FRANK JASPER PTY LTD -v- GLEW [No 3] [2012] WASC 24 (25 January 2012)

Supreme Court of WA|2012-01-25|Before: Martin CJ

1 I have charted the earlier history of these proceedings in reasons which I published in 2010 (Frank Jasper Pty Ltd v Glew [2010] WASC 24). In those reasons I explained the sequence of events which led to the resolution of issues which had been raised with respect to title to the intellectual property rights referred to in those reasons, and as to the extent of those rights. I also set out my findings with respect to the allegations of misleading and deceptive conduct, and as to the payments made in reliance upon the conduct which I found to be misleading and deceptive, and explained why those conclusions were insufficient to finally resolve the substantive claims in these proceedings. I also dismissed the counterclaim by the second defendant, Glew Technologies Pty Ltd.

2 Mr Glew's appeal from the decisions which were the subject of those reasons has been dismissed - see Glew v Frank Jasper Pty Ltd [2010] WASCA 87.

4 Shortly prior to the hearing, Mr Glew filed written submissions which dealt only with the question of my authority to determine the proceedings, and which did not deal at all with any of the substantive issues in the case. When the matter came on for hearing, Mr Glew challenged my authority to determine the claims against him by reference to those written submissions. I advised Mr Glew that I found those submissions to be incomprehensible, referring, as they did, to a schedule to the Australian Constitution which does not exist, and failing to identify any coherent basis upon which it was asserted that my appointment as a judge of the court was invalid. I advised Mr Glew that at the time of my appointment I had taken the oaths applicable to the various judicial offices which I hold in accordance with the requirements of the Supreme Court Act 1935 (WA). I invited Mr Glew to refer me to any provision of the Australian Constitution which could support the proposition that my appointment was invalid. He was unable to identify any such provision. I therefore indicated to Mr Glew that I considered my appointment to be valid, and that I had authority to determine the case against him, and would proceed to exercise that authority.

5 At that point Mr Glew indicated that he proposed to withdraw. I advised him clearly and unequivocally that if he did withdraw, and took no further part in the proceedings, they were likely to continue in his absence, and that judgment may be entered against him (ts 502). Mr Glew nevertheless proceeded to withdraw, and took no further part in the hearing.

6 Following Mr Glew's withdrawal, evidence was led from three witnesses, Mr Frank Raymond Jasper (known as Jay Jasper), Mr David Richard Worth, and Ms Dawna Kathleen Wright. In addition, affidavits of two solicitors acting on behalf of the plaintiff were read.

7 Mr Jasper's evidence took the form of a written witness statement, which he verified, and was augmented by some brief oral evidence. The evidence which he gave was logical and plausible, and although it was not tested by crossexamination, I have no reason to doubt its veracity, although in due course I came to doubt its mathematical accuracy, as I shall explain. Accordingly, I make the following findings based upon the evidence of Mr Jasper.

8 In Frank Jasper Pty Ltd v Glew, I identified the payments which had been made by the plaintiff to Mr Glew and/or Glew Technologies Pty Ltd, or on their behalf, in reliance upon the misleading and deceptive conduct which I found. The payments which I found had been made in reliance upon the misleading and deceptive conduct totalled $250,046.37, and were made between 25 September 2003 and 8 March 2007. Further, as I observed:

The findings which I have made establish a continuing course of conduct on the part of Mr Glew and Glew Technologies which, over the course of a number of years, created a false and misleading impression as to the state of development of the system the subject of the inventions, its capabilities and its satisfaction of standards imposed by Australian Design Rules [146].

9 In addition to the payments made to Mr Glew and/or Glew Technologies Pty Ltd, or on their behalf, the plaintiff incurred significant other expenditure in the testing and development of the inventions described in my earlier reasons. Those payments would not have been made if Mr Jasper had been aware of the true state of development of the system the subject of those inventions, and of the true results that had been obtained from the testing of the system.

