Stewart v Biodiesel Producers Ltd
[2009] WASC 145 (S)
•28 MAY 2009
| JURISDICTION | : | SUPREME COURT OF WESTERN AUSTRALIA IN CIVIL |
| CITATION | : | STEWART -v- BIODIESEL PRODUCERS LTD [2009] WASC 145 (S) |
| CORAM | : BEECH J | ||
| HEARD |
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| DELIVERED |
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| SUPPLEMENTARY | |||
| DECISION |
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| FILE NO/S |
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| BETWEEN | : ANTHONY PAUL STEWART |
Plaintiff
AND
BIODIESEL PRODUCERS LTD
Defendant
Catchwords:
Costs - Whether plaintiff should pay defendant's costs of the action on an indemnity basis - Turns on own facts
Legislation:
Nil
Result:
| Plaintiff to pay defendant's costs to be taxed if not agreed Category: B | [2009] WASC 145 (S) |
| Representation: | |
| Counsel: |
| Plaintiff | : | No appearance |
| Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | B W Duckham & Co |
| Defendant | : | Williams & Hughes |
Case(s) referred to in judgment(s):
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
DP World Australia Ltd v Fremantle Port Authority [2009] WASCA 16
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003]
WASC 122(S); (2003) 28 WAR 95
NMFM Property Pty Ltd v Citibank Ltd (No 2) [2001] FCA 480; (2001) 109
FCR 77
Redowood Pty Ltd v Link Market Services Pty Ltd [2007] NSWCA 286
Stewart v Biodiesel Producers Ltd [2009] WASC 145
Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18
WAR 190
| BEECH J | [2009] WASC 145 (S) |
BEECH J: On 28 May 2009 I delivered my reasons on the trial of preliminary issues in this action: Stewart v Biodiesel Producers Ltd [2009] WASC 145. In summary, I found that Mr Stewart's claims in this action were not precluded by a cause of action estoppel, but were precluded by an Anshun estoppel.
On 28 May 2009 I ordered that:
1. The action be permanently stayed;
2. Subject to par 3, the plaintiff pay the defendant's costs of the action to be taxed; and
3. The defendant have liberty to apply with accompanying written submissions within seven days for an order for indemnity costs, in which event:
(a) the order in par 2 is vacated; (b) the plaintiff file and serve submissions in opposition within 14 days; and (c) the question of costs be determined on the papers.
3 The defendant invoked the liberty in par 3 of those orders. The
defendant applies for an order to the effect that the plaintiff pay the
defendant's costs on an indemnity basis.
For the reasons that follow, I am not persuaded that costs should be awarded on an indemnity basis.
I begin with an outline of some general principles relevant to the exercise of the discretion to award costs.
6 The usual costs order is that the party who succeeds in an action is
awarded its costs on a party and party basis. An order for indemnity costs will be made only if there is some special or unusual feature in the case to justify departure from the ordinary practice. The court has power to make an indemnity costs order whenever justice requires it: Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190; Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122(S); (2003) 28 WAR 95 [8].
7 The categories of cases in which the discretion to award indemnity
costs may be exercised are not closed: Colgate-Palmolive Co v Cussons
| BEECH J | [2009] WASC 145 (S) |
Pty Ltd (1993) 46 FCR 225, 233 - 234; Unioil International Pty
Ltd (191).8 Most of the situations in which indemnity costs have been awarded
have involved an element of improper or unreasonable conduct on the part of the unsuccessful party or its advisers in the conduct of the case: Flotilla Nominees Pty Ltd [9]; Colgate-Palmolive Co (233 - 234). In Flotilla Nominees Pty Ltd [9] Pullin J gave some examples:
Thus, the making of allegations of fraud knowing them to be false, or the commencement of proceedings for some ulterior motive, or in wilful disregard of known facts or the established law, or the making of allegations which ought never to have been made, or the undue prolongation of a case on groundless contentions, and even an unreasonable refusal to accept an offer of compromise, may lead to indemnity costs orders. See Colgate-Palmolive v Cussons (supra) at 233. The creation of false issues by tactical denials or failures to admit the facts may, in the circumstances of particular cases, lead to such an order: Unioil's case. An action commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success, may lead to such an order because such action might be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law. See Fountain Selected Meats (supra).
