TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd
[2020] WASC 364 (S)
•28 OCTOBER 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: TEC HEDLAND PTY LTD -v- THE PILBARA INFRASTRUCTURE PTY LTD [2020] WASC 364 (S)
CORAM: HILL J
HEARD: 21 OCTOBER 2020 & ON THE PAPERS
DELIVERED : 28 OCTOBER 2020
PUBLISHED : 28 OCTOBER 2020
FILE NO/S: CIV 3060 of 2017
BETWEEN: TEC HEDLAND PTY LTD
Plaintiff
AND
THE PILBARA INFRASTRUCTURE PTY LTD
Defendant
Catchwords:
Evidence - Legal professional privilege - Inspection of documents over which privilege claimed by defendant - Turns on own facts
Legislation:
Nil
Result:
Plaintiff's application upheld in respect of six documents
Plaintiff's application otherwise dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | A Messina |
| Defendant | : | R Young |
Solicitors:
| Plaintiff | : | Norton Rose Fulbright Australia |
| Defendant | : | Corrs Chambers Westgarth |
Case(s) referred to in decision(s):
AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30
TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364
HILL J:
On 21 October 2020 I published reasons for decision on the plaintiff's application for production of the Disputed Documents by the defendant (Primary Reasons).[1] In the Primary Reasons, I exercised my discretion to require the defendant to produce 61 documents for my inspection. The purpose of the inspection is to determine whether the documents are properly the subject of a claim for legal professional privilege. These supplementary reasons address the result of this inspection.
[1] TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364.
For the reasons that follow, it is my view that the defendant's claim for privilege over documents 769, 770, 771, 772, 977 and 1212 has not been established and these documents should be produced to the plaintiff for inspection. Otherwise, the plaintiff's application should be dismissed.
Purpose of inspection of documents
The purpose of inspecting the documents over which the defendant has claimed privilege is to determine whether, on the face of the documents, the nature and content of the document supports the claim for legal professional privilege.[2]
[2] AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 [44(12)].
In undertaking the inspection, I recognise that I do not have the benefit of additional submissions from either party or any further evidence to place any of the documents in their proper context. In considering the documents, I have had regard to the evidence and submissions made by the parties on the hearing of the application. Specifically, in inspecting the documents, I have had regard to the following matters.
First, in submissions before me at the hearing on 8 April 2020, the plaintiff accepted that where an email seeks legal advice from Ms Cowcher and commercial or operational views or input from others on the issue, the communication will be protected by privilege.[3] However, if the email was seeking to identify facts or events that had occurred, it was not protected by privilege. This position was reflected in [69] of the Primary Reasons.
[3] Plaintiff's submissions [30].
Second, in considering whether the email is privileged, I am reminded that the court should not take a narrow view and that legal advice is not confined to providing advice on the law but includes advice 'as to what prudently and sensibly should be done in the relevant legal context.'[4]
[4] See Primary Reasons [25] and the authorities cited and footnoted therein.
Disposition
Multi-addressee emails
Emails from Andrew Nuttman
Documents 534 and 535
I dealt with these documents at [76] ‑ [81] of the Primary Reasons.
Having inspected the document, the redacted portion of the email is an email from Mr Keay to Ms Cowcher, which is copied to Mr Fewster, Mr Nuttman and Mr Garg. It is clear on the face of the document that the redacted portion of the email seeks legal advice from Ms Cowcher and input from the other recipients on the same issue. On this basis, I consider that the defendant's claim for privilege over the email and the attachment is properly made and should be upheld.
Document 1287
I dealt with this document at [125] - [128] of the Primary Reasons.
In relation to document 1287, having inspected this document, the email is addressed to 'B' which I infer and find to be a reference to Ms Cowcher. It is clear that this email is a reply to an earlier email from Ms Cowcher to each of Mr Anderson and Mr Nuttman, copied to Ms Giudici. On this basis, I am satisfied that the dominant purpose of Mr Nuttman in sending this email was to provide Ms Cowcher with instructions.
For this reason, I accept that the defendant's claim for privilege is properly made over this document and should be upheld.
Documents 2003, 2015, 2016 and 2017
I dealt with these documents at [129] - [132] of the Primary Reasons.
