SP Investments Pty Ltd v Hancock Prospecting Pty Ltd [No 2]

[2012] WASC 118

SP INVESTMENTS PTY LTD -v- HANCOCK PROSPECTING PTY LTD [No 2] [2012] WASC 118

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2012] WASC 118
Case No:	CIV:3074/2010	Heard:	ON THE PAPERS
Coram:	KENNETH MARTIN J	Delivered:	4/04/12
No of pages:	6	Judgment Part:	1 of 1
Result:	Order made for payment forthwith on indemnity basis
Category:	B
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Parties:	SP INVESTMENTS PTY LTD AS TRUSTEE FOR THE LEONARD MICHAEL BRENNAN TRUST HANCOCK PROSPECTING PTY LTD WRIGHT PROSPECTING PTY LTD HAMERSLEY IRON PTY LTD
Catchwords:	Interpleader Costs of party interpleading Identification Costs reserved to trial or forthwith
Legislation:	Nil
Case References:	Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : SP INVESTMENTS PTY LTD -v- HANCOCK PROSPECTING PTY LTD [No 2] [2012] WASC 118 CORAM : KENNETH MARTIN J HEARD : ON THE PAPERS DELIVERED : 4 APRIL 2012 FILE NO/S : CIV 3074 of 2010 BETWEEN : SP INVESTMENTS PTY LTD AS TRUSTEE FOR THE LEONARD MICHAEL BRENNAN TRUST

Plaintiff

AND

HANCOCK PROSPECTING PTY LTD
First Defendant

WRIGHT PROSPECTING PTY LTD
Second Defendant

HAMERSLEY IRON PTY LTD
Third Defendant

Catchwords:

Interpleader - Costs of party interpleading - Identification - Costs reserved to trial or forthwith

Legislation:

Nil

(Page 2)

Result:

Order made for payment forthwith on indemnity basis

Category: B

Representation:

Counsel:

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

Solicitors:

Plaintiff : King & Wood Mallesons
First Defendant : Tottle Partners
Second Defendant : Clayton Utz
Third Defendant : Allens Arthur Robinson

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

Nil

(Page 3)

1 KENNETH MARTIN J: I am dealing with the application of the third defendant for interpleader orders whereby it essentially abides the outcome of the proceedings between the plaintiff and the first and second defendants. There is no objection of principle to the making of interpleader orders in favour of the third defendant, but there are some residual issues as to costs. By agreement of the parties, the matter has been dealt with on the papers and various minutes have been exchanged.

2 There has been a degree of evolution in the proposed orders. I note for the record that I have received written submissions from the parties as follows:

(a) Third defendant's submissions in support of interpleader application, filed 28 February 2011 (which advocate for orders in terms of an amended minute of proposed orders filed the same day).

(b) Second defendant's submissions regarding the third defendant's interpleader application, filed 13 March 2012 (indicating non-opposition to orders 1, 2, 3 and 6 of the third defendant's amended minute but opposing orders 4 and 5).

(c) Plaintiff's submissions, filed 14 March 2012 (also indicating non-opposition to orders 1, 2, 3 and 6 and opposing proposed orders 4 and 5).

(d) First defendant's submissions regarding the third defendant's interpleader action of 15 March 2012 (indicating non-opposition to orders 1, 2, 3 and 6 and opposing orders 4 and 5 of the amended minute).

(e) Third defendant's submissions in reply, filed 16 March 2012, which are supported by an affidavit of Trudi Nicole Steedman sworn 16 March 2012 and a further amended minute of proposed orders filed 16 March 2012. By its revised minute the third defendant makes some adjustments to orders 4 and 5 in light of the objections raised by the plaintiff, first defendant and second defendant.

3 It is convenient to set out the terms of the third defendant's further amended minute of 16 March 2012. As regards proposed orders 4 and 5, I will highlight adjustments which have been made by the third defendant, in effect, by way of concession to concerns raised by the other parties.

(Page 4)

4 The proposed interpleader orders under the third defendant's further minute of 16 March 2012 are:

1. Upon the Third Defendant filing and serving a notice that it will abide by the decision of the Court and subject to paragraphs 2 and 3 below, the Third Defendant is excused from all further participation or attendance in these proceedings, until further order (if any).

2. Subject to their compliance with case management orders, the Plaintiff, First and Second Defendants are not precluded from making applications for further discovery from the Third Defendant, by reason only that the Third Defendant has been excused from all further participation or attendance in these proceedings. The grounds upon which the Third Defendant may oppose any such discovery application are otherwise not limited.

3. If declarations and orders are made by the Court in terms of the relief claimed by the plaintiff in paragraphs B - CB of its further amended statement of claim dated 12 August 2012, the amount of any payment that must be made by the Third Defendant to the Plaintiff pursuant to those orders, including interest:


(a) may be deducted by the Third Defendant from monies payable to the First and Second Defendant under the Royalty Agreement (as defined in the further amended statement of claim) after the date of judgment; and

(b) paid to the plaintiff.


