Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122; (2003) 28 WAR 95

Tey v Optima Financial Group [No 3] [2012] WADC 3

Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 18 WAR 190

1 COMMISSIONER GETHING: By chamber summons filed on 21 September 2011 the appellant sought leave to appeal from the costs order made by her Honour Judge Davis on 25 June 2010 (in relation to the history of this matter more generally see: Tey v Optima Financial Group [No 3] [2012] WADC 3). The appellant filed an affidavit in support of her application of the same date in which she said, among other things, that when the bill of costs came to be taxed, a question arose about whether the respondent was entitled to the costs of the appeal, as well as the application to strike out the appeal. The appellant subsequently sought to discontinue this application.

2 The first issue before me is the appropriate orders to deal with the application dated 21 September 2011. The appropriate orders in relation to a chamber summons is that the application be dismissed rather than discontinued.

3 The next issue is whether or not there is any entitlement to costs on behalf of the respondent. In my view, there is ample evidence before me that the respondent has wasted costs. They are entitled to their costs.

4 The third issue is the basis on which those costs ought to be assessed. The respondent claims that the appropriate costs order is for indemnity costs; that is, that the costs be taxed so that the respondent is fully indemnified for all its costs incurred, save for any costs which are of an unreasonable amount or have been unreasonably incurred.

5 Whether I make an order for indemnity costs or party/party costs, it seems to me appropriate that I fix the costs. This is in order to bring finality to the proceedings in the District Court and obviate any risk that there are further proceedings in relation to costs in this court.

6 I deal first with the issue of the costs that ought to be awarded. The chamber summons dated 21 September 2011 was before me on 19 January 2012 at a directions hearing convened by the court. On that same day an affidavit was filed by Mr De Vita who is a solicitor employed by the respondent's solicitor. This affidavit sets out the factual basis for the respondent's claim for indemnity costs. At the hearing on 19 January 2012 I adjourned the application to today, giving the appellant an opportunity to file and serve any affidavit in response by 30 January 2012. The appellant filed an affidavit in opposition to the respondent's claim for indemnity costs dated 30 January 2012.

7 In the affidavit she stated that she did not believe that the usual order as to costs was an indemnity costs order where an application is discontinued. She said that the making of such an order will serve to discourage litigants, in particular litigants in person, from discontinuing proceedings. The appellant said that this is especially so in the present case where her Honour Judge Deane had recommended that she rethink her position before going ahead. She said that after she had received this recommendation she spoke to a barrister who advised her to follow the suggestion of Judge Deane. She says she was told that indemnity costs are only awarded in exceptional cases and that there is nothing exceptional about this case to justify an indemnity costs order.

8 The present application was filed on 21 September 2011. By letter dated 3 October 2011, annexed to Mr De Vita's affidavit, the respondent's solicitors wrote to the appellant inviting her to consent to orders dismissing the application with no order as to costs. The letter included the following paragraph which is instructive to quote as it sets out the key aspects of the history in relation to this matter:

Your application is misconceived as there has already been an appeal from the decision of Davis DCJ which was heard and dismissed by the Court of Appeal. The notice of appeal filed in Court of Appeal matter CACV 78 of 2010 set out the entirety of the orders of Davis DCJ and recorded an appeal against the whole of that decision. Further, an application for special leave to appeal to the High Court was dismissed. In any event, there can only be one appeal in any matter. By those steps your right to appeal has been taken and is now spent. The District Court is therefore functus officio in any event. There is a question as to whether or not such application for leave to appeal ought to be made to the District Court or, in any event, ought to be made to the Court of Appeal. In addition, there is no merit in fact to the proposed appeal, which is another reason that your application is without merit. The application also fails to address any relevant fact that is capable of supporting an extension of time to appeal in any event.