10 Mr Jasper's written statement refers in detail to various expenses that he asserted were incurred by the plaintiff in the pursuit of the development of the system the subject of the inventions, and its exploitation in the United States, prior to the commencement of these proceedings in November 2007. Invoices, receipts, or other vouchers have been tendered in evidence in order to substantiate the items of expenditure asserted, and in most cases, the date upon which the expenditure was incurred. Mr Jasper's statement also attached a schedule which purported to set out various particulars in relation to each item of expenditure incurred, including the amount of expenditure, the currency in which the expenditure was incurred, the date upon which the expenditure was incurred and so on.

11 During the hearing I was advised by senior counsel for the plaintiff that he had been instructed 'that the most careful attention has been paid to the schedule by those who instruct me to ensure that what is in the schedule corresponds to the material in the two volumes' of receipts or other vouchers which had been tendered to substantiate the expenditure claimed (ts 505). I was then provided with another version of that schedule in which some of the claimed items of expenditure had been hatched in yellow, so as to indicate that those items of expenditure were no longer claimed because, for example, the supporting document was unintelligible or because the loss was incurred prior to the date upon which I had found the first material misrepresentation to have been made.

12 I raised the matter of interest with counsel for the plaintiff and was advised that simple interest was claimed in respect of each item of expenditure, from the date the expenditure was incurred. However, no calculation of interest computed on that basis had been performed or provided to the court. Accordingly, I directed that a further version of the schedule including a computation of the interest claimed in respect of each item of expenditure be prepared and provided to the court and to Mr Glew, and that Mr Glew have 21 days within which to provide any submissions in response to the amended schedule (ts 522).

13 In accordance with those directions, a revised schedule was filed and served, which included a computation of simple interest, at the rate of 6 % per annum, on each item of expenditure claimed. According to that revised schedule, the total of the items of expenditure claimed over and above the amount of $250,046.37 referred to in my earlier reasons was $1,627,791.96, giving a total claim of $1,877,838.33. The revised schedule also set out computations of interest claimed on the components of the total claim up to 1 February 2008, totaling $189,092.60. Consequently, according to the revised schedule, the total amount claimed, with interest, as at 1 February 2008 was $2,066,930.93. Interest between 1 February 2008 and the date of the hearing on 21 June 2011 was also calculated, in an amount of $381,535.59, giving a total claim, as at the date of hearing, of $2,448,466.52.

14 Mr Glew did not provide any material in response to the revised schedule. However, when I came to consider the schedule, and the evidence tendered in support of the schedule for the purpose of preparing these reasons, it became apparent that the materials were replete with error. The apparent errors included the maintenance of claims in respect of items of expenditure incurred prior to the earliest date upon which I had found misleading and deceptive conduct, the retention of items within the schedule which were highlighted in yellow in the schedule handed up by counsel and which should therefore have been deleted, items claimed which were unsubstantiated by any voucher or invoice, other items claimed in the schedule which were not referred to in the witness statement or in the supporting documents, duplications, double counting, errors in date, currency errors and so on. As a result, I caused my associate to write to the parties, setting out a detailed list of the apparent inaccuracies and errors and suggesting that the extent of the apparent inaccuracies and errors caused me to doubt the integrity of the schedule as a whole. At my request, my associate suggested to the parties that my confidence in any amended schedule might be restored if it were audited by a qualified auditor independent of the plaintiff.

15 The solicitors for the plaintiff advised the court that they proposed to take up the suggestion of engaging a qualified auditor independent of the plaintiff to undertake an audit of the schedule of the plaintiff's claims. In due course, the court received an affidavit of the solicitor with primary conduct of the proceedings on behalf of the plaintiff relating the steps that had been taken to review the schedule of claims, and which included the deletion of a number of claimed items, and the engagement of Mr John Dorazio to audit the revised schedule. An affidavit by Mr Dorazio has also been filed, in which he deposes that he is a chartered accountant and registered company auditor, and that he and the accounting firm of which he is a director are independent of the plaintiff and the plaintiff's solicitors, having not previously been engaged to do work for either of them or, so far as Mr Dorazio is aware, for any person or entity related to either of them. Mr Dorazio further deposes that he undertook an audit of the claims, after which he produced a revised schedule containing only those claims which he considers to be substantiated by the materials which he audited. That schedule is attached to his affidavit.

