Western Australian Planning Commission v Narcom Holdings Pty Ltd
[2011] WASC 259 (S)
•15 SEPTEMBER 2011
| JURISDICTION | : | SUPREME COURT OF WESTERN AUSTRALIA IN CIVIL |
| CITATION | : WESTERN AUSTRALIAN PLANNING |
COMMISSION -v- NARCOM HOLDINGS PTY LTD
[2011] WASC 259 (S)
| CORAM | : EDELMAN 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 | : WESTERN AUSTRALIAN PLANNING |
COMMISSION
Applicant
AND
NARCOM HOLDINGS PTY LTD
Respondent
ON APPEAL FROM:
| Jurisdiction | : | STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA |
| Coram | : | MR P McNAB (MEMBER) MS M CONNOR (MEMBER) MR P CURRY (SESSIONAL MEMBER) |
| Citation | : NARCOM HOLDINGS and WESTERN AUSTRALIAN PLANNING COMMISSION [2011] WASAT 23 | ||
| File No |
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[2011] WASC 259 (S)
Catchwords:
Costs - Whether 'costs of each other party' in s 105(12) of the State Administrative Tribunal Act 2004 (WA) refers to 'indemnity costs' or to 'party and party costs'
Legislation:
Nil
Result:
Orders made for costs on party and party basis
Category: A
Representation:
Counsel:
| Applicant | : | Mr C S Bydder |
| Respondent | : | Mr P D Quinlan SC & Mr P McQueen |
Solicitors:
| Applicant | : | State Solicitor for Western Australia |
| Respondent | : | Lavan Legal |
Case(s) referred to in judgment(s):
AB v Western Australia [2011] HCA 42
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009]
HCA 41; (2009) 239 CLR 27
Cachia v Hanes (1994) 179 CLR 403
Collins v Westralian Sands Ltd (1993) 9 WAR 56
Commissioner of State Taxation v EDI Rail (Maryborough) Pty Ltd [2010]
WASCA 17(S)
| Commissioner of Taxation v Anstis [2010] HCA 40; (2010) 241 CLR 443 EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59 Garnett v Bradley (1878) 3 App Cas 944 Geographe Point Pty Ltd and Town of Claremont [2009] WASAT 98 Jemena Asset Management (3) Pty Ltd v Coinvest Limited [2011] HCA 33 Jones v Coxeter (1742) 2 Atk 400; (1742) 26 ER 642 Metropolitan Properties Co Ltd v Purdy [1940] 1 All ER 188 Naidoo v Williamson [2008] WASCA 179 Oshlack v Richmond River Council (1998) 193 CLR 72 R v Wilks (1770) 4 Burr 2527; (1770) 98 ER 327 Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 Re Malley SM; Ex parte Gardner [2001] WASCA 83 Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 Shark Bay Tuna Farms Pty Ltd and Executive Director, Department of Fisheries | [2011] WASC 259 (S) |
(WA) [2005] WASAT 206
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129
Tian Zhen Zheng v Deju Cai [2009] HCA 52; (2009) 239 CLR 446
Unioil International Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 18 WAR
190
United States v Public Utilities Commission of California 345 US 295
Western Australian Planning Commission v Narcom Holdings Pty Ltd [2011]
WASC 259
| EDELMAN J | [2011] WASC 259 (S) |
EDELMAN J:
Introduction
1 On 15 September 2011, I delivered reasons for decision in this
matter: Western Australian Planning Commission v Narcom Holdings Pty Ltd [2011] WASC 259. My decision denied the appellant (the WAPC) leave to appeal in respect of the WAPC's grounds 1, 2, 3 and 5, granted the WAPC leave to appeal in respect of ground 4 but dismissed the appeal on that ground.
2 With one exception, the parties were agreed as to the appropriate
orders which were consequent upon my reasons. The exception was in relation to the respondent's proposed order 4, which sought the respondent's legal costs to be paid by the appellant on an indemnity basis. Counsel for the respondent (Narcom Holdings) sought, and was granted, leave to file written submissions on this issue, with responsive submissions from the WAPC.
