Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [No 13]

[2017] WASC 286

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 13] [2017] WASC 286

CORAM:   LE MIERE J

HEARD:   21 FEBRUARY 2017

DELIVERED          :   12 OCTOBER 2017

FILE NO/S:   CIV 1279 of 2001

BETWEEN:   WRIGHT PROSPECTING PTY LIMITED (ACN 69 008 676 417)

Plaintiff

AND

HANCOCK PROSPECTING PTY LIMITED (ACN 69 008 676 417)
Defendant

Catchwords:

Practice and procedure - Judgments and orders - Construction and interpretation - Construction of previous court orders regarding costs of the action - Where the parties referred five questions to the court directed to the clarification or interpretation of orders made by the court on 22 March 2011 - Turns on own facts

Legislation:

Nil

Result:

Answers given

Category:    B

Representation:

Counsel:

Plaintiff:     Mr R N Smith SC & Mr R J Brender

Defendant:     Mr J C Giles SC & Mr B W Ashdown

Solicitors:

Plaintiff:     Clayton Utz

Defendant:     Corrs Chambers Westgarth

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

Ailakis v Olivero [No 2] [2014] WASCA 127; (2014) 100 ACSR 524

Athens v Randwick City Council (2005) 64 NSWLR 58

Barbagello v J & F Catelan Pty Ltd [1986] 1 Qd R 245

Betts v Neilson (1868) LR 3 Ch App 429

Crouch v Stanley (Unreported, WASCA, 22 August 1991)

McKenna v Richey [1950] VLR 360

Owston Nominees [No 2] Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558

Permanent Building Society v Wheeler [No 2] (1993) 10 WAR 569

Re Group Pty Ltd v Kazal [No 3] [2017] FCA 754

Russell v RCR Tomlinson Ltd [No 2] [2016] WASC 240

Sertori Pty Ltd v Quakers Hill [2014] NSWCA

Terrace Councillors v Arnold [2002] WASC 90

Willison v Van Ryswyk [1961] WAR 87

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 11] [2011] WASC 74

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 9] [2010] WASC 44

LE MIERE J: 

Summary

1. The parties have referred to the court five questions directed to the clarification or interpretation of orders made by the court on 22 March 2011 concerning the costs of this action.

2. The plaintiff (WPPL) and the defendant (HPPL) carried on business as a partnership.  They entered into an agreement (1984 agreement).  Clause 4 of the agreement provided that each partner shall have the option to require the transfer of the HPPL interests to HPPL and the transfer of the WPPL interests to WPPL.  Schedule 1 set out the interests of HPPL and schedule 2 set out the interests of WPPL including interests of the partnership in the Rhodes Ridge Joint Venture and Temporary Reserves.  In December 1997 WPPL exercised its right under cl 4 by a notice and subsequently commenced this action seeking a declaration that the Rhodes Ridge Joint Venture and the Temporary Reserves were interests of WPPL and that HPPL's interest was held on trust for WPPL.  The primary issue was whether cl 4, or its exercise, contravened certain prohibitions against transferring or disposing of an interest without the approval of the Minister and other parties.  HPPL raised numerous defences.  WPPL also claimed that by denying that cl 4 was valid and effectual HPPL was acting unconscionably in breach of fiduciary duties owed to WPPL.  HPPL made a counterclaim but ultimately did not press it.

3. After a long trial Murray J delivered reasons for decision:  Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 9] [2010] WASC 44 (the Principal Judgment). His Honour held that there should be judgment for WPPL on its contractual claim and that cl 4 conferred on WPPL a right to call for the necessary steps to be taken to transfer the identified WPPL interests, including the Rhodes Ridge interest to WPPL. His Honour held that WPPL's unconscionability claim failed because an equitable remedy was unavailable. His Honour dismissed HPPL's counterclaim.

