1. During the course of the trial it became clear that the defendants did not take issue with most of the facts in relation to this matter but resisted liability on the grounds that:
   1. section 159 of the PD Act did not apply. There were several reasons why they said that this was so; and
   2. it was their view that, as a matter of fairness and law, no one can be held liable for a debt of which they had no knowledge until recovery of it was sought.
2. The defendants also disputed quantum but did not challenge the evidence of the plaintiff's experts and produced no evidence of their own as to how quantum should have been calculated.

1. Section 159 of the PD Act forms part of div 4, pt 10 of that Act. Section 159 provides:

(a) a person (in this section called the later subdivider) has subdivided land in which -

(i) a lot or lots has or have a common boundary with; or

an existing road to which there is access from the subdivided land; and

(b) a person (in this section called the original subdivider) who previously subdivided land that also has a common boundary with that existing road, in connection with that subdivision, contributed to or bore solely the cost of providing or upgrading the existing road; and

(c) the later subdivider did not contribute to that cost,

the original subdivider may, in accordance with this Division, recover from the later subdivider a sum representing one-half of so much of the reasonable cost as was borne by the original subdivider of providing or upgrading the part of the existing road which has a common boundary with the lot or lots, or is joined by a subdivisional road, as referred to in paragraph (a).

CPI means the Table described as the Consumer Price Index (All Groups Index) for Perth published by the Commonwealth Statistician under the Census and Statistics Act 1905 of the Commonwealth, or if the same is not published, such other similar index as the Minister may reasonably determine;

market value of land means the capital sum, determined in accordance with section 155(3)(b)(ii), (iii) and (iv), which an unencumbered estate in fee simple in the land might reasonably be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require;

road has the meaning given by section 4(1) and includes a private road created under Part IVA of the Transfer of Land Act 1893 or as defined in the Land Administration Act 1997 section 3(1).

(3) In this section a reference to the cost of providing a road is a reference to the aggregate of -

(a) the value, as at the date of the subdivision referred to in subsection (1)(b), of the portion of the land provided as a road, being such percentage of the market value of the total area of land comprised in that subdivision as the area of the road bears to that total area as at the date of that subdivision; and

(b) the reasonable cost of designing and carrying out the following works -

(ii) the formation, preparation, priming and sealing of the road; and

(iii) the provision of kerbing, drainage and service ducts in connection with the road,

escalated by the percentage by which the CPI last published prior to the date of the subsequent subdivision has increased over the CPI last published prior to the original subdivider subdividing the land referred to in subsection (1)(b).

1. Section 160 of the PD Act sets out how and when an amount payable under s 159 can be recovered. It states:

An amount payable under section 159 may be recovered by the original subdivider in a court of competent jurisdiction as a debt due to the original subdivider by the later subdivider; but no proceedings for recovery of the debt are to be commenced after the expiration of 6 years from the date of the later subdivision.

1. Section 161 sets out when a subdivision occurs for the purposes of div 4 of pt 10 of the PD Act. It states:

For the purposes of this Division land is subdivided on the date on which the approval of the Commission is endorsed on the diagram or plan of survey relating to the subdivision of the land.

1. The plaintiff called the following witnesses:
   1. Mr Darren Blowes;
   2. Mr Peter Golder;
   3. Mr Christopher Geers;
   4. Mr Mahesh Singh; and
   5. Mr Enzo Biagioni-Froudist.
2. Mr Blowes is the director of the plaintiff.
3. Mr Geers is a licensed valuer who gave expert evidence as to the value of the land which was used for the creation of the part of Sessilis Crescent which is the subject of the s 159 claim.
4. Mr Golder is a chartered professional engineer and has worked as a civil engineer since 1985. He is the director of Groundwork Consulting Engineers. He is the expert engaged by the plaintiff to provide the expert report and give evidence as to the cost of the construction of the relevant portion of Sessilis Crescent.
5. Mr Singh is a qualified civil engineer and builder and is currently a director of a building and land development company known as Sadhana Constructions Pty Ltd.
6. From 1996 to 2011, Mr Singh was employed by the Shire of Kalamunda. Between 1996 and 2005 he was the manager of Engineering Services. In this role, he had responsibility for managing the Shire's infrastructure assets including roads, paths and drainage. From the end of 2005 until December 2011 he was the Director of Engineering Services at the Shire and was responsible for the provision and maintenance of transport, parks and building infrastructure assets and the provision of waste management services. Part of his role was related to development approvals for urban development.
7. Mr Biagioni-Froudist is a civil engineer. He was employed by VDM Engineering (previously known as Van der Meer Consulting and Ewing VDM). VDM Engineering was engaged by the plaintiff to oversee the subdivision of the Proposed Development Area and to design the civil works which formed part of the project.
8. Mr Biagioni-Froudist gave evidence about the way in which the invoices for the works undertaken were assessed by VDM for payment.

