at the trial whether Mr Soia would have sought independent legal advice, what that independent legal advice would have been, what agreement, if any, would have eventuated had Mr Soia sought independent legal advice and whether such an agreement would have avoided the litigation.
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(d) Conclusions
11 It is trite law that in equity a relationship between a solicitor and client is recognised as a fiduciary one: Maguire & Tansey v Makaronis (1997) 188 CLR 449; Witten-Hannah v Davis [1995] 2 NZLR 141. As part of the fiduciary obligation a solicitor owes to a client there is an obligation to avoid any conflict of interest. The obligation may extend even to a former client as was the case in Witten- Hannah v Davis. That case concerned a solicitor who had acted for a woman in relation to matrimonial matters. The solicitor subsequently entered into a sexual relationship with the client which led to the birth of twins. Subsequently the relationship ended. The solicitor and his former client entered into property transactions to provide support for the client and the children. Richardson J stated as follows:
The relationship existing between solicitor and client is recognised in equity as a fiduciary one imposing on the solicitor special obligations: in dealing with the client the solicitor must exercise the utmost good faith and in any financial transaction with the client (save as to costs for work done) there is a presumption that such a transaction should not be upheld unless the solicitor can establish that it was effected by the free exercise of the client's will and without any influence on the part of the solicitor. If the client is to be in a position to make an informed decision about the proposed transaction he or she must be fully informed by the solicitor of the transaction and of all the implications for the client of entering into it (Sims v Craig Bell & Bond [1991] 3 NZLR 535, 543 and 544). It is apparent from the evidence that the appellant made no attempt to discharge that rigorous obligation (147).
12 The fiduciary duty requires the solicitor who has a personal interest to advise his client to obtain independent advice: Witten-Hannah v Davis (149) (Richardson J); see also Wan v McDonald (1992) 105 ALR 473, 493 (Burchett J).
13 In Sims v Craig Bell & Bond [1991] 3 NZLR 535, Richardson J stated:
The solicitor must be dedicated to the best interests of the client. If the solicitor is to have business dealings with the client the requirements of the law are rigorous. That is not simply because of the opportunity that exists in such a case for the confusion of roles. Rather it is because the solicitor is presumed to be in a position of special influence over the client. A client must be able to place complete reliance on the professional advice of the solicitor and is entitled to expect that the solicitor will serve and protect the client's interests at all times (543 - 544). (emphasis added)
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14 It is common ground that the fiduciary duty of Mr Bennett included an obligation to recommend Mr Soia seek independent legal advice. The plaintiffs contend that the duty went further than this and extended to insisting that Mr Soia obtain independent advice. Whether such an extended obligation exists depends on the nature of the relationship of the parties and the surrounding circumstances: Sims v Craig Bell & Bond (546) (Hardie Boys J); Red Hill Iron Pty Ltd v API Management Pty Ltd [2012] WASC 323. I do not believe I should decide this issue given that there was no claim in the action based upon a breach of fiduciary duty. Accordingly, the extent of Mr Bennett's duty, other than acknowledged by him that he ought to have advised Mr Soia to seek independent legal advice, was not canvassed.
15 However, there is no unfairness in taking into account on the question of costs the fact that Mr Bennett failed to recommend to Mr Soia to seek independent legal advice. Evidence emerged during the trial concerning this issue and is an important contextual consideration. Further, the defendant had a full opportunity to argue the significance of the breach of this obligation in relation to the issue of costs.
16 As stated above, the defendant contends that it is speculation whether Mr Soia would have followed a recommendation that he seek legal advice, and if he had received legal advice whether this would have avoided the proceedings. The plaintiffs counter this contention by relying upon the rule in equity that when a party holding a fiduciary relationship commits a breach of his duty by non-disclosure of material facts, speculation as to what course the other party would have taken is not relevant: Brickenden v London Loan & Savings Co [1934] 3 DLR 465, 469. This rule in Brickenden has been applied in Australia and New Zealand: Maguire & Tansey v Makaronis (471); Commonwealth v Smith (1991) 402 FCR 390, 394; Gemstone Corporation of Australia Ltd v Grasso (1994) 62 SASR 239, 243, 252; Sims v Craig Bell & Bond; Witten-Hannah v Davis; Haira v Burbery Mortgage Finance & Savings Ltd (In Receivership) [1995] 3 NZLR 396, 407 - 408.
