BLINCO -v- HILL [2025] WASC 510 (3 December 2025)

(a) pay the defendants' costs of the Application (on a party/party basis), to be taxed as one set of costs, if not agreed;

(b) if, within six months of the orders, one or more of the plaintiffs commence proceedings against one or more of the defendants, the costs of production of the documents and of the Application be costs in the cause of the subsequent proceedings; and

(c) if no proceedings are commenced, the defendants' costs of the Application and production of documents, be paid by the plaintiffs.

1. In relation to costs, the defendants rely on two affidavits of Makan Mirzai,[2] and an affidavit of the first plaintiff, Craig Anthony Blinco, sworn on behalf of the plaintiffs in support of the substantive application.[3] The defendants also rely on their outline of submissions filed in relation to the substantive Application,[4] and an outline of submissions filed in relation to the costs of the Application.[5]
2. The plaintiffs rely on a further affidavit sworn by Craig Anthony Blinco,[6] and an outline of submissions in relation to the costs of the Application.[7] They also relied on two affidavits of the first defendant, Peter Roger Christopher Hill, sworn in support of the substantive Application.[8]

The substantive application for pre-action discovery

1. In summary, the plaintiffs sought pre-action discovery in respect of alleged causes of action relating to their purchase of shares in, and loans made by, the plaintiffs to the corporate defendants and related entities in relation to various property developments operated by those defendants.
2. The first defendant, Peter Hill, was a director of each of the corporate defendants, the fourth to eleventh defendants, since their incorporation. The second defendant, Kerrilea Hill, is Mr Hill's wife and employed by the fourth defendant, Origin Projects Pty Ltd, as contracts administrator. The third defendant, Travis Kell, has acted as a director or alternate director of each of the corporate defendants since 2010.
3. In broad terms, the plaintiffs sought pre-action discovery from the defendants to enable them to make a decision as to whether to commence proceedings against the defendants, and against which of the defendants, in relation to causes of action they may have against them:

(a) in debt;

(b) in equity:

(i) for declarations of an express or Quistclose trust, on the basis that funds advanced by the plaintiffs to the relevant defendants were advanced with the mutual intention that they would be used for the specific purpose of the relevant property development; and

(ii) if the funds were not used for that purpose, for breach of trust and knowing participation in the breach; and

(c) for damages for misleading or deceptive conduct in relation to representations alleged to have been made as to:

(i) the purpose for which funds advanced by the plaintiffs were to be used; and

(ii) future matters concerning the profitability and duration of the development projects and whether there were reasonable grounds for making those representations.

1. As noted, the Application did not proceed to hearing. The parties agreed to the Discovery Orders, which were made by consent on the day of the hearing.[9] Confidentiality orders were subsequently made by consent in relation to the disclosure of any information or documents to be provided to the plaintiffs pursuant to the Discovery Orders.[10]
2. Affidavits of discovery were also filed verifying lists of documents provided by each of the first to eleventh defendants pursuant to the Discovery Orders.[11]

General principles as to costs in relation to pre-action discovery

1. It is uncontroversial that costs are in the discretion of the court. The court's discretion to award costs must be exercised judicially but is otherwise not confined.[12]
2. Although costs will usually follow the event so that the court will ordinarily order that the successful party recover their costs,[13] as observed in Waller v Waller,[14] a respondent to an application under O 26A is not a party to a normal civil suit. As such, the normal rules as to costs do not necessarily apply. Nor will that generally be the case where a party seeks an indulgence of the court. As a general rule, where a party seeks an indulgence, that party should pay the costs of the application, as explained by Wheeler JA in Stanley v Layne Christensen Company.[15]
3. In an application for pre‑action discovery, the usual rule is that the party seeking discovery should pay the costs of the application and the discovering party's reasonable costs and expenses of complying with any order made.
4. In Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd,[16] in relation to the costs of an application for pre‑action discovery, Martin CJ said:

[2] ... the proper course in proceedings of this nature is to order, in the absence of any reason to the contrary, that the applicant for the indulgence of pre-trial discovery pay both the respondent's costs of the application and the respondent's reasonable costs of complying with any order for discovery made. Further, it is my view that the obligation to pay costs should not be deferred indefinitely merely because proceedings are subsequently commenced by the applicant against the respondent.

[3] However, as a matter of principle, there should be a mechanism by which such an applicant can recoup not only the costs that it is ordered to pay to such a respondent, but also its own costs of the pre-trial discovery application if it commences proceedings against the respondent and it appears to the court responsible for those proceedings that such costs should be ordered to be paid to the applicant. In the present case, the best way of achieving this is to order that, subject to an order enabling recoupment of those costs, the current appellant pay the respondent's reasonable costs of compliance with the order for discovery and also the respondent's costs of the application before the master.

[4] The mechanism by which those costs can be recouped would be by way of an order empowering the current appellant to make an application in the course of any subsequent proceedings for orders with respect to not only the costs that it is ordered to pay the respondent today, but also with respect to its own costs of the application before the master.

1. In the present case, the court is only concerned with the costs of the plaintiffs' application for pre-action discovery and not the costs of an appeal.

