Practice and procedure - Appeal against costs orders - Turns on own facts

Civil Judgments Enforcement Act 2004 (WA), s 87

Legal Profession Act 2008 (WA), s 280

Bateman v Cookeson [1998] WASC 348

Cifuentes v Fugro Spatial Solutions Pty Ltd [2009] WASC 316 (S)

Donald Campbell & Co v Pollak [1927] AC 732

EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S)

Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)

Keet v Ward [2011] WASCA 139

Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534

Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23 (S)

Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183; (2009) 261 ALR 179

Rodwell v Hutchinson [2010] WASCA 197

Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2)

3 ALLANSON J: The applicants seek leave to appeal against costs orders made by Kenneth Martin J on 9 February 2011. If leave is granted the appeal is to be decided.

4 The appellants are the directors of Computer Accounting & Tax Pty Ltd. On 9 July 2008, Simmonds J gave judgment for Computer Accounting & Tax in an action it brought against Professional Services of Australia Pty Ltd and Martin Paul Banning. Simmonds J awarded damages of $967,202.50 plus interest of $138,824.83. That judgment was later reduced on appeal by approximately $680,000: see Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183; (2009) 261 ALR 179 delivered 23 October 2009.

5 While judgment still stood for the original sum, Mr Banning died and Computer Accounting & Tax attempted to enforce the judgment against his estate. On 21 November 2008, Computer Accounting & Tax obtained an order under pt 4 div 7 of the Civil Judgments Enforcement Act 2004 (WA) appointing the respondent, Mr Graeme Lean, as receiver over one share (50% shareholding) in Banning Holdings Pty Ltd. That share had been held by Mr Banning, and was the significant asset of his estate. The other shareholder in Banning Holdings was Mr Banning's widow, Sandra Banning.

6 The share was registered in the respondent's name in December 2008. He attempted to sell it in satisfaction of the judgment debt held by Computer Accounting & Tax. The highest offer for it was from the appellants. On 10 March 2009, the respondent entered an agreement with the appellants for the sale of the share, and the appellants paid him the purchase price of $730,000.

7 Also in March 2009, the directors of Banning Holdings refused to process or register an executed transfer of the share from the respondent to the appellants. The directors argued that the Articles of Association of Banning Holdings justified their refusal: the existing shareholder held a pre-emptive right under the Articles to purchase the share, and the

Articles authorised the board of Banning Holdings to 'decline to register any transfer without giving any reason therefor'.

8 On 20 March 2009, Professional Services of Australia entered into a deed of company arrangement with its creditors.

9 The respondent was holding $730,000 that the appellants had paid for the share. He asked the appellants to indemnify him if he paid the money to Computer Accounting & Tax. They did not agree. The respondent then returned all but $20,000 of the purchase price to the appellants.

10 On 20 April 2009, the appellants commenced these proceedings by writ against three defendants: Mr Campbell-Smith (the executor of Mr Banning's estate) and Mrs Banning, in their capacities as directors of Banning Holdings, and Banning Holdings. It is convenient to refer to them collectively as the defendants. The indorsement of claim on the writ sought a declaration that the transfer from the respondent to the appellants was a valid transfer pursuant to the orders made on 21 November 2008. It also sought an order that 'the orders the subject of the injunction of 20 April 2009 are confirmed'.

11 The respondent consented to be named as the second plaintiff in the action.

12 On 20 April 2009, at the time of commencing proceedings, the plaintiffs (including the respondent, then as second plaintiff) applied for orders that:

1. The time of service of the Application be abridged to the date of the hearing hereof.
2. The Defendants be immediately restrained whether by themselves, their servants, agents or employees from:

1. entering into and complying with a Deed of Company Arrangement dated 20 March 2009 relating to Professional Services of Australia Pty Ltd (ACN 082 879 641); 2. paying the Proceeds of the sale of the partnership known as Valencia Complex and real estate at 55 Benara Road Caversham to the Administrator of Professional Services of Australia Pty Ltd (Under Administration) (ACN 082 879 641);