4. After further submissions from the parties Murray J delivered supplementary reasons for decision:  Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 11] [2011] WASC 74 (the Supplementary Judgment). At [143] his Honour set out the orders to be made to give effect to the judgment. The orders subsequently extracted included the following:

   10.Subject to order 11, the defendant to pay the plaintiff's costs of the claim and counterclaim, including any reserve costs … 

   11.The plaintiff to pay the defendant's costs of the plaintiff's 'unconscionability claim', pleaded at paragraphs 22A - 22M of its statement of claim …

   (Costs Orders)

The Costs Orders

1. The principal issue now before the court is whether HPPL or WPPL is liable for, or can recover from the other, the Damages Costs, that is costs incurred in connection with the quantification of damages or equitable compensation.  HPPL says that it is entitled to those costs because they are 'costs of the plaintiff's "unconscionability claim"' within the meaning of order 11 of the Costs Orders.  WPPL says that it is entitled to those costs pursuant to order 10 because they are not costs of its unconscionability claim.

2. For the reasons which follow I answer the questions as follows:

   Question 1:

   Was the Alternative Relief Claim open to be brought by WPPL in the proceedings, and if so was the Alternative Relief Claim pursued by WPPL in the proceedings?

   Answer 1:

   The Alternative Relief Claim was open to be brought by WPPL in the proceedings and was pursued by WPPL.

   Question 2:

   Were the Damages Costs incurred after the Amendment Date wholly attributable to the Unconscionability Claim or were they at least in part also attributable to the Other Matters?

   Answer 2:

   The Damages Costs incurred after the Amendment Date were at least in part attributable to the Other Matters.

   Question 3:

   If and to the extent that the Damages Costs incurred after the Amendment Date were at least in part also attributable to the Other Matters, then:

   (a)Do the costs payable by HPPL to WPPL include any Damages Costs of WPPL that were partly attributable to the Other Matters, such that those Damages Costs of WPPL are payable by HPPL under order 10 of the Cost Orders?

   (b)Do the costs payable by WPPL to HPPL include any Damages Costs of HPPL that were partly attributable to the Unconscionability Claim, such that those damages Costs of HPPL are payable by WPPL under order 11 of the Costs Orders?

   Answer 3:

   (a)Yes;

   (b)No.

   Question 4:

   What is the basis upon which the taxing officer should approach the division of the Damages Costs after the Amendment Date between any costs that were wholly attributable to the Unconscionability Claim and any costs that were at least partly attributable to Other Matters?

   Answer 4:

   The taxing officer should approach the taxation of costs on the basis that all of the Damages Costs are costs of the claim and are payable by HPPL to WPPL pursuant to Order 10 except in so far as any cost item is shown to be unrelated to the assessment of damages in lieu of specific performance in the sense that the item is not relevant to the assessment of those damages.

Jurisdiction being exercised

1. Before addressing the meaning of the Costs Orders and the specific questions referred to the court it is necessary to identify the jurisdiction being exercised by the court and the principles to be applied by the court in answering those questions.

2. The court has an implied power to declare the meaning of orders where those orders are ambiguous or of uncertain meaning:  Owston Nominees [No 2] Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558 [22] ‑ [29], [64].

3. The court can only construe the order, and cannot make the order it considers the trial judge should have made.  Each of the questions requires the court to construe the Costs Orders.  As I set out below, the court approaches that task by reference to the reasons of the trial judge which the Costs Orders gave effect to, and where necessary and appropriate, to relevant materials before the trial judge.  Insofar as interpreting the Costs Orders requires giving meaning to findings of the trial judge the court must give effect to the findings of the trial judge and not the findings the court would have made.  Insofar as the court must give meaning to words used by the trial judge the court must give effect to the meaning of those words manifested in the reasons of the trial judge not the meaning which the court might otherwise give to those words.