Document 2003 is an email from Mr Nuttman to Ms Cowcher, Mr Anderson and Ms Giudici dated 24 August 2017. The email attaches a document (Document 2004) entitled 'how to conduct a plant performance test'. From the Original Schedule, it appears that the defendant originally objected to inspection of this document. I infer that this objection was resolved between the parties as document 2004 was not one of the Disputed Documents I was required to consider.
Having inspected this document, it is clear on the face of the document that the attached document was provided to Ms Cowcher as part of the continuum of communications for the dominant purpose of enabling Ms Cowcher to provide legal advice and for the other recipients to provide input on the same issue. On this basis, I consider that the defendant's claim for privilege over document 2003 is properly made and should be upheld.
Document 2015 is an email from Mr Nuttman to Ms Cowcher and Mr Anderson, copied to Ms Giudici. Having inspected this document, it is clear on the face of the document that the email was sent to Ms Cowcher for the dominant purpose of seeking legal advice from Ms Cowcher and that the other recipients to the email were copied in to keep them informed. On this basis, I accept that the defendant's claim for privilege over document 2015 is properly made and should be upheld.
Document 2016 is a further email from Mr Nuttman to Ms Cowcher and Mr Anderson, copied to Ms Giudici on the same topic. The email attaches document 2017, a memorandum from Mr Nuttman addressed to Ms Cowcher, and copied to Mr Anderson and Ms Giudici. Having inspected these documents, it is clear on the face of the documents that both the email and the memorandum were sent to Ms Cowcher for the dominant purpose of seeking legal advice from Ms Cowcher and that the other recipients were copied in to keep them informed. On this basis, I accept that the defendant's claim for privilege over documents 2016 and 2017 is properly made and should be upheld.
Documents 2082 to 2085
I dealt with these documents at [133] - [136] of the Primary Reasons.
Document 2082 is an email from Mr Nuttman to Ms Cowcher and Mr Anderson. The email attaches document 2083 which is a memorandum from Mr Nuttman addressed to Ms Cowcher and copied to Mr Anderson and Ms Giudici. Having inspected these documents, it is clear on the face of the documents that both the email and the memorandum were sent to Ms Cowcher for the dominant purpose of seeking legal advice from Ms Cowcher and that the other recipients were copied in to keep them informed. On this basis, I accept that the defendant's claim for privilege over documents 2082 and 2083 is properly made and should be upheld.
Documents 2084 and 2085 are documents which are in almost identical terms. On this basis, the same reasoning as set out in [18] applies to these documents. Accordingly, I accept the defendant's claim for privilege is properly made and should be upheld.
Documents 2096 and 2098
I dealt with these documents at [137] - [139] of the Primary Reasons.
Document 2096 is an email from Mr Nuttman to Ms Cowcher, Mr Anderson and Mr Garg. The document was produced with partial redactions to the plaintiff on 28 January 2020. The defendant objects to production of the redacted portion on the basis that it contains information on which Ms Cowcher was advising.
Having inspected the document, I am satisfied that on the face of the document, the redacted portion of the document is addressed to Ms Cowcher. On this basis, I accept that it was sent for the dominant purpose of seeking legal advice from Ms Cowcher and that the other recipients were copied in to the redacted portion to keep them informed. On this basis, I accept that the defendant's claim for privilege over the redacted portion of document 2096 is properly made and should be upheld.
Document 2098 is an email sent by Mr Nuttman to the same recipients shortly after document 2096 in almost identical terms. For this reason, the same reasoning as set out in [22] applies to this document. Accordingly, I accept the defendant's claim for privilege is properly made over the redacted portion of the document and should be upheld.
Documents 2191, 2192 and 2194
I dealt with these documents at [119] of the Primary Reasons.
Document 2191 is an email from Mr Nuttman to Ms Cowcher and Mr Anderson dated 26 September 2017. Documents 2192 and 2194 are identical documents and are almost identical to document 2191, although the email is sent some four hours later.
Having inspected these documents, it is clear on the face of the document that:
(a)the Leidos Report was commissioned by the plaintiff and provided to the defendant; and
(b)the email from Mr Nuttman was sent for the dominant purpose of providing Ms Cowcher with instructions and that Mr Anderson was copied in for his input and to keep him informed.
