Trafalgar West Investments Pty Ltd as trustee for the Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [No 8]
[2016] WASC 34 (S)
•20 APRIL 2016
TRAFALGAR WEST INVESTMENTS PTY LTD AS TRUSTEE FOR THE TRAFALGAR WEST INVESTMENTS TRUST -v- SUPERIOR LAWNS AUSTRALIA PTY LTD [No 8] [2016] WASC 34 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 34 (S) | |
| Case No: | COR:59/2011 | ON THE PAPERS | |
| Coram: | KENNETH MARTIN J | 20/04/16 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff to pay defendants' costs Costs to be taxed | ||
| B | |||
| PDF Version |
| Parties: | TRAFALGAR WEST INVESTMENTS PTY LTD AS TRUSTEE FOR THE TRAFALGAR WEST INVESTMENTS TRUST SUPERIOR LAWNS AUSTRALIA PTY LTD KINGSLEY CRAIG FLUGGE MARGARET FLUGGE JEROME MATTHEW FLUGGE LINLEY FLUGGE DAMIEN CRAIG FLUGGE |
Catchwords: | Costs Reserved costs |
Legislation: | Nil |
Case References: | Trafalgar West Investments Pty Ltd as Trustee for the Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [No 8] [2016] WASC 34 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
SUPERIOR LAWNS AUSTRALIA PTY LTD
First Defendant
KINGSLEY CRAIG FLUGGE
Second Defendant
MARGARET FLUGGE
Third Defendant
JEROME MATTHEW FLUGGE
Fourth Defendant
LINLEY FLUGGE
Fifth Defendant
DAMIEN CRAIG FLUGGE
Sixth Defendant
Catchwords:
Costs - Reserved costs
Legislation:
Nil
Result:
Plaintiff to pay defendants' costs
Costs to be taxed
Category: B
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Solicitors:
Plaintiff : Jebb Legal
First Defendant : Bennett + Co
Second Defendant : Bennett + Co
Third Defendant : Bennett + Co
Fourth Defendant : Bennett + Co
Fifth Defendant : Bennett + Co
Sixth Defendant : Bennett + Co
Case(s) referred to in judgment(s):
Trafalgar West Investments Pty Ltd as Trustee for the Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [No 8] [2016] WASC 34
1 KENNETH MARTIN J: I published reserved reasons for decision in Trafalgar West Investments Pty Ltd as Trustee for the Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [No 8] [2016] WASC 34 on 9 February 2016. At the end of those reasons, at [43], I concluded:
The defendants, being successful, should have their taxed costs of pursuing this application.
2 Paragraph [42] reflects what was a prima facie inclination towards the disposition of costs on this application, namely, that costs should follow the event for that application. However, the plaintiff, through pro bono counsel, indicated that it wishes to be heard in respect of the issue of costs for that application. Consequently, I agreed to receive each side's written submissions dealing with the issue of costs in respect of that decision on the basis that the issue of costs would be dealt with on the papers.
3 To that end, I received the plaintiff's written submissions on costs of 3 March 2016. They provide (note: the text appears without correction):
1. Following a hearing 18 December 2015, and in reasons published 9 February 2019 (Reasons), his Honour held that:
(a) the second tranche of security in the amount of $100,000.00 pursuant to orders made 21 November 2014 became due and payable 26 November 2015; and
(b) COR 59 of 2011 was stayed (not dismissed);
2. His Honour specifically stated [42] that he was not yet prepared to rule on the defendant's application for a dismissal and would hear the parties further (which occurred 18 February 2016 with judgment reserved).
3. His Honour indicated at [43] of the Reasons that the defendants should have their taxed costs of pursuing their application relating to the non-payment of the second tranche of security (Second Tranche Application).
4. At a subsequent hearing 18 February 2016 his Honour granted leave to the Plaintiff to make submissions on the appropriate costs order to be made.
5. The Plaintiff submits that no order for costs ought be made until the Defendants application for a dismissal is determined.
6. In the alternative the Plaintiff submits that the Defendant should not receive their taxed costs of the application on the basis that the Defendant's:
(a) should have limited their applications to the propriety of Mr Jebb acting on behalf of the Plaintiff (Representation Application) and engaged in proper conferral on the remaining applications;
(b) at no time sought merely that the matter be stayed;
(c) did not at any time prior to filing the Second Tranche Application request payment of the second tranche and in doing so failed to provide the Plaintiff with a realistic opportunity to agree on a stay while payment was being pursued which would have removed the need for a hearing;
(d) sought payment of $200,000.00 by 15 January 2016 by way of an increased second tranche and not the $100,000.00 held to be outstanding;
(e) put the Plaintiff to the trouble of considering 4 distinct applications (2 of which were abandoned) including for:
(i) an uplift in security for costs payable from $350,000 to $800,000, supported by an affidavit of 66 pages;
(ii) details of any entity that had provided litigation funding to the Plaintiff; and
(iii) copies of the Plaintiff's retainer agreement with its former solicitors and funding agreement with its former funders with a view to applying for non-party costs orders on the matters dismissal; and
(f) failed to confer with independent counsel or at all before filing each and every application above.