17 However, the strictness of rule in Brickenden is watered down in equity by it being possible for the court to fashion remedies so as to take into account all of the factors which would otherwise be urged as a reason for excluding relief at common law, for example the lack of causal connection between the breach and the loss: Maguire & Tansey v Makaronis (493) (Kirby J). This means that if the equitable rule in Brickenden is adopted by analogy to the discretion to award costs, the form of the costs order should take into account such factors as the lack of
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- proven causation and the fact that the plaintiffs commenced claims that were ultimately found to be unjustified.
18 In this matter the failure by the defendant, Mr Bennett, to recommend that Mr Soia obtain independent legal advice must be considered in the circumstances of Mr Soia and Mr Bennett were entering into a significant joint venture. Ultimately it was proposed that Mr Soia would close down the tutorial business of his company, the second plaintiff, and devote himself to the joint venture: Soia v Bennett [No 5] [276]. In such circumstances it was remarkable that there was not some form of agreement (even a heads of agreement type document) setting out the respective roles and obligations of Mr Soia and Mr Bennett and providing when management fees were to be paid to Mr Soia and the quantum of those fees. The absence of such an agreement was a recipe for future disputation. Ultimately it was the uncertainty about management fees which caused the fracture in the relationship between Mr Bennett and Mr Soia, and this was exacerbated by the uncertainty about the extent of funding that Mr Bennett was to provide: Soia v Bennett [No 5] [272], [274].
19 I am satisfied that the failure of Mr Bennett to recommend to Mr Soia that he obtain independent legal advice, in circumstances that Mr Bennett had assured Mr Soia it was unnecessary for the shareholders' agreement to contain provisions as to the respective roles of Mr Soia and Mr Bennett in the joint venture, constituted misconduct that contributed to a state of uncertainty as to the respective entitlements and obligations of the parties. This uncertainty significantly contributed to the action being commenced and unnecessary costs being incurred. Whether Mr Soia would have responded to the recommendation to get independent advice is largely speculation. However, he was denied the opportunity to consider such a recommendation. I believe that if he had responded to such recommendation then, assuming that advice to be competent, the advice would have recommended a written agreement between Mr Soia and Mr Bennett which included provisions as to the nature of their respective interests and obligations in the joint venture (including a payment of a management fee to Mr Soia). As stated in Soia v Bennett [No 5], such an agreement was likely to have avoided the action between the parties.
20 However against this I should take into account the fact that ultimately it was the decision of the plaintiff to pursue a claim which I found to be unjustified and which was dismissed. The rule that costs follow the event where a plaintiff's claim is dismissed is based upon the
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- premise that an award of costs is meant to provide an indemnity for the loss incurred in defending an unjustifiable claim. It was the plaintiffs in this action who elected to commence and pursue the unjustifiable claim.
21 Balancing the above considerations, I conclude, in the exercise of my discretion, that I should reduce any award of costs in favour of Mr Bennett by 50%.
Issue two
22 The second issue relates to a submission by the plaintiffs that, based upon the rule of practice stated in Dobree v Hoffman, Mr Bennett should not be awarded costs other than for the appearance of independent counsel because Mr Bennett was represented at all relevant times by his own legal practice, Bennett & Co.
(a) Rule of practice in Dobree v Hoffman
23 As a general rule a person can only be awarded costs in an action as an indemnity for out-of-pocket expenses. This means that a non-practitioner who is a litigant is not entitled to claim costs for his own time and inconvenience in conducting his case. However, in London Scottish Benefit Society v Chorley, Crawford & Chester (1884) 13 QBD 872, the English Court of Appeal held that a solicitor acting in person can claim costs for time spent conducting his case. This has come to be known as 'the Chorley exception'. Of course, if the practitioner/litigant engages a solicitor to represent him, then the litigant can recover under the relevant scale the remuneration paid to the solicitor. The costs claimable under the Chorley exception do not include a charge for the practitioner consulting himself, or instructing himself, or attending himself: London Scottish Benefit Society v Chorley, Crawford & Chester (876) (Brett MR).
24 The Chorley exception has been accepted in the High Court: Guss v Veenhuizen(No 2) (1976) 136 CLR 47. It has also been accepted generally in Australia although with some reservation: see discussion in Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2011] WASC 44 [25]; Cachia v Hanes(1994) 179 CLR 403, by the majority at409 - 410.
25 The rationale for the exception is firstly, if the exception were not allowed then practitioners who were litigants would always employ another solicitor, which ultimately is likely to increase the liability of the other party to costs; secondly, unlike a non-practitioner/litigant, there is a
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- relevant scale to assess the worth of the time spent by the practitioner/litigant.
