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

HANCOCK PROSPECTING PTY LIMITED (ACN 69 008 676 417)

Final orders - Form of orders settled - Whether orders should be suspended in operation

Costs - Special costs order - Whether lump sum costs order should be made

Final orders to give effect to the judgment in Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [No 9] [2010] WASC 44

Bell Group Ltd (In liq) v Westpac Banking Corporation [10] [2009] WASC 107

Brookvista Pty Ltd v Meloni [2009] WASCA 180

Bunnings Forest Products Pty Ltd v Bullen [1994] FCA 1526; (1994) 54 FCR 342

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

Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308

Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738

Heartlink Ltd v Jones [2007] WASC 254(S)

Idoport v NAB [2005] NSWSC 1273

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

Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473

Seven Network Ltd v News Ltd [2007] FCA 2059

State Bank of Victoria v Parry [1989] WAR 240

Streeter v Western Areas Exploration Pty Ltd [2009] WASCA 214

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

1 This judgment is supplementary to and should be read with the reasons for decision, Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 9] [2010] WASC 44. After a long trial, followed by a lengthy period of debate between the parties by way of closing submissions, which the parties brought to an end in July 2008, I published my reasons for decision on 5 March 2010. I gave judgment for the plaintiff upon its contractual claim and dismissed the defendant's counterclaim.

I propose to publish my reasons without the need for attendance by the parties in open court. I give judgment for the plaintiff on its contractual claim. I will make an order in the nature of specific performance, and such ancillary declarations and orders as are necessary and as are discussed in the section of these reasons concerned with the making of a decree of specific performance. The defendant's counterclaim is dismissed.

I invite the parties to prepare and file an agreed minute of substantive orders to give effect to these reasons. That minute should deal with an appropriate award of costs which should generally follow the event, but I appreciate that there may be special orders required to do justice between the parties, and if they can be agreed also, so much the better.

To the extent that, after a process of consultation, there may remain matters as to costs or as to the terms of any substantive order which are in dispute, I will, of course, hear the parties. But any such debate should proceed, in the first instance, by the exchange and lodgement of written submissions to enable me to decide whether I may resolve the matters in dispute on the papers, or whether I would need to hear the parties in open court [681] - [683].

3 Again, the parties have embarked upon an extensive process of exchange of written submissions. The plaintiff naturally commenced the process, filing on 30 July 2010, written submissions speaking to a proposed minute of final orders, which it appears that the parties have not been able to agree, and seeking special costs orders concerned to remove all limits on costs derived from applicable costs determinations and to bypass the ordinary process of taxation of costs by seeking to have me determine the costs to be paid by the defendant to the plaintiff by way of a lump sum.

4 In support of those submissions, the plaintiff filed and served a series of affidavits. One was sworn by a Ms Hymans, a solicitor employed by the plaintiff's solicitors, who deposed to her inquiries in relation to searches designed to confirm the present mining tenements and rights of occupancy under temporary reserves which together would constitute what, in these reasons, as in the principal reasons, I will refer to as the Rhodes Ridge interest, a half interest in which is held jointly and equally by the plaintiff and the defendant, the other half being held by a corporation within the Rio Tinto group of companies.

5 Mr Zappia, a senior associate employed by the plaintiff's solicitors, swore an affidavit which was filed and served, briefly describing the history of the litigation, its legal and factual complexity and the considerable amount of work required by counsel and solicitors to get the matter up and to present the matters at issue for my decision.

6 Ms Fuller, a solicitor employed by the plaintiff's solicitors, swore an affidavit which was filed on 30 July and served, in which she presents further information about the litigation and extracts a series of documents, including written submissions, which relate to the plaintiff's presentation of an alternative claim (if the contractual claim should fail) which I have referred to in a shorthand way as the plaintiff's unconscionability claim. I shall use that terminology again in these reasons.

7 It was a claim directed to securing to the plaintiff, orders in the nature of those I have foreshadowed in respect of the contractual claim. The claim advanced the equitable proposition that it should be held to have been unconscionable, having regard to the parties' dealings with each other, for the defendant to successfully advance a defence to the contractual claim. This alternative head of claim was seriously advanced and time was spent on it at trial. I dismissed it, not merely because I allowed the claim in contract, but also because I regarded the unconscionability claim as fundamentally misconceived.

8 In addition, Ms Fuller tendered the report of a Ms Harris, an accredited cost lawyer under the Law Institute of Victoria specialist accreditation scheme. Her report argues for a process by which a lump sum costs award might be made rather than to simply proceed to the taxation of costs in the ordinary way. I shall return to this material in due course.

9 The plaintiff also tenders an affidavit, again filed on 30 July 2010 and served, by a Ms Coulson, a barrister practising in Western Australia, as she puts it, 'almost exclusively in the area of legal costs'. She presents the opinion that for costs counsel and a specialist costs law clerk to draw a bill of costs for taxation would take approximately 40 weeks. She estimates that the taxation process itself would take in the order of four weeks, over a total period of approximately 19 months.

10 She estimates the entire taxation process on that basis would cost in the order of $450,000 as opposed to the lump sum costs determination proposed by Ms Harris to cost in the order of $100,000. This, therefore, is a further argument presented for the plaintiff, calling upon the expertise of lawyers who specialise in the matter of legal costs, supporting the making of orders for a lump sum costs determination by me as the trial judge.

11 That having occurred, on 2 August 2010 the plaintiff filed a minute of consent orders which I amended slightly, requiring the defendant to file and serve by 26 August 2010, any affidavit and submissions in opposition to the orders proposed in the plaintiff's minute of final orders. The plaintiff, I ordered, should have until 9 September 2010 to file and serve any affidavit evidence and submissions in reply to the defendant's material.

12 The defendant's written submissions as to the final orders which it proposed should be made and in relation to costs, including a set of confidential submissions on that topic, referring to matters subject to a confidentiality regime devised during the trial, were filed on 2 September and served.

13 At about the same time, on 8 September 2010, the defendant filed an affidavit made by a Mr Wilks, a lawyer with the defendant's solicitors. In it he makes a number of points. Firstly, he gathers together evidence which would suggest that as at the time of trial, and when the plaintiff briefed its valuation expert Mr Cole, it had no plans for the foreseeable future, if it was successful in the action it brought, to dispose of what would then be its 50% share in the Rhodes Ridge interest. The affidavit also provides some factual material in relation to costs.

14 Most importantly, annexed to the affidavit is an opinion and report obtained from Mr Garnsworthy, a lawyer who has significant expertise and specialises in matters concerned with legal costs. He was asked to express an opinion in relation to the reports to which I have referred, obtained by the plaintiff from Ms Coulson and Ms Harris. He does so at some length, expressing disagreement with both of them. He proposes that the court order that the plaintiff should have its costs to be taxed in the ordinary way, subject to special costs orders in relation to scale items under the applicable costs determinations.

15 Mr Garnsworthy suggests that it would be convenient for the court to direct a global mediation of the amount of costs preceded by conferral between experts and lawyers. That may lead to agreement being achieved without the need for a fully itemised bill of costs, but upon the basis of costs estimates in outline or summary form.

16 Mr Wilks' affidavit also sets out what is apparently an early draft of grounds upon which the defendant proposes to seek leave to appeal. They are relatively limited in their ambit, being concerned with the interpretation of cl 4 of the 1984 agreement and the question whether, upon the proper interpretation of cl 4, the entry into that agreement, or the exercise of the option conferred by it, prior to obtaining the consents or approvals of other affected parties, breached condition 3 of the temporary reserves, s 25.04 of the relevant State Agreement and s 11.01 of the Joint Venture Agreement. The question of illegality was argued at some length at trial. There is a ground based on my view of the operation of s 110 of the Property Law Act 1969 (WA). Finally, there is a ground which challenges my view of the meaning and effect of relevant terms of what at trial was described as the 1989 agreement.

17 I have said that the proposed grounds of appeal are rather limited in their ambit. Mr Wilks adds, in his affidavit affirmed on 2 September 2010, that they have not been settled. They may yet be amended and further grounds may be added, he says.

18 Broadly in line with the programming order about the making of final submissions, on 16 September 2010 the plaintiff filed its submissions in reply in relation to the making of the final orders other than in respect of costs. It did not add to the debate in respect of costs, but on 23 September, Ms Fuller swore a further affidavit annexing further reports by each of Ms Coulson and Ms Harris, maintaining their views and commenting adversely on the report which had been provided by Mr Garnsworthy.