1. The plaintiffs accept that they should pay the defendants' costs of the Application. The issues between the parties are, in broad terms, the basis upon which those costs should be paid and whether the plaintiffs should be able to recover some or all of the costs in any subsequent proceedings commenced by them. The questions to be determined are:

1. Are the defendants entitled to an order that the plaintiffs pay their costs of the Application on an indemnity basis? 2. If not, should a special costs order be made removing the limits on time and costs under item 11 of the 2022 Determination? 3. Are the defendants entitled to an order that their costs of the Application be paid in any event, or should orders be made that:

(a) if, within six months of the orders made, one or more of the plaintiffs commence proceedings against one or more of the defendants, the costs of production of the documents and of the Application be costs in the cause of the subsequent proceedings; and
>
> (b) if no proceedings are commenced, the defendants' costs of the Application and production of documents, be paid by the plaintiffs.

Are the defendants entitled to an order for indemnity costs? Applicable principles

1. The principles that apply to the grant of an order for costs on an indemnity basis are well established and were not in dispute. It is not necessary that I repeat them in detail in these reasons. They were set out in Swansdale Pty Ltd v Whitcrest Pty Ltd.[17]
2. An award of indemnity costs is a departure from the usual order that costs be awarded on a party and party basis. Although, the categories in which indemnity costs may be awarded are not closed, costs will usually only be awarded on an indemnity basis in exceptional circumstances.[18]
3. One category in which an award of indemnity costs may be made is where an action (or application) has been commenced or continued in circumstances where the applicant, properly advised, should have known that they had no chance of success or on a proper consideration should have been seen to be a hopeless case.[19] The court should not be quick to characterise a case as hopeless. Whether a case is hopeless is to be determined objectively and not with the benefit of hindsight.[20]
4. An indemnity costs order may be made in exceptional circumstances as a sanction to mark the court's disapproval of improper or unreasonable conduct.[21]
5. Even where exceptional circumstances are established, an indemnity costs order may not be appropriate if the claimed costs would be likely to be recovered under the standard order for party/party costs, or under a special costs order raising or removing a scale ceiling allowance. A properly crafted special costs order may obviate the need for an indemnity costs order, where components of cost scale items are allowed above the applicable scale ceiling.[22]

1. In essence, the defendants submit that the plaintiffs should be ordered to pay the defendants' costs of the Application, or a substantial proportion of them, in any event, and on an indemnity basis because:

(a) the plaintiffs unreasonably rejected an offer made by the defendants on 17 July 2023 (July 2023 Offer),[23] before the Application was made, to provide discovery of certain documents;

(b) the Application was an abuse of process and brought on an improper basis; and

(c) the plaintiffs commenced or continued the Application in circumstances where, if properly advised, they should have known they had no prospects of success.

1. In relation to in the plaintiffs' rejection of the July 2023 Offer, the defendants' position is, in summary, as follows:

1. The pre-action discovery pursued by the plaintiffs in the Application was far greater than that ultimately obtained by way of consent in the Discovery Orders. On the morning of the hearing of the Application, the plaintiffs proposed orders that effectively abandoned 16 of the 20 categories of documents included in the Application. 2. The discovery provided under the Discovery Orders included discovery of documents the defendants offered to provide in the July 2023 offer and, in other respects, was materially worse for the plaintiffs than the July 2023 Offer. 3. The July 2023 Offer was on condition that the documents to be provided and their contents not be disclosed to third parties and the plaintiffs pay the defendants' reasonable costs of providing the discovery. There were exchanges as to the amount of the defendants' costs of providing discovery which, at that time, were estimated to be approximately $12,500. The plaintiffs' position was that they would pay costs of no more than $5,000. Ultimately, the Discovery Orders provided for costs in the usual terms, that the defendants pay the plaintiffs' reasonable costs of providing discovery, to be taxed if not agreed. 4. The plaintiffs' rejection of the July 2023 Offer was unreasonable and the Application, as brought, was 'always doomed to fail'. The plaintiffs persisted with the Application, putting the defendants to considerable cost. The draft bill of costs attached to the Second Mirzai Affidavit, provides that the defendants' combined costs are in the order of almost $88,000. 5. The defendants also submit, for the reasons set out in their written submissions, that the Application is an abuse of process. They refer, amongst other things, to the plaintiffs:

(a) bringing one application to 'launch an omnibus fishing expedition' into the affairs of eight companies and their directors and staff;
>
> (b) seeking pre-action discovery on an improper basis to the extent it was sought to ascertain whether the defendants could meet any judgment ordered against them; and
>
> (c) maintaining the Application against the second and fourth defendants (Mrs Hill and Origin Projects Pty Ltd) in respect of whom no potential claims were advanced.

1. The defendants submit that the plaintiffs' conduct in relation to the Application brings this case within the category of cases in which an award of indemnity costs is appropriate where the action has been commenced, or continued, in circumstances where, if properly advised, they should have known they had no prospects of success.