26 In Dobree v Hoffman the successful plaintiffs were partners in a firm of solicitors. They were applying for a declaration that the defendant had retired from the partnership and other orders. The successful plaintiffs had acted as their own solicitors on the record and one of the plaintiffs appeared as junior counsel. They had entered into an agreement that the firm would represent them on the basis that each of them would charge the firm for the time personally spent on the matter.
27 The Full Court in Dobree v Hoffman took the view that the Chorley exception was merely a rule of practice and declined to follow the High Court and authorities in other jurisdictions of Australia where the Chorley exception had been followed. The Full Court held that solicitors who represent themselves in litigation should be regarded no differently to lay persons who represent themselves in litigation and are not entitled to claim costs of the time spent in relation to the litigation. Dobree v Hoffman has been applied in the Supreme Court in Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth; Bosco v Solomon Brothers[2006] WASC 307; and Re Bertini; Ex parte Bertini [No 2] [2010] WASC 86 [34] - [38] (Mazza J).
28 In Dobree v Hoffman Parker J (with whom Rowland & Steytler JJ agreed) took the view that there was no proper reasonto distinguish the practitioner/litigant in person from the non-practitioner/litigant in person. Parker J stated that to create an exception in favour of a practitioner, created a privilege in favour of a practitioner which would reflect poorly on the Court and the administration of justice.
29 Parker J also held that there was no legislative provision or provisions within the Rules of the Court that indicated an acceptance of the Chorley exception. Further, Parker J stated that the Chorley exception was inconsistent with a provision of the Legal Practitioners Act 1893 (WA). Under the Legal Practitioners Act 1893 the relevant scale of costs for litigation was made pursuant to a power on the part of the Legal Costs Committee to make a determination in regard to 'contentious business'. 'Contentious business' was defined in s 58L of the Legal Practitioners Act 1893 as 'business carried out as a practitioner in and for the purpose of any action, suit or proceeding before a court'. Parker J reached the conclusion that the wording 'business conducted as a practitioner' seemed to be intended by way of distinction from a business carried out as a litigant: Dobree v Hoffman (50). Since the decision of Dobree v
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- Hoffman the Legal Practitioners Act 1893 has been repealed. The applicable legislation governing legal practice in Western Australia is now the LPA 2008.The LPA 2008 has a different definition of 'contentious business'. It is now defined as meaning 'legal services by an Australian legal practitioner in or for the purposes of any action, suit or proceedings before a court, but does not include the administration of estates and trusts' (see s 274, LPA 2008). 'Legal services' is defined as meaning 'work done, or the business transacted, in the ordinary course of legal practice' (see s 3, LPA 2008). In my opinion these changes do not affect the reasoning adopted by Parker J which could equally apply to the definition of 'contentious business' in the LPA 2008. The distinction with business conducted as a litigant can still be made.
30 Significantly, Parker J in his decision also suggested obiter that the rule of practice might be extended where the practitioner did not act in person as an individual but was represented in the proceedings by a firm of which he was a partner. He stated that where practitioners acted in firms a variety of situations could be contrived so as to try to distinguish the situation to that where a practitioner acted for himself. Parker J concluded that it may not be in the interests of justice to allow costs where the litigant is represented by a firm of solicitors of which he is a member. His Honour stated:
In my view it is a relevant consideration that in this context there is quite a capacity to contrive the factual setting, or perhaps as importantly, that could appear to be the case to the other party in the litigation.
It remains the situation that each case of the type now being considered would involve a solicitor litigant who practised in a partnership which provided professional legal services. A solicitor litigant is necessarily both the receiver, and by virtue of the partnership, the provider of the professional legal services in the solicitor's own litigation. The acts of the partnership in litigation are the acts of the solicitor litigant. The solicitor litigant recovers personally any profit costs that are awarded or allowed to the solicitor in the litigation. Any fees paid or payable to the partnership by the solicitor litigant are also paid or payable to the solicitor litigant by virtue of the partnership. The notion of an award of costs indemnifying the solicitor litigant against fees or costs incurred is at best imperfectly reflected where the costs are incurred to the solicitor litigant's own firm.
In my view, given the range of possible factual situations and the legal and policy considerations involved, it may well prove to be the preferable course not to accept as material or determinative any distinction which might otherwise be drawn for some other purposes between a partner in a firm of solicitors who is a litigant in this court and the partnership of
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- solicitors of which he or she is a member. The interests of justice and the fair and convenient ordering of costs in respect of litigation may prove to be best served if profit costs are not ordered or allowed where a firm of solicitors acts for one (or more) of its partners in litigation in which the partner is a litigant (53). (emphasis added)
(b) Background details
31 The claim by Mr Bennett for costs is from 21 February 2011. The relevant costs determination is the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (WA) made pursuant to the LPA 2008.