19 A further dimension to the matters to be dealt with on the making of final orders was added by the defendant on 30 September 2010, when it applied for a suspension order pursuant to s 15 of the Civil Judgments Enforcement Act 2004 (WA) on condition that the defendant file and serve a written undertaking to the plaintiff and the court, that it would hold its Rhodes Ridge interest in escrow to abide the outcome of its appeal. Alternatively, it sought a stay of execution pursuant to the Rules of the Supreme Court 1971 (WA) O 42 r 2(2) pending the final disposition of its appeal. The application served to focus attention on the point, which was when the orders made should take effect.

20 I received submissions by the defendant in support of that application and the basis upon which it is made is set out in an affidavit filed on 30 September 2010 and served, sworn by Mr Watroba, a director of the defendant, long associated with both the plaintiff and the defendant, and familiar with the action, and the provisions of the joint venture agreement and the working of the joint venture.

21 In his affidavit he asserts that the Rio Tinto corporation associated with the joint venture, Hamersley Resources Ltd, has not advised its intention to construct a mine on any tenement, the subject of the joint venture. In those circumstances, Mr Watroba says, neither the plaintiff nor the defendant is required to contribute funds to the joint venture.

22 Mr Watroba then considers what might be the outcome if the defendant should be required to join with the plaintiff in seeking a transfer of the defendant's interest in Rhodes Ridge to the plaintiff. He worries that the rights of occupancy might be lost. It is sufficient to say that it would be astonishing if the Minister seized upon such an application as an opportunity to terminate the rights of occupancy. I do not propose to develop that point in any detail.

23 Of more interest are Mr Watroba's concerns that if there should be a transfer of the Rhodes Ridge interest from the defendant to the plaintiff and the defendant's appeal should succeed in terms requiring a re-transfer of the Rhodes Ridge interest, difficulty may be encountered if either, or both of the Minister or Hamersley Resources Ltd, did not consent or agree to a transfer back from the plaintiff to the defendant. I will examine this proposition in more detail in due course.

24 The parties agreed that the plaintiff should have 14 days to file and serve submissions in opposition to this application. It effectively met that agreement, filing its submissions on 15 October 2010. I have read them and will deal with the arguments raised. I do not need to hear the parties amplify or further debate the issues raised at an oral hearing.

25 In brief, as I understand the plaintiff's position, it opposes the suspension of certain declarations sought, which I have indicated I would be prepared to make. It opposes a stay of costs orders in any form, but it would be prepared to accept a suspension of speaking orders on terms that necessary documents by way of specific performance of the orders should be executed upon the plaintiff's undertaking to hold them in escrow and not to act upon them. Further, the plaintiff seeks an undertaking by the defendant as to damages, if any should be occasioned arising out of the operation of a suspension order.

26 On 18 October the plaintiff filed an affidavit by Ms Fuller. It reminds me of evidence given by Mr Wright as to the circumstances in which, and the price for which, he supposed that the plaintiff would have been prepared to sell a 50% interest in Rhodes Ridge if that was its entitlement. The prospective purchaser was supposed to be Rio Tinto Ltd. The evidence was given in closed court on 27 March 2007.

27 Otherwise, Ms Fuller's affidavit is concerned to provide me with an exchange of correspondence between the solicitors for the parties in which it was made clear, on behalf of the defendant, that it could see no basis upon which it might be appropriate to offer, or for the court to require an undertaking as to damages.

28 I was able to do little constructive work on the numerous issues raised by the parties before I took a long arranged break over the period of Christmas and January 2011. On 20 January 2011, the plaintiff's solicitors advanced amendments to the proposed final orders. In brief, what I have referred to as the speaking orders were proposed to be suspended upon the defendant providing an undertaking as to damages. It was apparently no longer proposed that necessary documentation in relation to the exercise of the option provided by cl 4 of the 1984 agreement be executed and held in escrow.

29 A new proposal was that the plaintiff should be permitted to exercise the management rights arising under the relevant Rhodes Ridge Joint Venture Agreement and attaching to the Rhodes Ridge interest held by both parties, subject only to the reservation to the defendant of liberty to apply on short notice to restrain any proposed exercise of such management rights by the plaintiff in respect of the Rhodes Ridge interest of the defendant.

30 Nothing appears from the papers or was advanced to suggest that there was any reason to suppose that such a proposal advanced by the plaintiff, '[t]o minimise any further debate over the nature and extent of the proposed suspension orders' would be accepted by the defendant, particularly as, insofar as the management rights referred to arose under cl 1 of the 1984 agreement, they were described as comprising the exercise of, 'sole control over and responsibility for the administration, development and disposal' of the particular asset and interest within the context, of course, of the partnership interest and the joint venture agreements.

31 I must say that I find it impossible to see how such an order might be made in the context of proceedings between these two parties in which there is no capacity to deal with the potential impact upon the rights of the other joint venturer, Hamersley Resources Ltd, the company within the Rio Tinto group holding the 50% interest in the joint venture.

32 Although the plaintiff's solicitors wrote to the court presenting this proposal on 20 January 2011, it seems that they had previously written in similar terms on 13 January 2011 to the defendant's solicitors to advance the same proposition. By a letter dated 25 January 2011, the defendant's solicitors wrote rejecting the 'offer' contained in the letter from the plaintiff's solicitors. I do not know what that offer might have been. The letter of 25 January closes by saying that since it was written, the defendant's solicitors had received a copy of the letter from the plaintiff's solicitors to the court dated 20 January, to which they said they would respond, 'when counsel are available after their vacation'.

33 On 3 February 2011, the defendant's solicitors provided an amended form of the minute of final orders proposed by the defendant. On 9 February 2011, the plaintiff's solicitors wrote criticising the changes proposed and advising that the plaintiff maintained its submission that its own draft orders were those that should be made. On 3 March 2011, the defendant's solicitors provided further commentary in relation to matters concerned with the terms of the orders and the question of suspension.

34 Nothing in this correspondence suggests to me that I should change my view that the terms of the orders to be made, and the question of their suspension, may be dealt with on the papers, particularly having regard to the exchange of submissions under the hand of senior counsel on both sides, followed, until early March, by 'submissions' by the solicitors for the parties.

The settlement of final declarations and orders

35 I will append to these reasons the orders that I make in their settled terms. The declarations in pars 1, 2 and 3 should be made. They are designed, as to par 1 to declare when, in my view, the option provided by cl 4 of the 1984 agreement was validly exercised and in pars 2 and 3, to identify the subject matter of the Rhodes Ridge interest relative to the date of exercise of the option and the forms of tenement which are now involved.

36 The accuracy of the Schedules is supported by the evidence before me at trial, as that evidence is now supplemented by affidavit. I note that the Rhodes Ridge interest comprises undivided shares as tenants in common in rights of occupancy under various temporary reserves and in various exploration licences, including that called Shovelanna, now the subject of applications for four mining leases.

37 What I have described as the speaking orders are those in the character of a decree of specific performance of cl 4 of the 1984 agreement as I have construed it, aided by the implication of the term, importing into the 1984 agreement the duty of cooperation imposed upon both parties, but relative to this case, upon the defendant, in the terms outlined in the judgment at [169].

38 As to the remedy to be provided, it may be that my views are most succinctly expressed in the judgment at [504] - [505] and [681]. In short, the final orders are designed to express, in the context of the applicable agreements, what must be done in the performance of cl 4 of the 1984 agreement to achieve the transfer to the plaintiff of the entire Rhodes Ridge interest held by the defendant.

39 Looking then to the relevant agreements or statutory instruments governing the processes required in relation to the transfer of an interest in affected ground, the first material provision in respect of the temporary reserves, is condition 3 of the rights of occupancy: judgment [101], under which the occupants, in this case the plaintiff, the defendant and the corporate entity within the Rio Tinto group, must not only agree upon the transfer, but first obtain the written approval of the Minister. This envisages a joint approach to the Minister for his or her consent to a proposed transfer.

40 In relation to the joint venture, the Rhodes Ridge State Agreement, ratified by the Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972 (WA) contains s 3.02 in relation to the terms of the rights of occupancy to be provided, with s 3.08 preserving the force of condition 3 of the rights of occupancy.

41 The State Agreement also contains s 25.04, which, in the circumstances of this case, requires the consent of the Minister to an assignment or other disposition of the rights and obligations from the defendant to the plaintiff and the execution by the plaintiff of a deed of covenant in a form approved by the Minister to comply with, observe and perform the provisions of the State Agreement. Again, it can be seen that the defendant would be required to cooperate in the assignment or disposition to the plaintiff which may not take effect until the Minister's consent is obtained and the deed of covenant is entered into.