1. lending monies to the 1st Defendant as The Executor of the Estate of Martin Paul Banning and to Professional Services of Australia Pty Ltd (Under Administration);

1. paying and/or lending the 1st defendant his fees and charges as Executor of the Estate of Martin Paul Banning; 2. paying the 2nd defendant her reasonable living expenses or any monies for her personal benefit;
2. The 1st defendant and 2nd defendant shall forthwith register the 1st Plaintiff as joint shareholders of Share No 1 in the share register of 3rd defendant;
3. The 1st defendant shall resign forthwith as director of 3rd defendant.
4. The Plaintiff's costs of this application be paid by 1st and 2nd defendants personally to be taxed if not agreed.

13 The appellants signed an undertaking to compensate any party restrained by the orders. The respondent, as second plaintiff, did not sign an undertaking.

14 On 24 April 2009, the injunction in par 2 of the application of 20 April 2009 was made by consent.

15 On 27 April 2009, the respondent obtained legal advice on his position and, based on the advice, decided that he did not wish to remain as a plaintiff in the action. It is not clear on the papers when he told the other parties of his decision.

16 On 13 May 2009, the first, second and third defendants applied by chamber summons for orders that:

1. Paragraph 1 of the orders of the honourable Justice Simmonds given in Chambers on 24 April 2009 [that is, the injunction] be set aside.
2. The Second Plaintiff be removed as a party in the action and the action of the Second Plaintiff against the Defendants be dismissed.
3. The First Plaintiffs or their solicitors or Counsel indemnify the First Defendant (in his capacity as Executor of the deceased estate of Martin Paul Banning), Professional Services of Australia Pty Ltd (administrator appointed), the Second Defendant (in her capacity as beneficial owner of the one share of the deceased estate of Martin Paul Banning in the Third Defendant), and the Third Defendant against all or any costs (including legal fees and expenses) incurred by the Second Plaintiff [the receiver] by virtue of his appointment as receiver of the one share of the deceased estate of Martin Paul Banning in the Third Defendant directly or indirectly in relation to this action, such amount to be assessed and paid forthwith.
4. The First Plaintiffs action be dismissed.
5. The First Plaintiffs pay the Defendants' costs of the action, including the Plaintiffs' summons dated 20 April 2009, and, of this summons on a full indemnity basis.

17 On 14 May 2009, the appellants filed a statement of claim. The appellants initially pleaded a claim against the first and second defendants for oppressive conduct (Corporations Act 2001 (Cth) s 232) and a claim for breach of their duties as directors. The pleading of the claim under s 232 suggests that the appellants were not then aware that the respondent would no longer be a plaintiff. The statement of claim was amended on 9 June and again on 16 June 2009. The appellants maintained the claim for a declaration that the transfer of the share in Banning Holdings by the receiver to the appellants was a valid transfer, and for an order (under Corporations Act s 1071F) requiring the first and second defendants, as officers of Banning Holdings, to do all things necessary to register the transfer. The appellants could not bring the proceedings under s 232 as they were not members of the company. They had standing to proceed under s 1071F as transferees.

18 On 19 May 2009, the appellants also applied by chamber summons. They sought orders that:

1. The name of Graeme Trevor Lean be struck out of the writ of summons herein as Second Plaintiff and that all costs of and occasioned by this order be payable by the said Graeme Trevor Lean in any event alternatively reserved.
2. The injunction granted by the Honourable Justice Simmonds by consent on 24 April 2009 be varied by deleting from the first undertaking all reference to an undertaking by the Second Plaintiff.
3. The Second and Third Defendants be restrained until further order from further instructing Messrs Eastwood Law in these proceedings, the interests of those parties conflicting with the interests of the First Defendant in these proceedings and it being in the interests of the administration of justice that the order be made.
4. The Defendants do pay the First Plaintiff's costs of this application (in respect of the Orders sought in paragraphs 3 and 4 above) in any event.