16 According to that schedule, the items of expenditure claimed over and above the amount of $250,046.37 the subject of my earlier reasons had been reduced to an amount of $1,291,936.16 giving a total claim of $1,541,982.53. In the schedule revised by Mr Dorazio, interest has been calculated on the various items of that claim up to 1 February 2008 in the total amount of $152,967.53, giving a total claim, including interest, as at 1 February 2008 of $1,694,950.07. Further, the revised schedule calculates interest on the outstanding principal (excluding interest) at the daily rate of $253.48, giving a total claim for further interest for the period between 1 February 2008 and the date of hearing on 21 June 2011 of $313,297.05. Accordingly, the total amount claimed, including interest as at the date of trial on 21 June 2011 is, according to the schedule revised by Mr Dorazio, $2,008,247.12, together with interest from the date of hearing of $253.48 per day.

17 The further affidavits and revised schedule were provided to Mr Glew. My associate contacted Mr Glew and requested his advice as to whether he objected to the additional affidavits and submissions, and as to whether he wished to adduce any further evidence or submissions in response, or whether he required a further hearing of the proceedings. The court has received a letter, apparently from Mr Glew, reiterating his assertion to the effect that the court lacks authority for reasons which are unintelligible, and attaching a document described as an 'affidavit of reservation of rights' which is equally unintelligible. I infer from that correspondence that Mr Glew maintains his position to the effect that he no longer wishes to actively participate in these proceedings.

18 I have carefully reviewed the schedule revised by Mr Dorazio. The apparent errors and inaccuracies which I had identified in the earlier version of that schedule have been corrected, and in most cases, the claimed item removed or in some cases the error corrected. As the claim has now been independently audited, I am satisfied that the schedule corresponds to the expenditure which is in fact substantiated by the evidence. I am also satisfied that the computations and calculations of interest have been properly carried out.

19 A significant component of the expenditure claimed was incurred in unsuccessful attempts to test and develop the system in the United States, with a view to the exploitation of products developed using the system in that market. Those items of expenditure were incurred in US dollars. An affidavit has been provided by a solicitor employed by the plaintiff attaching a printout downloaded from the website of the Reserve Bank of Australia showing the rate of exchange between Australian and US dollars at all relevant dates. In the schedule audited by Mr Dorazio, items of expenditure incurred in US dollars have been converted into the equivalent Australian dollar amount using the exchange rate applicable at the date the expenditure was incurred as shown on the printout attached to the affidavit. I am satisfied that the exchange rate printout is statistical information contained in a publication issued by the Reserve Bank of Australia, of which this court should take judicial notice pursuant to s 85A(1) of the Reserve Bank Act 1959 (Cth). I am also satisfied that the published rate applicable at the date the relevant item of expenditure was incurred is the appropriate exchange rate to use in order to convert expenditure incurred in US dollars into an appropriate amount of Australian currency - see BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd [2009] FCA 1448.

20 The evidence of Mr Jasper, which I accept, is to the effect that all the items of expenditure he identified were, in effect, thrown away, as the system the subject of the inventions, and the intellectual property, has no value. In order to test his assertion that the items of expenditure claimed had in fact been incurred in reliance upon the misleading and deceptive conduct which I had found in my earlier decision, I asked Mr Jasper to identify the point in time at which he came to appreciate that the system and the intellectual property were valueless. He responded to the effect that it was not until the first trial of these proceedings, which took place in 2009, when he saw Mr Glew in the witness box, that he came to appreciate that he had been completely misled, and that the system had no value (ts 516). I accept that evidence. Having regard to the fact that expenditure is only claimed up to the time at which these proceedings were commenced in November 2007, I have no reason to doubt Mr Jasper's assertion that expenditure incurred up to that date was incurred in reliance upon the misleading and deceptive conduct which I have found, and was all, in effect, thrown away as the system is of no value.

21 I note also that no claim has been made in respect of the capital amounts paid to Mr Glew and/or Glew Technologies Pty Ltd for the interest in the intellectual property rights that was acquired by the plaintiff.