On this basis, I accept that the defendant's claim for privilege over these documents is properly made and should be upheld.
Documents 2196, 2284, 2357 and 2359
I dealt with these documents at [143] - [145] of the Primary Reasons.
Document 2196 is an email from Mr Nuttman to Ms Cowcher and Mr Anderson dated 26 September 2017. Having inspected the document, the email is addressed to 'B' which I infer and find to be a reference to Ms Cowcher. On this basis, it is clear that the email from Mr Nuttman was sent for the dominant purpose of providing Ms Cowcher with instructions and that Mr Anderson was copied in for his input and to keep him informed.
Document 2284 is an email from Mr Nuttman to Ms Cowcher, Mr Anderson and Ms Giudici dated 5 October 2017 which replies to an email sent by Ms Cowcher earlier that day. Having inspected the document, the email is addressed to 'B' which I infer and find to be a reference to Ms Cowcher. On this basis, I am satisfied that the email was sent by Mr Nuttman for the dominant purpose of providing Ms Cowcher with instructions and that Mr Anderson and Ms Giudici were copied in to keep them informed (as recipients of the original email from Ms Cowcher).
Document 2357 is an email from Mr Nuttman to Ms Cowcher and Mr Anderson dated 12 October 2017 and attaches document 2359. Having inspected these documents, the email is addressed to 'Bethwyn' which I accept is a reference to Ms Cowcher. On this basis, I am satisfied that these documents were sent by Mr Nuttman for the dominant purpose of providing Ms Cowcher with instructions and that Mr Anderson was copied in to keep him informed.
For these reasons, I accept that the defendant's claim for privilege over these documents is properly made and should be upheld.
Documents 2409 and 2416
I dealt with these documents at [146] - [149] of the Primary Reasons.
Document 2409 is an email from Mr Nuttman to Ms Cowcher and Mr Anderson dated 23 October 2017. Document 2416 is an almost identical document sent shortly after document 2409. Having inspected these documents, they concern the same subject matter as document 2357 and are also addressed to Ms Cowcher. I find that these documents form part of the continuum of communication between Mr Nuttman and the defendant's internal legal counsel. For the same reasons as set out at [30] ‑ [31], I accept the defendant's claim for privilege is properly made over these documents.
Emails from Matthew Anderson
Documents 769 and 770
I dealt with these documents at [161] - [164] of the Primary Reasons.
Having inspected these documents, on their face, the purpose of Mr Anderson's email to Ms Giudici is to request that she draft a document. While I accept that Mr Anderson's purpose in copying Ms Cowcher into the email was so that she knew her advice would be sought, it is not clear on the face of the document which, if any, was the dominant purpose.
For these reasons, the defendant has not established that the dominant purpose in sending this email was to give Ms Cowcher instructions. Accordingly, I do not consider the defendant's claim for privilege can be upheld in respect of these documents. I would allow the plaintiff's application for production of these documents for inspection.
Documents 810 to 813
I dealt with these documents at [165] - [168] of the Primary Reasons.
Having inspected these documents, documents 810, 811 and 813 are part of an email chain that commences with an email from Ms Cowcher to Mr Anderson and Mr Nuttman. Document 812 is an annexure to document 811. I am satisfied that it is clear that these documents were sent by the author (Mr Anderson for 810 and 813 and for 811, Mr Nuttman) for the dominant purpose of providing Ms Cowcher with instructions and that the other recipient (Mr Nuttman or Mr Anderson) was copied in to keep him informed. These documents are part of the continuum of communications between internal legal counsel and Mr Anderson and Mr Nuttman and includes Ms Cowcher's legal advice. For these reasons, I am satisfied that the defendant's claim for privilege is properly made over these documents and should be upheld.
Documents 771, 772, 977, 1212, 1269
I dealt with these documents at [177] - [180] of the Primary Reasons.
Having inspected documents 771 and 772, it is clear on the face of these documents that they are identical to documents 769 and 770. Accordingly, the same reasons apply to these documents as set out at [35] ‑ [37]. I would allow the plaintiff's application to for inspect these documents.
In relation to document 977, having inspected this document, I am satisfied that:
(a)the purpose of Mr Anderson in sending this email to Ms Cowcher was to provide her with information which was relevant from a legal perspective; and
(b)his purpose in sending the email to Ms Giudici was to keep her up to date.