42 Finally, there is the Rhodes Ridge Joint Venture Agreement, s 11.01 of which provides, effectively so far as this case is concerned, that all three joint venturers must provide their consent for a sale, conveyance, assignment, transfer or other disposition of the defendant's interest under the joint venture to the plaintiff. The defendant and the Rio Tinto joint venturer would need to provide their written consent before the transfer or other disposition of the share in the joint venture from the defendant to the plaintiff may be made.

43 The mechanics of the process of transfer are clearly governed by the relevant agreements and the rights of occupancy. The final orders of the court need not, in my view, descend to specifics about that. In general terms, what is required is that the defendant should provide its cooperation to the processes required by the various instruments to which I have referred.

44 I have concluded that the plaintiff's proposed par 4 is unnecessary, but that rather than leave the orders generally silent as to the process by which various consents and approvals may be obtained, broadly speaking the orders which are pars 5 and 6 of the plaintiff's minute, should be made. I have therefore reformulated those orders to some extent and have renumbered the orders as 4 and 5.

45 The defendant initially proposed, without I think offering argument in support of the proposition, that the plaintiff should be required by the final orders to indemnify the defendant in respect of any liability and obligation under the State Agreement or the Joint Venture Agreement and otherwise with respect to the joint venture, to the extent at least that the defendant was unable to secure, with the proposed support of the plaintiff, a release and discharge from all such liabilities. As finally formulated, the paragraph is in very wide terms. The final formulation was discussed in the letter from the plaintiff's solicitors dated 9 February 2011. The making of such an order is opposed.

46 In my view, no such order should be made for the simple reason that it may be of far-reaching effect, and cannot be regarded as ancillary to the relatively simple process of translating into speaking orders what I conceive to be the defendant's obligation to comply with the notice of exercise of the option provided by cl 4 of the 1984 agreement.

47 The plaintiff submits that not only is such an order unnecessary and undesirable, but that, 'what would occur in the hypothetical circumstances mentioned can be dealt with under the liberty reserved'. Again, I disagree. I can see no basis for the making of such an order and I do not propose to reserve liberty to apply, except in relation to the performance of the orders which I have numbered 4 and 5. The order is in the terms of order 6.

48 I have read the final response of the defendant's solicitors in the letter of 3 March 2011. It observes that a release and discharge or indemnity should be inclusive rather than limited to the implementation of orders 4 and 5 because:

there are or may be numerous other potential areas of liability including but not limited to:

(a) ongoing arrangements and obligations with Native Title related matters;

(b) obligations arising under any agreements entered into by RTIO entities that HPPL and WPPL would then have financial responsibilities for;

(c) obligations to any third parties including neighbouring tenement holders for access and other conditions, responsibilities and obligations; [and]

(d) environmental obligations to the State under the Mining Act and Environmental Protection Act.

49 No such matter is referred to specifically. It may be that there are no such obligations or liabilities currently incurred in a form which might survive, so far as the defendant is concerned, the assignments and transfers required of it. If there are any such obligations or liabilities arising out of the specific implementation of the orders in the nature of specific performance of cl 4 of the 1884 agreement, then it would be proper, in my opinion, to advance any such matter by way of a specific application in accordance with the liberty to apply reserved.

50 Beyond that, it seems to me that the rights and obligations of the parties in their dealings with, or arrangements made with, others in relation to Rhodes Ridge, must be dealt with outside of the specific implementation of this judgment.

51 The defendant's application for orders suspending the operation of the final orders or staying their operation, relies alternately on s 15 of the Civil Judgments Enforcement Act 2004 (WA) and upon the Rules of the Supreme Court O 42 r 2(2).

52 The Civil Judgments Enforcement Act was proclaimed to come into operation on 1 May 2005 (Government Gazette, 31 December 2004, p7128). It applies to judgments given after that date and to enforcement processes in respect of such judgments.

53 I note in passing that by s 8, interest is to be paid on the unpaid amount of the judgment sum from the date of the judgment (ie, the date when these orders are made) until the date upon which the judgment sum is paid. That is the case whether or not a suspension order has been made, unless the court should order otherwise. The term 'judgment sum' is defined in s 3 to mean the amount of money ordered to be paid under a judgment, 'whether or not the money is or includes costs'.

54 So far as material, s 15 provides:

(1) A person against whom a judgment is given may apply for an order suspending the enforcement of all or part of the judgment to -

(a) the court that gave the judgment; or

(b) a court that is dealing with an appeal against the judgment.

(2) ...

(3) On such an application, the court may only make such an order if there are special circumstances that justify doing so.

(4) A suspension order may be made for any period (including an indefinite period) and may be made on terms as to costs or otherwise.

(5) ...

55 Section 16(3) provides that, 'To the extent that a suspension order suspends the enforcement of a judgment, the order is to be taken for all purposes to be a stay of the execution of the judgment to that extent.'

56 This provision is, I think, designed to make it clear that the provisions of s 15 of the Act were not concerned to change the substantive law formerly drawn from the Rules of the Supreme Court, O 47 r 13, and the inherent power of the court to control its own proceedings, discussed at some length by Malcolm CJ in State Bank of Victoria v Parry [1989] WAR 240, 244 - 247.

57 Nor is there, generally speaking it seems to me, a need to rely upon O 42 r 2(2), which provides for a modification of the general rule that an order of the court takes effect from the date upon which it is pronounced, 'unless the Court orders that it be dated as of some earlier or later day'. The stay of execution might then be achieved by postponing the day upon which the order may take effect, and it is generally considered that that may be achieved by ordering the postponement of the judgment or order until the occurrence of a specific event such as the final determination of an appeal, as well as by expressly ordering postponement until a particular date.

58 It is unnecessary for present purposes to be concerned with the question whether any part of the former jurisdiction or inherent jurisdiction now needs to be relied upon by way of expansion of the express power contained in s 15 of the Act. But I note that it has been held that the principles which govern the exercise of the discretion under s 15 are not materially different from those which applied to an application for a stay of execution before the introduction of the Act: Streeter v Western Areas Exploration Pty Ltd [2009] WASCA 214 per Buss JA, Owen JA agreeing, at [17] - [18].

59 In Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308, the Full Court, Murray and Parker JJ, summarised the criteria for the exercise of the discretion to grant a stay at 311 [9]:

In the light of the authorities, we may attempt to distil what we take to be the generally applicable relevant principles -

• The successful litigant at first instance will ordinarily be entitled to enforce the judgment pending the determination of any appeal.
• It is for the applicant for a stay to move the court to a favourable exercise of its discretion.
• It will not do so unless special circumstances are shown justifying the departure from the ordinary rule.
• The central issue will be whether the grant of a stay is perceived to be necessary to preserve the subject matter or the integrity of the litigation, or where refusal of a stay could create practical difficulties in respect of the relief which may be granted on appeal. It is often put shortly that it will first and foremost be necessary to establish that without the grant of a stay, the right of appeal, whether upon the grant of leave or special leave or not, will be rendered nugatory.
• If that can be demonstrated, the stay will generally still be refused unless it can be established that the appeal process, whether upon the grant of leave or special leave or not, has ultimately reasonable prospects of success so as to result in the grant of relief to the appellant.
• If that hurdle can be overcome, the stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant; where, for example, the grant of a stay will occasion hardship to the respondent which may not be alleviated by the terms upon which the stay may be granted.

60 In this case, as in Whisson, the court is moved by the defendant for a suspension order to be made, pending the final determination of the appeal which the defendant firmly proposes to institute upon the making of final orders. Under s 15, special circumstances for the making of such an order must be shown, and the consideration whether such circumstances exist involves a discretionary judgment concerned to identify whether, absent such an order, the integrity of the process of the appeal may be compromised by reason of practical difficulties which may arise if the appeal should be successful, and in the meantime the orders of the primary judge are allowed to take effect.

61 In the course of that evaluation, the court will be concerned to measure what is sometimes referred to as the balance of convenience, a term bearing in this context its ordinary meaning in the law, that the court is concerned to balance the risk of injustice which may flow if it wrongly grants, or wrongly refuses to grant, the suspension order sought. The court will always bear in mind that it is being asked, exceptionally, to at least postpone the entitlement of the party successful at first instance, to the fruits of its judgment.

62 It follows that, at the first level of consideration of this question, the court would need to be satisfied that the proposed appeal has reasonable prospects of success. In a civil case that may boil down to the question whether one or more of the grounds of appeal may have a real prospect of success, and in that event the judgment of the primary judge may be set aside or significantly modified in a way which will have a material effect upon the rights of the parties inter se.

63 The same question arises for the Court of Appeal under s 27(2) of the Criminal Appeals Act 2004 (WA), which requires leave to be given in respect of any ground of appeal advanced on the criminal side of the jurisdiction of the Court of Appeal, and provides that the court must not give leave to appeal on a ground of appeal, 'unless it is satisfied the ground has a reasonable prospect of succeeding'.