3 The only basis upon which the application for costs on an indemnity
basis is made is one of construction of the State Administrative Tribunal Act 2004 (WA) (the SAT Act). Narcom Holdings submitted that on the proper construction of s 105(12) of the SAT Act, 'indemnity costs' should be the usual condition of a grant of leave to appeal.
4 The submission requires consideration of the nature of an 'indemnity
costs' order, the historical and contextual background to the costs provisions in the SAT Act, and the proper construction of those provisions. Section 105(12) of the SAT Act does not empower, or require, an order of indemnity costs as the usual costs order in proceedings in the Supreme Court.
The terminology of 'indemnity costs' and 'party/party costs'
5 The terminology in this area is well known, although the
nomenclature invites confusion. The common term 'party and party costs' means the costs awarded usually between the parties to the litigation. But 'party and party' costs are not always costs between the parties. There are circumstances in which these costs can be awarded against non-parties: s 37 Supreme Court Act 1935 (WA); Naidoo v Williamson [2008] WASCA 179 [42] (Steytler P).
| 6 | The purpose of party and party costs orders is to indemnify partially the successful party: Cachia v Hanes (1994) 179 CLR 403, 410 (Mason CJ, Brennan, Deane, Dawson & McHugh JJ). But the term |
| EDELMAN J | [2011] WASC 259 (S) |
'indemnity costs' is used in contradistinction to party and party costs. This is unfortunate. Like party and party costs, 'indemnity costs' are also usually between the parties. Like party and party costs, indemnity costs also provide indemnity against legal costs incurred by the party who obtains the benefit of the order. Like party and party costs, 'indemnity costs' do not provide a complete indemnity against all legal costs.
7 The award of indemnity costs has been described as 'more or less' the
same as costs 'between solicitor and own client' and it has been said that in the absence of a costs agreement 'there should be no difference between the items and amounts allowed under a party and party bill of costs and those under a solicitor and client bill of costs': Collins v Westralian Sands Ltd (1993) 9 WAR 56, 64 (Ipp J); repeated in Unioil International Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 18 WAR 190, 191 (Ipp J).
8 Although the difference between party and party costs and indemnity
costs may not be vast, one significant distinction is that the onus of proof that the costs are reasonable is borne by the party entitled to the costs order in the party and party costs, but in the case of indemnity costs it falls to the person against whom the order is made to show that the costs are unreasonable. The difference in onus may be a significant matter: EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59, 65 (Megarry VC).
9 Despite the confusing terminology, the labels 'party and party costs'
and 'indemnity costs' are well known descriptors of the different approaches to costs orders. That common terminology provides background to the statutory provision in issue here, so it is convenient to use that common nomenclature in these reasons.
Principles concerning costs orders generally
10 The question in issue is one of construction of s 105(12) of the SAT
Act, which is the statutory provision by which the costs discretion is exercised in this case. One matter which is relevant to the construction of that provision is the regularised discretion by which costs decisions were generally governed when the SAT Act was enacted. The nature of the well recognised costs discretion is part of the 'existing state of the law' which is relevant to the question of construction: AB v Western Australia [2011] HCA 42 [10] (French CJ, Gummow, Hayne, Kiefel & Bell JJ).
11 Historically, when the court of chancery created the rule that costs
could be awarded, the court decided that the award of costs was a matter
| EDELMAN J | [2011] WASC 259 (S) |
of '[e]ntire discretion': Jones v Coxeter (1742) 2 Atk 400, 400; (1742) 26 ER 642, 642 (Lord Hardwick LC). Unlike the court of chancery, costs at common law derived from statute. They were introduced by the great reforming statute, the Statute of Gloucester, 6 Edw 1, passed by Edward I in 1278. The Statute of Gloucester introduced costs to the common law without any element of judicial discretion as to the award. As the former Vice-Chancellor and former Lord Chancellor emphasised in Garnett v Bradley (1878) 3 App Cas 944, the courts of common law were required to 'go back to a legislative enactment in order to arrive at their power, or rather their duty, for power they had none, of dealing with costs': (953 - 954) (Lord Hatherley).
