Westpac Banking Corporation v Willis-Jones - [2006] WADC 61

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: WESTPAC BANKING CORPORATION -v- WILLIS-JONES & ORS [2006] WADC 61

CORAM: MAZZA DCJ

HEARD: 3 MARCH 2006

DELIVERED : 13 APRIL 2006

FILE NO/S: CIV 1651 of 2004

BETWEEN: WESTPAC BANKING CORPORATION (ABN 33 007 457 141)
Plaintiff
AND
CLIVE WILLIS-JONES
First Defendant
LORNA WILLIS-JONES
Second Defendant
NATHAN KIM SHEDLEY
Third Defendant

Catchwords:

Practice and procedure - Application to stay taxation of costs - Turns on own facts

Legislation:

Act Amendment Court and Repeal (Court and Legal Practice) Act 2003 (WA)
Constitution Act 1889 (WA)

Judiciary Act 1903 (Cth)

Result:

Appeal dismissed

Representation:

Counsel:

Plaintiff:     Mr D K Skender
First Defendant             :     In person
Second Defendant         :     No appearance
Third Defendant           :     No appearance

Solicitors:

Plaintiff:     Gadens Lawyers
First Defendant             :     Not applicable
Second Defendant         :     Not applicable
Third Defendant           :     Not applicable

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

Green v Jones [1979] 2 NSWLR 812
Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73

Case(s) also cited:

Allen v Carbone (1975) 132 CLR 528
Australian Capital Television Pty Ltd v The Commonwealth of Australia (1992) 177 CLR 106
Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647
Blair & Perpetual Trustee Co Ltd v Curran (Adam's Will) (1939) 62 CLR 464
Chamberlain v Deputy Commissioner of Taxation (ACT) (1988) 164 CLR 502
China Ocean Shipping Co v South Australia (1979) 145 CLR 172
Commercial Bank of Australia Ltd v GH Dean & Co Pty Ltd [1983] 2 Qd R 204
Craine v The Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305
Henderson v Henderson (1843) 67 ER 313
Jackson v Goldsmith (1950) 81 CLR 446
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 475
McGinty & Ors v The State of Western Australia (1996) 186 CLR 140
New South Wales v The Commonwealth (1975) 135 CLR 337
Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Victoria v The Commonwealth (1970) 122 CLR 353

MAZZA DCJ: This is an appeal by the defendants against a decision made by Registrar Kingsley on 15 December 2005 refusing an application to stay a taxation of costs.

Background

The history of the matter is that the plaintiff brought an action against the defendants seeking payments of various amounts pursuant to a line of credit facility. On 1 October 2004, the plaintiff made an application for summary judgment but the defendants paid all outstanding sums to the plaintiff on or about 4 May 2005. When the application came on for hearing before Deputy Registrar Harman on 27 May 2005 the only issue was as to costs. In particular, the defendants' then counsel told Deputy Registrar Harman that he had no objection to a costs order being made against the defendants, but he did object to the making of an indemnity costs order. Ultimately, Deputy Registrar Harman did not order indemnity costs against the defendants.
The orders he made were:
1.The plaintiff pay the defendants' costs of today.
2.The defendants otherwise do pay the plaintiff's costs of the application including costs reserved on 13 October 2004 and 27 October 2004 and the plaintiff's costs of the action.
Importantly, in the context of this appeal, the defendants have not appealed against this order. Later, a bill of costs was filed by the plaintiff and was set down for taxation before Deputy Registrar Hewitt on 21 November 2005. At that taxation the defendants' sought a permanent stay of the taxation. Deputy Registrar Hewitt referred the matter to Registrar Kingsley. On 15 December 2005 Registrar Kingsley dismissed the application for a stay.
On 23 December 2005 the defendants lodged, in person, their notice of appeal. That notice asks that the orders of Registrar Kingsley made on 15 December 2005 be set aside and in lieu thereof the following orders be made:
1.That this matter be referred to a court in confident [sic - of competent] jurisdiction;
2.That all constitutional questions of law be reserved and transferred to the High Court;
3.That all criminal matters raised be heard and determined prior to other matters;
4.That the perjured affidavit of Mr Skender be struck out;
5.That all proceedings, orders and costs be stayed until the issues raised be heard and determined by the High Court;
6.Liberty to apply;
7.Costs.

This is a hearing de novo

The appellant's appeal is a hearing de novo as explained by Malcolm CJ: Hazart Pty Ltd v Rademaker (1993) 11 WAR at 28. I have read the pleadings and the affidavits filed by the parties.