There is no evidence before me as to which was the dominant purpose of Mr Anderson. While I accept that the copy of the email in Ms Cowcher's email inbox falls within the Propend principle, the copies of the emails in others do not. For these reasons, I consider that the defendant has not established the dominant purpose in sending this email was to give legal instructions or that the defendant's claim for privilege can be upheld in respect of this document. I would allow the plaintiff's application to inspect this document.
In relation to document 1212, having inspected this document, I am satisfied that:
(a)the purpose of Mr Anderson in sending this email to Ms Cowcher was to provide her with information which was relevant from a legal perspective; and
(b)his purpose in sending the email to Mr Nuttman and Ms Giudici was to keep them up to date.
In relation to document 1269, having inspected the document and having regard to Mr Anderson's evidence in relation to this email[5] and his purpose in emailing Ms Cowcher, I am satisfied that the dominant purpose in sending this email was to obtain legal advice from Ms Cowcher and that he copied Mr Nuttman into the email to keep him up to date and so that Mr Nuttman could provide his input. For these reasons, I am satisfied that the defendant’s claim for privilege over the document should be upheld.
[5] Affidavit of Matthew David Anderson filed 17 January 2020 [44(c)].
There is no evidence before me as to which was the dominant purpose of Mr Anderson in sending this email. While I accept that the copy of the email in Ms Cowcher's email inbox falls within the Propend principle, the copies of the emails in others do not. For these reasons, I consider that the defendant has not established the dominant purpose in sending this email was to give legal instructions or that the defendant's claim for privilege can be upheld in respect of this document. I would allow the plaintiff's application to inspect this document.
Emails from Atul Garg
Documents 1702 and 1705
I dealt with these documents at [209] - [212] of the Primary Reasons.
Having inspected these documents, it is clear on the face of these emails that they are part of an email chain between Mr Garg, Mr Anderson and Ms Cowcher, copied to Mr Humphries. I am satisfied that on the face of these documents, the redacted portions of these documents contain Ms Cowcher's advice and is part of a continuum of communications between these individuals for the dominant purpose of providing instructions or giving legal advice. For this reason, I am satisfied that the defendant's claim for privilege is properly made over the redacted portions of these documents and should be upheld.
Communications between non-lawyers
Document 686
I dealt with this document at [237] ‑ [238] of the Primary Reasons.
Having inspected this document, it is clear that the redacted portion of the email is part of an email chain between Ms Cowcher and Mr Keay, which Mr Anderson and Mr Nuttman are added into. I am satisfied that on the face of these documents, the redacted portions of this document contains Ms Cowcher's advice and is part of a continuum of communications between these parties for the dominant purpose of providing instructions or giving legal advice. For this reason, I am satisfied that the defendant's claim for privilege is properly made over the redacted portions of this document and should be upheld.
Documents 537, 538, 546, 547, 548, 549, 560, 561, 563 and 564
I dealt with these documents at [243] - [246] of the Primary Reasons.
Having inspected document 537 and its attachment, document 538, it is clear on the face of the document that it is an email from Mr Garg to Mr Keay which is part of an email chain commencing with an email from Mr Keay to Ms Cowcher copied to Mr Fewster, Mr Nuttman and Mr Garg attaching document 538. It is this email that is the subject of the redaction by the defendant. I am satisfied that an email from Mr Keay to Ms Cowcher which is copied to a limited number of other people is sent for the dominant purpose of seeking Ms Cowcher's advice on the attached document and to obtain the input of others on the document. For these reasons, I am satisfied that the defendant's claim for privilege is properly made over the redacted portion of 537 as well as document 538 and should be upheld.
Documents 546 to 549 and 563 and 564 are all copies of different versions of document 538. Having inspected these documents (including the electronic versions I was provided of documents 547 and 548), I am satisfied that the dominant purpose of these documents was to record Ms Cowcher's advice or the instructions she was given. For this reason, I consider that the defendant's claim for privilege is properly made over each of these documents and should be upheld.