22 Mr Worth is a mechanical engineer with expertise in the design and development of engines. His evidence took the form of an expert report which he verified. In that report he set out in detail the process of reasoning which caused him to conclude that the system or systems the subject of the patents identified in my earlier reasons offered no benefit over existing fuel systems and were not viable because of their inability to satisfy emission requirements in both Australia and the United States. There is no reason to doubt Mr Worth's conclusions, which I accept.

23 Ms Wright is a chartered accountant practising in the area of forensic investigation and reporting. Her evidence took the form of a written report which she verified. In that report, she set out the process of reasoning which led her to conclude that the intellectual property and the systems the subject of the intellectual property to which I referred in my earlier reasons are, and always have been, of no value. There is no reason to doubt that evidence, which I accept.

24 I am satisfied that in reliance upon the misleading and deceptive conduct which I found to be established, the plaintiff incurred expenditure in the total amount of $250,046.37, being the amount identified in my earlier reasons, and the further amount of $1,291,936.16 the subject of the evidence given by Mr Jasper at the most recent hearing, and being the amount claimed in the schedule which has been revised and audited by Mr Dorazio. I am also satisfied that the plaintiff has derived no value as a consequence of those payments, and has therefore suffered loss and damage in the total amount of $1,541,982.53.

25 Interest is claimed on the various payments to which I have referred, as and from the date the payment was made, at the rate of 6%, which is the maximum allowable under s 31(2) of the Supreme Court Act 1935 (WA), and which has been the rate applicable to judgment sums pursuant to s 8 of the Civil Judgments Enforcement Act 2004 (WA) at all times material to these proceedings. There is no reason why interest should not be included as a component of the damage suffered by the plaintiff or pursuant to s 32 of the Supreme Court Act 1935 (WA) at the rate claimed. The interest claimed has been calculated in the schedule revised and audited by Mr Dorazio, and results in interest calculated up to 1 February 2008 in the amount of $152,967.53, and thereafter at a daily rate of $253.48 (being the further sum of $368,559.92 up to 25 January 2012). That leads to the conclusion that judgment should be entered, as at the date of publication of these reasons, in the amount of $1,541,982.53 plus interest totalling $521,527.45 giving a total sum of $2,063,509.98. Accordingly, judgment will be entered in that amount against each of Mr Glew and Glew Technologies Pty Ltd. I will invite submissions from the parties in respect of costs.

CITATION : FRANK JASPER PTY LTD -v- GLEW [No 3] [2012] WASC 24 (S)

FURTHER WRITTEN SUBMISSIONS 27 JANUARY, 16 FEBRUARY, 20 FEBRUARY 2012

Practice and procedure - Costs - Special costs order - Whether matter of 'unusual difficulty' due to lack of cooperation by the defendants - Lack of cooperation resulted in no meaningful opposition to plaintiff's claims, and not an 'unusual difficulty' - Complexity of intellectual property claims meant it was appropriate to fix limits higher than those in costs determinations for discovery, getting up for trial and counsel fees - Legal Profession Act 2008 (WA), s 280(2)

Practice and procedure - Indemnity costs - Self-represented litigant - Unreasonable and uncooperative defendants - Lead to no meaningful opposition to the plaintiff's claims - Manifestly excessive claim for costs - Award of indemnity costs not appropriate

Defendants pay the plaintiff's costs except for those associated with the plaintiff's attempts to amend its statement of claim and correct its schedule of expenditure and interest

1 In these proceedings, the plaintiff, Frank Jasper Pty Ltd, sought various forms of relief relating to the assignment of certain intellectual property rights, and damages for misleading and deceptive conduct, against Mr Wayne Kenneth Glew, and Glew Technologies Pty Ltd, a company controlled by Mr Glew.

2 Orders were made deferring the assessment of any damages for misleading and deceptive conduct until after the trial of the other issues, and the issues other than those going to the quantum of damages were tried over four days in September 2009. In February 2010, I published my reasons for dismissing those parts of the plaintiff's claims that related to the assignment of intellectual property rights and for upholding the plaintiff's claims in relation to misleading and deceptive conduct (Frank Jasper Pty Ltd v Glew (No 2) [2010] WASC 24). Following a hearing which occupied less than half a day in June 2011, but which was followed by the submission of further evidence and written submissions during the latter half of 2011 and early 2012, on 25 January 2012 I published my reasons for concluding that the plaintiff was entitled to damages for misleading and deceptive conduct in the amount of $1,541,982.53, plus interest totalling $521,527.45 up to the date of judgment. Judgment was accordingly entered in favour of the plaintiff and against each of the defendants in the amount of $2,063,509.98.