The defendants' written submissions

Mr Clive Willis‑Jones who appeared before me in person on behalf of all defendants went to the trouble to prepare lengthy and detailed written submissions. I have carefully studied these submissions. With respect to Mr Willis-Jones, they are in places very difficult to understand, but having heard oral submissions from Mr Willis-Jones I think the following matters emerge.

The Constitutional point

The defendants have submitted that as a result of the passing of the Act Amendment Court and Repeal (Court and Legal Practice) Act 2003 ("the Act"), and in particular s 125 of that Act, this Court has no jurisdiction to hear any cause, either civil or criminal.
The defendants assert this is because:
1.The Act destroys "the separation of powers".
2.The Act ousts the authority of the Queen as the Head of State of Australia.
3.The Act is ultra vires both the West Australian Constitution and the Australian Constitution.
The defendants' submission is misconceived. The provisions of the Act do not have any of the dire consequences referred to by the defendants. The position, powers and authority of the Queen remain unchanged. However, the nomenclature has changed to reflect the name of the officer or the actual entity or authority through or under which the sovereign's power is exercised. There has been no change or diminution in the rights of citizens, nor has there been an attack on the doctrine of separation of powers, nor has the Constitution of the State of Western Australia or the Commonwealth been infringed upon.
The defendants contend that the taxation of costs should be stayed pending the service on the Attorneys‑General of the Commonwealth and of the States of a notice pursuant to s 78B of the Judiciary Act 1903 (Cth). As far as is relevant to these proceedings that section is as follows:
"1)Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of matter has been given to the Attorneys-General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys-General, of the question of intervention in the proceedings or removal of the cause to the High Court.
(2)For the purposes of subsection (1), a court in which a cause referred to in that subsection is pending:
(a)may adjourn the proceedings in the cause for such time as it thinks necessary and may make such order as to costs in relation to such an adjournment as it thinks fit;
(b)may direct a party to give notice in accordance with that subsection; and
(c)may continue to hear evidence and argument concerning matters severable from any matter arising under the Constitution or involving its interpretation."
While I accept that the defendants genuinely believe that this case involves a matter arising under the Commonwealth Constitution, the fact that a person has a genuine belief is insufficient. What has to be demonstrated is that the matter sought to be raised actually involves a matter arising under the Constitution: see Green v Jones [1979] 2 NSWLR 812 at 817‑818 per Hunt J and Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73 per Toohey J at 73 and 74.
In my opinion the defendants' submissions do not raise any matter arising under the Commonwealth Constitution. The defendants' appeal raises issues which, if anything, involve purely State law and have no connection with the Commonwealth Constitution.
To sum up, there is no arguable constitutional issue to be resolved in this case whether under the State or Commonwealth Constitutions. There is no reason for notices pursuant to s 78B of the Judiciary Act to issue. Accordingly, I am not prepared to stay the taxation of costs for this purpose.

Allegations that the bank is engaged in unconscionable conduct

The defendants allege that the plaintiff engaged in unconscionable conduct in its dealings with them in connection with the line of credit facility. As a result, the defendants assert that a stay of the taxation of costs is justified. This argument is unsustainable in light of the fact that the defendants voluntarily paid the plaintiff all monies owing to it prior to the hearing of the summary judgment application. The payment was made unconditionally and at a point in time when the defendants were legally represented. It is difficult to see how, in those circumstances, the plaintiff could be said to have engaged in unconscionable conduct.
I would not be prepared to stay the taxation of costs on this ground.