32 At all relevant times Mr Bennett was represented by Bennett & Co which was an incorporated legal practice under the LPA 2008. At all relevant times the practice of Bennett & Co was owned by Lawfirst Pty Ltd. Up until 24 January 2012 Mr Bennett was the sole director, secretary and shareholder of the company.
33 On 20 May 2011 Mr Bennett entered into a written cost agreement with Bennett & Co for the legal practice to represent Mr Bennett in this action.
(c) Submissions of the parties
34 The submissions of the plaintiffs is that at all relevant times Mr Bennett was represented by a legal practice of which he was the principal and it was akin to the situation spoken of by Parker J in Dobree v Hoffman of a practitioner/litigant being represented by his own firm. Accordingly it is submitted that the rule of practice should apply that costs should not be awarded in favour of the defendant Mr Bennett on the basis that he was effectively acting on his own behalf.
35 The submissions presented on behalf of Mr Bennett were as follows:
1. The so-called rule of practice in Dobree v Hoffman is contrary to High Court authority.
2. A claim by for costs by the defendant Mr Bennett is distinguishable from Dobree v Hoffman as the legal practice of Bennett & Co was not a party to the proceedings.
3. The incorporation of Bennett & Co meant that the defendant Mr Bennett was represented by a separate legal entity and the rule of practice in Dobree v Hoffman did not apply.
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(d) Conclusions
36 Although counsel for Mr Bennett submitted that Dobree v Hoffman was contrary to High Court authority, he conceded that it was the duty of a single judge of this Court to follow the Full Court decision: Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [24].
37 However, I have come to the conclusion for reasons set out below that the rule of practice in Dobree v Hoffman should not be applied in the present case.
38 As stated above, in 1996 when Dobree v Hoffman was decided the Legal Practitioners Act 1893 was the applicable legislation governing legal practice. There was no provision for a legal practice to be conducted by an incorporated body. Accordingly, where two or more persons operated a legal practice in 1996 they did so in partnership and were otherwise subject to the provisions of the Partnership Act 1895 (WA). A partnership is not a separate legal entity. Hence, the comment by Parker J in his decision that 'any fees paid or payable to the partnership by the solicitor litigant are also paid or payable to the solicitor litigant by virtue of the partnership'. In this case unless the corporate veil is lifted, the solicitors on the record, Bennett & Co, are a legal entity quite separate from Mr Bennett. Also, unlike the situation in Dobree v Hoffman, Mr Bennett was a party to these proceedings as an individual quite separate from the operation of the legal practice of Bennett & Co. In other words Bennett & Co was not a party to the litigation.
39 The rule that self represented litigants are not entitled to costs for their own time and inconvenience is built upon the premise that costs awarded are confined to money paid or liabilities incurred for professional legal services: Cachia v Hanes. The majority in that case stated:
It has not been doubted since 1278, when the Statute of Gloucester introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation. They were never intended to be comprehensive compensation for any loss suffered by a litigant.
40 In my opinion, the potential for receipt of profit by Mr Bennett from any award of costs is, in the context of this case, not sufficient to extend the Dobree v Hoffman rule of practice to the present situation where Mr Bennett is represented by a legal practice which is not a party to the proceedings and which is a separate legal entity to him. The
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- circumstances are somewhat analogous to cases where corporate litigants have been represented by solicitors employed by the corporate litigant. The traditional approach has been to award costs on the basis of comparable costs which would have been incurred and allowed on taxation had an independent solicitor been engaged, without enquiry as to how these compare with the expense of the internal employment of a solicitor. In other words, on the taxation, the taxing officer need not conduct an enquiry as to the extent the corporation might profit from costs been allowed on the basis of an independent solicitor acting: Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333, 337 [11].
41 In Re Eastwood (decd) [1975] Ch 112, Russell LJ (with whom Stamp & Lawton LJJ agreed) relevantly stated:
In summary, therefore, in our opinion: (1) It is the proper method of taxation of a bill in a case of this sort to deal with it as though it were the bill of an independent solicitor, assessing accordingly the reasonable and fair amount of a discretionary item such as this, having regard to all the circumstances of the case. (2) ... (3) It is a sensible and reasonable presumption that the figure arrived at on this basis will not infringe the principle that the taxed costs should not be more than an indemnity to the party against the expense to which he has been put in the litigation. (4) There may be special cases in which it appears reasonably plain that that principle will be infringed if the method of taxation appropriate to an independent solicitor's bill is entirely applied: but it would be impracticable and wrong in all cases of an employed solicitor to require a total exposition and breakdown of the activities and expenses of the department with a view to ensuring that the principle is not infringed, and it is doubtful, to say the least, whether by any method certainty on the point could be reached. To adapt a passage from the judgment of Stirling J in Re Doody [1893] 1 Ch at 137 to make the taxation depend on such a requirement would, as it seems to us, simply be to introduce a rule unworkable in practice and to push abstract principle to a point at which it ceases to give results consistent with justice (132).