64 In Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473, the Court of Appeal, Steytler P, Wheeler and Roberts-Smith JJA, held, at 487 [56]:

The ordinary meaning of the words, taken in their context (which includes the legislative purpose) must accordingly be taken to mean that a ground is required to have a rational and logical prospect of succeeding; that is, it would not be irrational, fanciful or absurd to envisage it succeeding in that forum; in effect, that it has a real prospect of success. ...

65 There is a difference, of course, in the two situations in that, under s 27(2) of the Criminal Appeals Act the test is to be applied in respect of the grant or refusal of leave for each ground upon which the appellant seeks to pursue the appeal. As their Honours in Samuels went on to observe, no question at that level arises as to whether there is a likelihood of success such that a miscarriage of justice may be held to have occurred so that the appeal might be allowed. That is a question left to the hearing of the appeal.

66 Here, in the context of the consideration of a suspension order, it seems to me that the question whether there are special circumstances that would justify making such an order must involve consideration of the possibility of an error, as contended for by the grounds of appeal or any of them, which may have produced a miscarriage of justice which would cause the appeal to be allowed. But in that context I am content to hold that the test is whether there is a rational and logical prospect of success on any one or more of the grounds; that it would not be irrational, fanciful or absurd to envisage the appeal succeeding.

67 Finally in considering this aspect of the matter, I firmly remind myself that the question for me is whether, upon any ground so far advanced, the appeal has reasonable prospects of success so as to result in the grant of relief to the appellant. The question is not whether, dealing with the application as the judge who made the decision at first instance, I may be persuaded that the appeal against that decision is likely to succeed.

68 Applying those tests in this case leads me to hold, without distinguishing between any of the grounds of appeal so far advanced, that I am satisfied that the proposed appeal may have reasonable prospects of success in that the grounds do raise questions upon which minds may reasonably differ, and they are by no means grounds in respect of which it is possible to say that they are absurd. On the contrary, they are fairly arguable and it is not for me to say that they could not succeed.

69 I turn then to the question whether it is demonstrated at least that there are pragmatic difficulties which may arise if I should make the speaking orders and allow them to be satisfied so as to cause what I have compendiously referred to as the Rhodes Ridge interest of the defendant to be transferred, within the context of the relevant State agreement and the joint venture agreement, to the plaintiff.

70 As to that, it seems to me that it is useful that Mr Watroba draws attention to the fact that, if that should occur, and yet the appeal should succeed in a way which would require the restoration of the present status quo, it may not be simple or even possible to unwind the process so as to allow that to happen. As has been seen, ministerial and other party approvals and consents may be required.

71 But it may be that by the time they are required, the new joint venturers, in the absence of the defendant, may have entered into arrangements or commitments and may have incurred obligations or have conferred rights upon third parties which may not readily be set at naught, quite apart from what may be envisaged to be significant taxation questions and stamp duty commitments.

72 It may be, therefore, that to refuse to make the suspension order may ultimately be productive of prejudice of some substance to the defendant. On the other hand, the question must be asked whether to make the order may cause prejudice of some substance to be suffered by the plaintiff, denied, for the period of its operation, the fruits of the judgment which it has achieved. It is here that one notes the evidence given by Mr Wright at trial and the other evidence before the court then, and now by affidavit, that there appears to be no prospect of development of the Rhodes Ridge interest in a productive way within the foreseeable future.

73 At least when speaking during the trial, Mr Wright, on behalf of the plaintiff, advanced no particular plans or desire to have the capacity to dispose of the 50% interest resulting from the judgment rather than to await prospects for the development of the interest in a way which would be well calculated to increase considerably the value of the plaintiff's holding. In short, it seems to me that the balance of convenience would favour the making of a suspension order pending the final determination of the appeal. There are, in my opinion, special circumstances to justify the making of such an order.

74 For the plaintiff it is, I think, substantially accepted that that might properly be my conclusion. But I think it is important that the making of such an order should result from the considered judgment of the court which is asked to deal with the application. Whether under s 15 of the Civil Judgments Enforcement Act or, if it remains available, the inherent jurisdiction of the court, such an order may only be made exceptionally in special circumstances.

75 The general rule is clear. Judgment having been pronounced, it is for the successful party to have the benefit of that judgment, regardless of any appeal which may be contemplated. Whether under the Act or some other source of jurisdiction, the making of a suspension order may not be allowed to occur by default of concerted opposition to the making of such an order.

76 The plaintiff does, however, advance the question whether, at least, any suspension order should be made on terms as envisaged by s 15(4). The terms proposed are to require the operation of a suspension order to be conditioned upon the defendant giving an undertaking in the usual form to pay to the plaintiff such damages as may ultimately be found to have been incurred as the result of the operation of the suspension order. The plaintiff points out that although it may have no present particular plans to turn the Rhodes Ridge interest to a profit, iron ore mining in the Pilbara is a somewhat volatile enterprise. Demand may change, and the need for changed plans may be affected by events overseas.

77 I have no doubt that I may make the suspension order on a term which would require the defendant who seeks the order to give an undertaking as to damages in a manner which has regularly been employed as a condition of the grant of a stay of execution. I accept the plaintiff's submissions on this point that the effect of a suspension order would be to freeze the status quo in relation to what is described as a large and valuable asset.

78 It is noteworthy that although the defendant does not proffer an undertaking as to damages, and indeed opposes the making of an order that it should do so, it is prepared to give a written undertaking as the price of its application for a suspension order, 'that it will hold its Rhodes Ridge interest (as defined in the schedule to the plaintiff's Minute of Proposed Orders) in escrow to abide the outcome of the appeal'. Such a term would embody the proposition that the suspension order may potentially cause damage to be sustained by both parties, but relevantly in this case by the plaintiff, in the form of lost opportunities to exploit the interest commercially. I will make the suspension order on the term of the giving of an undertaking as to damages.

79 I add, in passing, that it is unnecessary to impose the term of the undertaking proffered by the defendant. The defendant may not dispose of or encumber or otherwise deal with its Rhodes Ridge interest without satisfying the requirements of consent and approval imposed by the relevant agreements.

80 I am about to make costs orders. It is not clear that the operation of those orders would fall within the defendant's application for a suspension order. But if that was the case, then I immediately make it clear that I would not exceptionally grant a suspension order in relation to the costs orders. There is no question that the plaintiff, having received the benefit of compensation for the costs that it has incurred in relation to the trial of this matter, would be unable to repay the amount received by way of costs if the appeal proposed by the defendant should succeed.

81 I have mentioned the terms of s 8 of the Civil Judgments Enforcement Act concerning the payment of interest on judgment sums, and I have no doubt that if an appeal succeeds the defendant may obtain appropriate orders to compensate it, not only for its costs at first instance and on appeal, but also in respect of any delay in recovering such costs.

82 A question has arisen whether the suspension order should be applied to the declarations proposed as orders 1, 2 and 3. I think not. The declaratory relief embodied in those orders does not take effect without the operation of orders 4 and 5, as I propose to make them. They are the orders which I have termed 'speaking orders'. It is their enforcement which I propose to suspend, pending the final determination of the appeal. It is by orders 4 and 5 that the declaratory relief, particularly that which is the subject of order 1, may be exercised.

83 In any event, I must say that I find it conceptually difficult to understand how declarations of the character of those I will make in this case may be the subject of a suspension order or stay of execution. I propose to declare that the plaintiff validly exercised its rights under cl 4 of the 1984 agreement in respect of the Rhodes Ridge interest as defined in that agreement and to identify the tenements which constitute the Rhodes Ridge interest the subject of the declaration. The operative orders giving effect to the declaration of validity are orders 4 and 5. It is those orders which, in my view, should be suspended, and if that is done that will have the effect of preventing the translation of the declared rights into assets in the name of the plaintiff.

84 I find persuasive in this regard the reasoning of Carr J in Bunnings Forest Products Pty Ltd v Bullen [1994] FCA 1526; (1994) 54 FCR 342, 347, where his Honour held that although, in his view, the court had no power to stay a declaratory order declaring that a deed of arrangement was void, in an appropriate case the court might, 'stay the exercise of rights which might be declared to exist, pending an appeal which might have the result of the declaration being set aside'. That, I think, with respect, is a good description of what I will do in this case.

85 It is trite to observe that the award of costs lies within the discretion of the court: Supreme Court Act 1935 (WA), s 37. Generally speaking, the discretion will be exercised so that costs follow the event, and the successful party in an action will recover costs which provide reasonable compensation for the professional work done: Rules of the Supreme Court, O 66 r 1(1). Generally speaking, party and party costs are taxed according to a scale laid down by a relevant costs determination: O 66 r 11.