Alleged criminal matters and perjury

The defendants allege that the plaintiff, its solicitors and their former solicitor have committed offences of fraud contrary to s 409 of the Criminal Code and have committed offences contrary to s 52 and s 53 of the Trade Practices Act 1974 (Cth). Nothing which has been put before me by the defendants leads me to think that any criminal offence has been committed by the plaintiff, its legal advisors and the defendants' former solicitor.
The defendants also assert that the plaintiff's solicitor, David Kingsley John Skender, perjured himself in his affidavit sworn 29 November 2005. In that affidavit, Mr Skender referred to a facsimile transmission dated 17 December 2004, which is annexure "DKS 11". That facsimile reads in part:
"We confirm the parties have agreed to resolve the matter on the following terms ‑
1.Your clients pay to the bank:
(a)All amounts owing to the bank under the equity access loan (including principal, interest and bank fees and charges): and
(b)$5,000 in respect of the bank's legal costs: on or before 31 January 2005."
The defendants allege that Mr Skender has perjured himself because in fact all that the parties had agreed was that the defendants would pay the plaintiff $5,000 in respect of costs.
DKS 11 is a letter which sets out the terms of an agreement which Mr Skender says was reached by him and the defendants' solicitor, Mr Paiker, over a course of correspondence and telephone conversations. Mr Skender has annexed the relevant correspondence and his telephone notes in his affidavit. In particular, Mr Skender refers to a telephone conversation with Mr Paiker on 27 October 2004, where Mr Paiker allegedly told Mr Skender that the defendants would "clean up" the amounts outstanding to the plaintiff by 31 January 2005.
While it may be a matter of dispute that the defendants had agreed with the plaintiff to pay all amounts to the plaintiff by 31 January 2004, at this point there is nothing to suggest that Mr Skender's statement is false, and even if it was false, it was wilfully false. I note in this regard that no affidavit from Mr Paiker has been filed. Even if I am wrong about this I cannot see why the taxation of costs should be delayed by the resolution of this issue.
I would not grant a stay of the taxation of costs on this ground.