12 It is now well established that the award of costs, by legislation and
rule, is generally discretionary. Order 66 r 1 of the Rules of the Supreme Court 1971 (WA) provides that the costs of and incidental to all proceedings shall be in the discretion of the court. But the judicial discretion is not exercised as Deborah under a palm tree: cf Metropolitan Properties Co Ltd v Purdy [1940] 1 All ER 188, 191 (Lord Goddard CJ). It is a discretion 'governed by rule not by humour: it must not be arbitrary, vague, and fanciful; but legal and regular': R v Wilks (1770) 4 Burr 2527, 2539; (1770) 98 ER 327, 334 (Lord Mansfield).
13 In general terms, the starting point for the exercise of a costs
discretion is that the 'usual order as to costs' means that costs are awarded to the successful party: O 66 r 1 Rules of the Supreme Court, Oshlack v Richmond River Council (1998) 193 CLR 72, 97 (McHugh J, not dissenting on this point). The general approach is that the costs are party and party costs.
14 In contrast with the general order of party and party costs, an order
for indemnity costs is exceptional: Re Malley SM; Ex parte Gardner [2001] WASCA 83 [2] (the Court). Some of the exceptional circumstances for an award of indemnity costs are set out in Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10] (the Court). The situations in which they may be awarded include (but are not limited to) an unsuccessful party who brought proceedings for a collateral purpose or committed some species of fraud; an unsuccessful party who persisted in a hopeless case; and improper or unreasonable conduct by a party or that party's legal advisers. Narcom Holdings quite properly acknowledges that there is no basis for an award of indemnity costs in this case on any of these grounds.
| EDELMAN J | [2011] WASC 259 (S) |
15 Although these general principles in relation to party and party costs
and indemnity costs are well recognised, as Lord Hatherley said more than a century ago, the fundamental consideration in determining the manner in which any costs order is to be exercised is the statutory power to do so. In Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184, 200, Kirby J emphasised that '[s]tatutory powers providing for costs appear in a multitude of forms ... preconceptions must not distract the Court from the task of construction which each statutory provision for costs invokes'. The general costs discretion in O 66 r 1 is also expressly subject to the provisions of any statute, including s 105(12) of the SAT Act. Hence, these general principles concerning party and party costs and indemnity costs are relevant only as interpretative material. They are part of the matrix in which s 105(12) was enacted.
The provisions of the SAT Act
16 Part 5 of the SAT Act is entitled 'Appeals from Tribunal's decisions'.
The first section, s 105, is the relevant section to this application. It has the subtitle, 'Appeal from Tribunal's decision'. Section 105(9) of the SAT Act provides that '[t]he court dealing with the appeal may ... make any order the court considers appropriate'. That subsection provides the power to award costs in an appeal: Commissioner of State Taxation v EDI Rail (Maryborough) Pty Ltd [2010] WASCA 17(S) [7] (the Court). Section 105(11) and s 105(12) then provide:
(11) If the Tribunal's decision is made in a proceeding prescribed by the regulations, a party cannot apply for leave to appeal under this section unless the party agrees to indemnify each other party to the proceeding against that other party's reasonable legal costs of the appeal. (12) In the case of a decision in a proceeding coming within the Tribunal's review jurisdiction, any leave to appeal granted to the decision-maker is to be granted on the condition that the costs of each other party are to be met by the decision-maker, unless the court considers that it would be unjust or unreasonable to impose that condition, whether generally or in respect of the costs of a particular party.