1. Against the defendants' application for indemnity costs, the defendants' submissions were, in summary, to the following effect:

1. The plaintiffs did not act unreasonably in not accepting the July 2023 Offer. Although, at the time of that offer, the parties were close to reaching an agreement as to the scope of the discovery to be provided, agreement could not be reached due to a number of factors. These included from the plaintiffs' perspective:

(a) the need for court orders to provide a means of enforcing the defendants' discovery obligations, including for the discovery to be verified by affidavit;
>
> (b) regulating the reasonableness of the defendants' costs of providing the discovery and to provide a mechanism for taxation;
>
> (c) the information available to the plaintiffs that led to the Discovery Orders being made by consent, as to the existence or otherwise of some of the documents, was not all available at the time of the July 2023 Offer. This included information verified in the Second Hill Affidavit filed shortly before the hearing of the Application.

1. The Application was not hopeless or such that it had no prospects of success. As to the defendants' contentions that the plaintiffs abandoned their claims for discovery against some of the defendants, all eleven defendants consented to the Discovery Orders and gave discovery verified by affidavits. 2. It is not an improper purpose to seek pre-action discovery to ascertain any available defences and their strength, the extent of a defendant's breach or the likely quantum of damage.[24]

1. In this case, there has been no substantive hearing on the merits of the Application, the Discovery Orders were made on the day of the hearing, by the consent of the parties. The matters that were in issue between them in relation to the substantive application have not been determined.
2. In Re Minister for Immigration and Ethnic Affairs: Ex parte Lai Qin,[25] McHugh J, explained the approach generally taken by the courts in determining costs where proceedings have been resolved without a hearing on the merits. In doing so, his Honour stated, relevantly:

... When there has been no hearing on the merits, ... a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

... The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra‑curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ...

(citations omitted)

1. In Nichols v NFS Agribusiness Pty Ltd,[26] Basten JA observed that:

... although it is possible to make an order for costs against one party if it can be shown that it has invited the litigation by its unreasonable behaviour, or has unreasonably pursued the litigation, such an order should only be made where that judgment is manifest by reference to known circumstances, not in dispute between the parties. If the question cannot be answered without reviewing large swathes of evidence and resolving, on a tentative basis, disputed questions of fact, the task should not be embarked upon.

1. While Basten JA's observations were in the context of litigation, as opposed to an application for pre-action discovery, they are in my view equally applicable in the circumstances of this case. There are several issues in dispute between the parties concerning the merits of the Application, which cannot be answered without reviewing a large volume of material.
2. The plaintiffs filed three affidavits in support of the substantive Application comprising a total of approximately 560 pages. They also filed approximately 40 pages of submissions (including their amended submissions in support of the Application and submissions in reply). The materials filed by the defendants were significantly less voluminous, comprising approximately 40 pages across three affidavits and 15 pages of submissions.
3. I do not propose to determine the issue of costs by reference to the arguments as to the merits of the Application. To do so would require me to effectively resolve the issues the parties themselves chose not to litigate. Nor do I consider that it is necessary to do so. For the following reasons, I am not satisfied that an order requiring the plaintiffs to pay the defendants' costs on an indemnity basis is warranted, in the circumstances of this case.