3 The plaintiff now applies for orders with respect to the costs of the proceedings. These reasons are concerned only with issues relating to costs.

4 In respect of costs incurred prior to 9 July 2009, the plaintiff seeks orders that the defendants pay its costs to be taxed on a party and party basis, but, pursuant to s 280(2) of the Legal Profession Act 2008 (WA) (the Act), without regard to the limits imposed by the applicable costs determinations. In respect of costs incurred after 9 July 2009, the plaintiff seeks orders that the defendants pay its costs to be taxed on an indemnity basis - that is to say, on the basis that the plaintiff recover all costs paid by it to its solicitors save those unreasonably incurred or of an unreasonable amount, except that there be no order in respect of the costs relating to the plaintiff's various applications to amend its statement of claim during the first trial, or in respect of the steps taken by the plaintiff to amend and correct the schedule of expenditure incurred and interest thereon which was tendered at the second trial.

5 The course of the proceedings has been charted in the two sets of reasons I have previously published. It is therefore unnecessary to restate the course which they followed in detail in these reasons. Aspects of that course that are relevant to the costs issues, include the fact that although the defendants were represented for a time prior to trial, during which time a defence was filed on their behalf, the retainer of those solicitors was terminated prior to trial. Following the termination of the solicitors' retainer, on 9 July 2009 the defendants submitted a defence which denied each and every paragraph of the statement of claim. This is the date which has been selected by the plaintiff as the date after which it submits it should receive its costs on an indemnity basis.

6 The first trial took place over four days. However, significant amounts of the allocated hearing time were lost, or wasted, as I explained in my reasons. Part of the time lost, or unproductively used, arose from the various attempts by the plaintiff to amend its statement of claim. Part of the time which was wasted came about because of the inconsistent position adopted by Mr Glew with respect to the issues relating to the intellectual property rights. In the end, the plaintiff's claims with respect to those issues were dismissed because, after the hearing, assignments were executed which rendered the relief sought by the plaintiff unnecessary.

7 The evidence in support of the plaintiff's claim for misleading and deceptive conduct was given largely by Mr Jay Jasper, and in the form of a lengthy witness statement. That evidence was not substantially challenged by crossexamination. Mr Glew gave evidence which was mainly directed to issues which became moot following the assignment of the intellectual property rights. Another witness was called on behalf of the defendants, a Mr Thomas, whose evidence was relatively brief and went essentially to certain tests which he had conducted in relation to the inventions the subject of the proceedings.

8 Following publication of my reasons in February 2010, directions were made with respect to the trial of the issues relating to the quantum of damages. In relation to those issues, the plaintiff commissioned and served reports from two expert witnesses - one dealing with the capabilities of the inventions the subject of the proceedings, and another dealing with the value of the intellectual property rights relating to those inventions. The essence of those reports was to the effect that the inventions lacked the capacity to achieve their stated objectives, and were of no value. In addition, a witness statement from Mr Jay Jasper was prepared, filed and served, relating to the expenditure said to have been incurred in reliance upon the misleading and deceptive conduct. Mr Glew did not actively participate in the processes leading up to the trial on quantum, and did not disclose any evidence which he proposed to lead at that trial.

9 The trial with respect to quantum was listed to be heard over two days. Shortly after the commencement of the hearing, Mr Glew withdrew in the circumstances described in my reasons. This had the result that the defendants were essentially unrepresented during the hearing. Brief evidence was led from the experts to whom I have referred, and from Mr Jay Jasper. The hearing was completed in less than half a day.

10 Following the hearing, the plaintiff filed and served a schedule identifying the interest claimed, in accordance with directions which I had made. That schedule was based upon another schedule which had been handed up during the hearing, which purported to itemise the various items of expenditure claimed on the basis of the evidence given by Mr Jasper, and the various documents which were tendered in the course of that evidence.