Having inspected documents 560 and 561, on its face, document 560 is an email from Mr Keay to Mr Garg which is part of an email chain commencing with an email from Ms Cowcher to Mr Keay, copied to Mr Fewster, Mr Garg and Mr Nuttman. It is this email that is the subject of the redaction. I am satisfied that an email from Ms Cowcher to Mr Keay, which is copied to a limited number of other people, is sent for the dominant purpose of providing legal advice. In respect of the attachment (document 561), I have inspected both a hard copy and electronic version of the document. I am satisfied that the attachment contains Ms Cowcher's legal advice and, as a result, is properly subject to a claim for legal professional privilege. For these reasons, I am satisfied that the defendant's claim for privilege is properly made over the redacted portion of 560 as well as document 561 and should be upheld.
Documents 1601, 1602, 2556 and 2559
I dealt with these documents at [249] - [252] of the Primary Reasons.
Having inspected documents 1601 and 1602, document 1601 is an email from Ms Giudici to Mr Anderson which is part of an email chain commencing with an email from Mr Nuttman to Mr Anderson and Ms Cowcher which is copied to Mr Garg and Ms Giudici. It is this email that is the subject of the redaction.
Consistent with the approach that I have taken in relation to other documents, I am satisfied that the email from Mr Nuttman was sent to Ms Cowcher for the dominant purpose of obtaining legal advice and was sent to the other recipients for the purpose of obtaining their input on the matters raised. For these reasons, I am satisfied that the defendant's claim for privilege is properly made over the redacted portion of 1601 as well as its attachment (document 1602) and should be upheld.
Having inspected document 2556, this document is an email from Ms Giudici to Mr Anderson which forward an email from Ms Giudici to Ms Cowcher. It is this email that is the subject of the redaction. I am satisfied that an email from Ms Giudici to Ms Cowcher was sent for the dominant purpose of providing Ms Cowcher with instructions and is properly the subject of a claim for privilege. For these reasons, I am satisfied that the defendant's claim for privilege is properly made over the redacted portion of 2556 and should be upheld.
Having inspected document 2559, this document is an email from Ms Giudici to Mr Anderson which forwards an email from Ms Cowcher to Mr Huston. It is this email that is the subject of the redaction. I am satisfied that an email from Ms Cowcher to Mr Huston is properly the subject of a claim for privilege. For these reasons, I am satisfied that the defendant's claim for privilege is properly made over the redacted portion of 2559 and should be upheld.
Documents with insufficient description
As set out in [254] of the Primary Reasons, the documents which are not sufficiently described in the Amended Schedule upon which any objective inference can be drawn are documents 565, 773, 824, 826, 860, 1458, 1878, 1908, 1909, 1910, 1991, 2034.
Having inspected documents 565, 773, 824, 826, 860, 1878, 1908, 1909, 1910, 1991 and 2034, it is clear on the face of each of these documents that each is an email prepared by Ms Cowcher. On this basis, I am satisfied that each of these documents was prepared for the dominant purpose of obtaining instructions or providing legal advice and is properly the subject of a claim for privilege. For this reason, it is my view that the defendant's claim for privilege is properly made and should be upheld.
Having inspected document 1458, it is clear on the face of the document that it is an email sent by Ms Cowcher to Ms Giudici, copied to Mr Anderson. On this basis, I am satisfied that the email forms part of the continuum of communications between inhouse counsel and representatives of the defendant and was sent for the dominant purpose of providing legal advice and is properly the subject of a claim for privilege. For this reason, I consider that the defendant's claim for privilege is properly made and should be upheld.
Conclusion
Having inspected the documents provided to me by the defendant in accordance with the Primary Reasons, it is my view that the defendant has not established that the dominant purpose of documents 769, 770, 771, 772, 977 and 1212 was to give or obtain legal advice. Accordingly, these documents should be produced for inspection by the plaintiff.
In relation to the remaining documents, it is my view that the claim for privilege is properly made and the plaintiff's application to inspect these documents should be dismissed.