1. As submitted on behalf of the defendants, the scope of pre-action discovery ultimately ordered is much narrower than that sought in the 20 categories of documents included in the Application. The five categories of discovery that the parties agreed, and which were ordered, are as set out in Schedule A to the Discovery Orders. Four of those categories include documents of the kind included in the July 2023 Offer. One of the categories was not included in the July 2023 Offer or the Application. The categories of documents included in the Discovery Orders are as follows.
2. The first category is financial reports of each of the corporate defendants for the past seven years. The plaintiffs sought discovery in similar terms in the Application but for the date range of every financial year from the date of the respective company's incorporation to the end of the 2022 financial year. The defendants' July 2023 Offer provided for production of financial statements for five of the eight corporate defendants (those the plaintiffs were shareholders off) where available and, if not, current management account reports.
3. The second category is management accounts (profit and loss statements and cash flow statements) for each of the corporate defendants, except Origin Projects Pty Ltd, for the past seven years and interim accounts to 31 March 2024. The plaintiffs sought discovery on similar terms in the Application but for all corporate defendants and for a date range of every financial year from the date of the respective company's incorporation, and interim accounts to 30 April 2023. I infer that the later date for interim accounts reflects the passage of time between the filing of the Application and the orders made.
4. As noted, the July 2023 Offer provided for production of current management accounts for five of the eight corporate defendants where financial statements were unavailable. As observed by the defendants, it is unlikely that the documents produced in this category for periods in which financial statements have been produced would be substantially different to the documents produced under category 1.
5. The third category is ledgers for all loan accounts between the plaintiffs and the corporate defendants from July 2017 to the date of the Discovery Orders. This category of documents was not sought in the Application. It was offered in the July 2023 Offer, except in relation to Origin Projects Pty Ltd.
6. The fourth category is all receipts and/or acknowledgments of funds received from and in relation to the plaintiffs from the date of incorporation of each of the corporate defendants. A similar category was included in the Application, but in much wider terms. It was not confined to receipts and acknowledgments from or relating to the plaintiffs but any investors and/or lenders and included the individual defendants, not just the corporate defendants. No offer was made by the defendants in relation to the plaintiffs' original, wider request.
7. The fifth category is all company financial modelling with respect to the fifth to eleventh defendants conducted internally and externally at the date the plaintiffs first lent or invested monies with each of the corporate defendants. In the Application, this category included all company financial modelling and since incorporation of each company. In the July 2023 Offer, the defendants offered to provide financial modelling relating to companies in respect of which the plaintiffs were shareholders or lenders as at the time they first became shareholders or lenders.
8. Although, the Application sought a much larger number of categories of documents than was ultimately ordered, I do not consider that the plaintiffs conduct in not accepting the July 2023 Offer was unreasonable or such as to warrant an order for indemnity costs.
9. The July 2023 Offer was not made in accordance with the principles in Calderbank v Calderbank.[27] Even so, the mere fact that the recipient of a Calderbank offer is ultimately worse off than they would have been had the offer been accepted, does not mean that its rejection was unreasonable.[28]
10. There are a number of factors to be considered in determining whether rejection of (or a failure to accept) a Calderbank offer is unreasonable, as outlined in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2).[29] Critically, in this case, the July 2023 Offer did not state that it was made in accordance with the principles in Calderbank v Calderbank, and did not foreshadow that an application for indemnity costs would be made if the offer was rejected, or not accepted.
11. In any event, whilst costs may have been saved if the plaintiffs had accepted the offer of discovery, there was no obligation on the defendants to give pre-action discovery and no guarantee they would do so. Nor did the July 2023 Offer provide for the discovery to be verified by affidavit. The plaintiffs sought the security of an order of the court requiring the defendants to give discovery on oath, so that the plaintiffs could decide whether to bring proceedings and against which defendants, the extent of the claimed breach of trust, the availability and strength of any defences, and the likely quantum of any damage. These were all legitimate reasons for pursuing the Application.
12. Although, the plaintiffs were not wholly successful, in the sense that they did not obtain orders for pre-action discovery in respect of all the categories included in the Application, it is not possible to discern on the evidence before the court, and in the absence of a substantive hearing, what proportion of the parties' respective costs relate to which categories. It is not possible to say, nor has either party demonstrated, what, if any, additional costs have or have not been incurred in relation to the categories of documents included in the Application that were not ultimately included in the Discovery Orders.
13. Whilst, bringing a single application against multiple defendants may increase the costs of the application, I do not consider that, in this case, such amounts to an abuse of process. The plaintiffs' claims all appear to arise out of common facts or circumstances and involve related entities, in respect of which the plaintiffs believed that each of the individual and corporate defendants had, or were likely to have had in their possession or control, documents or information that may assist the plaintiffs in deciding whether to commence proceedings.
14. As to the defendants' contention that the plaintiffs did not maintain the Application against the second and fourth defendants, the Discovery Orders required all eleven defendants to give discovery of the documents in Schedule A. They have each filed an affidavit of discovery. As observed by the defendants, there is a significant amount of overlap in relation to the documents discovered by each of them. Although not all defendants have discovered precisely the same documents, the degree of overlap tends to rally against the suggestion that bringing one proceeding for pre-action discovery against all of the defendants was improper or an abuse of process.
15. For these reasons, none of the matters raised by the defendants are such, in my view, as to justify an order for indemnity costs.
16. I now consider the defendants' alternative claim for a special costs order.

Should a special costs order be made removing the limits on time and costs under item 11 of the 2022 Determination?

1. In support of their application for a special costs order, the defendants rely on the First Mirzai Affidavit,[30] and the updated draft bill of costs attached to the Second Mirzai Affidavit in relation to the defendants' costs of the Application.[31]
2. The defendants' combined costs sought in relation to the Application are $87,887.25,[32] which is made up of:

(a) $48,765.75 in solicitors' fees, $37,545.75 of which relate to costs incurred from the issue of the originating process (the Application);

(b) $39,044.50 for counsel's fees; and

(c) disbursements totalling $77.00.

1. The amount charged in relation to solicitors' costs does not appear to claim all amounts included in the invoices and has been arrived at by deducting amounts described as 'taxed off'. No amount has been deducted from the amounts invoiced by counsel.
2. The defendants submit that the effect of the cap on the time and costs under item 11 is to notionally limit the costs recoverable by each of the 11 defendants to $3,590 (which equates to a combined amount of $39,490).
3. Mr Mirzai deposes that his firm's invoices were issued to 'Peter Hill, Travis Kell and others', referring to each of the defendants, and that he was instructed that each of the invoices was paid by Origin Projects Pty Ltd, which intended to charge each of the defendants 1/11th of the total amount of the invoices for legal costs not recovered from the plaintiffs.[33]
4. It was submitted on behalf of the defendants in effect that:

(a) the maximum amounts as to time and costs allowed under item 11 of the 2022 Determination are inadequate; and

(b) having regard to the number of defendants and the way in which the Application was brought, made the Application unusually difficult and self‑evidently complex.