11 After giving detailed consideration to the schedule of damages and interest claimed for the purpose of preparing my reasons for decision, it became apparent that the schedule was replete with error and discrepancy. I caused my associate to communicate with the solicitors for the plaintiff, advising them of the opinions which I had formed in relation to the errors and discrepancies in the schedule, and suggesting that one way in which my confidence in the integrity of the schedule might be restored would be by causing it to be redrawn and audited by a registered auditor independent of the plaintiff. The plaintiff took that course, and further evidence was produced, including a report from an independent auditor verifying a revised schedule. Following the provision of that evidence, and the provision of an opportunity to Mr Glew to respond to that evidence, which he did not take, I published my reasons for concluding that judgment should be entered in the amount to which I have referred.

12 Two written submissions have been filed on behalf of the defendants on the question of costs. They are essentially irrelevant. They also contain assertions that are in some cases spurious, and in other cases delusional. As they are completely without substance, the cost issues can be determined by reference only to the submissions of the plaintiff.

13 The plaintiff properly concedes that there should be no order with respect to the costs incurred and occasioned by its various attempts to amend its statement of claim during the first hearing, or the steps which had to be taken to rectify the errors and discrepancies in the evidence and schedules it produced at the second hearing. As Mr Glew was not legally represented at the time those events occurred, no question arises of any costs order in his favour in relation to those matters, or of the costs order properly made against him being offset by costs he incurred in relation to those matters. It is therefore unnecessary to say any more about those aspects of the costs orders sought by the plaintiff.

14 The plaintiff submits that it should receive a costs order in its favour in relation to the costs incurred with respect to the intellectual property issues notwithstanding the dismissal of its claims in relation to those issues. It is submitted that the reason it became unnecessary to resolve those issues, was Mr Glew's actions after the completion of the first hearing, effectively giving to the plaintiff all that it had sought. It is further submitted that if Mr Glew had taken that course when first requested, at or about the time the proceedings were commenced, all the costs incurred in relation to those issues could, and should, have been avoided.

15 I accept those submissions. As I noted in my earlier reasons, the stance adopted by Mr Glew with respect to the plaintiff's rights to the intellectual property it claimed was inconsistent. In the result, by his actions, he effectively conceded to the plaintiff the relief which it had sought. Accordingly, this is one of those cases in which, despite there being no judicial determination of the issues, it can nevertheless be said that the plaintiff was essentially successful in its claim, with the result that costs should follow its success.

16 In respect of costs incurred prior to 9 July 2009, the plaintiff seeks an order that its costs be taxed on a party and party basis, but without regard to the limits imposed by the relevant costs determinations. That order is sought pursuant to s 280 of the Act which is in the following terms:

(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.

(4) If a costs determination is in force in respect of any business referred to in section 275(1), any other subsidiary legislation fixing or purporting to regulate the remuneration of law practices in respect of that kind of business is of no force or effect.

17 It is established that the adjective 'unusual' when used in s 280 qualifies only the word 'difficulty' and does not apply to the independent grounds of complexity or importance upon which an order may be made under s 280 (see Milne v Kendall [2010] WASC 338(S); Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254(S).

18 The plaintiff principally relies upon what it asserts to be the 'unusual difficulty' arising from Mr Glew's uncooperative behaviour prior to and during the two hearings. Various instances of that behaviour are provided, including his service of an amended defence, on 9 July 2009, which denied each and every assertion in the statement of claim. His inconsistent position in relation to the adducing of evidence is also referred to, as is his lack of cooperation in relation to the evidence to be adduced on behalf of the plaintiff.

19 I accept that Mr Glew has been uncooperative, inconsistent and erratic in the positions which he has adopted in relation to preparation for the first hearing, and during the course of that hearing. However, aside from putting the plaintiff to strict proof of its claim for damages (as he was entitled to do), Mr Glew was not actively involved in the prehearing process leading up to the second hearing, and took no substantive part in that hearing. I also accept that the position adopted by Mr Glew resulted in the plaintiff incurring costs that could have been avoided if Mr Glew had adopted a more cooperative stance.