I will hear from the parties as to the precise orders, including orders as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Research Orderly to the Honourable Justice Hill
28 OCTOBER 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: TEC HEDLAND PTY LTD -v- THE PILBARA INFRASTRUCTURE PTY LTD [2020] WASC 364 (S2)
CORAM: HILL J
HEARD: ON THE PAPERS
PUBLISHED : 18 NOVEMBER 2020
FILE NO/S: CIV 3060 of 2017
BETWEEN: TEC HEDLAND PTY LTD
Plaintiff
AND
THE PILBARA INFRASTRUCTURE PTY LTD
Defendant
Catchwords:
Costs - Appropriate costs order - Whether special costs order should be made - Turns on own facts
Legislation:
Legal Profession Act 2008 (WA)
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA)
Rules of the Supreme Court 1971 (WA), O 66
Supreme Court Act 1935 (WA)
Result:
Plaintiff to pay the defendant’s costs of the chamber summons dated 19 December 2019 without regard to the limits of item 10 of the 2018 Costs Determination
Category: B
Representation:
Counsel:
| Plaintiff | : | A Messina |
| Defendant | : | R Young & S P Tomasich |
Solicitors:
| Plaintiff | : | Norton Rose Fulbright Australia |
| Defendant | : | Corrs Chambers Westgarth |
Case(s) referred to in decision(s):
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S)
Frigger v Lean [2012] WASCA 66
Hughes v St Barbara Ltd [2011] WASCA 234 (S)
Mentha v Hughes [2014] WASC 478 (S)
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S)
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388
TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364
TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364 (S)
HILL J:
On 21 and 28 October 2020, I delivered reasons for decision on the plaintiff's chamber summons for production of documents for inspection by the plaintiff.[6] On 28 October 2020, I made orders for the filing of any affidavits and submissions by each party and for the application for costs to be determined on the papers.
[6] TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364; TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364 (S).
The defendant seeks orders that the plaintiff pay their costs of the application forthwith without regard to the scale limits imposed by the applicable costs determination.[7] The plaintiff opposes these orders and contends that the appropriate costs order is that costs be in the cause.
[7] Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (2018 Costs Determination).
The parties have each filed submissions in support of the orders they seek and the defendant has filed an affidavit.[8]
[8] Plaintiff's submissions filed 6 November 2020; Defendant's submissions filed 13 November 2020, Affidavit of Rachael Elizabeth King filed 13 November 2020.
For the reasons which are set out below, it is my view that the plaintiff should pay the defendant's costs of the application, without regard to the limit imposed by item 10 of the 2018 Costs Determination.
Legal Principles
Under s 37 of the Supreme Court Act 1935 (WA), the court has a wide discretion to award costs. However, the discretion is not unfettered and must be exercised judicially.[9]
[9] Frigger v Lean [2012] WASCA 66 [53]; Hughes v St Barbara Ltd [2011] WASCA 234 (S) [5].
The general rule is that costs should follow the event; that is, the successful party should recover their costs from the opposing party.[10] Ordinarily, this is a just outcome because a party who has required the other party to apply to the court to enforce the rules or procedure of the court or who has unjustifiably resisted the application should be required to recompense the other party for its costs.
[10] Rules of the Supreme Court 1971 (WA), O 66 r 1(1).
As was noted by the Court of Appeal in Strzelecki Holdings Pty Ltd v Jorgensen:[11]
What constitutes 'success' in proceedings is to be determined by the reality of the circumstances involved in the case. The Court may depart from the general rule that costs follow the event and modify a costs order to take into account matters such as any unreasonable conduct of a generally successful party, or to the failure of that party on one or more specific issues. The exercise of the discretion in that way is recognised by a number of rules in the [Rules of the Supreme Court], together with the practice of the Court, and authority. So, for example, if the Court is of the opinion that the conduct of a successful party - either before or after the commencement of the litigation - has resulted in costs being unnecessarily or unreasonably incurred, the Court may deprive that party of costs, either wholly or in part, and it may further order that party to pay the costs of an unsuccessful party, either wholly or in part. (footnotes omitted)
[11] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 [50].
Pursuant to s 280(2) of the Legal Profession Act 2008 (WA) (Act):
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.
The principles concerning special costs orders are well settled. Before exercising the power under s 280 of the Act, the court must form an opinion which has two components: first, the court must determine that the amount of costs allowable under the relevant legal costs determination is inadequate and second, the court must conclude that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter.[12]
[12] Mentha v Hughes [2014] WASC 478 (S) [4].