1. The plaintiffs submit that the draft bill of costs relied upon by the defendants in support of their alternative application for special costs, is not prepared in accordance with the accepted form of a bill of costs and does not refer to the item numbers in the relevant cost determination. They say that it does not provide a proper basis upon which the court may assess whether the costs are properly claimable so as to be satisfied that the 2022 Determination is inadequate.
2. By way of example, the plaintiff refers to the listing of counsel's fees as total amounts invoiced with no reference to the time spent or to the work undertaken. The plaintiff also refers to the hourly rate charged and claimed by Mr Mirzai of $660, which exceeds the senior practitioner rate of $506 allowed under the 2022 Determination by $154 per hour. Counsel's hourly rate of $495 per hour also exceeds the amount allowed under the 2022 Determination by $22 per hour.
3. Counsel for the plaintiffs also highlighted certain line items in the draft bill, including costs of $660 claimed for preparing and attending for a directions hearing in December 2023, in respect of which costs were awarded against the defendants. It is unclear whether the counsel's fees claimed include costs relating to that hearing as there is no breakdown of counsel's fees. Further, the plaintiff referred to time spent considering and taking instructions in relation to affidavits which appear disproportionate to the length of the affidavits filed by the defendants.

Special costs orders under s 141(3) of the Uniform Law

1. Order 66 r 51(1)(b) RSC provides that, in a particular action or matter the Court may make an order under s 141(3) of the Uniform Law.
2. Section 141 of the Uniform Law, relevantly, provides:

(1) The following are regulated by an applicable costs determination -

(a) the taxation of bills of law practices;

(b) any other aspect of the costs charged by law practices.

...

(3) Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do any or all of the following -

(a) order the payment of costs above those fixed by the determination;

(b) fix higher limits of costs than those fixed in the determination;

(c) remove limits on costs fixed in the determination;

(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.

(4) Subsection (1) does not limit the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court, judicial officer or taxing officer the amount of costs allowed.

1. The matter in question in this case is the Application (for pre‑action discovery), which was commenced by originating summons. The special costs order sought is under s 141(3) to lift the maximum time and costs allowed under item 11 of the 2022 Determination, which applies to legal costs incurred in relation to an originating process, in the period up to 30 June 2024.
2. The relevant parts of item 11 of the 2022 Determination are extracted below:

1. An order made under s 141(3) does not, of itself, mean a party will recover all of the costs they have incurred or seek to recover from another party. It does not replace the taxation process. It only operates so as to modify the limits imposed on the allowable costs. Whether the costs have been reasonably and properly incurred remains the task of the taxing officer.
2. The principles that apply to the determination of whether a special costs order should be made are well established. They were set out in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2][34] (in relation to the earlier, equivalent provision, s 280 of the Legal Profession Act 2008 (WA)) and have been referred to and summarised in numerous decisions.[35] The relevant principles may be summarised as follows.
3. The court's discretion to make a special costs order under s 141(3) of the Uniform Law will be enlivened, if the court is satisfied that:

(a) the amounts allowed under the relevant item are inadequate, in the sense there is a fairly arguable case that, on taxation of the costs, they may be properly allowed in an amount greater than the maximum allowable under the relevant costs determination; and

(b) that the inadequacy of the costs allowable under the cost determination arises because of the unusual difficulty, complexity or importance of the matter.

1. In assessing those matters, it is not necessary for the court to determine what amount would be allowed on taxation. In Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Limited,[36] Martin CJ reiterated that once an order is made for the taxation of costs, it is not appropriate for the court to usurp the function of the taxing officer. Rather, the function of the court in an application for a special costs order is limited to setting the parameters within which the taxing officer will tax the relevant bill. The quantum of costs to be allowed is to be determined by taxation. The powers conferred upon the court in relation to special costs orders are to be exercised as matters of impression rather than science, taking into account the greater expertise of taxing officers in fixing the amount of costs properly and reasonably allowed.
2. The 'matter' which must be 'unusually difficult, complex or important' in order to enliven the special costs jurisdiction is the whole of the 'matter' in respect of which legal services were provided and which comes within the scope of a legal cost determination.[37] Relevantly, in this case the matter in respect of which legal services were provided and that has enlivened the jurisdiction of the court is the Application - the plaintiffs' application for pre‑action discovery.
3. References to complexity in the authorities are consistent with complexity arising from either the legal or factual issues raised in the matter.[38]
4. As to the next element, importance, Archer J (as her Honour then was) considered the meaning of the word 'importance' in the context of a special costs application in BCBC Singapore Pte Ltd v PT Bayan Resources TBK [No 5],[39] and concluded that:

[75] Cases in which importance has been found include cases which involve the risk of significant professional damage, test cases, or cases which involve enormous sums of money.

[76] Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) was a case in the first category, involving serious allegations against liquidators. In Heartlink, Martin CJ said that:

[B]y reference to 'importance' in this context, the legislature is allowing the court to have regard to the question of whether the work done was appropriate to the significance of the issue that arose in the litigation. Significance can arise either because of the significance of the issues to the parties or because of the significance of the issues to other prospective parties or to the public or to the community generally. In this case, the issues raised were of considerable significance to the liquidators in the practice of their profession, and in respect of whom serious allegations were made.

[77] This passage was endorsed by the Court of Appeal in Sino Iron [No 2].

[78] In Blatchford v Laine, Vaughan J commented on the passage as follows:

His Honour's formulation involves a qualitative evaluation as to the significance of the matter. It requires an assessment of the weight, seriousness and gravity of the issues and controversy before the court. Often the question of importance will be answered as a matter of impression informed by experience. Outside of those relatively rare cases involving matters of public importance - where 'importance' may well be obvious - the importance of the matter may be evident in the amount of the claim or the nature of the allegations that are being litigated.