Interpretation principles

1. In Sertori Pty Ltd v Quakers Hill [2014] NSWCA 340, [81] Tobias JA said that it appears to be an open question whether, before resort can be had to the reasons for judgment of a court for the purpose of construing its orders, the orders must contain an ambiguity. In Athens v Randwick City Council (2005) 64 NSWLR 58 at [133] Santow JA preferred the line of authority that the meaning of words in an order should in an appropriate case be considered by reference to the reasons for judgment, themselves finding their context in the overall proceedings. His Honour had earlier said:

   To pose the question as simply, can ambiguity in court orders be resolved by reference to their external context, obscures the point of what an order sets out to do.  The purpose of a court order is, ordinarily, to give effect to a judgment.  The judgment is not some kind of penumbral context surrounding the order.  Rather the judgment is the source of the order. A court order derives from its originating judgment, as a transfer of land derives from the underlying contract.  The order must therefore conform to the judgment, with only such latitude as the judgment allows.  Likewise the transfer must conform to the contract.  To speak therefore of the originating judgment as providing context for resolving ambiguity understates the primacy of that judgment as a source of interpretation of the order.

   If an order were made in clear disconformity with its originating judgment, that would ordinarily invalidate the order pro tanto.  It is the judgment which controls the scope of any consequential orders, setting the parameters for what conformance requires.  Contractual context does not operate in so controlling a manner in resolving contractual ambiguity.  It is but one aid to construction amongst several.  Whereas in the case of ambiguous court orders, it is the judgment which is ordinarily the primary reference point in resolving ambiguity though the wider proceedings may also on occasion assist [129] ‑ [130].

2. In Russell v RCR Tomlinson Ltd [No 2] [2016] WASC 240 at [63], Tottle J held that in construing orders made by the Court of Appeal it was permissible to have regard to the reasons for judgment without finding any element of ambiguity in the orders. More recently, in Re Group Pty Ltd v Kazal [No 3] [2017] FCA 754 Perram J at [19] said that in construing an order of the court it was relevant to have regard to the reasons for judgment which it gives effect. In this case in construing the Costs Orders it is relevant to have regard to the reasons for judgment to which they give effect.

3. In Owston Nominees at [27], Allsop J said that in construing an ambiguous order it is necessary to look at the surrounding circumstances which include 'the reasons, the pleadings and, if necessary, the evidence and how the case was conducted'. In Athens v Randwick City Council Santow JA said that if an order was ambiguous and the ambiguity could not be resolved by reference to the judgment then 'resort may be had to the proceedings and in particular the pleadings, which provide an interpretive context' [136].

4. Each party maintained that the meaning of the Costs Orders is clear but advanced diametrically opposed meanings.  The meaning advanced by each party is reasonably open from the words of the orders.  In those circumstances the court should first have resort to the judgment which contains the findings and reasons of the trial judge for making the orders.  The Supplementary Judgment contains the trial judge's reasons for making the Costs Orders.  However, Murray J commenced those reasons with the statement that they are supplementary to and should be read with the Principal Judgment.  In addition, each of the parties had resort to the pleadings, the evidence and the submissions before the trial judge as providing the context of his Honour's judgments and thereby assisting in construing the Costs Orders.  In the circumstances of this case that is appropriate.

The Supplementary Judgment

1. At [99] of the Supplementary Judgment Murray J referred to the 'cost of issues' question to be whether in relation to WPPL's unconscionability claim, upon which it failed, an order should be made for the payment of costs in favour of HPPL. Murray J commenced his consideration of that question by referring to O 66 r 1(3) of the Rules of the Supreme Court 1971 (WA):

   Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues.

   His Honour said that O 66 r 1(3) is reinforced by the provisions of O 66 r 2(a):

   In the absence of any special order ‑ 

   (a)where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs shall be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought;

2. Murray J then referred to Permanent Building Society v Wheeler [No 2] (1993) 10 WAR 569, 574 ‑ 575. In Permanent Building Society v Wheeler Anderson J found that the plaintiff's case comprised three separate causes of action.  His Honour then observed at 573:

   It is true that in one sense the case against the defendants is capable of being described as a case based upon breach of fiduciary duty and in that sense there was 'one cause of action'.  However, although there is an evidentiary inter‑relationship, the material facts on which the plaintiff relied to entitle the plaintiff to restitution with respect to losses incurred in the purchase and attempted development of the Vickers Hadwa site are different from the material facts relied on to entitle the plaintiff to recover the overpayment of $59,729.85.  The cause of action based upon the overpayment is pleaded in three relatively short paragraphs of the statement of claim - pars 23, 28 and 30:  see p 51 of reasons for judgment.  Although the evidence and the law relevant to that cause of action did, to a significant extent, overlap the evidence and the law relevant to the cause of action based on the improper arrangement, if the former cause of action alone had been prosecuted, the statement of claim would not have run to 21 pages, the book of pleadings would not have run to 113 pages, the interrogatories would not have filled a Lever Arch file as they did, the court record would not have comprised six volumes and the documents tendered by consent by the plaintiff would not have amounted to 1420 folios.

   Anderson J referred to O 66 r 2(a) and then referred to a number of cases decided in other jurisdictions which tend to support a somewhat different approach, Anderson J said that it must be borne in mind that those authorities were decided on rules of court that did not include a rule in the same terms as O 66 r 2(a) (574). His Honour then made the statement which is reproduced by Murray J at [105] of the Supplementary Judgment:

   In my opinion the approach required by the rules of this Court is that, once it is seen that separate causes of action are involved, and that the plaintiff has succeeded on only one or some, the defendant is prima facie entitled to his costs on the other or others.  However, in my experience, this Court will not make such an order as of course.  The court will always look at the realities of the case and attempt to do substantial justice.

   In the exercise of his discretion Anderson J did not order the plaintiff to pay the defendant's costs of the two causes of action on which the plaintiff had failed.  Essentially, his Honour did so because the two causes of action on which the plaintiff had failed had not been unreasonably raised and much of the evidence led on the first cause of action alleging breach of fiduciary duty was necessary background information for the court to be able to adjudicate the cause of action on which the plaintiff was successful.

3. After referring to Permanent Building Society v Wheeler, to which I have just referred, Murray J referred to the submissions of the parties.  WPPL submitted that it should not be ordered to pay the costs of litigating the unconscionability claim because the evidence relevant to the determination of that issue was admissible on, and relevant to, the issues upon which it succeeded and no material additional evidence was led or time taken.  His Honour did not accept that submission.

4. His Honour referred to the substantial time involved in getting up and answering WPPL's damages case.  His Honour said that in view of his decision to order specific performance, and the way in which the parties had framed their cases, he did not find it necessary to make an assessment of damages and did not further delay delivery of judgment by making a provisional assessment.

5. At [108], Murray J said that there were two scenarios open upon the pleadings and in the way that the issues were fought at trial which would lead to the need to make an assessment of damages of the kind claimed by WPPL alternatively to an award of specific performance.  His Honour said that he had presented his views about those matters in the Principal Judgment at [660] ‑ [672].  At those paragraphs of the Principal Judgment Murray J said that the question of the assessment of damages may arise in two ways, but in both cases the process would involve the assessment of damages in equity and the court's approach to the assessment would be the same in either case.  The first way was that if the court refused a decree of specific performance on discretionary grounds then it may award equitable damages in lieu of specific performance under the Supreme Court Act 1935 (WA) s 25(10). The second way was that if WPPL's contractual claim failed and its equitable claim based on allegations of unconscionability succeeded, then WPPL claimed equitable damages for breach by HPPL of the fiduciary obligation which it owed to WPPL.

6. Murray J then referred to HPPL's submissions.  At [111] his Honour said that HPPL argued that it was the late introduction of the unconscionability claim which led to all of the additional expenditure incurred in a number of areas including the evidence relating to the issue of damages.  His Honour did not accept that submission.

7. At [112] his Honour described WPPL's submission to be that the alternative of damages to specific performance would have been open and pursued in respect of the loss of the opportunity to obtain HPPL's 25% Rhodes Ridge interest and to develop it and deal with it for WPPL's profit in due course.

