Citation : FRIGGER -v- CLAVEY LEGAL PTY LTD [No 3] [2015] WADC 21 (S)

Practice and procedure - Security for costs - Appeal against decision for costs in substantive appeal (costs appeal) - Application by respondent for security for costs in costs appeal - Costs appeal raises arguments and issues beyond those addressed in substantive appeal - Security granted in costs appeal - Turns on own facts

Brandrill v Newmont Yandal [2006] NSWSC 974

Frigger v Clavey Legal Pty Ltd [No 2] [2015] WASCA 258

Frigger v Clavey Legal Pty Ltd [No 3] [2015] WADC 21

Frigger v Clavey Legal Pty Ltd [No 3] [2015] WADC 21 (S)

1 REASONS OF THE COURT: This matter came before the court on 7 April 2016 pursuant to a registrar's notice to attend dated 18 March 2016, to consider an application by the respondent (Clavey Legal) dated 4 March 2016 for security for costs. On that occasion, we ordered security for costs, and said we would provide written reasons later. These are our reasons.

2 The appeal herein (costs appeal) is brought by Mr and Mrs Frigger against a costs decision of Herron DCJ: Frigger v Clavey Legal Pty Ltd [No 3][1] (costs decision). The costs decision related to the costs of unsuccessful proceedings brought by Mr and Mrs Frigger against Clavey Legal in the District Court. His Honour's decision to dismiss Mr and Mrs Frigger's claims against Clavey Legal in the District Court is recorded in Frigger v Clavey Legal Pty Ltd [No 3][2] (substantive decision).

3 In the costs decision, Herron DCJ ordered:[3]

1. [Mr and Mrs Frigger] pay [Clavey Legal's] costs of the action, including reserved costs before 14 June 2013 on a party and party basis to be taxed;
2. [Mr and Mrs Frigger] pay all [Clavey Legal's] costs of the action from 14 June 2013 except insofar as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exclusions [Clavey Legal] is completely indemnified by [Mr and Mrs Frigger] for its costs from 14 June 2013, including the costs of this application for costs.
3. [Clavey Legal's] costs under items 17, 20(b) and 20(d) be taxed without reference to the limits fixed under the Supreme Court scale of costs.
4. [Mr and Mrs Frigger] pay [Clavey Legal's] costs of obtaining the transcript incurred by [Clavey Legal].

4 Mr and Mrs Frigger have appealed the substantive decision (substantive appeal), and security for costs has already been ordered in that appeal: Frigger v Clavey Legal Pty Ltd [No 2].[4]

5 The costs appeal raises various matters, including the following:

(a) it is alleged that the judge acted on a wrong principle by mistaking the facts and misconstruing a material consideration in finding that the Calderbank offer to which he referred in his reasons was not capable of acceptance by Mr and Mrs Frigger (ground 1, par 3.1);

(b) it is alleged that the judge erred by mistaking the facts, was guided by extraneous and irrelevant matters, and failed to give any consideration to the evidence contained in Mrs Frigger's affidavit sworn 4 September 2015, 'which evidence proves that [Clavey Legal's] witnesses had lied in their oral evidence at the trial and materially contradicted the contemporaneous documentary evidence' (ground 1, par 3.2);

(c) it is alleged that the judge failed to take into account the evidence in Mrs Frigger's affidavit sworn 4 September 2015 in making the findings which he did at [65] of the costs decision (ground 2, par 4.2).

6 Also, in the 'orders wanted' in the costs appeal, Mr and Mrs Frigger seek orders to the following effect in the event that they fail in the substantive appeal:

(a) Mr and Mrs Frigger pay Clavey Legal's costs of the District Court action on a party-party basis for a 6-day trial only;

(b) Clavey Legal pay Mr and Mrs Friggers' costs of the cross-examination of Mrs Frigger, including preparation for that cross-examination by counsel and Mr Griffin without reference to the limits fixed under the Supreme Court Scale; and

(c) Clavey Legal pay the costs of Mrs Frigger as a witness at an hourly rate of $350 per hour.

In relation to proposed order (a) above, the trial in fact took 12 days.

7 In support of the application for security, Clavey Legal relies upon an affidavit by Ms Duthie sworn 4 March 2016. In that affidavit, Ms Duthie annexed copies of her affidavits sworn 14 July 2015 and 13 November 2015, upon which Clavey Legal had relied in the application for security in the substantive appeal. Ms Duthie also annexed a letter containing a draft bill of costs setting out the estimated costs of the appeal in the sum of approximately $19,000.