[79] It is plain from these authorities, and the context of s 141 and the Legal Profession Uniform Law Application Act as a whole, that a matter will not be 'important' in the required sense simply because a party considers it to be so. If it were otherwise, the test of importance would probably be satisfied in every litigated dispute.

[80] Further, I consider that a matter will not be 'important' in the required sense simply because the amount of money involved is large. It would depend on the circumstances.

(citations omitted)

Are the maximum amounts allowed under item 11 inadequate?

1. Although the defendants' draft bill of costs has not been prepared in the usual form and does not refer to the applicable item number in the 2022 Determination, as has been stated, item 11 applies to a proceeding commenced by originating summons. The way in which costs are 'taxed off' in the draft bill is not explained. Even with the amounts 'taxed off', the total amount sought for solicitors' and counsel's fees significantly exceeds the limits for time and costs allowed in item 11.
2. The 2022 Determination allows for a total amount of costs (solicitors' and counsel's fees) of $39,490. This covers two days' preparation, one day hearing and preparation of case - up to a total of 50 hours (five days). The defendants' draft bill provides that counsel's fees alone are $39,044.50. At the hourly and daily rate allowed in the 2022 Determination for counsel of $473 ($4,730 per day), allowing two days' preparation and one day hearing amounts to $14,190 (noting the hearing itself did not proceed in this matter).
3. The only other relevant allowances are for the costs of a senior practitioner attending at the hearing of the Application and attendance at a directions hearing or case management conference. In this case, that would leave $25,300. Most of this is used up with counsel's fees, leaving only $2,530 of the allowable costs under item 11.
4. As observed by the plaintiffs, counsel's fees are set out in the draft bill only by reference to the total amounts of each of the invoices issued. It is possible to calculate that, at counsel's hourly rate of $495, counsel spent approximately 80 hours (eight days). This is three days longer than the maximum limit allowed in the 2022 Determination in relation to time. However, there is no information in the draft bill of costs from which any assessment may be made as to how that time was spent or the work undertaken by counsel.
5. As noted by the plaintiffs, the hourly rate charged for the senior practitioner also exceeds the maximum hourly rate allowed under the 2022 Determination. The amount of work and time to be spent is, of course, a matter between solicitor and client, as what rates they agree. However, for the purpose of taxation, the time and costs set out in the defendants' draft bill of costs for solicitors' fees are well in excess of the allowable scale limits for the purpose of taxation. Noting that it is not necessary that I assess the reasonableness of the defendants' costs, both appear to me to be on the high side for the nature of the Application. That is ultimately a matter for the taxing officer.
6. Having said that, as a matter of impression, having regard to the volume of material served on the defendants by the plaintiffs and the issues raised in the Application, I am satisfied that the there is a fairly arguable case that, on taxation, the defendants' costs of the Application may be allowed in an amount greater than the maximum allowable under item 11 of the 2022 Determination.
7. Accordingly, I accept that the amounts allowed under item 11 of the 2022 Determination are inadequate. However, that is not the end of the enquiry. I must also be satisfied that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter.

Does the inadequacy of the costs allowable under the 2022 Determination arise because of the unusual difficulty, complexity or importance of the matter?

1. The plaintiffs submitted that the defendants have not explained in any detail what it is about the Application that made it unusually difficult and 'self‑evidently complex'. The plaintiffs said that the defendants' argument appeared to focus on the difficulty or complexity of the underlying causes of action in respect of which they sought the pre‑action discovery but there was very little focus on that in the Application itself.
2. There were numerous causes of action the plaintiffs sought pre‑action discovery in respect of. Whether an applicant for pre-action discovery may have a cause of action against the potential party is one of the threshold jurisdictional requirements under O 26A r 4 RSC[40] and, as such, an issue that required consideration on behalf of the defendants.
3. The causes of action relied upon by the plaintiffs, which included breaches of trust and knowing assistance or receipt, and the fact that the Application involved multiple plaintiffs and defendants involved a degree of complexity as compared to many applications for pre‑action discovery where just one party is seeking discovery of another. The defendants did not make any submissions as to the importance of the matter.
4. The plaintiffs also submitted that the materials filed by the defendants in opposition to the Application were not unusually complex or difficult. They pointed to the length of affidavits filed by the defendants, which comprise 40 pages, the body of which across the three affidavits comprise only 10 pages, and did not engage with the causes of action. The balance of pages are attachments to those affidavits. The defendants' submissions filed in opposition to the Application comprise 15 pages.
5. The plaintiffs also observed that the number of documents ultimately discovered was less than 2,000, with many of the documents discovered being duplicated across the affidavits sworn by each of the defendants.
6. Although the defendants' materials were relatively brief compared to those filed by the defendants, that is not necessarily a measure of the time taken to deal with the Application. As noted, the plaintiffs filed three affidavits in support of the substantive Application comprising a total of approximately 560 pages. They also filed approximately 40 pages of submissions. Whether the time spent preparing the affidavits is reasonable will be assessed by the taxing officer.
7. I accept that the Application was sufficiently difficult and complex, as compared to more routine (usual) applications for pre‑action discovery that come before the court, so as to satisfy the requirements that it was unusually difficult or complex.
8. For these reasons, I am satisfied that the defendants have demonstrated there is a fairly arguable case to be presented to the taxing officer that the amount which should be allowed in respect of item 11 is greater than the limit imposed by the 2022 Determination. I am also satisfied that the inadequacy of the scale amount arises because of the unusual difficulty or complexity of the matter.
9. Accordingly, in my view, it is appropriate to order that the limits as to time and costs imposed by item 11 be removed. However, that should not be taken as an indication that all the costs claimed by the defendants would be regarded as reasonable in the context of the taxation of party/party costs. The questions as to the reasonableness of and necessity for the work undertaken, and the amount of costs to be allowed are for the taxing officer to make a judgment about, if the costs are not agreed.