42 Counsel for Mr Bennett in oral submissions has made it clear that Mr Bennett does not seek any allowance for costs for legal services for time spent by Mr Bennett or Mr Colin Edward Chenu (a current director of Lawfirst Pty Ltd) in preparing or attending the trial (ts 27). Essentially Mr Bennett is seeking a costs award which covers the expense of employed solicitors, Ms Onofaro and Mr Ebbs of Bennett & Co, and independent counsel, Dr Schoombee, representing Mr Bennett in these proceedings. Ms Onofaro attended the trial as instructing solicitor and Mr Ebbs attended the trial as second counsel. It is clear from the length of the trial and the amount of the documentation involved that considerable
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- expense was incurred by Bennett & Co in providing the legal services necessary to represent Mr Bennett at the trial. I conclude that it would be unjust to deny an allowance to Mr Bennett for the provision of legal services provided by Bennett & Co in such circumstances. I do not believe that such an order is contrary to the rule of practice stated in Dobree v Hoffman which is confined to the situation where the law practice providing legal services is a party to the action although, according to the obiter judgment of Parker J, this rule of practice could be extended in an appropriate case where the practitioner/litigant is represented by his or her firm of solicitors. Whether the rule of practice is extended to such circumstances is a matter for the discretion of the court awarding costs. Although I conclude that the fact that the practitioner/litigant is represented by an incorporated legal practice does not necessarily preclude a court denying costs applying the rationale of Dobree v Hoffman, in this case, for the reasons I have given earlier, I conclude that it is not appropriate to exercise my discretion to place such a blanket limitation on costs awarded. However, in line with the concession made by counsel appearing for Mr Bennett I believe it is appropriate that I make an order that any allowance for costs on taxation not include an allowance for the time spent by Mr Bennett and Mr Chenu preparing the case for the defendant.
Issue three
43 The defendant seeks the following special costs orders:
1. Pursuant to section 280(2)(c) of the Legal Profession Act 2008, any limits fixed by any applicable costs determination are removed with respect to the following items;
(a) Item 3(a) - Defence;
(b) Item 7(b) - Giving Discovery;
(c) Item 8 - Inspection;
(d) Item 17 - Getting Up; and
(e) Item 20 - trial.
2. The Defendant be allowed costs in respect of;
(a) running transcript;
(b) two Counsel attending the trial; and
(c) one solicitor attending and instructing counsel at the trial.
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44 Section 280(2) of the LPA 2008 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.
1. Before the court can make an order under the subsection, the court must form an opinion which has two components. Firstly, whether the costs determination is inadequate; secondly, whether the inadequacy is because of the unusual difficulty, complexity or importance of the matter [11].
2. The policy considerations which should guide the court when considering such an application are, firstly, that the court should not usurp the role of the taxing officer and, secondly, that at least where party/party costs are concerned, the court should make an order that would give effect to the general principle of allowing the successful party to be compensated for their costs by the unsuccessful party, where appropriate [13].
3. The requirement of inadequacy will be demonstrated if the applicant shows that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant costs determination [16].
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- 4. The courts should discourage a requirement that to prove inadequacy the applicant must present a detailed evaluation in the form of a draft bill of taxation. Instead it is desirable that the issue of inadequacy be evaluated as a matter of impression rather than detailed evaluation [20] - [21].
5. The word 'unusual' in the subsection only qualifies the word 'difficulty' and did not qualify the words 'complexity' or 'importance' [17].
6. The word 'importance' need not be given a meaning restricting it to importance to the community. Importance 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 the community [19].
7. Nothing that a court does in determining an application can in any way bind or impinge upon the decisions to be made by the taxing officer as to whether or not work was appropriately and reasonably done, or as to the proper amount to be allowed in respect of that work. The question for determination on the application is not whether the bill will, in fact, tax out at more than the limit, but rather whether there is a fairly arguable case that it may tax out at an amount above the limit [25].
46 The application for special orders by Mr Bennett is supported by an affidavit of Ms Onofaro sworn 24 September 2012 and an affidavit of Mr Ebbs sworn 15 October 2012.
47 The application by the defendant seeks to remove any limits fixed under the scale of costs contained in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (WA) for the items of defence, discovery, inspection, getting up and trial.