Background to Hearing 18 December 2016
7. On 4 December 2015 Jebb Legal advised the Defendant's solicitors by letter that the Plaintiff's former solicitors had ceased acting on account of the earlier withdrawal of litigation funding and that Jebb Legal had agreed to represent the plaintiff.
8. Importantly this letter conceded Mr Jebb's lack of independence to the Plaintiff and properly invited the Defendant's solicitors to confer with independent counsel on an application the Defendant's may wish to make, or which the Court may itself initiate, on Jebb Legal's right to act for the Plaintiff.
9. Until this application was determined Jebb Legal properly could not, and did not, seek further and better discovery or apply to have the security of costs order varied on a change in circumstances.
Defendant's Second Tranche Claim
10. At 2.21pm 8 December 2015 solicitors for the Defendant's responded by email to Jebb Legal's letter, a copy of which is attached to this submission, advising that the Defendants:
(a) will be seeking orders that he matter be dismissed for want of payment of the second tranche [4];
(b) would be requesting the Court restrain Jebb Legal from acting [10]; and
(c) would be seeking an uplift in security for costs.
11. Notably this was the first time the Defendants had suggested payment of the second tranche was due, let alone overdue.
12. This letter did not indicate that payment of the second tranche would be accepted within a reasonable time or that anything other than dismissal of the action was being sought for non-payment. The Plaintiff was not given the opportunity to agree to a stay on any terms.
13. At 5.38pm the same day (8 December 2015) the Defendant's solicitors sent a minute of proposed orders to Jebb Legal which provided at [7] and [8] in effect that if the Plaintiff paid the second tranche of $100,000.00 by 15 January 2016 then the security for cost order be increased to $800,000.00 and that the second tranche would be increased to $200,000.00.
14. Importantly the effect of the Defendant's proposed order [7] and [9] was that even if the Plaintiff was able to pay the $100,000.00 by 15 January 2016 the payment would still be insufficient to satisfy the amended second tranche payment requiring a further $100,000.00 on the same day.
15. The Defendants therefore never notified the Plaintiff that the second tranche was due, and did not offer to accept the second tranche payment of $100,000.00 even if it were to be paid when it was first requested.
16. Approximately 4 minutes after the proposed minute of orders above were sent to Mr Banda, on behalf of the Defendants, filed by email:
(a) a 17 page affidavit in support of the Defendant's application for an increase in the security from $350,000.00 to $800,000.00;
(b) a minute of proposed orders in relation to security for costs; and
(c) a second minute of proposed orders in relation to:
(i) Jebb Legal acting for the Plaintiff;
(ii) any prior litigation funding arrangements of the Plaintiff; and
(iii) trial allocation and programming;
18. On 11 December 2015 Mr Tharby, on behalf of the Defendants, filed a:
(a) 5 page document entitled 'Defendant's Chronology' in support of the application for security for costs (Chronology); and
(b) 66 page affidavit in support of the orders sought by the Defendants.
19. On 16 December 2015 Mr Banda notified the Court that paragraph 6 of his affidavit incorrectly stated that conferral had been undertaken and confirmed this paragraph would not be read.
20. On the same day Mr Banda filed a further minute of proposed orders seeking copies of the Plaintiff's former solicitor's retainer agreement and former funders funding agreement.
21. At the hearing 18 December 2015 the Representation Application was ordered to be determined on the papers (largely in accordance with the Plaintiff's minute) and the Court heard argument only on the Defendant's application for the matter to be dismissed on account of the non-payment of the second tranche of security.
22. Neither the security for costs uplift and application for details of prior funding details were pursued.
4 There followed the response from the defendants' solicitors to the plaintiff's submissions. These are the defendants' written submissions as to costs concerning that reserved decision. The written submissions were provided on 11 March 2016. They provide as follows:
1. The plaintiff failed to pay a second tranche of security for costs in the amount of $100,000 by 25 November 2015 and disputed that it was liable to do so. This dispute was resolved in the Defendants' favour which is recorded in the Court's Reasons for Decision [No 8] 2016 WASC 34 (Reasons). The unsuccessful plaintiff sent submissions to the Court regarding the costs of that dispute on 3 March 2016 (Plaintiff's Submissions). The Plaintiff's Submissions identify no proper basis as to why the costs of the disputed application should not follow the event.
Response Plaintiff's Position
2. The Plaintiff's Submissions have been signed by Jebb Legal despite the plaintiff's proffered undertaking not to file any document that had not been settled by counsel. This has required the defendants' response, at their cost, and further highlights the issue of Mr Jebb acting for the plaintiff through Jebb Legal.