86 In this action, which was commenced early in 2001, there are a number of costs determinations which are potentially applicable. They are each entitled a Legal Practitioners (Supreme Court) (Contentious Business) Determination. The reason why a number of costs determinations are potentially applicable to the taxation of costs in this case is that each determination expressly does not apply to the remuneration of practitioners based on costs incurred before the date upon which the determination comes into operation. The 1999 determination does not apply in respect of costs incurred before 1 July 1999. Thereafter, there have been a series of determinations, in 2002, 2004, 2006, 2008 and currently the 2010 determination, which came into operation on 1 July 2010.

87 The determinations provide for the remuneration of various types of professional work. The work may be remunerated at different rates, depending on the seniority of the practitioner involved, and different maximum rates are chargeable as counsel fees, depending upon whether or not a barrister engaged in the case is of the status of senior counsel. The costs determinations include, within that description, Queens counsel or senior counsel appointed in WA or in any State or Territory in Australia if, in the latter case, the appointment is recognised by the Chief Justice. I would be sure that that is the case with respect to all Queens counsel or senior counsel from outside WA who have been engaged in this case from time to time.

88 Apart from some particular items where a fixed allowance is prescribed, the amounts recoverable on a party and party basis as prescribed in the scale are maximum amounts calculated upon the basis of a maximum number of hours or days work which might be allowed for, and having regard to the seniority and the maximum charge-out hourly rate applicable to a practitioner or paralegal whom the scale prescribes as being appropriate to perform a particular item of work. In that way, and having regard to the differences in the prescriptive content of the various costs determinations, they may potentially be applied to guide the taxing officer in fixing the allowance which may be made for particular items of work held to be reasonably undertaken in the conduct of the litigation.

89 There is power to make a special costs order which will involve departure from the prescription made by any applicable costs determination. Section 280 of the Legal Profession Act 2008 (WA), so far as material, provides:

Effect of costs determination

(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,

is regulated by an applicable costs determination.

(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.

...

90 The plaintiff seeks such an order, although it relies upon s 215 of the Legal Practice Act 2003 (WA), the statute which was repealed by s 598 of the Legal Profession Act. The point appears to be of academic interest only, as s 215(2) of the 2003 Act is expressed in identical terms to s 280(2) of the 2008 Act.

91 Section 280 is in Part 10 of the 2008 Act. Section 254 of that Act sets out what is referred to as the 'first instructions rule'. The section provides:

This Part applies to a matter if the client first instructs the law practice in relation to the matter in this jurisdiction.

Having cited that provision, the plaintiff submits that s 280 will not apply because the plaintiff first instructed the law practice in relation to this litigation prior to the commencement of the 2008 Act. I do not understand the submission. Section 254 applies a territorial rule; the jurisdiction referred to is WA. The 2008 Act was proclaimed to come into operation on 1 March 2009 (Government Gazette, 27 February 2090, p 511). That was the date upon which the repeal of the 2003 Act took effect.

92 However, s 616(1) of the 2008 Act is in the following terms:

(1) ... Part 10 applies to a matter if the client first instructs the law practice on or after the commencement day and Part 13 of the 2003 Act continues to apply to a matter if the client first instructed the law practice in the matter before the commencement day.

That being so, the power I am invited to exercise in this case is that which arises under s 215(2) of the 2003 Act.

93 I approach the question by the application of well-settled principles. It is convenient, in this case, for me to set them out in the way in which I expressed them in Cifuentes v Fugro Spatial Solutions Pty Ltd [2009] WASC 316(S) [20] - [22], as follows:

Generally speaking the judicial discretion in relation to costs orders is very wide (Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516, 526 [38] - [39] (Steytler P, Pullin JA & Murray AJA agreeing)), but the exercise of the discretion to make a special costs order under s 215(2) is guided. In the first place it is evident that the party seeking the order must persuade the judge to the opinion that the amount of costs allowable under the relevant legal costs determination is inadequate. That will be established if the unusual difficulty of the matter, its complexity and/or its importance lead to the conclusion that reasonable remuneration for the successful party will not be provided simply by ordering the payment of costs to be taxed and therefore by limiting that process of taxation by the application of the relevant provisions of the applicable legal costs determination.

In that regard I think that some of the older cases continue to have application. The inadequacy of the legal costs determination may be demonstrated by consideration of the amount of work involved in the preparation and presentation of the case. That consideration of itself may sufficiently relate to the complexity of the matter to demonstrate the inadequacy of the scale: Schmidt v Gilmour [1988] WAR 219, 220. The consideration of the issue by the judge should not descend into the taxation process, but the judgment to be made is essentially preliminary and provisional: Collins v Westralian Sands Ltd (1993) 9 WAR 56, 64, 68.

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.

94 As Martin CJ observed in Heartlink Ltd v Jones [2007] WASC 254(S), the application of this provision, which requires the court to be of the opinion that the amount of costs allowable in respect of a matter is inadequate should be approached upon the basis that that conclusion will be open if the court is satisfied, 'that there is a fairly arguable case to be put before a taxing officer to the effect that the bill to be taxed should tax out at more than the limit that would be imposed by the costs determination' [14].

95 As to the question of the importance of the litigation, in Heartlink [19], Martin CJ said:

It seems to me that by 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 issues 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. ...

96 I have set out, in brief outline, the affidavit evidence upon which the plaintiff relies in support of this application. It is principally the affidavit of Mr Zappia, but the reports of the plaintiff's costs experts, Ms Harris and Ms Coulson are relevant, as is affidavit evidence in response by Mr Wilks, and the report of Mr Garnsworthy. I need not, I think, review that evidence in detail or set out the schedules or timetables which have been generated. I have had the capacity also to have regard to my own understanding of the case and the nature of the issues thrown up by the pleadings on either side.

97 Having regard to all that material, it is sufficient that I say that in my opinion, if the costs generally involved in this litigation were to be taxed and allowed under the relevant legal costs determinations applicable over the years, they would be inadequate to provide fair remuneration for either party. There were some matters which raised, in my opinion, issues of unusual legal difficulty, but I would not rely substantially upon that aspect of the section. Rather, it seems to me that to the parties involved, the issues raised by this litigation were of particular importance, being concerned with their rights inter se in relation to the Rhodes Ridge interest and how, if at all, under the 1984 agreement, that interest was to be dealt with to the benefit of one party or the other.

98 The issues raised, particularly by way of defence, were complex. There was a multiplicity of them and no more need be said to demonstrate the importance of the matter to these parties than to observe that the litigation was hard fought and that it concerned their rights to the Rhodes Ridge interest which on any view of the evidence, is an iron ore mining prospect potentially of great value to these parties, or rather the successful party, who would then be able to pursue the development of the interest in association with Hamersley Resources Ltd.

99 I have said that I would be of that view in relation to the capacity to adequately and fairly remunerate either party. I have put it that way because I am about to deal with the question whether in relation to the plaintiff's unconscionability claim, upon which it failed, an order should be made for the payment of costs in favour of the defendant. It would be artificial, in my opinion, if the defendant is to have its costs of that issue, that it should be in terms of a different form of special costs order than that applicable to the plaintiff. A special order in terms sought by the plaintiff is justified in my view, having regard to the amount of costs which would be allowable in respect of the litigation generally if relevant legal costs determinations are to limit the exercise of discretion by a taxing officer.

100 The defendant opposes the plaintiff's application to remove the limits on costs fixed by the various determinations. It suggests that the parties' costs should be taxed without regard to the limits as to the hours involved in relation specifically, to the giving of discovery of documents, proceedings in chambers, getting up and counsel's fees.

101 Incidentally, the defendant asks me to certify for the provision of transcript and for the costs of a multiplicity of counsel. Neither form of certificate is in my view, required. It is perfectly obvious that transcript was required and the taxing officer should provide a reasonable allowance for obtaining transcript of the trial and the various interlocutory proceedings. Further, while it is abundantly clear that senior counsel and one or more junior counsel were required having regard to the complexity of the litigation, there is no need for certification, but the matter may be safely left to the taxing officer to come to a decision about the reasonableness of the number of counsel involved at any given stage of the proceedings and the extent to which counsel's fees should be reasonably recoverable by way of party and party costs.

102 In my opinion, the matter does not sustain substantial debate. This is not a case where the taxation process would be assisted by generally retaining the limits fixed by the scale, but by removing the limits as to maximum hours allowable in relation to specified items. The process of taxation will, I am satisfied, be both simplified and rendered capable of producing fair and just compensation by way of costs if I make an order under s 215(2)(c) simply removing the limits on the costs fixed in the determinations that are applicable and I will make order 12 in that form.