(a) Defence - Item 3(b) of the scale of costs
48 The maximum allowance under the scale for preparing a defence document is an allowance of 10 hours at a rate of $429 per hour leading to a maximum of $4,290. The final defence document filed in this matter dated 23 December 2011 followed a number of amendments which were allowed both before and after the trial. The final defence document consisted of 30 paragraphs. There is no indication from the affidavit material before me as to why the maximum amount claimable under the scale is inadequate. Based upon the length of the pleading I am not able
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- to conclude that there is an arguable case that the maximum allowance is inadequate. Accordingly, I make no order in relation to the limit fixed in the scale for the preparation of the defence document.
(b) Discovery - Item 7(b) of the costs scale
49 The maximum amount allowed for discovery under the scale is 10 hours for a senior practitioner leading to a maximum amount of $4,290. The affidavit of Ms Onofaro states that the defendant's solicitors spent in excess of 50 hours in providing discovery and supplementary discovery. I am satisfied by way of impression that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that is fixed under the scale based upon the number of hours spent. Accordingly, I am prepared to remove the limit in relation to this item.
(c) Inspection of documents - Item 8 of the scale of costs
50 The affidavit of Ms Onofaro deposes that the plaintiffs discovered 128 documents in the initial discovery and provided informal discovery of approximately 173 documents (by informal lists dated 17 February 2011, 18 February 2011, 13 May 2011 and 16 May 2011). The maximum amount fixed under the costs determination is limited to $429 per hour. The scale does not provide any limit to the number of hours. I am not satisfied that the hourly rate is inadequate. Accordingly, I am not prepared to remove the limit in relation to inspection. Ultimately it will be a matter for the taxing officer to assess if the amount claimed is reasonable in terms of the total time spent for inspection.
(d) Getting up - Item 17 of the scale of costs
51 The amount fixed under the scale is a maximum of 120 hours by a senior practitioner totalling $51,480.
52 The affidavit of Ms Onofaro deposes that the solicitors for the defendant spent approximately in excess of 150 hours undertaking getting up work, additional work preparing trial bundles, 50 hours reviewing 37 individual tutorial presentations of Mr Soia and in excess of 40 hours preparing submissions. Based upon this affidavit material and the length of the trial, I am satisfied by way of impression that there is a fairly arguable case that the limits provided in the scale of costs are inadequate. Accordingly I am prepared to make an order removing the limit in relation to this item.
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(e) Trial - Item 20
53 The amount fixed under the scale is as follows:
(a) 3.5 days preparation and first day of trial - $15,345;
(b) counsel fee for the second and each successive day of the hearing - $3,410;
(c) instructing legal practitioner attending trial - $429 per hour;
(d) attending on reserve decision (including preparation, consideration of reasons for decision and all necessary work and attendances to obtain final orders) - $429.
54 Based upon the length of the trial, the frequent adjournments (which would have necessitated additional preparation) and the complexity of the issues, I am satisfied by way of impression that it is fairly arguable that the limits for items (a), (b) and (d) above are inadequate. However I am not satisfied that it is fairly arguable that (c) is inadequate. Accordingly, I am prepared to make an order removing the limits in relation to items 20(a), (b) and (d) above.
55 The conclusions I have reached that it is fairly arguable that the limits set in the scale of costs for discovery, getting-up and trial are inadequate are based upon the number of hours involved. I do not conclude that it is fairly arguable that the hourly rates of charge for fee earners prescribed in the costs determination are inadequate.
56 The second matter for consideration is whether the inadequacies that I have identified are based upon the unusual difficulty, complexity or importance of the matter.
57 Applying the principles that I have summarised earlier in this decision, I am satisfied, as demonstrated by the number of evidentiary and legal issues canvassed in my judgment in this matter, the length of the trial and the amount of documentation involved, that the inadequacies I have identified are due to the complexity of the matter. Also, the size of the claim made by Mr Soia, being in excess of $30 million, also leads me to the conclusion that the inadequacies partly arise because of the importance of the claim to the parties.
58 The defendant Mr Bennett also seeks special orders as to transcript; two counsel attending the trial; and one solicitor attending and instructing counsel at the trial. Order 66 r 18 of the RSC provides that a court may
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- make an order allowing costs for any item not provided in the relevant scale. Given the length of the trial and a number of adjournments during the course of the trial, I am satisfied that a special order should be made for an allowance in respect of the costs of obtaining a running transcript. However, in relation to the order sought for two counsel and an instructing solicitor attending trial, these items are covered by the relevant scale and are a matter for assessment by the taxing officer: Seaman 66.11.11;item 20 of the relevant scale.