17 No proceeding has been prescribed by the regulations, so currently
s 105(11) has no application. However, that subsection remains relevant
to the construction of s 105(12).18 The argument for Narcom Holdings is that the word 'costs' in the
phrase in s 105(12), 'the costs of each other party are to be met by the
| EDELMAN J | [2011] WASC 259 (S) |
decision-maker', should be construed as meaning 'indemnity costs'. I do
not accept that submission for four reasons.19 First, s 105(12) must be construed alongside s 105(11) which
immediately precedes it. Both subsections are concerned with the matter of costs. Both subsections are concerned with costs as a condition of the grant of leave to appeal. But only s 105(11) uses language which is commonly associated with an indemnity costs order: 'indemnify each other party'; 'against that other party's reasonable legal costs'.
20 Secondly, the words 'costs of each other party' in s 105(12) are a
general reference to costs. Although preconceptions about costs orders should not distract from the exercise of statutory construction, the reference to 'costs' as an undefined term invites consideration of the general approach to costs as the contextual background to the meaning of the use of the word 'costs' in the subsection: see above [10].
21 Section 105(12) was included as part of the SAT Act at its inception
in 2004. Section 105 has been amended but only in minor ways and not in relation to s 105(11) nor s 105(12). The general approach to 'party and party costs' and 'indemnity costs' which I have described above at [12] - [14] was well established in 2004; in particular the usual order is for party and party costs and indemnity costs only in exceptional circumstances. Section 105(12) must be construed in light of this well recognised approach that the usual order for costs is party and party costs, not indemnity costs.
22 Thirdly, s 105(12) does not merely omit the use of the words
'reasonable legal costs' which appear in s 105(11) and which might suggest an indemnity costs reversal of onus. Instead, s 105(12) specifically uses the words 'unjust or unreasonable' in the different context of deciding whether the condition to award costs against the decision-maker at all should be undertaken. This is also another matter which shows a distinctly different, and less strict, approach to the award of costs in s 105(12) from that in s 105(11).
23 Fourthly, elsewhere in the SAT Act the use of the word 'costs' is a
reference to party and party costs. Section 87, which is entitled 'Costs of parties and others' forms part of div 5, 'Costs'. The State Administrative Tribunal rarely exercises this power, but it is expressed in very similar terms to s 105(12). Section 87(2) provides a general power for the State Administrative Tribunal to make an 'order for the payment by a party of
| EDELMAN J | [2011] WASC 259 (S) |
all or any of the costs of another party'. It does not contemplate indemnity
costs.24 These matters of construction ought to be sufficient to dispose of this
application. The terms of s 105(12) are clear, in light of their statutory context and their well understood legal meaning. That subsection is concerned with costs in the usual understanding of that term. However, Narcom Holdings submitted that:
(1) this construction is contrary to the objectives of the SAT Act; (2) this construction is contrary to the rarity of costs orders being made in the State Administrative Tribunal's review jurisdiction; and (3) this construction is contrary to the 'clear legislative intent' behind
s 105(12).25 As to (1) - the objectives of the SAT Act - Narcom Holdings relies
upon the objective described in s 9(b) of the SAT Act, 'to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties'. Section 87 and s 88 of the SAT Act are consistent with this objective, providing an indication that the State Administrative Tribunal should not usually exercise a discretion to award costs.
The purpose (or 'mischief') of a statutory provision is clearly relevant to the construction of the statutory words: s 18 Interpretation Act 1984 (WA). But Narcom Holdings does not explain how the making of an order for indemnity costs could further the objective of minimising the costs to the parties. I do not consider that it could. First, no order for the payment of costs will minimise the costs to the parties. Any order for costs will partly indemnify Narcom Holdings, but at the expense of the WAPC. Secondly, indemnity costs will generally be greater than party and party costs. It is difficult to see how a greater award of costs can have the effect of minimising the costs to the parties.