103 The question arises whether, although generally successful and entitled to the costs of its claim upon which it succeeded and to the costs of the counterclaim which is to be dismissed, the plaintiff in relation to its unconscionability claim, which I dismissed, holding it to be misconceived, should be exposed to an award of costs in relation to that issue in favour of the defendant. The Rules of the Supreme Court O 66 r 1(3) provides:

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

104 The point is reinforced by the provisions of O 66 r 2(a) as follows:

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

105 Although this all sounds rather prescriptive, the clear intention of the rules is to provide a particular application of the general discretion leaning towards the conclusion that the successful party should recover its costs. In Permanent Building Society v Wheeler [No 2] (1993) 10 WAR 569, 574 - 575, Anderson J said:

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

106 The plaintiff realises that it is in jeopardy of being subjected to an order that it should pay the costs of litigating the unconscionability claim. It submits that it should not be subjected to such an order because the evidence relevant to determination of the issue was admissible on, and relevant to, the issues upon which the plaintiff succeeded. No material additional evidence was led or time taken, the plaintiff asserts. The plaintiff's submissions discuss in some detail the evidence which I canvassed in the judgment in relation to the issues that were raised on the pleadings.

107 There was much discussion on both sides about the substantial time involved in getting up and answering the plaintiff's damages case. It is undoubtedly the case that at trial the overwhelming time and effort and the witnesses led related to the question of damages and, in the end, in view of the decision to which I have come to order specific performance, and the way in which the parties framed their cases, I did not find it necessary to make an assessment of damages, and I did not further delay an already long delayed judgment by making a provisional assessment in case I should, on appeal, be found to have erred in making orders in the nature of specific performance of the plaintiff's contractual claim rather than ordering that the plaintiff should have damages in lieu of specific performance or, alternatively, if I should be found to have erred entirely in relation to the plaintiff's contractual claim and in rejecting the plaintiff's claim for equitable compensation on the basis that its unconscionability claim should have been held to have been made good.

108 These were the two scenarios open upon the pleadings and in the way that the issues were fought at trial which would lead to a need to make an assessment of damages of the kind claimed by the plaintiff, alternatively to an award of specific performance. I presented my views about those matters in Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [9] at [660] - [672]. I do not repeat that discussion here, but it will be observed that it was open to the plaintiff, seeking specific performance in relation to its contractual claim, to advance a case for damages in the alternative in the event that I should hold that equitable relief by way of specific performance should not, for one reason or another, be granted.

109 In seeking an order that the plaintiff should pay the costs of the unconscionability issue, or that the plaintiff's costs generally of the claim and counterclaim should be reduced (a fallback position leaving both parties to bear their own costs of the unconscionability issue), the defendant refers to the damages case and its relevance to the unconscionability claim.

110 It points out that a claim for damages was first expressly pleaded in the context of the relatively late introduction of the unconscionability claim and it observes, with some justification, that the introduction of the claim, apparently until then overlooked by the plaintiff in connection with its contractual claim, led, in ways which are documented and can be demonstrated, to the following:

1. A new round of discovery was embarked upon by both parties.
2. It was the evidence relating to the issue of damages, particularly having regard to the way in which the plaintiff's case linked that issue, not only to plans for Rhodes Ridge, but also to the development by joint venture of Hope Downs and the interest of Rio Tinto corporations, which led to the need to devote considerable time and effort by the parties and the court to devising an overall confidentiality regime and an even more stringent regime, which came to be called a regime of superconfidentiality, to ensure that the court could have presented to it the necessary evidence while preserving commercial confidentiality for the various interested parties.
3. The damages case had to be got up and additional witness summonses issued, particularly to those required to qualify themselves to give expert evidence and present reports in closed court. In addition, witnesses such as Mr Michael Wright, called by the plaintiff, were examined and cross-examined in relation to these issues.
4. Finally, there was an issue in relation to obtaining access to and using, to the extent that I ruled permissible, documents filed in proceedings in the Family Court.

111 The defendant argues that it was the late introduction of the unconscionability claim which led to all of the additional expenditure incurred in the areas of the case to which I have referred. It argues that it should have all these costs because the plaintiff failed to make good its unconscionability claim. Alternatively, the plaintiff's costs of the claim and counterclaim should be reduced by 50%, it submits. On the other hand, the plaintiff's point appears to be that however the matter in fact arose, albeit belatedly in the history of the litigation, by the time the case got to trial it would inevitably have been the case that it would have sought to make a claim for damages for breach of contract of precisely the same kind as was ultimately presented, as an alternative to the grant of specific performance.

112 In other words, the alternative of damages to specific performance would have been open and pursued in respect of the loss of the opportunity to obtain the defendant's 25% Rhodes Ridge interest and to develop it and deal with it for the plaintiff's profit in due course, subject to any difficulties arising out of the state of the pleadings and the question whether all material facts supporting such a claim had been pleaded.

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

114 That may not be a task without its own difficulty. But I see no reason to suppose that the complexities would be such that at least a broad brush assessment could not be made to enable substantial justice to be done to the parties. In those circumstances, it seems to me to be desirable to make an order in terms of order 11 which allows the award of costs to follow the event of the failure of the unconscionability claim and has the desirable outcome of leaving the plaintiff at hazard in respect of the costs occasioned by the introduction of that claim.

115 The plaintiff moves for an order that I should fix its costs by way of a lump sum order, assessing the costs myself and bypassing the process of taxation by a registrar acting as a taxing officer.

116 The defendant makes no such application in the event, which has transpired, that I should order that it should have the costs of the plaintiff's unsuccessful unconscionability claim. Indeed, it opposes the plaintiff's claim and presents arguments against the plaintiff's submissions. I presume, however, that if I was to make such an order in relation to the costs awarded to the plaintiff, it would be inevitable that I should make a similar order in relation to the costs awarded to the defendant, despite its opposition to my taking that course and despite the fact that it makes no application that I should do so.

117 I have referred to the evidence, opinions and prognostications by way of affidavits made and reports provided by the costs lawyers, Ms Harris from Victoria, and Ms Coulson, who argued the position advanced by the plaintiff, and Mr Garnsworthy, upon whom reliance is placed by the defendant. I have described generally the views they expressed and the positions they take on either side of the debate. I need not, I think, refer to that material in any more detail for the purpose of making clear my reasoning upon this issue. However, I place on record that I have carefully considered that material in reaching my conclusion.

118 The discretion in relation to an order for the payment of costs is provided by s 37 of the Supreme Court Act. The Rules of the Supreme Court, O 66 r 13, provides:

In any matter or case to which any relevant scale does not apply, the Court may -

(a) award a lump sum by way of costs;

(b) direct the Taxing Officer to tax or allow costs analogous to those allowable under the said scale;

(c) direct the Taxing Officer to tax and allow reasonable costs.

119 It is not abundantly clear, and I am aware of no authority on the point in this jurisdiction, but for present purposes it would be necessary to hold that the rule would accommodate a case such as this where the award of a lump sum by way of costs is not the subject of agreement between the parties affected but, on the contrary, there is disagreement between them in relation to the making of such an order.

120 On one view, r 13, when read with r 14 in respect of the making of an interim lump sum award, applies simply to the case of a particular claim for costs which does not fall within a relevant scale fixed by way of an applicable costs determination. In that case, the rule directs that a lump sum may be awarded by the court as an alternative to directing the taxing officer to tax or allow costs analogous to those provided for in the scale, or to a direction to the taxing officer simply to tax and allow reasonable costs.

121 That would not, of course, be this case. But a more expansive reading of r 13 would give the court power to make an award of a lump sum by way of costs, at least in a case such as this where, by a special costs order, the court removes limits on costs prescribed by any applicable costs determination. On that view of it, r 13 merely draws attention to the general power of the court to exercise a discretion to order the payment of the costs of and incidental to proceedings in the court, drawing into that discretionary process the power to make a decision as to how such costs are to be assessed and ordered to be paid.

122 I have not thoroughly examined the terms of relevant rules in other jurisdictions where lump sum orders have been made. But I note, for example, that the Federal Court Rules, O 62 r 4(2)(c), gives the Federal Court power, when it orders the payment of costs, to:

further order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that person shall be entitled to -

(a) ...

(b) ...

(c) a gross sum specified in the order instead of the taxed costs; or

(d) a sum in respect of costs to be ascertained in such manner as the Court may direct.