It is not necessary for the court to find that the costs allowable under the relevant determination are inadequate. It is sufficient if the court considers it is fairly arguable that a greater amount should be allowed than that allowable under the relevant determination.[13]
[13] Mentha v Hughes [5].
In Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2], the Court of Appeal summarised the approach to be taken by a court in considering an application for special costs in the following terms:[14]
For the purposes of exercising the powers conferred by s 280(2) of the Act, it will not ordinarily be necessary for the court to determine what amount should be allowed on taxation, but only whether there is a fairly arguable case that a greater amount should be allowed than that which is allowable under the relevant determination.
A fairly arguable case to that effect will not be established merely because a party incurred greater costs than those allowable under the relevant determination. However, depending on the particular case and all the circumstances, the fact that a party has applied significantly greater legal resources to each step in the litigation than those for which allowance is made under items of the relevant determinations, when viewed in the context of the difficulty, complexity or importance of the matter, may sustain the conclusion that there is a fairly arguable case that each of the items identified is inadequate (and thereby the amount of costs allowable in respect of the matter is inadequate) because of the unusual difficulty, complexity or importance of the matter. (citations omitted).
[14] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) [13] - [14].
The court went on to state in relation to the lifting of the hourly and daily rates of counsel and instructing solicitors:[15]
The fact that a party's counsel or instructing solicitor has charged at a rate higher, or even significantly higher, than the scale does not of itself justify the lifting of the scale. We were of the view that the scale rates were, in all the circumstances, reasonable, particularly in a context where, as we have indicated, it was appropriate to remove the scale limits. (footnotes omitted)
[15] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [22].
The question as to whether a special costs order should be made under s 280 of the Act is addressed as a matter of impression rather than science or mathematical precision.[16] In some cases, it will be necessary for a party to adduce evidence to enable the court to form the necessary opinion under s 280. However, in other cases, the court might be able to form the necessary opinion from its knowledge of the case and its circumstances.[17]
[16] EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7].
[17] Mentha v Hughes [5].
Plaintiff's submissions
The plaintiff submitted that each of the parties had partial success on the application and that as a result, the appropriate order was that the costs of the application be costs be in the cause.
In support of this submission, the plaintiff emphasised that between filing its application and the hearing, the defendant had produced all documents in one of the categories to which objection had been taken[18] and produced further documents for inspection by the plaintiff on a number of occasions.[19]
[18] Plaintiff's submissions [5].
[19] Plaintiff's submissions [7].
Counsel for the plaintiff contended that in considering the appropriate costs order the court should not embark on a mathematical exercise but exercise its discretion broadly and pragmatically.[20]
[20] Plaintiff's submissions [14] - [15].
Defendant's submissions
The defendant submitted that they had been predominantly successful on the application and that the starting point was that costs should follow the event.
In this regard, counsel for the defendant noted that following the hearing, the plaintiff had been ordered to produce six documents out of the 181 the subject of the application.[21] The defendant also emphasised that out of the 2,727 documents that were the subject of the plaintiff's original application, the defendant produced approximately 15% of the documents prior to the hearing of the application and the plaintiff withdrew its challenge to approximately 80% of the documents, primarily in respect of communications to or from Ms Cowcher.[22]
[21] Defendant's submissions [2].
[22] Defendant's submissions [8].
The defendant also sought an order that the limits of item 10 of the 2018 Costs Determination be removed as well as the limits of the individual rates for senior counsel and solicitors. In relation to the special costs order, counsel for the defendant contended that the application was both complex and important.
I note that the only detailed evidence before me as to the breakdown of these costs is the hourly rates of the practitioners involved in the application as well as the hourly rate of senior counsel.[23] Otherwise, Ms King's evidence is that:[24]
On the basis of my enquiries referred to in paragraph 12 above, and without having reviewed every time entry to ensure it has been correctly allocated, it appears to me that the costs incurred in respect of the time spent by solicitors at Corrs Chambers Westgarth in relation to TECH's application significantly exceed the $20,460 limit provided by item 10 of Table B of the Legal Practitioners (Supreme Court Contentious Business) Determination 2018, without taking into account any disbursements or counsel fees.
[23] Affidavit of Rachael King filed 13 November 2020 [14].