Are the defendants entitled to an order that their costs of the Application be paid in any event?

1. It was submitted on behalf of the defendants, in effect, that the plaintiffs' conduct is such that the defendants should have their costs in any event, and the court should depart from making an order of the kind described by Martin CJ in Kelbush. It was submitted that, if an order was to be made, the amount the plaintiffs are entitled to recover in any subsequent proceedings should be limited. It was suggested that, for example, the plaintiffs only be allowed to make an application to recover a proportion or percentage of their costs.
2. I am not persuaded that the plaintiffs' conduct is such that they should be deprived of an opportunity to apply in any subsequent proceeding for an order to recoup some or all of the costs to be paid to the defendants. However, there should, in my view, be a limit on the plaintiffs' ability to do so, as set out below.

Should orders be made in relation to the costs in subsequent proceedings?

1. As outlined earlier in these reasons, the plaintiffs seek orders that:

(a) if, within six months of the orders made, one or more of the plaintiffs commence proceedings against one or more of the defendants, the costs of production of the documents and of the Application be costs in the cause of the subsequent proceedings; and

(b) if no proceedings are commenced, the defendants' costs of the Application and production of documents, be paid by the plaintiffs.

1. The six months referred to is within six months of the date of the costs orders made in relation to the costs of the Application.
2. As referred to earlier in these reasons, Martin CJ expressed the view in Kelbush that, as a matter of principle, there should be a mechanism by which an applicant may recoup costs associated with pre‑action discovery, if it commences proceedings against the respondent and it appears to the court responsible for that proceeding that such costs should be ordered to be paid to the applicant.
3. If such an order is to be made, it is not an order for the costs of the pre-action discovery application (and of providing discovery) to be in the cause of any subsequent action that is commenced. Rather, in Kelbush, Martin CJ's view, with which Buss JA and Vaughan J agreed, was that the obligation to pay costs should not be deferred indefinitely merely because proceedings are subsequently commenced by the applicant against the respondent.[41] The mechanism referred to in Kelbush provides for a successful applicant for pre-action discovery to be permitted to make an application in any subsequent proceedings commenced against the respondent to recoup costs it has been ordered to pay in relation to the pre-action discovery.[42]
4. In response to a recent enquiry by my associate, the plaintiffs' solicitors have indicated that the plaintiffs have not commenced any other proceedings against the defendants, and that they would consider my decision in relation to costs before they made any decision as to whether to commence proceedings.
5. I will make an order permitting the plaintiffs to make an application to recoup the costs of the pre‑action discovery in any subsequent action commenced against the defendants. However, such should be limited to any proceeding commenced within three months of the date of the order. What, if any, orders are ultimately to be made concerning the recoupment of any of the pre‑action discovery costs will be a matter to be determined by the court responsible for the subsequent action. Such a decision would, necessarily, be informed by the issues in the subsequent action and the relevance or otherwise of the documents provided under the orders for pre‑action discovery.
6. There may be some practical issues as to how the quantum of any costs to be recouped are to be determined if proceedings are commenced by one or more of the plaintiffs against one or more of the defendants. However, that is not a reason I consider prevents an order being made to allow an application in any subsequent proceeding by the plaintiffs to recoup some or all of the costs the plaintiffs have been ordered to pay to the defendants in relation to the pre‑action discovery.
7. The making of such an order will not operate to defer the taxation and payment of the defendants' costs of the Application. The defendants are entitled to have their costs taxed, if not agreed, and to have them paid. It is merely to provide a mechanism for the plaintiffs to apply to recoup some or all of the costs of the pre‑action discovery in any subsequent action, but only if such action is commenced within three months.

1. For these reasons, the plaintiffs are to pay the defendants' costs of the Application, including any reserved costs on a party/party basis, to be taxed if not agreed.
2. I will also make an order, pursuant to s 141(3) of the Uniform Law, that the defendants' costs are to be taxed without regard to the limits imposed by item 11 of Table B to the 2022 Determination, as to the maximum allowances for time and total costs.
3. The defendants did not seek to lift or remove the limits on hourly or daily rates but, for the avoidance of any doubt, no order is to be made to remove the limits in relation to the maximum hourly and daily rates provided in the 2022 Determination.
4. An order will also be made that the plaintiffs may apply, in any subsequent proceedings commenced by any one or more of the plaintiffs against any one or more of the defendants in relation to the matters the subject of the Application, within three months of the date of the orders made, to recoup some or all of the costs paid to the defendants in relation to the pre‑action discovery.
5. As to the costs of the costs argument, subject to hearing from the parties, it seems to me that as there has been mixed success, each party should pay their own costs, or there should be no order as to costs.
6. I will hear from the parties as to the form of the orders to be made in relation to the costs of the Application, and in relation to the costs of the costs argument.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Orders of Master Russell made on 9 May 2024.