123 The Supreme Court Rules 1970 (NSW), Pt 52A r 6(2)(c), is in similar terms. It provides firstly that, generally speaking, when costs are ordered to be paid to any person, that person is entitled to 'assessed costs'. The rule goes on to provide:

(2) Where the Court orders that costs be paid to any person, the Court may, at any time prior to the costs being referred by the registrar for assessment, further order that, as to the whole or any part (specified in the order) of the costs, instead of assessed costs, that person shall be entitled to -

...

(c) a gross sum specified in the order instead of the assessed costs.

124 No West Australian case was cited to me on either side, considering the power to make an order for lump sum costs in circumstances such as are presented in this case. Indeed, my inquiries reveal no such case.

125 In the Bell Group Ltd (In liq) v Westpac Banking Corporation [10] [2009] WASC 107, Owen J gave reasons for the making of various final orders in that massive litigation. His Honour concluded his reasons rather despondently, commenting upon the likelihood of further litigation between the parties. He added:

There is one ray of light in this otherwise gloomy picture. With the assistance of Registrars of this Court the parties agreed costs. The savings to the public and to the parties by the avoidance of a full taxation of costs are significant. I can only hope that the parties have learned from that experience [160].

In that case then, as in this case, his Honour ordered the limits prescribed by scales fixed in applicable costs determinations to be removed, and the defendants were ordered to pay the plaintiff's costs fixed in the sum of $82.5M. The significant point, of course, is that it was done by consent, and the process of reaching agreement was aided by mediation by registrars of the court. I have no doubt that the discretion to award costs may be exercised by fixing a lump sum to which the parties both consent.

126 In Brookvista Pty Ltd v Meloni [2009] WASCA 180, a District Court judge had ordered a party, in a case before him, to pay costs thrown away by reason of the adjournment of a trial. He fixed the amount which was to be paid. It was not suggested that his Honour could not do so, but on appeal it was contended that the amount fixed was arbitrary and revealed error in the exercise of the discretion because there had, in fact, been no assessment of the extra costs incurred as a result of the adjournment. The appeal was allowed.

127 Newnes JA said, Buss JA agreeing, at [26] - [27]:

As I have mentioned, a court has a wide discretion in relation to costs. It is, however, a discretion that must be exercised judicially: Naidoo v Williamson [2008] WASCA 179 [39]. It is also clear that costs may be dealt with at any stage of proceedings and the court may order that costs be paid forthwith notwithstanding that the proceedings are not concluded: O 66 r 10(1), Rules of the Supreme Court 1971 (WA). It was not in issue that when a costs order is made, the court may fix the amount of the costs payable rather than order that they be taxed. The purpose of fixing costs is to avoid the expense and delay involved in taxation. Consistent with that objective, in fixing the sum the court will not subject the costs to the detailed scrutiny often applied in taxation of costs. It is appropriate instead to apply a 'much broader brush' than would be applied on a taxation: see Sony Entertainment (Australia) Ltd v Smith [2005] FCA 228; (2005) 215 ALR 788 [197] - [200]; Hadid v Lenfest Communications Inc [2000] FCA 628 [35].

But in fixing the amount of the costs, the approach of the court should be 'logical, fair and reasonable': see Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 123; Nine Films and Television Pty Ltd v Ninox Television Ltd [2006] FCA 1046 [8]. And the power to award a fixed sum should only be exercised when the court considers that it can determine the amount of the costs fairly. That means the court must have available to it sufficient material that it is confident it can arrive at an appropriate sum: see Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738 [22].

128 The important point is that although a broad brush approach may be employed in determining the appropriate amount of the lump sum, nonetheless the sum arrived at must represent an appropriate exercise of the discretion to award costs, in an amount providing to the successful party appropriate compensation for the costs incurred on a party and party basis. Applying a broad brush does not imply a stab in the dark, to mix the metaphors.

129 In Brookvista, Newnes JA refers to the decision of Giles JA in the New South Wales case of Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738. At [21] - [22] Giles JA said:

The power conferred by Pt 52A, r 6(2) is not confined, and may be exercised whenever the circumstances warrant its exercise. It may appropriately be exercised where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment.

Of its nature, specification of a gross sum is not the result of a process of taxation or assessment of costs. As was said in Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 (at 124), the gross sum "can only be fixed broadly having regard to the information before the Court"; in Hadid v Lenfest Communications Inc (No 2) (1997) 57 FCR 119; [2000] FCA 628 (at [35]) it was said that the evidence enabled fixing a gross sum "only if I apply a much broader brush than would be applied on taxation, but that ... is what the rule contemplates". The approach taken to estimate costs must be logical, fair and reasonable (Beach Petroleum NL v Johnson (at 123); Hadid v Lenfest Communications Inc (at [27])). The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available (various citations omitted).

130 Again, the point being made is that it may not be an arbitrary process, and although the process of fixing the lump sum could not be described as a process of taxation of costs, it must, nonetheless, be the end result of a process of assessment based on the materials provided by the parties and otherwise available to the judge.

131 Assuming that I have the power to do so, the principles upon which the discretion to make an award of a lump sum by way of costs is to be exercised are, typically of his Honour, succinctly stated by Einstein J in Idoport v NAB [2005] NSWSC 1273, where he said:

I note that there are authorities which arguably support the following propositions:

• The purpose of a gross sum costs award is to avoid the expense, delay and aggravation involved in protracted litigation arising out of a taxation (and by analogy an assessment).
• The discretion to award a gross sum is not confined and may be exercised whenever the circumstances warrant its exercise.
• It may appropriately be exercised where an assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from an assessment.
• The discretion is particularly suited to complex litigation where the costs of assessing or taxing a bill would be considerable, and the delay and inconvenience involved would also be considerable.
• Specification of a gross sum is not the result of a taxation or assessment of costs. The rule contemplates application of a much broader brush approach than would be applied on taxation. It is to be fixed broadly having regard to the information before the Court. To descend into the level of detail required on taxation or assessment defeats the purpose of a gross sum order.
• Nevertheless the power to award a gross sum should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available.
• The approach taken to estimate costs must be logical, fair and reasonable. On the one hand the Court must be astute to prevent prejudice to the unsuccessful party by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary 'fail safe' discount on the costs estimate submitted to the Court.
• The assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing.
• Expert evidence from a legal costs consultant has been accepted as appropriate to support an application of this kind.
• The expert's evidence will commonly canvass the following matters:

i. that the preparation of an assessment/taxation is likely to be protracted and expensive;

ii. the manner in which an assessment or taxation is ordinarily undertaken by a costs assessor. For example, the expert might depose as to the discount ordinarily imposed by a costs assessor; and

1. the complexity and novelty of the proceedings (citations omitted).

132 Recently, in Seven Network Ltd v News Ltd [2007] FCA 2059, Sackville J made a lump sum order, in lieu of taxation, in a complex, long-running case in circumstances where the parties were in agreement that lump sum costs should be awarded. Again with the agreement of the parties, his Honour heard the proceedings in respect of costs while sitting with a deputy registrar who was experienced in the taxation of costs.

133 After restating the applicable principles, at [25] his Honour was careful to note that the procedure authorised by the Rule was designed to replace the process of taxation, but not to result in an award of costs which was greater than or discounted below that which would result from the taxation process; hence the emphasis upon being able to do justice to the parties in respect of costs on the basis of the available material, despite the avoidance of the taxation process during which a taxing officer will make an analysis of an itemised bill of costs.

134 Nonetheless, written submissions made to the court, expanded by expert evidence, provided a firm framework for fixing the lump sum and there was a lot of common ground between the experts as to the appropriateness of the schedules. There was limited disagreement in relation to particular matters, the evidence about which was assessed by the court so as to result in a principled decision by way of the lump sum fixed. In my view, it can be seen, in those circumstances, how the process of fixing the lump sum might supplant the more elaborate taxation process in circumstances calculated to result in an order which operates fairly in respect of costs from the point of view both of the successful party and the party who must pay the costs.

135 For my part, I am unpersuaded by the evidence of the costs deponents upon whom the plaintiff relies that there would be such a marked difference in a case like this, where it has been difficult to secure agreement between the parties in relation to any substantial matter, between the ordinary taxation process and proceedings before me to provide material upon which I would be asked to exercise my discretion to fix lump sums of costs to be awarded respectively to the plaintiff and the defendant.

136 In either case, the final sum to be awarded by way of costs would, I think, necessarily depend upon evidence which would be tendered by the parties in one form or another. It would be very likely, I think, that before me the parties would wish to call various experts and to cross-examine them so that I may make a decision about which expert view I prefer. A judgment would certainly need to be made about the necessity for and reasonableness of the work done, the time taken in doing it and the appropriateness of the level of fee earner engaged in doing the work.