9 The letter went on to invite the appellant to consent to the dismissal of the application with an order as to costs, by signing and returning a memorandum of consent orders that was enclosed. The letter concluded:

Should not consent to the dismissal of the application then we shall continue taking our client's instructions and preparing our client's affidavit(s), submissions and instructing counsel to work preparing our client's opposition to the application, and will tender a copy of this letter to the court on 18 November 2011 and seeking that you pay all of our client's legal costs upon an indemnity basis in dealing with the matter from its inception until ultimate completion.

10 By letter dated 12 October 2011, the appellant acknowledged that she had received the 3 October letter and responded that she was not yet in a position to make a decision one way or the other. She said that she would contact the respondent's solicitors by the end of that month, being October 2011.

11 By letter dated 18 October 2011, the offer made by the respondent's solicitors to the appellant was extended until Friday, 21 October 2011. Again they reserved the right to tender a copy of the letter to the court and seek that the appellant pay all the respondent's legal costs on an indemnity basis in dealing with the matter from its inception until ultimate completion.

12 By letter dated 2 December 2011 to the court, copied to the respondent's solicitors, the appellant advised that she was withdrawing her challenge against the costs order made by Judge Davis. On 11 January 2012 the appellant filed a notice of discontinuance in relation to the application dated 21 September 2011.

13 As to the relevant law, it is clear that the District Court has the power to make an indemnity costs order. From the decisions in Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 18 WAR 190 and Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122; (2003) 28 WAR 95, four propositions emerge in relation to the grant of indemnity costs.

14 The first is that the usual costs order is one for party and party costs.

15 The second is that the court has jurisdiction to make an indemnity costs order whenever justice requires such an order.

16 The third is that an order for indemnity costs will only be made if there is some special or unusual feature in the case to justify a departure from the ordinary practice.

17 The fourth is that most examples of cases where an indemnity costs order has been made have involved some element of improper or at least unreasonable conduct on the part of the parties or their legal advisers.

18 In the decision in Flotilla, Pullen J observed at [9]:

... the making of allegations of fraud knowing them to be false, or the commencement of proceedings for some ulterior motive, or a wilful disregard of known facts or the established law, or the making of allegations which ought never to have been made, or the undue prolongation of a case on groundless contentions, and even an unreasonable refusal to accept an offer of compromise, may lead to indemnity costs orders.

19 In the circumstances of this case I am of the view that there ought to be an order for indemnity costs. This is for a number of reasons. First, the application was without any foundation and was bound to fail. There had already been an appeal against the orders of Judge Davis. The orders under appeal included the cost orders. There is no power in the District Court to extend the time within which to appeal or, indeed, to allow a second appeal from a decision of a District Court judge. Any application ought to have been made in the Court of Appeal.

20 The second is that this position was very clearly brought to the attention of the appellant in the respondent's letter of 3 October 2011. The offer to resolve the matter was done on the basis that the application be dismissed with no orders to costs. This would have left the respondent bearing its own costs in relation to any work done on the application.

21 In my view, the appellant was given a fair opportunity to withdraw the application without incurring any costs. She was also put on notice that the respondent would instruct its solicitors to commence working earnestly in relation to the issues.

22 The third issue is that the dispute at the heart of this appeal is for $550 together with interest and costs fixed in the sum of $368.05. The appeal was dismissed substantively as the costs were disproportionate to the amount in the claim. The respondent has been put to inordinate expense in defending the claim, expense which far outweighs the amount in dispute.

23 Taking that together, it seems to me that this is a case where justice requires the grant of an order for indemnity costs. The conduct of the appellant in bringing multiple applications in this case has, as I have said, put the respondent to inordinate expense, expense far outweighing the amounts in issue. The appellant was put on notice that this particular application was without merit and put on notice in such a way that I would characterise as to be fair and reasonable. Her decision not to finalise the matter on that basis in the context of the amount in issue in the dispute was, in all the circumstances, most unreasonable. It is sufficient to justify a departure from the usual order in relation to costs and the making of an award of indemnity costs.

24 I turn then to the amount of the costs order. The usual formulation for an order for indemnity costs is that the costs be paid on an indemnity basis so that the respondent is fully indemnified for all its costs incurred, save for any costs which are of an unreasonable amount or which have been unreasonably incurred. As I said at the commencement of these reasons I propose to fix those costs.