27 As to (2), Narcom Holdings is correct that the approach taken by the
State Administrative Tribunal is that the 'contemplation of the SAT Act is ... that the Tribunal is generally a no-costs jurisdiction': Geographe Point Pty Ltd and Town of Claremont [2009] WASAT 98 [15] (Senior Member Parry). The established practice of the State Administrative Tribunal is that normally each party should bear its own costs, at least in relation to its review jurisdiction: Shark Bay Tuna
| EDELMAN J | [2011] WASC 259 (S) |
Farms Pty Ltd and Executive Director, Department of Fisheries (WA)
[2005] WASAT 206 [28] (Barker J).28 Narcom Holdings submits that this general approach to the State
Administrative Tribunal as a no-costs jurisdiction means that s 105(12) must contemplate indemnity costs as the usual order. But that asserted conclusion simply does not follow from the general no-costs nature of the State Administrative Tribunal. It might equally be supposed that, as a matter of general policy, the no-costs nature of the State Administrative Tribunal should require only party and party costs on appeals. These policy suppositions, in any event, do not assist in this case with the construction of the words of the SAT Act.
29 As to (3), the 'clear legislative intent' behind s 105(12), Narcom
Holdings made substantial submissions concerning the parliamentary history of that section, particularly by reference to the Report of the Standing Committee on Legislation in relation to the State Administrative Tribunal Bill 2003 and the State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Bill 2003 (the Standing Committee Report) and to Hansard. The submission requires consideration of the parliamentary history of s 105.
30 Section 105 of the SAT Act was introduced to the Legislative
Assembly as cl 104 of the State Administrative Tribunal Bill 2003 (the Bill). That clause was passed by the Legislative Assembly without amendment. The Legislative Council then referred the Bill to the Standing Committee on Legislation: Hansard, Legislative Council, 16 September 2003, 11195 - 11196.
31 The Standing Committee Report recommended a number of
amendments to the Bill. Those amendments were made by the Legislative Council: Hansard, Legislative Council, 10 November 2004, 7753 - 7755, 7775 - 7776. The Legislative Council's amendments were accepted by the Legislative Assembly and the Bill was passed, as the SAT Act, without further amendment: Hansard, Legislative Assembly, 10 November 2004, 7871 - 7887.
32 Chapter 9 of the Standing Committee Report considered the question
of appeals from the State Administrative Tribunal, including the issue of costs. The Standing Committee Report made observations which are entirely consistent with the construction of s 105(12) as concerned with 'costs' in the usual understanding of that term as party and party costs. For instance, the Standing Committee Report:
| EDELMAN J | [2011] WASC 259 (S) |
(1) explained that '[c]onducting proceedings in the Supreme Court can be extremely costly. Even if a party succeeds in the Supreme Court, the costs awarded never fully compensate a party for their legal costs' [9.18] (172); (2) said that it had 'considered various options to limit the costs that a party will face in the event that a matter is appealed from the SAT' [9.19] (172) (emphasis added); and (3) recommended the insertion of subclause 105(12) to 'ensure that government parties to matters before the State Administrative Tribunal are not able to use their greater financial resources to disadvantage other parties on an appeal to the Supreme Court' (174). Elsewhere, the Standing Committee had referred to this concern so as to ensure that the financial resources of the State are not used to appeal a decision 'to the significant financial detriment of the other party or parties' [9.20] (174). 33 Apart from the Standing Committee Report, Narcom Holdings also
relies upon lengthy extracts from Hansard of the second reading speech by the Hon Peter Foss, on 27 October 2004 and 9 November 2004, as well as his speech during the Committee stage of the hearings on 10 November 2004.
34 Consideration may be given to these speeches, as with the Standing
Committee Report, if they are 'capable of assisting in the ascertainment of the meaning of the provision': s 19 of the Interpretation Act. The issue is the meaning of the words in the legislation. Parliamentary materials are relevant to that task of construction.