Issue four
59 The defendant Mr Bennett seeks an order against the plaintiffs and their solicitor, Mr T Galic, jointly and severally to pay the defendant's costs incurred on an indemnity basis in respect of an application by the defendant seeking an order allowing the extraction of the judgment in this action.
60 The background to this issue is that the decision in the action was handed down on 16 August 2012. On that date the plaintiffs were represented in court by Mr Galic. Counsel for the defendant applied for judgment dismissing the plaintiffs' claims. Mr Galic did not oppose such an order for judgment being made. The question of costs was adjourned sine die. On 30 August 2012 Mr Galic caused a letter to be sent to the Supreme Court of Western Australia requesting that the judgment not be extracted until the plaintiffs had an opportunity to make an application to reopen their case. As a result of this letter the defendant's solicitors enquired with the court orders division of the Supreme Court whether the judgment filed by the defendant's solicitors had been extracted. The defendant's solicitors were informed the matter had been referred to Commissioner Sleight's associate. Despite a written request from the defendant's solicitors to the plaintiffs' solicitors that the plaintiffs withdraw their opposition to the extraction of the judgment, the plaintiffs through their solicitors failed to take any steps to either withdraw the letter to the Supreme Court requesting the judgment not be extracted or make any application to the court. Faced with this impasse, the defendant's solicitors filed an application seeking an order that the court orders division of the Supreme Court be required to process the extraction of the judgment filed by the defendant's solicitors. On 12 September 2012I made an order that the court orders division of the Supreme Court allow the extraction of the judgment and reserved costs.
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61 Order 66 r 5 provides as follows in relation to orders be made against a solicitor personally.
5. Lawyer may be ordered to pay costs etc.
(1) Where in any proceedings costs are incurred by a party -
(a) as a result of any improper, unreasonable, or negligent act or omission; or
(b) which, in the light of any such act or omission occurring after they were incurred, the Court considers it is unreasonable to expect that party to pay,
the Court may order any practitioner whom it considers to be responsible (whether personally or through a servant or agent) -
(c) to pay those costs personally or to indemnify any party who has been ordered to pay those costs; or
(d) not to claim any relevant costs or fees; or
(e) to refund any relevant costs or fees which may have been paid already.
(2) No order under this rule shall be made against a practitioner unless he has been given a reasonable opportunity to appear before the Court and show cause why the order should not be made, except where any proceeding in court or in chambers cannot conveniently proceed, and fails or is adjourned without useful progress being made -
(a) because of the failure of the practitioner to attend in person or by a proper representative; or
(b) because of the failure of the practitioner to deliver any document for the use of the Court which ought to have been delivered, or to be prepared with any proper evidence or account, or otherwise to proceed.
(3) The Court may before making an order under this rule refer the matter to the taxing officer for inquiry and report.
(4) The Court may direct that notice of any proceedings or order against a practitioner under this rule shall be given to his client in such manner as may be specified in the direction.
62 The jurisdiction to make an order against a legal practitioner personally should be exercised with caution. Generally, practitioners should be free to act for their clients without being inhibited by a threat of
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- personal liability for costs: Re Bendeich (1994) 53 FCR 422; (1994) 126 ALR 643 [10].
63 An applicant's right for an order for payment of costs by a practitioner personally depends upon showing that the practitioner has been in breach of his or her duty to the court (Seaman 66.5.6). The court only has jurisdiction to make an order for payment of costs against the practitioner under the rule where the improper, unreasonable or negligent conduct complained of has caused an unjustifiable waste of costs: Ridehalgh v Horsefield [1994] Ch 205, 207; [1994] 3 WLR 462, 482 - 483; Seaman 66.5.5 and 66 5.7.
64 In response to the defendant's application for costs Mr Galic has sworn and filed an affidavit sworn 12 October 2012. Mr Galic did not seek independent representation on the application. On the application the plaintiffs were represented by Mr Garnsworthy on instructions from Galic & Co.
65 In his affidavit, Mr Galic states that he concluded that there might be a basis for an application to reopen the case on the basis of a pleading issue arising from [291] in Soia v Bennett [No 5]. This related to the plaintiffs' claim for damages under the Fair Trading Act 1987 (WA). In my reasons for decision I stated as follows:
289 According to the factual findings I have made earlier in this decision, the representational basis of the plaintiffs' claim of misleading or deceptive conduct has largely disappeared. The only relevant proven representations are set out earlier in this decision in my conclusions relating to par 3 of the statement of claim.