9 Where one party points out to the other, with sufficient particularity,
reasons why it is inevitable that the other party's case must fail, this can be a factor in favour of an award of indemnity costs: NMFM Property Pty Ltd v Citibank Ltd (No 2) [2001] FCA 480; (2001) 109 FCR 77 [87] - [88].
10 Generally at least, an indemnity costs order will not be made unless
it is shown that some part of the costs order will not be covered by an order for party party costs or by a special costs order: Unioil International Pty Ltd (193); Flotilla Nominees Pty Ltd [11], [24] - [26].
11 I turn to the matters relied upon by Biodiesel Producers Ltd (BPL)
in support of its contention that costs should be awarded on an indemnity
basis.12 The starting point for BPL's submissions is the proposition that the
rationale of the Anshun doctrine is to prevent abuses of the process of the court. Consequently, an attempt to litigate a claim which should (in the Anshun sense) have been litigated in the prior proceedings is itself an abuse of process. BPL refers to the decision of the New South Wales Court of Appeal in Redowood Pty Ltd v Link Market Services Pty Ltd
| BEECH J | [2009] WASC 145 (S) |
[2007] NSWCA 286 [44] - [45] in support of its submissions. I accept that those passages in the Redowood decision support the proposition advanced by BPL. However, in my principal reasons in this action I stated [55] that in Anshun's case the High Court rejected the proposition that it was an abuse of process to raise in subsequent proceedings matters which could and should have been litigated in earlier proceedings. In that respect, I followed what Newnes AJA (as his Honour then was) had said (McLure JA agreeing) in DP World Australia Ltd v Fremantle Port Authority [2009] WASCA 16 [75].
13 Consequently, I do not accept BPL's contention that commencement
of an action subsequently found to be precluded by Anshun estoppel of
itself involves an abuse of process.
BPL refers to three further matters in support of its contention that indemnity costs should be awarded:
1. A deliberate decision was made in the Federal Court action not to pursue the Quantum Meruit Claim which was then pursued in this action (as I found [187]); 2. The Agreement Claim in this action involved an attempt to characterise conversations between Messrs Stewart and Barron as amounting to a contract between Mr Stewart and BPL, when Mr Stewart had said in the Federal Court action that those same conversations constituted an agreement between Mr Stewart and Mr Barron personally. BPL says this must have been apparent at least to Mr Stewart's legal advisers; 3. BPL's solicitor's letter of 23 July 2008 which stated that the Anshun principle would preclude this action. 15 BPL's solicitor's letter of 23 July 2008 made a number of assertions
about alleged flaws in Mr Stewart's claim in the action. The decision in the Federal Court action was said to create an issue estoppel in several respects. Those contentions were developed in some detail. The letter stated that the claim or parts of the claim were untenable for grounds relating to the merits of the action. A short paragraph near the end of the letter stated that the relief claimed was relief which ought reasonably to have been claimed in the proceedings and arose out of substantially the same facts, and that accordingly there was an Anshun estoppel.
16 Questions of issue estoppel were not pursued at the trial of
preliminary issues. Questions as to the merits have not been determined.
| BEECH J | [2009] WASC 145 (S) |
In my view, the letter is not of the kind referred to by Lindgren J in NMFM Property Pty Ltd [87] as might justify an award of indemnity costs.
17 In my opinion, the three matters relied on by BPL, individually and
taken together, do not call for a departure from the general rule that costs
be paid on a party party basis.
For these reasons, I am not satisfied that it is appropriate to award costs on an indemnity basis.
Accordingly, I order that the plaintiff pay the defendant's costs of the action to be taxed.
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