35 A close focus on particular words used in a Parliamentary debate
may not always be capable of assisting in the ascertainment of the meaning of words used in legislation. Further, the search for objective meaning of words should not become confused with a construction of the subjective views of legislators. References to 'Parliamentary intention' are not to the subjective intentions of the legislators. Nor are they references to 'a collective mental state to legislators': Tian Zhen Zheng v Deju Cai [2009] HCA 52; (2009) 239 CLR 446, 455 - 456 [28] (French CJ, Gummow, Crennan, Kiefel & Bell JJ). In United States v Public Utilities Commission of California 345 US 295, 319 (1953), Justice Jackson opened his concurring opinion with the words: 'I should concur in this result more readily if the Court could reach it by analysis of the statute
| EDELMAN J | [2011] WASC 259 (S) |
instead of by psychoanalysis of Congress ... Never having been a
Congressman, I am handicapped in that weird endeavour'.36 At the time of the speeches relied upon by Narcom Holdings, the
Hon Peter Foss was a member of the Opposition. He was not the responsible Minister for the SAT Act. The honourable member in these speeches refers to his views about the concerns of the Standing Committee (of which he was a member). He cited the concern that
some poor blighter ... gets his decision before [the] tribunal and feels good about it and then finds himself in the Supreme Court on an appeal. Even if he wins in the Supreme Court, he could still be on his way to the High Court of Australia. At that stage, the situation could become fairly disastrous ... the Government can get leave for an appeal only if it gives an undertaking to pay all the costs of the appeal': Hansard, Legislative Assembly, 9 November 2004, 7626.
37 At the 10 November 2004 Committee hearing, the honourable
Member for the Opposition also said that the Standing Committee had 'created an ability for people to use the tribunal without fear that they will end up in a higher court and run the risk of being penalised through huge costs': Hansard, Committee hearing, 10 November 2004, 7754.
38 On neither of these occasions did the honourable member for the
Opposition say anything about the nature or meaning of 'costs' or how the costs should be calculated. His words have little relevance as part of the factual matrix for construing the meaning of s 105(12).
For these reasons, nothing in the parliamentary history of s 105 contradicts the construction of that subsection as concerned with the usual understanding of costs, ie the order generally being party and party costs. This is, perhaps, unsurprising. Extrinsic materials, such as second reading speeches, are circumstantial guides to the objective meaning of a statutory text. They may not often assist in the construction of the words of the statute: Commissioner of Taxation v Anstis [2010] HCA 40; (2010) 241 CLR 443, 459 [40] (Heydon J). The exercise of construction of words is an exercise which draws from Parliamentary statements only to elucidate the objective meaning of words. As the joint judgment in Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252, 264 - 265 [31] (the Court) emphasised:
Statements as to legislative intention made in explanatory memoranda or by Ministers, however clear or emphatic, cannot
| EDELMAN J | [2011] WASC 259 (S) |
overcome the need to carefully consider the words of the statute to
ascertain its meaning.
See also Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; (2009) 239 CLR 27, 46 [47] (Hayne, Heydon, Crennan & Kiefel JJ); Jemena Asset Management (3) Pty Ltd v Coinvest Limited [2011] HCA 33 [50] (French CJ, Gummow, Heydon, Crennan, Kiefel & Bell JJ).
Conclusion
40 Section 105(12) of the SAT Act does not require that indemnity costs
be awarded generally in applications and appeals from the State Administrative Tribunal. None of the usual bases, nor any unusual basis, for an indemnity costs order applies in this case. Indemnity costs are not appropriate. The orders I make are as follows:
1. Leave to appeal in respect of the appellant's grounds 1, 2, 3 and 5 be denied. 2. Leave to appeal in respect of the appellant's ground 4 be allowed on the condition that the costs of the respondent are met by the appellant. 3. The appeal be dismissed and the decision of the State Administrative Tribunal dated 7 February 2011 be affirmed. 4. The appellant pay the respondent's costs of the appeal on a party and party basis, to be taxed if not agreed.
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