19 The applications were heard together by Kenneth Martin J on 21 May 2009. His Honour made orders on each summons. Both the appellants and the defendants had applied for an order removing the respondent as second plaintiff, and the respondent also asked to be removed as a plaintiff. The appellants asked for an order that the respondent remain a party, as fourth defendant. The respondent did not oppose that order. Counsel for the defendants told the court that they intended to proceed against the respondent as a defendant to their counterclaim, so he would be a party to the proceedings in some capacity. Kenneth Martin J ordered that the respondent be removed as second plaintiff, and made fourth defendant.

20 His Honour made no order on the application to restrain the solicitors for the first, second and third defendants from acting further, while preserving the plaintiffs' right to pursue those orders. Similarly, his Honour made no order on the defendants' application that the plaintiffs indemnify the respondent, while preserving the defendants' rights to pursue those orders.

21 His Honour varied the injunction to remove reference to an undertaking as to damages on behalf of the respondent as second plaintiff. The respondent had not signed an undertaking.

22 His Honour set aside the injunction. In extempore reasons, he identified several considerations supporting that course.

23 First, the consent orders granting the injunction were apparently predicated on the respondent having given an undertaking as to damages. If that undertaking was a precondition to the injunction, then the orders may never have taken effect.

24 Second, the injunction was an interlocutory order and subject to be reviewed in the light of changed circumstances. And circumstances had changed. It had initially been granted by consent, but the defendants now sought to have it set aside. The position of the respondent had changed - he no longer wished to be a plaintiff, and it was now clear that he had given no undertaking as to damages.

25 Third, the disputes between the parties, including whether Banning Holdings was entitled to refuse to register the share transfer, and whether the respondent was entitled to request the appellants to indemnify him in respect of any payment of the purchase price of the share, would take considerable court time to resolve.

26 Fourth, the balance of convenience did not favour the continuation of the injunction. The effect of the injunction was to prevent Banning Holdings from providing payments to the administrator of Professional Services of Australia in terms of the deed of company arrangement made on 20 March 2009, and thus to prejudice the implementation of that arrangement. The relevant risk to the appellants, arising out of the implementation of the deed of company arrangement, lay in the implications of the company arrangement for the assets of Banning Holdings. If they were successful in their claim, the appellants would be shareholders in Banning Holdings. If the appellants lost some advantage in their capacity as shareholders, their loss would probably be susceptible to computation by way of damages. The respondent had returned the purchase price to the appellants and they were not out of pocket.

27 Having regard to all of those matters, his Honour was not prepared to continue the restraint. The appellants did not appeal the decision to set aside the injunction, and make no complaint in this appeal about any of his Honour's findings or his reasons.

29 On 23 October 2009, the Court of Appeal allowed the appeal by Professional Services of Australia against the award of damages. One practical consequence was that the award of damages was satisfied independently of any proceeds from the sale of the share held by Mr Lean as receiver.

30 Some time after the decision of the Court of Appeal, orders were made winding up Computer Accounting & Tax in insolvency.

31 In November 2010, Simmonds J made orders removing the respondent as receiver under s 103 of the Civil Judgments Enforcement Act.

32 On 10 September 2010, Kenneth Martin J heard an application by the defendants that he permanently stay the appellants' action against them. On 2 December 2010, he published reasons for granting a stay. In his reasons, Kenneth Martin J made no final determinations of fact. But he identified a number of matters that made the continuation of the proceedings pointless. It is not necessary to here set out those reasons, none of which have been challenged on appeal, save to note that Kenneth Martin J then understood that there may be some doubt whether the respondent had consented to be a plaintiff in the action.

33 Kenneth Martin J made no final orders at the time of publishing his reasons, but requested the parties to submit draft orders.

34 The matter came back before Kenneth Martin J on 9 February 2011. His Honour then announced orders which he stayed for seven days, so that they came into effect on 16 February 2011. He ordered that the plaintiff's claim against the defendants be permanently stayed. He also dismissed the plaintiff's application to restrain the first, second and third defendants' solicitors and counsel from acting. The counterclaim by the first, second and third defendants against the plaintiffs and the respondent (as fourth defendant) was adjourned.