8. Having reviewed the rules, principles and parties' submissions his Honour then set out his conclusion:

   In the final analysis, it seems to me that this is a case where the defendant's prima facie entitlement under the rules to have the costs of the failed unconscionability claim is not disturbed by any consideration arising out of the submissions made on either side. A taxing officer would, of course, be required to isolate out those additional elements of costs and disbursements of the kind to which I have referred which may be said to be attributable to the making of the failed claim, in the sense that those costs elements would not have arisen or would not have arisen to the same extent had the unconscionability claim not been made [113].

9. His Honour then acknowledged that that may not be a task without its own difficulty but he saw no reason to suppose that the complexities would be such that at least a broad brush assessment could not be made to enable substantial justice to be done to the parties.  His Honour said at [114] that he would make an order in terms of order 11 which allows the award of costs to follow the event of the failure of the unconscionability claim and 'has the desirable outcome of leaving the plaintiff at hazard in respect of the costs occasioned by the introduction of that claim'.

1. I make the following observations about [113]. First, the defendant is 'to have the costs of the failed unconscionability claim'. Secondly, those costs are to be those additional costs which may be said to be attributable to the making of the failed claim in the sense that those costs would not have arisen or would not have arisen to the same extent had the unconscionability claim not been made. The defendant is not to have the costs of all of the work done and evidence adduced in relation to, or relevant and admissible in relation to, the unconscionability claim. If his Honour had meant that he would not have said that the costs of the failed unconscionability claim which the defendant was to have are those costs which would not have arisen or would not have arisen to the same extent had the unconscionability claim not been made. Thirdly, costs 'which may be said to be attributable to the making of the failed claim' refers to the costs of work done, evidence adduced and submissions made which are relevant and admissible only in relation to the failed claim. His Honour must be taken to have intended that the taxing officer is to determine the matter objectively by considering whether the work done, evidence adduced or submissions made, the costs of which are in contention, were relevant to or admissible in relation an issue in the proceedings other than the failed unconscionability claim. The alternative is that his Honour intended the taxing officer to conduct an inquiry into the parties' subjective intention in doing the work, adducing the evidence or making the submission. That is a wholly inappropriate task for a taxing officer and his Honour should not be taken to have intended the taxing officer to undertake such a task. The meaning I have adopted is entirely consistent with the text of his Honour's reasons. The words 'which may be said to be attributable to' point to an objective inquiry not an inquiry into the subjective reasons for the costs being incurred. Having made those observations I turn to the questions the parties referred to the court.

Question 1

1. Question 1 is:

   Was the Alternative Relief Claim open to be brought by WPPL in the proceedings, and if so was the Alternative Relief Claim pursued by WPPL in the proceedings?

   The Alternative Relief Claim means 'the claim or potential claim by WPPL for damages or equitable compensation in lieu of specific performance pursuant to the First Claim'.  The First Claim is the contractual claim pleaded in [5] to [22] inclusive and [23] and [24] of the statement of claim.

2. HPPL says that the answer is 'no'.  HPPL says that the claim to damages in lieu of specific performance was not available to WPPL at trial because it was not pleaded and was not pursued by WPPL because it did not expressly advance, and indeed disavowed, such a claim.

3. WPPL says that it is not necessary as a matter of law or practice for a party to specifically plead a claim for relief by way of damages as an alternative to specific performance.  In support of its submission WPPL cites Terrace Councillors v Arnold [2002] WASC 90, [6]; Crouch v Stanley (Unreported, WASCA, 22 August 1991); Willison v Van Ryswyk [1961] WAR 87; Betts v Neilson (1868) LR 3 Ch App 429, 441; McKenna v Richey [1950] VLR 360, 371; Barbagello v J & F Catelan Pty Ltd [1986] 1 Qd R 245, 254 and Ailakis v Olivero [No 2] [2014] WASCA 127; (2014) 100 ACSR 524 [173] (Murphy JA).