$5,000 costs agreement

The defendants assert that the plaintiff is not entitled to tax its costs because there was a concluded agreement between the defendants and the plaintiff that the defendants would pay the plaintiff's costs of the proceedings fixed in the sum of $5,000. The short answer to this assertion is that the order of Deputy Registrar Harman was for the costs to be taxed and no appeal has been made from this order. However, having analysed the evidence before me I have come to the conclusion that there was no agreement of the sort claimed by the defendants. My reasoning is as follows.
According to Mr Skender's affidavit, the parties' solicitors were in the process of attempting to negotiate a settlement of the plaintiff's claim from 20 October 2004. On 29 October 2004 Mr Skender had a telephone conversation with the defendants' solicitor, Mr Paiker, concerning the issue of costs. According to Mr Skender, on about 2 November 2004 he had another conversation with Mr Paiker concerning the question of costs, and on 12 November 2004 Mr Paiker told Mr Skender that his clients would pay $4,000 in costs. On 19 November 2004 there were further discussions between Mr Skender and Mr Paiker on the issue of costs, but no agreement was reached. On 1 December 2004 Mr Skender telephoned Mr Paiker. Mr Paiker told Mr Skender that the defendants would not budge beyond paying $4,000 in costs. Mr Skender then asked "whether we could do a deal of $5,000 in costs". On or about 8 December 2004 Mr Skender received a facsimile from the defendants' solicitors which was headed "without prejudice" and is in the following terms:
"We … advise that our client is agreeable to settle the costs in the amount of $5,000."
On 17 December 2004 the plaintiff's solicitors sent a facsimile transmission. I mentioned this facsimile earlier but now refer to the full text of that facsimile which is expressed to be without prejudice and is in the following terms:
"We confirm the parties have agreed to resolve the matter on the following terms.
1.You clients pay to the Bank:
(a)all amounts owing to the Bank under the Equity Access Loan (including principal, interest and bank fees and charges); and
(b) $5,000 in respect of the Bank's legal costs;
on or before 31 January 2005.
2.You execute a consent judgment on behalf of your clients forthwith for the amounts claimed by the Bank in the summary judgment application, which consent judgment is to be held by Gadens Lawyers in escrow;
3.If your clients pay the amounts to be paid to the Bank in accordance with paragraph 1 above, the parties solicitors are to sign a minute of consent orders to discontinue the above proceedings with no order as to costs and existing costs orders being vacated.
4.If your clients fail to pay the amounts to be paid to the Bank in accordance with paragraph 1 above, the period of escrow referred to in paragraph 2 above will end and the Bank will be able to file the consent judgment and obtain judgment against your clients.
5.The parties execute a deed of settlement and release incorporating the terms set about above.
Please let us know as soon as possible whether your clients will execute a deed in terms of the attached draft."
The defendants' solicitor did not respond to this facsimile and so the plaintiff's solicitor sent another facsimile dated 18 January 2005 enquiring whether Mr Paiker had received instructions from the defendants with respect to the facsimile of 17 December 2004.
On 24 January 2005, Mr Skender said that he spoke with Mr Paiker. At par 20 of Mr Skender's affidavit he states:
"On 24 January 2005 I spoke with Mr Paiker about the status of the matter. In the course of the conversation, he made reference to the fact that his client had left him a message. The message was to the effect that his client was selling shares to pay the $5,000 in costs. He said words to the effect that he would pay the $5,000 as 'part performance'. I said I needed to get instructions as to the matter. He replied by saying that he going to pay the money anyway and that we could accept it on a without prejudice basis. Annexed hereto and marked "DKS14" is a true copy of my telephone attendance note of the conversation."
I have read "DKS14" and it is consistent with the terms referred in par 20 of Mr Skender's affidavit.
Mr Skender deposed that on about 31 January 2005 he spoke to Mr Paiker's secretary. The secretary told Mr Skender that Mr Paiker had left a message for her to pass on to him. The message was that the defendants had paid him $5,000 and that he would send it to the plaintiff's solicitors by letter. On or about 2 February 2005 the plaintiff's solicitors received a letter from the defendants' solicitor dated 1 February 2005 enclosing a cheque in the amount of $5,000. That letter is expressed to be without prejudice and is in the following terms:
"We refer to the above and enclose, without prejudice, our client's cheque for $5,000 being the agreed costs. We understand that there has been reductions made in the principal debt directly to the Bank and transferred to your client's accounts. Please confirm these monies have been received."
On 3 February 2005 Mr Skender deposed that he telephoned Mr Paiker and had a discussion with him during which the question of costs was raised. Mr Skender said that the plaintiff would not accept the $5,000 for costs because "it was not sufficient and that a further claim for costs would be made". On 21 February 2005 Mr Skender sent a facsimile to Mr Paiker informing him that the cheque sent with his letter of 1 February 2005 had not been banked and that the plaintiff had expressly reserved its rights in relation to that cheque.
On 22 February 2005 Mr Skender said that he had a further telephone conversation with Mr Paiker. During that conversation Mr Skender asked Mr Paiker whether the parties "had an arrangement". I interpret the word "arrangement" to mean a settlement in the terms as set out in DKS 14. Mr Paiker, according to Mr Skender, replied "yes" but said his clients "did not comply". I interpret this as meaning that the defendants had neither paid all the amounts owing to the Bank nor had they executed a Deed of Settlement. Mr Skender said that during this conversation Mr Paiker confirmed that any arrangement was to have been subject to a deed.
I pause to add that in the end, no settlement deed was ever executed by the parties.
On 15 March 2005 Mr Skender sent a facsimile to Mr Paiker stating that in the circumstances the plaintiff did not accept the amount of $5,000 on account of costs but was prepared to accept the $5,000 in reduction of the principal amount owing. On 16 March 2005 Mr Paiker sent a facsimile to the plaintiff's solicitor requesting the return of the cheque. On 17 March 2005 the cheque was returned to the defendants' solicitor.
Subsequently, the plaintiff's application for summary judgment was listed before Deputy Registrar Harman for hearing. I have already mentioned what occurred at that hearing but I add that the transcript of the proceedings shows that Mr Paiker said (at T2):
"I have no objection to costs in the normal course but I do have an objection in this matter to the indemnity costs."
There is no reference to any alleged agreement between the parties that the defendants would pay the plaintiff costs fixed in the sum of $5,000.
In my opinion, there was no final agreement to settle the issue of costs in the sum of $5,000. I accept the submission made by Mr Skender on behalf of the plaintiff that the negotiations as to costs were in the context of the wider negotiations to fully resolve the matter and any agreement was subject to the execution of a Deed of Settlement. The two issues of payment of monies owed under the line of credit and costs were not to be agreed in isolation of each other. Neither party intended to form an agreement solely as to costs and leave all other matters in dispute.

The parties' conduct subsequent to the events of December 2004 through to March 2005 clearly indicates that neither party believed there was any binding agreement with respect to costs. Had the defendants believed that such an agreement was in place, I have no doubt that Mr Paiker would have raised the matter before Deputy Registrar Harman on 27 May 2005, yet he did not.
In the circumstances, I find that the defendants did not enter into a binding agreement with the plaintiff to pay the plaintiff's legal costs in the sum of $5,000. For this additional reason I can see no reason why the plaintiff's costs should not be taxed.
In view of my findings it is not necessary for me to address the plaintiff's other arguments set out in its outline of submissions under the headings of "Res judicata/Estoppel" and "Issues Concerning the Allegation of an Agreement as to Costs".

Conclusion

In my opinion none of the reasons offered by the defendants justify a stay of the taxation of costs. Accordingly, I dismiss the appeal.