35 His Honour made orders for the costs of earlier proceedings. It is those orders, or some of them, that are subject of this appeal. The orders now in contest are:

1. The plaintiffs pay the costs of the first, second and third defendants of the plaintiffs' application by chamber summons dated 20 April 2009, to be taxed if not agreed.
2. The plaintiffs pay the first, second and third defendants' costs of the chamber summons of 13 May 2009, including costs reserved by his Honour, to be taxed if not agreed.

4(a) The plaintiffs pay the first, second and third defendants' costs of the plaintiffs' chamber summons dated 19 May 2009, including costs reserved by his Honour, to be taxed if not agreed.

...

1. The plaintiffs pay the fourth defendant's costs in the action, including any reserved costs, with the taxing officer to make reasonable allowance for the fourth defendant's costs without being limited to the amounts imposed by any relevant costs determination.

1. The plaintiffs pay the first, second, third and fourth defendants' costs of today's special appointment (of 2.75 hours' duration) to be taxed if not agreed.

36 For the hearing on 9 February 2011 the first named appellant, Mrs Angela Frigger, and the respondent each filed affidavits. The evidence is quite brief and there is no real dispute about it.

37 Mrs Frigger made two affidavits. In the first, dated 13 December 2010, she stated that the appellants commenced proceedings after they had received a letter from the defendants refusing to register the share transfer, and after Simmonds J had dismissed an application by Professional Services of Australia (as judgment debtor) to set aside the share sale. Mrs Frigger stated that she telephoned the respondent on 17 April 2009. Her evidence about the phone call is short:

On 17 April 2009 I telephoned the 4th defendant and stated that Mr Stokes advised it was necessary for 4th defendant to be joined as plaintiff in our application for an injunction over the assets of the 3rd defendant and the registration of the share transfer. I advised the 4th defendant that he would not need separate legal representation. He agreed to be joined as plaintiff.

38 Mrs Frigger said that around May 2009, the appellants also believed that the respondent would take action against them personally for his costs and expenses.

39 Mrs Frigger made a supplementary affidavit on 14 December 2010, annexing correspondence relevant to whether the respondent consented to be joined as a plaintiff.

40 In an affidavit dated 8 February 2011, the respondent agreed that he received a telephone call from Mrs Frigger on 17 April 2009, during which she asked him if he would consent to being a co-plaintiff in an action to register the share transfer. He stated, 'I believe that I provisionally agreed to such a course of action, however, I did not understand the ramifications of my being joined as a plaintiff to the action at that time'. The respondent said nothing in his affidavit about the application for an injunction.

41 The writ, with the respondent named as second plaintiff, and the injunction application were both filed on 20 April 2009; this was the next business day, as 17 April 2009 was a Friday.

42 It is not in dispute that on 24 April 2009, immediately before the hearing for the injunction, senior counsel who was then acting for the appellants rang the respondent and asked if he consented to being second plaintiff. Counsel told the respondent that there was some urgency in the decision as the matter was in court that day. The respondent said in his affidavit that he was distracted and did not have the opportunity to seek legal advice. He agreed, without having the opportunity to thoroughly consider the matter. He said, in particular, that he gave no consideration to who would be his solicitor, but did not agree to the solicitor for the appellants acting as his solicitor.

43 The respondent did not give an undertaking as to damages. There is no evidence that he was asked to.

44 The respondent says that on or about 27 April 2009, he obtained legal advice and, based on that advice, instructed his solicitor to have him removed as second plaintiff.

45 In the light of this evidence, Kenneth Martin J amended his earlier reasons to delete reference to the consent of the receiver not having been obtained. He confirmed, however, that the change in no way affected his view of the outcome of the stay application (ts 129).

46 His Honour outlined the following considerations as guiding his decision on costs (ts 129 - 130):

1. First, the party who is successful in a contested argument is normally entitled to their costs.
2. Second, the court had not made any determination of the merits of the action, although it had determined the application for a stay in favour of the defendants.
3. Third, the respondent was an officer appointed by the court as part of the process of enforcement of an unsatisfied judgment.
4. Fourth, the respondent had acted properly and with restraint, where he was brought into proceedings as part of the job he was charged with (that is, selling the share in Banning Holdings for the purpose of satisfying the judgment debt). To that extent he should not be out of pocket in respect of his proper participation in the proceedings.