290 I find that these representations were to future matters and, accordingly, the plaintiffs' claims under the FTA based upon a 'falsification' (that is, that the representations were not carried out) cannot succeed as a matter of law.
291 It was never the pleaded case of the plaintiffs that:
(a) Mr Bennett did not have reasonable grounds for making the alleged representations; or
(b) that it could be implied from Mr Bennett's alleged non-compliance that when he made the alleged representations that he did not intend to carry out the representations or have the capacity to do so.
292 The plaintiffs sought to overcome this legal obstacle to their claims by applying, after the close of evidence and after the close of
- addresses, to amend the statement of claim to plead in the alternative to the falsification claim that the representations were to future matters and they were made without reasonable grounds. I disallowed the proposed amendments given the lateness of the application and the unfairness that would arise: Soia v Bennett [No 3] [2011] WASC 361 (Soia v Bennett [No 3]). The particulars of the proposed amended claim were as follows:
'The defendant at the time he made the representations had no intention of funding the business or did not have reasonable grounds for saying he was going to fund the business to the extent required for its development as set out in the budget of $1,765,765 for the first year and $1,980,000 for the second year or the management fees listed therein as $200,000 for the first year and $300,000 for the second year or to pay any management fees at all until the business had its own income.'
- 293 Even if I had allowed the amendment, consistent with my factual findings, the claim would have been defeated on the basis that the representations were not made as alleged in these particulars.
66 Mr Galic states that in July 2009 the plaintiffs had applied to amend the statement of claim to plead that 'there was no reasonable grounds for the making of the said representations as the defendant did not have the financial capacity required and/or the means necessary to make good the said representations'. Mr Galic stated that Master Sanderson disallowed the proposed amendment. Mr Galic stated that his recollection (my emphasis) was that the proposed amendment was disallowed by Master Sanderson on the grounds that 'he did not consider the proposed amendments to be necessary'.
67 The explanation given by Mr Galic provides no reasonable explanation or justification for requesting that the judgment not be extracted. Trial counsel had already made an application to amend the statement of claim by pleading that there were no reasonable grounds for Mr Bennett making the alleged representations and this application had been dismissed: Soia v Bennett [No 5] [292]; Soia v Bennett [No 3] [2011] WASC 361. Further, at no time did the plaintiffs file an application to reopen as foreshadowed in the letter sent by Mr Galic to the Supreme Court dated 30 August 2012.
68 Mr Galic sought to justify his steps in frustrating the extraction of the judgment on the basis that he was unable to seek advice from trial counsel due to a fee dispute. Further that at the time he was under personal pressure due an illness in his family. Other than these broad contextual
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- circumstances, Mr Galic gave no explanation as to why an appropriate application was not filed with the court on urgent basis.
69 I conclude that in the circumstances Mr Galic has acted unreasonably by seeking to delay the extraction of the judgment and/or not filing an urgent application to the court seeking a stay of the extraction of the judgment. This caused an obvious expense to the defendant by forcing an application to be made to the court compelling the extraction of the judgment. I consider it is unreasonable to expect either Mr Galic's clients to pay the these costs or the defendant. I consider that Mr Galic was responsible for the unreasonable decision to frustrate the extraction of the judgment entered. Accordingly, I conclude that an order should be made that Mr Galic pay the costs of this application. For the same reasons, I conclude the costs should be on an indemnity basis: Seaman 66 1.66.
Orders
70 For the above reasons I make the following orders:
1. The plaintiffs pay 50% of the defendant's costs of the action to be taxed if not agreed, from 21 February 2011, and for the purpose of such taxation:
(i) no allowance be made for time spent for legal services of Mr Bennett and Mr Colin Edward Chenu of Bennett & Co;
(ii) pursuant to s 280 (2) (c) of the LPA 2008, any limits fixed by any relevant costs determination are removed with respect to:
(a) Item 7(b) - Giving Discovery;
(b) Item 17 - Getting-up; and
(c) Item 20 - Trial
(where the limits fixed by the relevant costs determination are based on a formula of the number of hours multiplied by the rate of charge for a senior or junior practitioner, the limits are removed only as to the number of hours).
2. The plaintiffs' solicitor, Mr T Galic, pay personally the defendant's costs on an indemnity basis with respect to the application by the defendant seeking orders permitting the defendant to extract a judgment in accordance with the order of Commissioner Sleight made 16 August 2012.
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71 The defendant also sought reserved costs. However, no orders for reserved costs were identified in written or oral submissions. In the absence of any orders for reserved costs being identified or submissions being presented in support of such orders, I have not included in my orders any provision for reserved costs.
72 Finally, I will hear counsel as to any application for costs in relation to the hearing for costs.
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