Wilmoth Field Warne (A Firm) v Toshiba Singapore Pty Ltd
[2011] FCA 987
•4 August 2011
FEDERAL COURT OF AUSTRALIA
Wilmoth Field Warne (A Firm) v Toshiba Singapore Pty Ltd [2011] FCA 987
Citation: Wilmoth Field Warne (A Firm) v Toshiba Singapore Pty Ltd [2011] FCA 987 Parties: WILMOTH FIELD WARNE (A FIRM) v TOSHIBA SINGAPORE PTY LTD and CASTEL ELECTRONICS PTY LTD (ACN 074 561 087) File number: VID 401 of 2011 Judge: BROMBERG J Date of judgment: 4 August 2011 Cases cited: Wilcox v Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 Date of hearing: 4 August 2011 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 23 Solicitor for the Applicant: Mr V Stefano of Wilmoth Field Warne Counsel for the First Respondent: Mr A Young Solicitor for the First Respondent: DLA Piper Alderman Counsel for the Second Respondent: Dr K Hanscombe SC with Mr D Bailey Solicitor for the Second Respondent: Browne & Co
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 401 of 2011
BETWEEN: WILMOTH FIELD WARNE (A FIRM)
ApplicantAND: TOSHIBA SINGAPORE PTY LTD
First RespondentCASTEL ELECTRONICS PTY LTD (ACN 074 561 087)
Second Respondent
JUDGE:
BROMBERG J
DATE OF ORDER:
4 AUGUST 2011
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The applicant’s claim for interlocutory relief made by its Application of 13 May 2011 be dismissed.
2.The applicant pay the first respondent’s costs of the applicant’s claim for interlocutory relief made by its Application of 13 May 2011.
3.Save for the costs of and incidental to today’s hearing, the applicant pay the second respondent’s costs of the applicant’s claim for interlocutory relief made by its Application of 13 May 2011.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 401 of 2011
BETWEEN: WILMOTH FIELD WARNE (A FIRM)
ApplicantAND: TOSHIBA SINGAPORE PTY LTD
First RespondentCASTEL ELECTRONICS PTY LTD (ACN 074 561 087)
Second Respondent
JUDGE:
BROMBERG J
DATE:
4 AUGUST 2011
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
I have today dismissed the applicant’s application for interlocutory relief. The parties are in dispute as to who should pay costs. Ordinarily, costs follow the event, but two matters arise for consideration. The first is whether the second respondent should bear its own costs of today. The second is whether the first respondent should be awarded indemnity costs from 17 May 2011.
Background Facts
I need first, to turn to some background facts. The applicant (“WFW”) were the former solicitors of the second respondent (“Castel”) in relation to legal proceedings in this Court brought by Castel, against the first respondent (“Toshiba”), in the course of the trial of the proceedings between Castel and Toshiba, Castel replaced WFW with another firm of solicitors. Castel succeeded at trial, and judgment was given by Ryan J in favour of Castel on 28 September 2010. An appeal from the decision of Ryan J was allowed by a Full Court on 11 May 2011. The judgment sum payable to Castel was substantially increased.
On 11 February 2011, WFW provided to Castel a bill of costs for $580,105.99 and asserted an equitable lien or a solicitor’s lien over the judgment debt which arose from the judgment of Ryan J. The lien was claimed over legal costs alleged by WFW to be owed to it in acting as Castel’s solicitors. On 4 May 2011, WFW again asserted an equitable lien in an amount of $580,117.30, but this time over the judgment debt arising from the judgment of the Full Court. On 5 May 2011, WFW wrote to Toshiba’s solicitors asserting Castel’s liability in the sum I have mentioned and a solicitor’s lien and sought an undertaking that such sum be retained by Toshiba from moneys payable by Toshiba to Castel under the judgment debt to which I have referred. Castel disputed the asserted lien and Toshiba, by letter dated 10 May 2011 declined, to give the undertaking sought.
On 13 May 2011, WFW made this application to the Court seeking a declaration as to the existence of the equitable lien and other relief. Interlocutory relief was also sought against Toshiba and Castel in which an order was sought that, pending the final determination of the proceeding, Toshiba be restrained from either disposing of, transferring, or in any other way encumbering to the extent of $580,105.99 any part of the sum referred to in the claim for declaratory relief.
On 17 May 2011, Toshiba proffered an undertaking to WFW in terms different to those earlier sought by WFW, but in terms which I will later deal with.
WFW’s claim for interlocutory relief came before me on 20 May 2011. At the request of the parties, the part-heard application was adjourned to a date to be fixed. It appears that in the interim between that occasion and now, negotiations occurred between WFW and Toshiba. Those negotiations resulted in WFW not pressing for relief.
On 6 June 2011, WFW advised the Court that it had reached an arrangement with Toshiba, which involved Toshiba giving an undertaking that it would not distribute the sum of $580,117.30 without giving notice to WFW. It was said that in those circumstances it was not necessary to seek any relief against Castel. It put its view that its application may be adjourned sine die (indefinitely) with costs of the application being reserved. That correspondence was copied to the other parties.
On 1 July 2011, Castel’s solicitors advised the Court via email (copied to the other parties), that it sought that WFW’s application for interlocutory relief be relisted. The purpose of the relisting was not explained. It was estimated that half a day would be required on the relisting. Castel filed two affidavits yesterday. Correspondence exhibited by those affidavits shows that Castel has objected to the agreement reached between WFW and Toshiba and that there remains a dispute between Castel and WFW as to the amount of any legal costs owing and whether or not a bill of costs in taxable form has been provided by WFW.
One of the affidavits filed by Castel is an affidavit of its solicitor, Mr Edgar. Mr Edgar’s affidavit does not identify any order that was being sought by Castel at the resumed hearing. It does, however, exhibit correspondence between the parties to which I will return.