20 However, the overall effect of the position adopted by Mr Glew was to make the plaintiff's case easier, not more difficult. Mr Glew did not comply with any directions relating to the disclosure of evidence to be led at either hearing. Although he was permitted to adduce evidence at the first hearing notwithstanding his noncompliance with the pretrial directions which I had made, that course was taken on the basis that the evidence would not cover topics which would take the plaintiff or its legal advisers by surprise and thereby necessitate an adjournment of the hearing. In the result, the plaintiff's legal advisers were able to deal with the evidence adduced on behalf of the defendants 'on the run', and most of that evidence went to issues which became 'moot' in any event. As I have indicated, no evidence was led at the second hearing which became, in effect, an uncontested hearing with respect to the quantification of damages.

21 To put the matter another way, the stance adopted by Mr Glew had the result that no meaningful opposition was mounted to the plaintiff's claims. In those circumstances, I am unable to see how the plaintiff's case can be characterised as one of 'unusual difficulty' within the meaning of s 280 of the Act.

22 The plaintiff also relies upon the complexity of the case, involving as it did a number of intellectual property issues which were of complexity, claims for misleading and deceptive conduct which traversed a significant number of statements and representations made over a number of years, and a claim for damages which included a large number of items of separate expenditure made over a number of years. I accept that these various factors, viewed in combination, result in the plaintiff's case being properly characterised as complex.

23 However, before any of the powers conferred by s 280 of the Act can be exercised, the court must be of the opinion that the amount of costs allowable in respect of a matter subject to a cost determination is inadequate because of one or other of the unusual difficulty, complexity or importance of the case. That opinion will usually be formed if the applicant for an order under the section shows a fairly arguable case that a bill to be presented to a taxing officer may properly tax at an amount greater than the limit imposed by the relevant costs determination because of one or other of the unusual difficulty, complexity or importance of the case (see Heartlink, [16]).

24 As is customary, the plaintiff sought to make out an arguable case to the effect that its bill of costs may tax above the amount prescribed by the relevant determination by filing a draft bill of costs. The bill also contained a number of schedules providing a breakdown of the amounts claimed under different items. The total amount of professional costs sought in the draft bill is $649,495.51, together with disbursements of $86,454.51, giving a total bill of $735,950.02.

25 On the face of it, this is an extraordinary claim for costs which are said to only relate to two and a half days of the first hearing (it being accepted that there should be no order as to costs with respect to one and a half days), and a second hearing which went for less than half a day. Although I have accepted that the uncooperative position of the defendants resulted in costs being incurred that could have been avoided, it is also significant that the plaintiff foreshadows a claim for costs of this magnitude in a circumstance in which there was no meaningful opposition or intelligibly articulated resistance to the plaintiff's claims.

26 Most, if not all, of the maximum amounts specified in the relevant costs determinations are based upon estimates of the amount of professional time likely to be engaged in the provision of professional services relating to that item. In respect of some of those items, such as attendance at case management directions hearings, the amount of professional time properly engaged in the provision of the service may be unaffected by the complexity of the case. However, in relation to other items, including the provision of discovery, getting up for trial, and counsel fees, complexity in the sense I have described in this case may well have a bearing upon the professional time properly engaged in the performance of the relevant service.

27 Unsurprisingly, the major component of the draft bill of costs relate to items where the professional services provided are likely to have been affected by the complexity of the case. A claim of approximately $55,000 is foreshadowed in respect of discovery, approximately $243,000 in respect of getting up for the first hearing, approximately $85,000 for counsel fees for the first hearing, approximately $160,000 by way of getting up for the second hearing, and approximately $35,000 by way of counsel fees for the second hearing.

28 While I accept that the case had its complexities, these amounts appear to me to be excessive, particularly when account is taken of the fact that the hearings to which the claims are said to relate occupied less than three days in total. I will return to the proper exercise of the discretion conferred by s 280 after considering the plaintiff's claim for indemnity costs in respect of costs incurred after 9 July 2009.