4. In Willison v Van Ryswyk the plaintiff, in a suit for specific performance of a contract for sale of a business, neither alleged nor claimed damages in lieu of specific performance. The trial judge exercised his discretion not to give specific relief and in lieu assessed and awarded damages. On appeal, the Full Court held that damages in lieu of specific performance may be awarded although not expressly claimed and it is not necessary to amend a statement of claim to obtain such an award. Virtue J, with whom Jackson SPJ and D'Arcy J agreed, referred to the terms of s 25(10) and s 24(7) of the Supreme Court Act, text books and authorities. His Honour also noted that an express prayer for relief is unnecessary under the provisions of O 20 r 5 of the Supreme Court Rules which provides that it shall not be necessary to ask general or other relief which may always be given if the court or judge may think just to the same extent as if it had been asked for. That rule has subsequently been amended. However, in Ailakis v Olivero [No 2] at [173], Murphy JA said:

   In relation to an award of damages under Lord Cairns Act, it is unnecessary for a plaintiff who applies for such damages at trial to have expressly claimed such damages in the writ or pleading:  McKenna v Richey [1950] VLR 360 at 371 … ; Willison v Van Ryswyk [1961] WAR 87 at 89 - 90; Betts v Neilson (1869) LR 3 Ch App 429 at 441.

   The statement by Murphy JA was obiter.  The other members of the court found it unnecessary to address the issue.  Whilst the statement of Murphy JA is not binding on me as a matter of precedent, I should follow seriously considered obiter dicta of a member of the Court of Appeal unless I am satisfied it is wrong.

5. HPPL submitted that the modern case management rules adopt a different approach to case management to those which historically prevailed, focussing on the overriding purpose of the just disposition of proceedings with a minimum delay and expense.  HPPL submits that the modern rules have the consequence that the authorities relied on by WPPL, and referred to by Murphy JA, must be treated with caution as reflecting a different approach to litigation that is today required.  In my view case management principles do not have the effect argued for by HPPL.  I see no reason not to follow the considered statement of Murphy JA.

6. The circumstances of a case may lead a judge to decline to award damages in lieu of specific performance where a plaintiff has not pleaded or made such a claim.  However, Murray J did not consider this to be such a case.  At [660] to [680] of the Principal Judgment Murray J considered that if he had refused specific performance on discretionary grounds, equitable damages may be awarded in lieu of specific performance.  At [108] of the Supplementary Judgment his Honour said that it was open upon the pleadings and in the way the issues were fought at trial that the court could award damages in lieu of specific performance.  For those reasons I conclude that the Alternative Relief Claim was open to be brought by WPPL in the proceedings.

7. The second part of the question is whether the Alternative Relief Claim was pursued by WPPL in the proceedings?  WPPL made no claim for damages until it amended its statement of claim on 8 September 2006 to claim damages as part of its unconscionability claim.  WPPL did not expressly claim damages in lieu of specific performance.  WPPL made no reference to damages in lieu of specific performance in its opening submissions.

8. At the conclusion of the evidence the parties delivered a series of extensive written submissions. WPPL delivered closing submissions dated 3 October 2007 and entitled 'written outline of plaintiff's submissions on liability and quantum (non‑confidential portions only)'. Part 2 contains WPPL's submissions on damages. At [1194] ‑ [1197] WPPL says that its primary case is for declaratory relief and relief in the nature of specific performance. WPPL then states that a second and alternative case is that if cl 4 of the 1984 Agreement is invalid, unenforceable or illegal as HPPL contends, the court should declare that HPPL holds its interest in the Rhodes Ridge interest upon constructive trust for WPPL. WPPL then states that its third case is its claim for equitable damages. The claim for equitable damages is the relief claimed in relation to its unconscionability claim. Earlier in its submissions WPPL responds to HPPL's limitation defence. At 3.10.1(e) WPPL states that damages were not claimed at the commencement of the proceedings but were available under s 25 of the Supreme Court Act, which permits a court with power to order specific performance of an agreement to award damages in substitution for an order for specific performance.  WPPL concludes this section of its submissions by submitting that if HPPL's conduct was unconscionable, but the court found that imposition of a constructive trust was not appropriate and equitable damages was the appropriate form of relief but the court found that that claim was out of time then the unconscionability exception would be engaged.