47 His Honour noted the 'stuttering nature' of Mr Lean's initial involvement, but held that he needed to participate, had properly participated, and there had been no determination that reflected on him adversely in a substantive sense so as to warrant depriving him of his costs.

48 The appellants challenge only the orders as to costs. Further, they do not challenge the orders to the extent that they provide costs are payable to the first, second and third defendants, but only who should pay those costs. Accordingly, the first, second and third defendants were not named as respondents to the appeal.

49 The appellants seek orders that orders 2, 3, 4(a), 8 and 11 made by Kenneth Martin J, which came into effect on 16 February 2011, be set aside; and that the respondent pay the appellants' and defendants' costs of the chamber summons of 19 May 2009, order 1 of the chamber summons of 13 May 2009 (the order setting aside the injunction), and the appellants' application for an injunction including hearings on 22 April 2009, 24 April 2009 and 21 May 2009. They also seek an order that the respondent's costs in relation to the action be costs in the receivership. Finally, the appellants seek an order that the respondents pay 50% of the appellants' and defendants' costs of the hearing of 9 February 2011.

1. The learned Judge erred in law in firstly finding that a party to litigation who is successful in a contested argument is entitled to its costs, but then ordering the appellants to pay the other parties' costs of the appellants' wholly successful application of 19 May 2009.
2. The learned Judge erred in law in ordering the appellants to pay costs in interlocutory proceedings dated 20 April 2009, 13 May 2009 and 19 May 2009 where the respondent's conduct caused and or necessitated these applications.
3. The learned Judge erred in law by ordering the appellants to pay the respondent's costs of the action when the trial judge who appointed him had already made a cost order in this regard.
4. The learned Judge erred in law and in fact by ordering the appellants to pay the respondent's costs of the action when:

(1) the respondent's joinder as plaintiff was by his consent;

(2) the respondent's joinder as 4th defendant related to issues of his conduct in the share sale.

1. The learned Judge erred in law where there was no decision on the merits of the action to warrant a cost order against the appellants (a reference to order 8 that the plaintiff pay the fourth defendant's costs in the action).
2. The learned Judge erred in law by making a special cost order in favour of the respondent without the necessary inquiry and evidence required for such an order.

51 Of the orders which the appellants seek to have set aside, only orders 8 and 11 deal with costs between the appellant and respondent. Order 8 is the subject of grounds 3, 4, 5 and 6. I am not sure what grounds relate to order 11, although it may come within grounds 3 and 4.

52 The other orders (2, 3 and 4(a)), which are the subject of grounds 1 and 2, provide solely for costs between the appellants and the defendants. The appellants do not dispute that it was appropriate for the primary judge to order that the defendants have their costs of the several applications. The only issue is whether his Honour erred in not ordering that the respondent rather than the appellants should pay those costs.

53 The discretion regarding costs has been described as absolute, unconfined or unfettered, although a discretion that must be exercised judicially, not arbitrarily or capriciously, or on grounds unconnected with the litigation: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21] - [22], [134]; Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 540, 558, 562, 568; Donald Campbell & Co v Pollak [1927] AC 732, 811. The principles to be applied in an appeal from a decision awarding costs were recently summarised in Keet v Ward [2011] WASCA 139:

The costs of and incidental to all proceedings in the Supreme Court are in the discretion of the court or judge: s 37(1) Supreme Court Act 1935 (WA). The discretion conferred by s 37 of the Supreme Court Act is not an unfettered discretion. It is a discretion which must be exercised judicially. The legal principles which govern the review of discretionary decisions by an appellate court are well established: see House v The King [1936] HCA 40; (1936) 55 CLR 499, 504 - 505; Queensland Wire Industries Pty Ltd v Broken Hill Pty Ltd (1987) 17 FCR 211, 222. In the absence of express error, an appellate court is not entitled to substitute its own decision for that which is the subject of the appeal merely because it prefers a different result or even merely because it thinks that a different result would be more just and equitable. Before it intervenes, it must be satisfied that the decision is clearly wrong: Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605, 634 (Wilson J). In the absence of an identifiable error of fact or law (and none has been identified in this case) the appellate court must be persuaded that the order stands outside the limits of a sound discretionary judgment before it intervenes: Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513, 520 (Mason and Deane JJ). In short, the appellate court may only intervene in a case where no express error is revealed if upon the facts the decision is 'unreasonable or plainly unjust': House v The King (505) [17].