8 Mrs Frigger has sworn an affidavit dated 18 March 2016, on behalf of the appellants, in opposition to the application. In that affidavit, Mrs Frigger deposes to the effect that:

(a) the security for costs ordered in the substantive appeal is sufficient security for the costs of this appeal because the matters in pars 3.2 - 4.2 of the costs appeal are the same as those in the substantive appeal and accordingly, Clavey Legal will not incur additional costs in the costs appeal;

(b) the only additional matter in relation to the costs appeal concerns the attack on the judge's findings in relation to the Calderbank offer; and

(c) for the reasons given in the appellants' case filed in the costs appeal, Clavey Legal will not be able to successfully challenge the appeal in relation to the Calderbank offer, and in that regard, Clavey Legal 'will not be successful [in resisting the appeal] and will not be awarded costs'.

9 The factors to which we had regard in ordering security for costs in the substantive appeal are applicable, in general terms, to the current application in the costs appeal. The evidence of Ms Duthie in her affidavits of 14 July 2015 and 13 November 2015, was summarised in the earlier security for costs judgment.[5] As we found in that judgment,[6] Ms Duthie's evidence indicates that there is a substantial risk that Mr and Mrs Frigger will be unable to satisfy any costs order if the appeal is successful. There is, however, no suggestion that an order for security would stifle the appeal. Nor has there been, or indeed any suggestion that there has been, any material delay in the application. The notice of appeal was filed on 9 November 2015. The solicitors for Clavey Legal sought security by email letter dated 30 November 2015. Mr and Mrs Frigger did not respond substantively to that email, but there followed correspondence between the parties about the possible consolidation of the substantive appeal with the costs appeal. No orders were made for consolidation, and by letter dated 19 February 2016, Clavey Legal's solicitors asked Mr and Mrs Frigger whether they opposed security being ordered in the costs appeal. There was no response to that letter, and the application herein was filed on 4 March 2016.

10 As to the particular matters raised by Mrs Frigger in her affidavit, in our view it is plain that, having regard to the matters in [5] above, the costs appeal encompasses arguments and issues which extend beyond those to be addressed in the substantive appeal, including, but not limited to, the Calderbank issue. Although Mrs Frigger asserted in oral submissions that her affidavit of 4 September 2015 added nothing to the material that had emerged at trial, insofar as the grounds and arguments in the appeal are formulated by reference to that affidavit, the scope of the contents of the affidavit will still need to be examined in the course of the appeal and be subject to submissions from the parties. Also, even assuming that the additional points raised in this appeal are arguable, our necessarily preliminary view is that it could not objectively be said (as Mr and Mrs Frigger, in effect, invited the court to infer) that the attack on the judge's findings in relation to the Calderbank offer has good prospects of success, or for that matter that the appeal as a whole has good prospects.

11 In oral submissions, Mr and Mrs Frigger also referred to a decision of the New South Wales Supreme Court in 2006: Brandrill v Newmont Yandal [2006] NSWSC 974. Mrs Frigger referred to [56] of that decision, in particular. It appears in that paragraph that the judge referred to an affidavit of a Mr Zwier who deposed to a conversation with Mr Clavey some years earlier in relation to a deed of company arrangement the subject of those proceedings. Mrs Frigger contended that this showed that Mr Clavey knew that a deed of company arrangement which operated prejudicially (in that case in relation to an insurer) might be the subject of an application to vary it.

12 The submission is misconceived. Neither Mr Zwier's affidavit in that case, nor the judge's summary of his evidence in Brandrill, could have any bearing on the trial before Herron DCJ in the primary proceedings and it has no conceivable application to an assessment of the prospects of success of the appeal for the purposes of this application.

13 There was no dispute as to quantum, save insofar as was implicit in the two arguments we have rejected. In particular, there was no challenge to the itemised costs in the draft bill of costs contained in the letter annexed to Ms Duthie's affidavit. It appeared to us, in the circumstances, that the sum sought was slightly higher than was reasonably appropriate, having regard to the degree of overlap between the substantive appeal and the costs appeal. Nevertheless, we accepted that a fair degree of work would be involved in the costs appeal additional to that in relation to the substantive appeal. That is evident from, amongst other things, proposed order (a) (referred to in [6] above), which suggests that there would be an examination of the conduct of the trial for 6 of its 12 days.

14 For these reasons, in all the circumstances, we ordered security for costs in the sum of $17,500.

15 We also ordered Mr and Mrs Frigger to pay Clavey Legal's costs of the application in any event, essentially for the reasons that there were no reasonable grounds on which to avoid the giving of security in the circumstances, and the appellants had not, it seemed to us, meaningfully engaged in the conferral process. Further, Mr and Mrs Frigger did not dispute Clavey Legal's application for costs.

[1] Frigger v Clavey Legal Pty Ltd [No 3] [2015] WADC 21 (S).

[2] Frigger v Clavey Legal Pty Ltd [No 3] [2015] WADC 21.

[4] Frigger v Clavey Legal Pty Ltd [No 2] [2015] WASCA 258.

[5] Frigger v Clavey Legal Pty Ltd [No 2] [2015] WASCA 258 [7] - [16].

[6] Frigger v Clavey Legal Pty Ltd [No 2] [2015] WASCA 258 [34].