9. In its closing submissions dated 20 November 2007 HPPL addressed WPPL's claim for equitable damages. At [1246] HPPL said in effect that WPPL's claim which was expressed as one for equitable damages was a claim for equitable damages in lieu of specific performance under s 25(10) of the Supreme Court Act.  At [1273] HPPL said that there was another basis on which WPPL puts its damages case; that is, a claim for equitable damages for breach of the equitable duty of good faith.

10. In its submissions in reply of 14 February 2008 WPPL said at [695] that in its submissions HPPL had treated WPPL's claim for equitable compensation as a claim for damages in lieu of specific performance under Supreme Court Act s 25(10). WPPL went on to say that its primary case was for relief in the nature of specific performance and as an alternative case, the unconscionability case, only arises if cl 4 of the 1984 Agreement was held to be invalid, unenforceable or illegal. The remedy then sought was primarily a constructive trust and in the alternative, equitable damages. At [698] WPPL said that there was no express claim in the pleading for damages in addition to, or in lieu of, specific performance 'although the court has power to order it whether or not pleaded'.

11. HPPL delivered further submissions in response to WPPL's claim for damages.  HPPL commences those submissions by stating that the question of damages only arises if the court refuses specific performance on discretionary grounds, and the court would then assess damages in substitution for specific performance.  At [47] HPPL says in relation to WPPL's claim for damages that HPPL understands that the jurisdiction of the court which WPPL seeks to enliven to award damages is its jurisdiction to award damages as an alternative form of relief to specific performance pursuant to Supreme Court Act s 25(10).

12. WPPL filed submissions entitled 'Plaintiff's Submissions in Reply' on 27 March 2008.  WPPL said that HPPL's understanding that its claim for equitable damages was a claim for damages in lieu of specific performance under Supreme Court Act s 25(10) was wrong. At [708] WPPL referred to HPPL's submission that there was no entitlement to equitable damages if specific performance cannot be ordered due to the lack of a requisite consent. WPPL said that that misstated WPPL's case; that equitable damages are not sought in lieu of specific performance, they are sought as equitable compensation for breach of fiduciary duty on the hypothesis that a constructive trust is not ordered. I pause to say that that submission did not disclaim damages in lieu of specific performance. It is a statement that HPPL has mischaracterised WPPL's claim for equitable damages.

13. I make the following observations about the parties' submissions in relation to damages in lieu of specific performance.  First, WPPL expressly stated that it was open to the court to award damages in lieu of specific performance.  Secondly, WPPL said that its primary, second and third claims were for relief other than damages in lieu of specific performance.  Thirdly, damages in lieu of specific performance received little attention in WPPL's extensive submissions.  Fourthly, WPPL did not disclaim a claim for damages in lieu of specific performance.

14. I remind myself that my task is to construe the orders made by Murray J and not to put forward the orders I would have made.  Evidence was adduced which was capable of supporting a claim for damages in lieu of specific performance.  In the Principal Judgment Murray J found that it was open to the court to award damages in lieu of specific performance.  In its closing submissions WPPL submitted that it was open to the court to award damages in lieu of specific performance.  In its submissions HPPL referred to a claim for damages in lieu of specific performance.  In that context, I turn to the judgment of Murray J to see how his Honour viewed the matter.  At [108] of the Supplementary Judgment his Honour said that making an assessment of damages in lieu of specific performance was open upon the pleadings and 'in the way that the issues were fought at trial'.  I find that the Alternative Relief Claim was pursued by WPPL in the proceedings in the sense that WPPL adduced evidence that was relevant and admissible in relation to the assessment of damages in lieu of specific performance and submitted that it was open to the court to award such damages if its claims for declaratory relief, relief in the nature of specific performance, the declaration of a constructive trust and the award of equitable damages did not succeed.

Question 2

1. Question 2 is:

   Were the Damages Costs incurred after the Amendment Date wholly attributable to the Unconscionability Claim or were they at least in part also attributable to the Other Matters?