54 This ground relates to order 4(a) and the application of 19 May 2009, in which the appellants say they were wholly successful. The appellants say his Honour erred in failing to apply the general rule that a successful party is entitled to its costs.

55 The application of 19 May 2009 was heard at the same time as the defendants' application of 13 May 2009. The only contested matter determined on that occasion was the defendants' successful application to discharge the injunction that had been made by consent on 24 April 2009. The appellants had sought to maintain the injunction, even after the respondent ceased to be a plaintiff in the action. The primary judge awarded costs to the defendants on the basis that the appellants had failed to hold the injunction and ordered that the appellants pay those costs.

56 The primary judge did not attempt to differentiate the issues upon which each party was successful or unsuccessful and to make separate costs orders by reference to those issues. The appellants do not argue that he should have made separate costs orders, and do not contest the order to the extent that it provides that the defendants have their costs of the application. The heart of their complaint, as the ground was argued, is that the respondent's conduct in agreeing to be second plaintiff, and then in withdrawing that agreement, led to the costs being incurred. That complaint does not arise out of ground 1, but is central to ground 2 and I will deal with it there. Ground 1 does not identify any error on the part of the primary judge.

57 Next, the appellants say that the respondent should be liable for the costs of the application for the injunction, the application to remove the respondent as a plaintiff, and the applications to vary the injunction and set it aside, because his conduct 'caused and or necessitated' those applications. They seek orders that he pay both the defendants' costs and the appellants' costs of those proceedings. The appellants rely on O 66 r 1(2) of the Rules of the Supreme Court 1971 (WA), which provides that the court may order a party whose conduct has resulted in costs being unreasonably or unnecessarily incurred to pay the costs of an unsuccessful party, either wholly or in part. They refer also to the principle stated in Kerr on the Law and Practice as to Receivers (16th ed, 1983) that 'a receiver may be ordered personally to pay costs incurred by reason of his misconduct or neglect in the discharge of his duties'.

58 The conduct on which the appellants rely is the respondent giving his consent to be joined as a plaintiff in the action, and then withdrawing that consent. The argument was raised before the primary judge. His Honour gave what he described as truncated reasons, and did not deal with all arguments put before him. He did, however, make the following observations in his oral reasons regarding the respondent's conduct:

My perception of the conduct of the fourth defendant [the respondent] in these proceedings is that it has acted properly, with restraint and necessarily so as a receiver brought into proceedings on the basis of the role that the receiver has performed in the proceedings as part of the job that the receiver was charged with ... I make those observations irrespective of the somewhat stuttering nature by which the receiver began as a participant in these proceedings initially as a co-plaintiff and then became fourth defendant and then has participated in defence of counterclaims brought against him by the first, second and third defendants.

The fact of the matter seems to me to be, irrespective of how any of that happened, that the receiver has needed to participate and has properly participated in the proceedings and there has been no determination of any matter which would reflect adversely in a substantive sense upon the receiver warranting the receiver being deprived of his costs.

59 The appellants have not shown that his Honour was in error in making those findings. If it is accepted that the respondent participated properly as a court appointed receiver, then the order that the appellants pay the defendants' costs is not clearly wrong.

60 It is also relevant, in my opinion, that the injunction was for the purpose of preserving the assets of Banning Holdings for the benefit of the appellants should they succeed in being registered as the holder of the share. Further, they attempted to maintain the injunction after the respondent had ceased to be a plaintiff in the action.