At the outset of proceedings today, I asked counsel for Castel what relief, if any, Castel was seeking given that the adjourned hearing was resumed at Castel’s request. Counsel indicated that Castel sought only that WFW’s interlocutory application be heard, determined, and dismissed.
The first issue I have identified of whether Castel should bear its own costs of today’s resumed hearing, arises because there is an issue as to whether Castel gave sufficient and proper notice of the purpose of the resumed hearing, and whether, if that had been given, the hearing would have been necessary. To deal with that issue, I need to return to the correspondence that was exchanged between the parties.
On 25 May 2011, Toshiba’s solicitors wrote to WFW, copying Castel’s solicitors. Toshiba offered WFW an undertaking to resolve WFW’s claim for relief. On that day, Castel’s solicitors wrote to WFW and to Toshiba’s solicitors, referring to Toshiba’s offer of an undertaking and stated:
We confirm that Castel does not agree to the undertaking or the course proposed. Castel’s rights are affected. Castel is entitled to, and will seek to be heard at any resumed hearing, in this regard.
The undertaking offered by Toshiba, with some variation to the terms offered on 25 May 2011 was accepted in a letter from WFW of 30 May 2011. In that letter, WFW indicated to Toshiba’s solicitors that there seemed no point in relisting the proceeding. On 30 May 2011, WFW also wrote to Castel’s solicitors advising Castel of its acceptance of Toshiba’s undertaking. The letter continued:
In light of Toshiba’s undertakings, and the fact that no payment has been made to you or your client, there is no longer any live controversy between us and your client. Specifically, as matters stand, it is not necessary to seek injunctive relief against your client, as it is not in possession of the relevant funds. Moreover, your client has no entitlement to stand in the way of Toshiba giving those undertakings. In the circumstances, it is not necessary to relist the proceeding.
On 27 June 2011, Castel’s solicitors wrote to WFW referring to the correspondence of 30 May 2011. The letter asserted that the arrangement reached between WFW and Toshiba:
1.Interfered with Castel’s legal rights;
2.May well constitute a contempt; and
3.Constituted an abuse of process.
The letter said that Castel had given instructions: “To seek relief in respect of the events which have occurred”.
The letter went on to say that Castel objected to the agreement between WFW and Toshiba and proposed to relist the matter for further hearing after the expiration of seven days. A letter in the same terms (for relevant purposes) was also forwarded on 27 June 2011 by Castel’s solicitors to Toshiba’s solicitors.
On 28 June 2011, WFW advised Castel’s solicitors that it rejected their challenge to the arrangement made with Toshiba. On 1 July 2011, Castel requested that the matter be relisted in the terms I have already identified. On 14 July 2011, Castel’s solicitors wrote to WFW saying:
In the interests of clarity, we again record Castel’s contention set out in previous correspondence or notification to you, that the proceeding is, in our view, not properly constituted before the court, and that it and the agreement made between WFW and TSP (Toshiba) are, in any event, an abuse of process.
As I have said, on 30 May 2011, WFW advised both respondents that there was no longer a live controversy between it and Castel and that it was unnecessary for this hearing to be resumed.
Should Castel or WFW pay the costs?
In my view, at that point, the parties should have approached the Court with proposed consent orders dismissing the application for interlocutory relief and requiring WFW to pay Castel’s costs. Instead, WFW indicated it sought the indefinite adjournment of its application for interlocutory relief and Castel intimated that it would utilise the resumed hearing to contest the arrangement made between Toshiba and WFW. Neither course had any merit and the pursuance of either course would have led to failure and an adverse costs order.
In those circumstances, and in the exercise of the Court’s wide discretion as to costs, I propose to order that each of WFW and Castel bear their own costs of and incidental to today’s hearing. I do not accept Castel’s submission that it should have been apparent to WFW that the only matter that Castel intended to pursue on the resumed hearing was the dismissal of the interlocutory application. In the context of the correspondence to which I have referred, if that was truly Castel’s position prior to today, then, in my view, it was incumbent upon Castel to have said so expressly.
Who should pay Toshiba’s costs and at what rate?
There is some force in the contention that Toshiba’s costs of today should be equally borne by WFW and Castel. On balance, however, I’ve determined that given that WFW was the moving party for positive relief and given that it maintained its application that its claim for interlocutory relief be adjourned rather than dismissed, WFW should pay Toshiba’s costs of today.
Whilst I have some sympathy for Toshiba’s position, as a party somewhat innocently caught in a dispute essentially between Castel and WFW, I am not prepared to award it costs on an indemnity basis.
Its application for indemnity costs may have been irresistible, if there had been sufficient correlation between the undertaking it offered on 17 May 2011 and that which it gave on 25 May 2011. However, that was not the case. The 17 May 2011 offer was conditional upon WFW’s claim for its fees being agreed or taxed. The imposition of that qualification put WFW at risk that until one or other of those conditions were met, there was no surety that Toshiba would not make payment to Castel without notice. In those circumstances, WFW’s rejection of the offer was not unreasonable, and the occasion for the awarding of indemnity costs does not arise as, in my view, there’s no special or unusual feature in the case justifying departure from the ordinary rule: Wilcox v Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at 152 (Black CJ).
Orders
In addition to the order already made this morning, I will make orders that: the applicant pay the first respondent’s costs of the applicant’s claim for interlocutory relief, made by its Application of 13 May 2011; and that, save for the costs of and incidental to today’s hearing, the applicant pay the second respondent’s costs of the applicant’s claim for interlocutory relief made by its Application of 13 May 2011.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate:
Dated: 26 August 2011
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