137 The assessment of the complex circumstances involved in doing the professional work required by this case would not, I think, be lessened by a process aimed at producing a lump sum award of costs. If, in that context, material could be presented in schedules related to types of compensable professional work, that would be highly desirable. But it is a process which can be employed in the taxation of costs, in just the same way as I would expect to be employed in proceedings before me, directed to a lump sum assessment.

138 In that regard, the defendant reminds me that the Consolidated Practice Directions of this court, item 4.7.3, deals with the use of schedules in bills of costs and provides the following guidance:

1. The object of a schedule is to assist the taxing officer and the paying party by providing additional information regarding the work carried out in respect of an item and the allowances sought. The schedule should set out the various general heads of work performed in respect of the scale item, the amount of time spent on each head, and the amount allocated to each head. It should not take the form of a breakdown of each and every piece of work performed in respect of an item in the bill and the cost thereof and nor is it appropriate to attach to the bill a computer printout of time spent on any item in the bill. Overly detailed schedules should be avoided.
2. A schedule to a bill will not be taxed in the sense of an allowance being made in relation to each item that appears in it.

139 As par 9 of item 4.7.3 of the Practice Directions makes clear, there is no reason why, when a bill of costs is very substantial and complex, directions may not be obtained from the taxing officer to employ a somewhat truncated and more manageable process of taxation than might ordinarily be used. Paragraph 9 observes:

The parties should consider whether such bills may be taxed by, for example, considering a sample of items in the bill and then applying the conclusions drawn in respect of those items to the balance of the bill.

140 Paragraph 10 makes express reference to the desirability of seeking directions from the taxing officer as to the mode of taxation, confining the areas of the bill with respect to which there is disagreement or objection, and the referral of the bill to a mediation conference to be conducted by a registrar. It will be recalled that that was a particular measure recommended by Mr Garnsworthy and, as I have noted, it was a process employed with success in the Bell Group case. I remain hopeful that it would be a process which might be employed in this case.

141 I would not, at this juncture, order such a mediation, but I do reserve, by order 13, liberty to each party to apply in respect of the implementation of the costs orders, and if a mediation order is necessary (which should not be the case), I would make it.

142 In short, I am far from persuaded that the process of an assessment of lump sum costs by me would be likely to be a process less time consuming and less expensive to the parties than a properly structured process of taxation by a registrar. I decline to make such an order, if indeed I have the power, in the present circumstances, to do so.

143 It only remains then to set out the orders that I will make to give effect to the judgment in this case, and they are as follows:

1. The plaintiff validly exercised its right under clause 4 of the partnership agreement between the plaintiff and the defendant dated 15 February 1984 (1984 Agreement) by the service of a notice of exercise of option dated 11 December 1997 (Exercise Date) by the plaintiff on the defendant.
2. The partnership's interest in the assets and interests referred to in paragraph (a) of Schedule 2 to the 1984 Agreement (the Rhodes Ridge Interest), remained a WPPL Interest (as that term is defined in the 1984 Agreement) as at the Exercise Date.
3. The Rhodes Ridge Interest now consists of the partnership's interest in the Rhodes Ridge Joint Venture and in the areas the subject of the Temporary Reserves and Exploration Licences identified in Schedules 1 and 2 attached hereto.

1. Subject to order 7, when requested by the plaintiff, the defendant shall do all things and execute all documents which are necessary for it to do and execute in order that applications may be made to:

4.1 the Minister for State Development for his consent to the assignment to the plaintiff of all of the defendant's rights and obligations under the Iron Ore (Rhodes Ridge) Agreement made and executed on 12 October 1972 (State Agreement) including the rights of the defendant as grantee of an undivided ¼ share in the rights of occupancy granted by the State in respect of the temporary reserves particularised in Schedule 1 and section 3.02 of the State Agreement (Rights of Occupancy);

4.2 Hamersley Resources Limited for its consent to the assignment by the defendant to the plaintiff of all of the defendant's 25% Share (as defined) in the joint venture the subject of the Rhodes Ridge Joint Venture Agreement dated 11 October 1972 (Joint Venture Agreement) and all property, real and personal, held, developed, constructed or acquired for the purposes of the Rhodes Ridge project (as that term is used within the definition of 'Project' on page 7 of the Joint Venture Agreement) by or on behalf of Hamersley Resources Limited, the plaintiff and the defendant as tenants in common under or pursuant to the Joint Venture Agreement or the Rhodes Ridge Management Agreement dated 11 October 1972 (Management Agreement) including, without limitation, all facilities and equipment located on the areas subject to the Rights of Occupancy and other areas the subject of further mining tenements granted by the State of Western Australia for the purposes of the Joint Venture and all of the rights and obligations of the participants under the Joint Venture Agreement, the Management Agreement, the State Agreement and all other agreements entered into by or on behalf of Hamersley Resources Ltd, the plaintiff and the defendant for the purposes of the Joint Venture;

4.3 to the Minister for Mines for his approval of the assignment from the defendant to the plaintiff of all the defendant's interest as grantee of an undivided ¼ share in the Rights of Occupancy;

4.4 to the Minister for Mines for his consent to the transfer from the defendant to the plaintiff of all of the defendant's 25% (25/100th) shares in the exploration licences particularised in Schedule 2 (Exploration Licences) and in such mining leases as are granted pursuant to applications lodged by Hamersley Resources Limited, the plaintiff and the defendant on 5 September 2005 for mining leases M46/437, M46/438, M46/439 and M46/440 (Mining Leases).

and that the defendant do undertake all necessary and proper actions to support and facilitate the grant of the applications referred to in subparagraph 4.1 to 4.4 inclusive and to obtain the grant of the Mining Leases.

1. Immediately on receipt of the consents and approvals referred to in paragraph 4, or if such consents and approvals are not necessary, the defendant do all things and execute all documents which are proper and necessary for it to do and execute in order to:

5.1 assign to the plaintiff its rights, and for the plaintiff to assume the defendant's obligations, under the State Agreement including but not limited to the execution of a Deed of Covenant with the State and the plaintiff in a form that complies with the requirements of clause 25.04 of the State Agreement;

5.2 assign to the plaintiff all of the defendant's 25% interest in all its rights and obligations as a participant of the joint venture the subject of the Joint Venture Agreement and the Management Agreement (and all other agreements referred to in subparagraph 4.2 above) including in the joint venture, and all property, real and personal, the subject of the Joint Venture Agreement including but not limited to the execution of a deed of assignment in a form that complies with the requirements of section 11.01 of the Joint Venture Agreement and section 11.01 of the Management Agreement;

5.3 transfer to the plaintiff all of the defendant's interest as grantee of an undivided ¼ share of the Rights of Occupancy by execution of transfers of each of the Rights of Occupancy;

5.4 transfer to the plaintiff all of the defendant's 25% (25/100th) shares in the Exploration Licences by execution of transfers in the prescribed form in respect of each of the Exploration Licences;

5.5 transfer to the plaintiff all of the defendant's 25% (25/100th) shares in the Mining Leases by execution of transfers in the prescribed form in respect of each of the Mining Leases,

and that the defendant do undertake all necessary and proper actions to support and facilitate the execution and registration of such assignments and transfers, where and as required by law to give effect to them.

1. Liberty to apply as to the implementation of orders 4 and 5 is reserved to each party upon 7 days notice to the other.
2. Subject to the defendant undertaking to the Court that the defendant will pay to the plaintiff such compensation as the Court may in its discretion consider in the circumstances to be just by reason of the suspension of orders 4 and 5, such compensation to be assessed by the Court in accordance with such directions as the Court may make and to be paid in such manner as the Court may direct, the enforcement of orders 4 and 5 is suspended until 28 days after the defendant is served with a sealed copy of any further order or final orders disposing of any appeal.
3. Within 28 days of the defendant being served with a sealed copy of any further order or final orders disposing of any appeal, orders 4 and 5 shall be satisfied.
4. The counterclaim is dismissed.
5. Subject to order 11, the defendant do pay the plaintiff's costs of the claim and counterclaim, including any reserved costs, to be taxed if not agreed.
6. The plaintiff do pay the defendant's costs of the plaintiff's 'unconscionability claim', pleaded at paragraphs 22A - 22M of its statement of claim, to be taxed if not agreed.
7. For the purposes of orders 10 and 11, all limits on costs prescribed by any applicable legal costs determinations be removed.
8. Liberty to apply as to the implementation of orders 10 to 12 is reserved to each party upon 7 days notice to the other.

TR's and EL's as at the date of the 1983 Agreement (24 May 1983) and the 1984 Agreement (15 February 1984)

Schedule 2 - TRs and ELs as at the date of these orders

The TRs identified in Schedule 1 and the following