61 The order is not, in my opinion, 'unreasonable or plainly unjust'.

62 This ground refers back to orders made on 21 November 2008, when Simmonds J appointed the respondent as receiver under the Civil Judgments Enforcement Act. Under s 87, the court appointing a receiver may make any ancillary or consequential orders, including any order needed as to the payment of the receiver's fees and expenses. Receivers are entitled to have their costs, charges and expenses properly incurred in the discharge of their ordinary duties, or in the performance of extraordinary services which have been sanctioned by the court: Kerr on the Law and Practice as to Receivers (17th ed, 1989) 233. Consistently with principle, Simmonds J ordered:

The costs of the Receiver including his remuneration, the cost of obtaining his appointment, of completing his security, of passing of accounts and of obtaining his discharge shall be taxed unless assessed by the master and shall be primarily payable by the judgment debtors by making payment of the taxed costs to the judgment creditor within such time as the Master may allow on taxation or assessment or is otherwise ordered by this honourable Court.

63 The appellants submit that Kenneth Martin J erred in ordering them to pay the respondent's costs because those costs had already been disposed of by Simmonds J in other litigation.

64 Kenneth Martin J however, was concerned with a quite different question: who should pay the legal costs of the receiver in proceedings, other than those in which he had been appointed, in which the receiver had been joined as a party. He accepted that the receiver's costs of the action would be costs of the receivership (that is, the receiver could claim them as expenses properly incurred) but held that the appellants 'should bear the first exposure' to those costs. There is, in my opinion, no inconsistency between the costs order made by Kenneth Martin J and the order made by Simmonds J.

65 In submissions, the appellants say that the primary judge erred in fact in finding that the receiver had been 'dragged into the action by the decision of the plaintiff'. The appellants say that the finding is contrary to the uncontested evidence that the respondent consented to be joined as second plaintiff. They rely on this as an alleged error of fact.

66 The expression 'dragged into the action' should not be read out of context. His Honour was discussing why the receiver should have his reasonable costs, and not be limited to the amounts imposed by a determination made under the Legal Profession Act 2008 (WA). He had earlier referred to the evidence that the respondent consented to be joined as plaintiff, and indeed had corrected his earlier reasons to reflect the fact of that consent. I have no doubt that his Honour appreciated that the respondent had consented, but in circumstances where the action against the defendants was driven by the appellants' desire to be registered as the owner of the share in Banning Holdings. The appellants asked him to consent to be a plaintiff, and when later he wished to withdraw that consent, they moved for him to remain a party, but as a defendant. The comment referred to in this ground reflects those facts.

67 There was no wrong finding of fact, and no error in the exercise of the primary judge's discretion.

68 In ground 5 the appellants rely on the fact that there was no decision on the merits of the action to warrant an order for costs. In seeking to identify error by the primary judge, counsel for the appellants referred back to ground 4 - that an order had already been made for the respondent's costs as receiver.

69 The primary judge expressly took into account that he made no final determination of the merits. Further, he excluded from his costs orders any costs of the counterclaim, which had not yet been determined and which was not stayed.

70 His Honour said that the respondent had acted properly and with restraint as part of the job that he was charged with by the court, and had 'participated neutrally in those proceedings, made some helpful submissions and certainly did not oppose the stay' (ts 129).

71 In my opinion, the appellants have identified no error in the order made and no basis on which the court should interfere with the discretion of the primary judge.

72 In ordering the appellants to pay the receiver's costs of the action, the primary judge provided for 'the taxing officer to make reasonable allowance ... without being limited to the amounts imposed in any relevant costs determination' (ts 136). The appellants submit that his Honour did so 'without the necessary inquiry and evidence required for such an order'.

73 There are two aspects to the complaint, both arising out of s 280(2) of the Legal Profession Act: that the respondent had to prove that costs under the scale would be inadequate, for example by providing a draft bill of costs, and that there was no ground for his Honour to conclude that the matter was 'unusually difficult, complex or important'.