29 That claim is advanced on much the same basis as the claim for an order under s 280 of the Act - namely, Mr Glew's unreasonable, uncooperative and inconsistent behaviour. There is no doubt that Mr Glew's conduct, which is properly characterised as unreasonable and uncooperative is capable of sustaining the exercise of the discretion to award costs on an indemnity basis: see for example Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (No 2) (1997) 18 WAR 190. However, an unusual characteristic of this case is that while on the one hand Mr Glew's conduct resulted in the plaintiff incurring costs which could have been avoided if Mr Glew had been more cooperative, on the other hand the lack of any meaningful opposition to the plaintiff's claim made its task easier. Excluding from consideration matters attributable to the plaintiff's indecision with respect to the enunciation of its statement of claim, and the errors and inconsistencies in its quantification of its damages claim, the hearings on both liability and quantum occupied less than three days. There was no meaningful crossexamination of any of the plaintiff's witnesses, and much of the evidence adduced by Mr Glew became irrelevant.

30 In the unusual circumstances of this case, it is also relevant that the additional costs reasonably and properly incurred by the plaintiff due to complexities of the case which might have been avoided if Mr Glew had adopted a more cooperative stance can be recovered by the exercise of the discretion conferred by s 280 of the Act.

31 I also take into account the fact that the plaintiff has foreshadowed a claim for costs which I consider to be manifestly excessive, although I acknowledge that the weight of this consideration is significantly diminished by the terms of the indemnity orders sought, which would exclude recovery of any costs unreasonably incurred or unreasonable in amount.

32 Weighing the various considerations to which I have referred, I have concluded that this is not an appropriate case in which to exercise the discretion to order indemnity costs. However, for the reasons I have already given, I do consider that this is an appropriate case in which to exercise the power conferred by s 280 of the Act. The court has a number of options when its jurisdiction under s 280(2) of the Act is enlivened. One option is the order sought by the plaintiff, which would enable costs to be taxed without regard to any of the upper limits imposed by any relevant costs determination. Another option is the fixing of higher limits than those fixed by the relevant determinations.

33 Costs determinations serve a number of purpose. The purposes that are relevant to the present case include the purpose of regulating the costs properly and reasonably recoverable by a successful party to litigation, and the purpose of enabling parties to litigation to make an approximate assessment of their exposure to an adverse costs order in the event they are unsuccessful. Another relevant purpose is the purpose of encouraging legal representatives to only undertake work, and incur costs that are properly and necessarily incurred in the conduct of the litigation, as considerable gaps between costs claimed on a solicitor and client, and party and party basis, may give rise to client dissatisfaction. Each of these purposes is to some extent diminished if the court exercises the power conferred by s 280 to award costs without regard to the limits imposed by the relevant costs determinations, although there will nevertheless be some cases in which that course is appropriate.

34 Having reviewed the draft bill of costs, I am satisfied that there is a fairly arguable case that the costs properly allowed to the plaintiff by a taxing officer might exceed the limits applicable, with the result that the costs allowable to the plaintiff would be inadequate, in respect of the items I have identified - namely, the provision of discovery, getting up for hearing, and counsel fees on trial. Taking into account the various considerations to which I have referred, including the purposes for which costs determinations are made which are relevant to these circumstances, any to my evaluation of the work properly and reasonably done for the purpose of presenting the plaintiff's case, I have concluded that in the somewhat unusual circumstances of this case, the proper exercise of my discretion under s 280 of the Act is to order that the limits of the costs allowable to the plaintiff in respect of the items I have identified be double those specified in the relevant costs determination.

35 For these reasons, I propose to exercise my discretion with respect to costs by making orders in the following terms:

(1) The defendants pay the plaintiff's costs of the proceedings to be taxed (if not agreed), including all costs reserved and ordered to be in the cause, save for:

(a) all costs in connection with, or occasioned by the plaintiff's applications to amend its statement of claim during the hearing conducted in September 2009; and

(b) the steps taken by the plaintiff to amend and correct its schedule of expenditure and interest dated 27 June 2011, including the costs associated with the further evidence led by the plaintiff in that respect, including the evidence of Mr John Dorazio.

(2) For the purposes of taxation, the limit on the costs allowable to the plaintiff in respect of the provision of discovery, getting up for trial (in respect of both hearings), and counsel fees be double the limit specified in the relevant costs determination.

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Judgment (76 paragraphs)

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