3. The Court should dismiss the plaintiff's request that any order as to costs should await the determination of the defendants' application for a dismissal. This submission is misconceived: the dismissal application is the very subject of the Reasons, upon which self-executing orders have issued. In any event, the Court has now made springing orders for dismissal in [No 9] [2016] WASC 68 at [55].
4. The plaintiff's alternative position is that the defendants should not receive their costs. In answer to the matters raised in support of that position, the defendants respond seriatim:
4.1 the security for costs application made by the defendants was necessary due to the plaintiff's failure to pay, and disputing its liability to pay, the second tranche. The allegation that the defendants failed to properly confer fails to acknowledge that pro bono counsel for the plaintiff, Mr Penglis' authority to confer was limited to the plaintiff's representation only. In any event, order 1 for the defendant's minute of proposed orders for the strategic conference dated 8 October 2016 [sic] requested that the defendants be discharged from the requirement to confer with Mr Jebb.
4.2 the defendants were not required to seek that the matter be stayed: The stay was effected by the operation of the self-executing orders made, by consent, on 21 November 2014 and the plaintiff's failure to pay the second tranche.
4.3 due to the automatic operation of the orders on 21 November 2014 it was not necessary 'to provide the plaintiff with a realistic opportunity to agree on a stay while payment was being pursued'.
4.4 the defendants have applied to uplift the amount of security for costs, which application has not been progressed, although conferral had taken place between Bennett + Co and the plaintiff's former solicitors, Corrs.
4.5 the plaintiff's conduct has given rise to the defendants' separate applications, none of which have been abandoned contrary to the plaintiff' submission, and will need to be determined if the stay of the proceedings is lifted.
4.6 again, Mr Penglis' authority to confer was limited to the plaintiff's representation.
5. The defendants respond to the balance of the Plaintiff's Submissions by reference to the headings used in the Plaintiff's submissions.
Background to hearing 18 December 2015
8. The plaintiff repeats that the defendants acted unreasonably by failing to suggest to the plaintiff that payment of the second tranche was due and by failing to accept payment within a reasonable time. The stay of proceedings was automatic and, given the plaintiff remains in default of payment of the second tranche of security for costs, the plaintiff would not have been able to make payment within a reasonable time in any event.
9. Paragraph 19 of the Plaintiff's Submissions has no basis. Mr Banda's email to the Court stated that the defendants would not read paragraph 6 of his affidavit into evidence following conferral between Mr Penglis and Mr Bennett. A copy of that email is annexed to these submissions as Annexure 'A'.
10. As to paragraphs 21 and 22 of the Plaintiff's Submissions, the parties have exchanged submissions regarding the Representation Application and the defendants' 'Production Application', and the defendants' application to uplift the amounts of security for costs remain in abeyance pending whether the plaintiff will remedy its default in failing to pay security for costs by noon on 8 April 2016.
Defendants' Position
11. The plaintiff has put forth no valid reason why costs ought not follow the event on the application regarding the construction of the security for costs orders. As the Court held, the plaintiff's construction was uncommercial and unacceptable. The plaintiff resisted the application. The defendants were left with no option but to seek the court's orders against the plaintiff's active resistance. The defendants were successful in their application and therefore costs should follow the event.
Costs determination
5 In short, I accept the essence of the written submissions of the defendants. They confirm me in the prima facie disposition as to costs, which I indicated under [43] of my earlier reasons.
6 The fallacy in the plaintiff's arguments is that it overlooks that the plaintiff voluntarily took up a position, and chose to maintain and to argue to support that position when it was challenged, and then, was ultimately proven wrong in the end, as regards the subject matter of a dispute concerning whether or not the $100,000 security instalment was then due. It was due. The plaintiff lost that argument. The only reason there was an argument was because the plaintiff chose to advocate a position about which it was proven wrong. Costs were incurred by the defendants in the process. Taxed costs should follow that event. The multiple other considerations sought to be raised by the plaintiff are only irrelevant distractions. They do not engage viably against the core point that the plaintiff voluntarily chose to fight on this issue and lost in the end.
7 In short, nothing within the plaintiff's written submissions persuades me that the ordinary rule concerning costs following the event in the wake of what was a contested argument, ought not to apply here.
8 Consequently, orders will issue upon the publication of these reasons that the plaintiff should pay the defendants' taxed costs of the application and of the argument heard in chambers on 18 December 2015, which became the subject matter of my written reasons in Trafalgar [No 8],delivered 9 February 2016.
9 The defendants should also have their taxed costs associated with the preparation of their written submissions exchanged for the purposes of the present costs determination on the papers, which has been required by the plaintiff. Orders in those terms shall issue upon the publication of these reasons.
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