[2] Affidavit of Makan Mirzai sworn on 20 August 2024 (First Mirzai Affidavit); Affidavit of Makan Mirzai sworn on 30 October 2024 (Second Mirzai Affidavit).

[3] Affidavit of Craig Anthony Blinco sworn on 7 July 2023 (First Blinco Affidavit).

[4] Defendants' outline of submissions filed on 27 March 2024 (Defendants' Submissions).

[5] Defendants' outline of submissions filed on 26 August 2024 (Defendants' Costs Submissions).

[6] Affidavit of Craig Anthony Blinco sworn on 25 September 2024 (Second Blinco Affidavit).

[7] Plaintiffs' outline of submissions filed on 25 September 2024 (Plaintiffs' Costs Submissions).

[8] Affidavit of Peter Roger Christopher Hill sworn on 10 January 2024 (First Hill Affidavit); Affidavit of Peter Roger Christopher Hill sworn on 7 May 2024 (Second Hill Affidavit).

[9] Orders of Master Russell made by consent on 9 May 2024.

[10] Orders of Master Russell made by consent on 13 June 2024.

[11] Affidavits of Peter Roger Christopher Hill sworn and filed on 27 June 2024, as the first defendant and on behalf of the fourth to ninth and the eleventh defendants; Affidavit of Kerrilea Hill, second defendant, sworn and filed on 27 June 2024; Affidavit of Travis Blair Kell, third defendant, sworn on 31 July 2024; Affidavit of Ian Edward Phipps sworn and filed on behalf of the tenth defendant on 27 June 2024.

[12] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 (Oshlack) [21] ‑ [22]; Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 (Sangare) [24] ‑ [25]; Hughes v St Barbara Ltd [2011] WASCA 234 (S) [5]; Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96 [48] ‑ [50].

[14] Waller v Waller [2008] WASC 51 [210].

[15] Stanley v Layne Christensen Company [2006] WASCA 56 [52].

[16] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14 (S) (Kelbush) [2] ‑ [4] (Martin CJ), [8] - [9] (Buss JA and Mitchell J agreeing).

[17] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) (Swansdale) [10] (Pullin JA, Kenneth Martin J). See also Huntingdale Village Pty Ltd v Korda [2015] WASCA 101 (S) [11] - [17]; Yara Australia Pty Ltd v Oswal [2012] WASCA 264 [33].

[19] Ben Pelech v Royle [2020] WASCA 168 (S) (Ben Pelech) [7] - [8] (Murphy, Beech and Vaughan JJA); Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [6]; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 364; (1988) 81 ALR 397, 401 (Woodward J).

[21] Swansdale [10] (7), (10) (citing Colgate-Palmolive Company v Cussons Ltd (1993) 46 FCR 225, 233 (Sheppard J), referred to in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [25] (Pullin J)).

[23] Mr Mirzai deposes to the terms upon which the July 2023 Offer was made and attaches a copy of it to the First Mirzai Affidavit, [50] - [53], 'MM20'.

[24] Referring to Downer Utilities Australia Pty Ltd v Alinta Energy Transmission (Chichester) Pty Ltd [No 2] [2023] WASC 1 [92].

[25] Re Minister for Immigration and Ethnic Affairs: Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6, 624 ‑ 625.

[26] Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84; (2018) 97 NSWLR 681 [8]. See also Molnar v Good Mood Food Pty Ltd [2020] FCA 1242 [19].

[27] Calderbank v Calderbank [1975] 3 All ER 333. See also Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 (Ford v Lo Presti) [16] ‑ [32] (Buss JA, Wheeler JA agreeing).

[28] Ford v Lo Presti [18], citing SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 [37].

[29] Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298.

[30] First Mirzai Affidavit [93] - [95].

[31] Second Mirzai Affidavit [8] - [9], 'MM45'.

[32] All amounts stated are inclusive of GST.

[34] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) (Sino Iron [No 2]) [11] - [15] (Buss P, Murphy and Beech JJA).

[35] See for example, Bolt v Bolt [2023] WASC 162 (S) [8] - [19] (Vandongen J, as his Honour then was); INPEX Operations Australia Pty Ltd v AIG Australia Ltd [No 3] [2023] WASC 332 (S) [36] (Lundberg J).

[36] Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd [2014] WASC 469 (S) (Synergy v Woodside) [4].

[38] See for example Heartlink Ltd v Jones (as liquidator of HL Diagnostics Pty Ltd) [2007] WASC 254 (S) (Heartlink Ltd v Jones) [24] (Martin CJ).

[39] BCBC Singapore Pte Ltd v PT Bayan Resources TBK [No 5] [2023] WASC 116 [75] - [80], referring to Heartlink Ltd v Jones [19]; Sino Iron [No 2] [15]; Blatchford v Laine [2018] WASC 207 (S) [88];

[40] See BWS v ARV [No 2] [2021] WASCA 62 [29].