74 Section 280 of the Legal Profession Act is in the same terms as its predecessors: s 215 of the Legal Practice Act 2003 (WA) (the 2003 Act), and s 57ZB of the Legal Practitioners Act 1893 (WA). Section 280 relevantly provides:

(1) Subject to any costs agreement made in accordance with Division 6 or the corresponding provision of a corresponding law, section 306 and the Legal Aid Commission Act 1976 section 14 -

(a) the taxation of bills of law practices; and

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

(2) 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 all or any 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.

(3) Nothing in subsection (1) is to be construed as limiting the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court or judicial officer the amount of costs allowed.

75 Ground 6 in the appeal assumes that the primary judge was acting under s 280(2). I am not satisfied that this assumption is correct. His Honour made no reference to the criteria under s 280(2). Nor was it necessary for him to do so.

76 Under s 37(1) of the Supreme Court Act 1935 (WA), the costs of and incidental to all proceedings shall be in the discretion of the court or judge. That discretion is subject to the express provisions of any other Act. But s 280(3) of the Legal Profession Act provides that nothing in s 280(1) is to be construed as limiting the power of the court to determine in any particular case the amount of costs allowed. Section 280(2) is not the only source of power to determine costs outside a costs determination. It remains within the discretion of the court, for example, to make an order for indemnity costs.

77 There are several decisions of the court which recognise the effect of s 280(3) and its predecessors. In relation to s 215 of the 2003 Act, Newnes JA (Pullin JA and Murphy JA agreeing) said in Rodwell v Hutchinson [2010] WASCA 197:

In respect of party and party costs, the substantive effect then of s 215 was that the legal costs of proceedings were to be determined pursuant to any applicable costs determination made under s 210, subject to the power of the court to exceed the limits in the costs determination in the specific circumstances set out in s 215, and without derogating from the power of the court to determine costs outside the costs determination in a particular case [19]. (emphasis added)

78 To similar effect, Parker J in Bateman v Cookeson [1998] WASC 348 said:

Even though it is clearly the intention of the 1987 amendments, and continued by the 1992 amendments, that the taxation of both practitioner and client and party and party bills should be regulated by a determination, that general scheme is expressly subjected by s 58ZB(3) to any continuing power of a court to determine in a particular case the amount of costs to be allowed. (emphasis added)

79 See also Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23 (S) [1] (Pullin JA), [15] (Buss JA).

80 In my view, the primary judge was entitled to make the order he did by reference to the position of the respondent as a court appointed receiver who had been a party to litigation because he held property by reason of his office. His Honour was not limited by s 280 in doing so.

81 Even if his Honour had been acting under s 280(2), it was not necessary for him to find that the costs allowable under a determination are in fact inadequate. It is sufficient if the court considers that it is fairly arguable that the taxing officer might properly allow costs at an amount greater than the amount allowable under the relevant legal costs determination: Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [16], [22]. This does not always require evidence of the costs actually incurred. As Murray J said in Cifuentes v Fugro Spatial Solutions Pty Ltd [2009] WASC 316 (S):

It is to be remembered that a special order which fixes higher limits than those derived from the relevant determination, or which increases the amounts for specific items of work, or removes limits on costs derived from the determination, does no more than that. It is for the taxing officer to consider the reasonableness and the necessity for the work and to make a judgment about the remuneration reasonably required: Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400, 404 [22].

82 The questions arising under s 280 are to be addressed as matters of impression rather than detailed evaluation: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7]. In some cases, it may be necessary to prove the criteria in s 280 by specific evidence. In other cases, the court may be able to form a view from its knowledge of the case, as in Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2) [14] - [15]. In the present case, the primary judge had heard and determined the applications to remove the receiver as plaintiff and to set aside the injunction, and had then determined the application to permanently stay the appellants' action. It was open to his Honour to form the necessary opinion from his own knowledge of the matter and from the papers before the court without requiring further evidence such as a draft bill of costs.

83 Finally, although it does not appear to be the subject of any specific ground of appeal, the appellants seek an order that the respondent pay 50% of the costs of the hearing of 9 February 2011. In the light of my findings on the grounds of appeal, there is no basis for such an order.

84 I would refuse the application for leave to appeal.