25 The information before me is more than adequate for me to fix the costs. I note that in the affidavit filed by Mr De Vita on behalf of the respondent he has included both his costs agreement with the respondent and the costs agreement of counsel.

26 The affidavit of Mr De Vita also encloses two schedules of costs. The first on pages 43 - 47 is his costs. Those costs total $5,698. The second is on page 48, which is counsel's costs totalling $8,469.99.

27 Counsel for the respondent then added two costs that have arisen subsequent to the preparation of this affidavit. The first is the cost of extracting the order of 19 January which he claimed at $209. The final one is the costs of today. The three items of costs, being Mr De Vita's costs, Mr Ashdown's costs, (counsel), and the costs of extracting the order total $14,376.99. To that we add the costs of today, giving an amount in the region of $15,000.

28 The appellant in her argument submitted that it ought to have been clear to those advising the respondent that her application was bound to fail. On that basis, there was no need for them to do a large volume of preparatory work for the hearing before her Honour Judge Deane on 18 November 2011. She said that if there are to be costs awarded, it should be a relatively modest amount based on the appearance before her Honour Judge Deane.

29 In essence, the respondent submitted that given the way in which the appellant has proceeded in this action to date, it had to proceed on the basis that the application would be strenuously contested.

30 Counsel also submitted that where there is an unrepresented litigant, it is likely that the other side will have to do more work than normal to ensure that all relevant authorities and all relevant facts are before the court.

31 The work done in the present case for the hearing before her Honour Judge Deane included a 62 page affidavit from a director of the respondent setting out the relevant history of the action to date, a 23 page set of written submissions by counsel and a two page chronology.

32 In relation to the claim for indemnity costs, the starting point is that I am satisfied that the respondent has incurred the costs set out in Mr De Vita's affidavit, that is, the solicitor's costs in the amount of $5,698, counsel's costs in the amount of $8,469.99, the costs of extracting the order and the costs of the appearance before me.

33 The onus then shifts to the appellant to satisfy the court that these costs, either in total or in part are of an unreasonable amount or have been unreasonably incurred.

34 In my view, there is a slight element of over engineering in the costs incurred by the respondent. In particular, given the strength and clarity with which the respondent's solicitor put the position that the appellant's application had no foundation in the 3 October letter, I do not consider that it was necessary to have gone to the entirety of the lengths which it went to for the hearing before her Honour Judge Deane.

35 Having said that, I do accept that the present appeal has a long and detailed history and that the materials presented, in particular the factual materials, were no doubt of considerable benefit to her Honour Judge Deane in the hearing on 18 November.

36 I also consider that the respondent was entitled to proceed on the basis that the hearing on 18 November was going to be a contested one and prepare accordingly; not only to prepare accordingly, but to prepare on the basis that the appellant was unrepresented and thus it had a higher burden than usual to make sure all relevant factual and legal material were placed before the court.

37 It seems to me that the appropriate way to fix the costs on this basis is to make a global deduction for what I have termed as a slight element of over engineering. It seems to me that this is more a reflection of the work done by counsel than the work done by instructing solicitors.

38 An appropriate starting point is to take the amount of $14,376.99 and round that up to an amount over $15,000 to deal with the costs of counsel attending today. Then it seems to me that in fixing the costs, I should make a global deduction and reduce that down to that that the amount of $12,500.

39 The question then arises as to whether I should fix a time for payment. It seems to me that I should do that and I should fix a time that is the time for payment as in relation to the costs for the review, being 24 February 2012.

40 The two orders I make then in relation to the matters before me are:

(1) the appellant's chamber summons dated 21 September 2011 be dismissed; and

(2) the appellant pay the respondent's costs of the application upon an indemnity basis so that the respondent is fully indemnified for all its costs incurred save for any costs which are of an unreasonable amount or have been unreasonably incurred, fixed at $12,500 payable by 24 February 2012.