2. The Damages Costs means any or all costs incurred:

   (a)in connection with the quantification of damages or equitable compensation;

   (b)with respect to confidentiality orders and the access to documents produced (including by the parties, the Rio Tinto entities and the BHP entities),

   including any associated evidence (including expert evidence) and submissions excluding costs relevant to the valuation of the Rhodes Ridge tenements as at 1991 or 1992.  The Amendment Date means 8 September 2006, when the statement of claim was amended to introduce the Unconscionability Claim which is pleaded in [22A] to [22M] of the statement of claim.

3. The answer to this question depends on what is meant by 'attributable to'.  The Damages Costs incurred after the Amendment Date were partly attributable to the Other Matters in the sense that they were relevant to and admissible in relation to the Other Matters.  As I have said, having regard to the parts of the Supplementary Judgment to which I have referred, I find that that is what Murray J meant by 'attributable to'.

Question 3

1. Question 3 is:

   If and to the extent that the Damages Costs incurred after the Amendment Date were at least in part also attributable to the Other Matters, then:

   (a)Do the costs payable by HPPL to WPPL include any Damages Costs of WPPL that were partly attributable to the Other Matters, such that those Damages Costs of WPPL are payable by HPPL under order 10 of the Cost Orders?

   (b)Do the costs payable by WPPL to HPPL include any Damages Costs of HPPL that were partly attributable to the Unconscionability Claim, such that those damages Costs of HPPL are payable by WPPL under order 11 of the Costs Orders?

2. The answer to question 3(a) is 'yes'.  The answer to question 3(b) is 'no'.  The meaning of the Costs Orders is that the costs of the plaintiffs' unconscionability claim are those costs that relate exclusively to the plaintiffs' unconscionability claim; that is, work done, evidence adduced and submissions made that are not relevant to the Other Matters.  If work done or evidence adduced is relevant to the damages in lieu of specific performance that the court may have awarded if it had declined relief in the nature of specific performance on discretionary grounds, then it is not wholly attributable to the plaintiffs' unconscionability claim.  The Damages Costs related to the Other Matters in that the evidence in support of WPPL's claim for equitable damages was relevant to the damages in lieu of specific performance which the court may have awarded if the court had upheld its contractual claim but declined the primary relief sought.

Question 4

1. Question 4 is:

   What is the basis upon which the taxing officer should approach the division of the Damages Costs after the Amendment Date between any costs that were wholly attributable to the Unconscionability Claim and any costs that were at least partly attributable to Other Matters?

   The taxing officer should approach the taxation of costs on the basis that all of the Damages Costs are costs of the claim payable by the defendant to the plaintiff pursuant to Order 10 except in so far as any item is unrelated to the assessment of damages in lieu of specific performance in the sense that the item is not relevant to those damages.  Murray J said that the assessment of equitable damages and damages in lieu of specific performance would be the same in either case.  Therefore, unless it is shown that some item is not relevant to the assessment of damages in lieu of specific performance it should be taken to be costs of the plaintiff's claim.

Question 5

1. Question 5 is:

   Which party (if any) is liable to pay the costs of:

   (a)the motion for relief following judgment; and/or

   (b)the plaintiff's application for lump sum costs orders

   The subject of the decision of Murray J delivered 22 March 2011 (being the subject of reasons for decision published with the medium neutral citation [No 11] [2011] WASC 74?

2. During the hearing of this application the parties reached the following agreement:

   1.HPPL is liable to pay WPPL's costs of the following issues:

   (a)HPPL's chamber summons for a stay or suspension of final orders;

   (b)WPPL's application for:

   (i)final orders other than as to costs;

   (ii)the removal of limits on costs;

   (iii)a lump sum costs order.

   2.The question of who pays the costs of WPPL's motion as to the costs of the claim, including as to the unconscionability claim, will abide the Court's decision as to questions 1 to 4.

3. The court's decision in relation to questions 1 to 4 has essentially been determined in favour of the plaintiff.  The defendant should pay WPPL's motion as to the costs of the claim.