4. Save to the extent that costs have been unreasonably incurred or are of an unreasonable amount, the Third Defendant's external and internal costs of and incidental to these proceedings (including all costs of complying with, and incidental to giving, discovery) be paid on an indemnity basis from the monies referred to in order 3(c) of the orders made by Kenneth Martin J on 8 February 2011. Subject to paragraph 5, all costs ordered in favour of the Third Defendant, including previous orders, be paid forthwith.

5. If the quantum of the Third Defendant's costs are agreed then, no later than 3 weeks after this order or 3 weeks after the date on which the Third Defendant notifies the other parties of its external and internal costs (whichever is the later), the parties are to file a minute of consent orders for the payment out of the interest bearing account to the Third Defendant of its agreed costs. In the absence of agreement, the Third Defendant's costs are to be taxed and, following taxation, the parties are to file a minute of consent orders for the payment out of the interest bearing account to the Third Defendant of its taxed costs.

(Page 5)

6. The parties have general liberty to apply.

5 Proposed orders 1, 2, 3 and 6 are now uncontroversial. They can be made.

6 Following an excision (which the third defendant now accepts) of the problematic adjectives 'external and internal' as regards the noun 'costs', the only residual points of contention concerning proposed order 4 are whether costs should be reserved and, if not, whether the third defendant's costs should be paid immediately. The plaintiff and second defendant accept that if the third defendant's costs are not reserved they should be paid forthwith. The first defendant does not make that concession.

7 I am of the view, in the context of this particular interpleader situation, that there is no reason why the third defendant's legal costs should not be paid immediately. There is an available fund of money from which payment can be made. In my view there is no reason to delay or interrupt the proper reimbursement to the third defendant for its legal costs on what is uncontroversially accepted (if the third defendant's costs are not reserved) will be an indemnity basis.

8 I am of the view that the question of the third defendant's costs on the interpleader ought not be reserved until trial. The third defendant should timeously receive, as regards its legal costs, a full indemnification for its legal expenses (including disbursements). Proposed order 4 delivers that indemnification result, invoking the orthodox terminology of an exclusion only of costs unreasonably incurred, or of an unreasonable amount. Proposed order 4 in its amended terms is now appropriate.

9 In its submissions, the second defendant referred me to paragraphs 25A and 25B of its further amended defence and counterclaim. In those paragraphs the second defendant asserts, in effect, that the plaintiff's claim in the proceedings arises out of the third defendant's default: a failure to pay 15% of the Hanwright Royalties directly to Mr Perron in accordance with a tripartite agreement alleged to exist by the second defendant. The second defendant says the third defendant should not be permitted to recover its costs until it is known whether the third defendant's alleged default caused conflicting claims in this case.

10 I am not persuaded this potential argument is a sufficient basis for refusing to make proposed orders. The key issue in dispute in the action, as I assess it at this interlocutory stage, is whether or not royalty payments made by the third defendant in respect of some Brockman Project iron ore mines near Tom Price have been erroneously received over time by the

(Page 6)

first and second defendants instead of the plaintiff. The plaintiff says these Brockman mines fall within the area to which the arrangements for the payment to it of a 15% royalty out of what the first and second defendants would otherwise receive, as reached in 1964, are applicable. As I assess the position, the first and second defendants strongly dispute that Mr Perron or the plaintiff (which is his assignee/trustee corporation) is so entitled. They press their entitlements to these royalty funds.

11 Given a stark clash of positions, it seems to me that the point over direct payment, by reference to an alleged tripartite agreement, does not really bear upon the reasonableness of the interpleader stance taken by the third defendant once these proceedings were begun by the plaintiff. It is not appropriate the third defendant's interpleader costs be deferred. The issue can be addressed now.

12 I now move to proposed order 5. The only controversial point is in relation to a proposed insertion by the plaintiff of the word 'reasonable', before the word 'costs' in the first line of proposed order 5. But that alteration is opposed by the third defendant on the basis that the proposed reasonableness augmentation will be of no utility. This is because either there will be some agreement reached under proposed order 5, as to the quantum of the third defendant's indemnity costs, or there will not. In the latter case, the matter would then proceed to a taxation before a Registrar of this court. Proposed order 4 proceeds on the basis that the third defendant holds an entitlement to indemnity costs. Insertion of the word 'reasonable' in proposed order 5 as regards the quantum of those costs will, the third defendant says, be redundant and confusing. I accept that submission. The word 'reasonable' will not be added to proposed order 5. In my view, proposed order 5 is otherwise appropriate.

13 Accordingly, I will today make orders 1 to 6 inclusive, pursuant to the further amended minute of proposed orders as filed by the third defendant on 16 March 2012.