[24] Affidavit of Rachael King filed 13 November 2020 [13].
Disposition
Appropriate costs order
Having considered the submissions of both parties, for the following reasons, I consider that the plaintiff should pay the defendant's costs of the application.
First, I consider that, viewed broadly, the defendant was largely successful in the application. I accept that after the plaintiff's application was filed, the defendant produced further documents for inspection by the plaintiff. However, in the context of this application, these documents comprised only a relatively small proportion of the documents in issue, approximately 15% of the 2,727 documents in issue.
Second, prior to the application coming on for hearing, the plaintiff withdrew its challenge to a significant number of the documents being documents sent or received by Ms Cowcher. Before the application was filed, the defendant informed the plaintiff that at the time of these communications, Ms Cowcher did not have a commercial role with the plaintiff.[25] In these circumstances, I consider that the plaintiff's concession (which was properly made) should have occurred prior to the filing of the application.
[25] Affidavit of Rachael Elizabeth King filed 13 November 2020 'RK‑1', p 9.
Third, the plaintiff was largely unsuccessful on the legal issues that were the subject of the hearing before me on 8 April 2020. Ultimately, it succeeded in obtaining inspection of only six documents (out of 181 documents).
Special costs order
The costs of the application fall within item 10 of table B of the 2018 Costs Determination. For this reason, unless a special costs order is made, the costs of the application are limited to a maximum of $20,460. This assumes two days preparation and a one day hearing with attendance by senior counsel. This is based on an hourly rate for senior counsel of $682.
There is no evidence before me, other than the hourly rates of senior counsel and the legal practitioners involved in responding to the application, to establish that the maximum amount provided under the 2018 Costs Determination is inadequate. However, from my knowledge of the application, I have formed the opinion that the maximum amount is inadequate. In forming this opinion, I have had regard to the following matters.
First, the defendant filed three substantial affidavits in opposition to the application, including two affidavits of Mr Ryder, a partner at Corrs Chambers Westgarth, the defendant's solicitors. It is evident from the contents of Mr Ryder's affidavits that in preparing for the application, the defendant's solicitors reviewed each of the 2,727 documents that were the subject of the original application on more than one occasion and have taken instructions from a number of people employed by the defendant. Second, lengthy schedules were filed as part of the application, which were amended on a number of occasions prior to the hearing. I accept that the defendant's senior counsel and solicitors needed to review and comment on these schedules in preparing for the application. Third, the hearing before me took one day.
Taken together, I consider that it is fairly arguable that the work involved in opposing the plaintiff's application took more than two days preparation and one day hearing, which is the time estimate assumed by item 10 of the 2018 Costs Determination.
I accept that the issues raised for determination on the application were complex. The application involved a significant number of documents and raised a number of legal arguments, at least one of which had not been previously considered by an Australian court. I also accept that the application was important in the relevant sense. Both parties were represented at the hearing by Senior Counsel or Queen's Counsel. I accept that the question as to whether a claim for privilege could be maintained over documents and whether privilege had been waived over other documents was, and is, important to the parties.
Accordingly, I consider that the amount of costs allowable in respect of the plaintiff's application under the 2018 Costs Determination may be inadequate because of the difficulty and importance of the matter.
As a consequence, my discretion to make a costs order under s 280(2) of the Act is enlivened. I consider that, in the circumstances of this matter, it is appropriate to remove the limit provided by item 10 of the 2018 Costs Determination.
However, apart from adducing evidence that the hourly rates of the practitioners involved in the matter exceed the maximum provided by the 2018 Costs Determination, no evidence or submissions were advanced as to why the limits as to the hourly rates were not appropriate. In my view, the rates provided by the 2018 Costs Determination are appropriate, particularly in the context that I have found it is appropriate to remove the limit provided by item 10.
Ultimately, it will be for the taxing officer to determine, in relation to the work actually performed, whether it was reasonable to incur the costs of each item and, if so, the amount of hours that was reasonable in respect of each item.
Conclusion
For these reasons, the order will be that the plaintiff pay the defendant's costs of the chamber summons to be taxed if not agreed and paid forthwith, with the limits provided by the 2018 Costs Determination removed in respect of item 10.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Research Orderly to the Honourable Justice Hill
18 NOVEMBER 2020
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