1. The first defendant herself was the only witness who gave evidence for the defendants. Her evidence was that prior to purchasing Lot 900 the defendants searched the Local Council Register of Orders and the Certificate of Title for Lot 900 to see whether there were any encumbrances or easements affecting the land (ts 145 - 146). She gave evidence that no encumbrances or easements were identified in those searches.
2. The first defendant also gave evidence that the defendants were not told that a claim against them could be made under s 159 of the PD Act (ts 150).

1. As I have said there were no facts in dispute and neither party raised any questions as to the credibility of any evidence given in the course of the trial. I have, therefore, accepted all the witnesses' evidence.

1. The factual background to this matter is not in dispute. The facts which are agreed and which I have found on the balance of probabilities are as follows.
2. The plaintiff, Starshore Pty Ltd, ACN 108 107 606, is a company of which Mr Darren Blowes is the director. Mr Blowes is a registered real estate sales representative. Over the past 20 years Mr Blowes has been involved in the business of property development, which he conducts through various companies (exhibit 2, [1] - [3]).
3. The plaintiff was registered on 24 February 2004 for the purposes of conducting the development of an area of land in Wattle Grove, which is within the Shire of Kalamunda (Shire) and comes within an area of the Shire designated as 'Cell 9' in the Shire's Local Planning Scheme No 3 (exhibit 1 - 16).
4. The land which the plaintiff proposed to develop (Proposed Development Area) consisted of the following two areas:
   1. Lot 22, being the whole of the land in Certificate of Title Volume 18900 Folio 442 and Lot 23 (Lot 22); and
   2. Lot 23, being the whole of the land in Certificate of Title Volume 1890 Folio 443 (Lot 23).
5. On 24 February 2004, Lot 22 was owned by a Mr and Mrs Adams and Lot 23 was owned by Mr Blowes.
6. In May 2004, Mr and Mrs Adams entered into a contract with the plaintiff by which they agreed to sell Lot 22 to the plaintiff. The contract was conditional upon the plaintiff obtaining approval for the subdivision of the Proposed Development Area. It was also a condition of the contract that a specified area of that land, on which the Adams' home was situated (Homestead Lot), would be transferred to them following the subdivision of the Proposed Development Area and the creation of the Homestead Lot as a separate Lot (exhibit 1 - 82; exhibit 2 [9]).
7. On 10 May 2004, an application for conditional development approval of the Proposed Development Area was made by Gray & Lewis (a planning company) on behalf of Mr and Mrs Adams and Mr Blowes (exhibit 1 - 29; exhibit 2 [20]).
8. The proposed subdivision of the Proposed Development Area showed the land which was then Lots 22 and 23 being subdivided as follows:
   1. 21 lots coming from Lot 22;
   2. five lots from Lot 23;
   3. the upgrading of William Street; and
   4. the construction of Extensa Road and Sessilis Crescent.
9. Conditional approval for the subdivision of the Proposed Development Area was obtained from the Western Australia Planning Commission (WAPC) on 3 December 2004 (exhibit 1 - 35).
10. The WAPC reference number given to the proposed subdivision of the Proposed Development Area was 125238.
11. Lot 22 was transferred to the plaintiff on 11 March 2005 (exhibit 1 - 83).
12. Lot 23 was subsequently transferred to the plaintiff by Mr Blowes. Mr Blowes gave evidence that he does not recall the date on which this occurred (ts 53) and no other evidence was led as to the date.
13. The subdivision of the Proposed Development Area was effectively carried out in stages.
14. First, Lots 900 and 9000 were created. Lot 900 was the Homestead Lot. Lot 9000 was the balance of the land which had formerly been part of Lot 22. The WAPC endorsed the relevant Deposited Plan, Deposited Plan 45126 with its approval of this subdivision on 31 May 2005 (exhibit 1 - 53).
15. Lot 900 (the Homestead Lot) was transferred to Mr and Mrs Adams by the plaintiff on 2 August 2005 in satisfaction of their agreement (exhibit 1 - 87).
16. Second, the plaintiff further subdivided Lot 9000. This involved the creation of Extensa Road and Lot 9001. The WAPC approval was endorsed on the relevant Deposited Plan, being Deposited Plan 53290 on 26 February 2007 (exhibit 1 - 54).
17. Third, Lot 9001 was then subdivided by the creation of Lots 601, 602, 603, 615, 616 and 9101. The WAPC approval was endorsed on the relevant Deposited Plan, being Deposited Plan 58752 on 11 April 2008 (exhibit 1 - 55).
18. Fourth, Lot 9101 was subdivided by the creation of the relevant portion of Sessilis Crescent, and Lots 604 - 606 (inclusive), 609 - 614 (inclusive) and 617 - 622 (inclusive). The WAPC approval was endorsed on Deposited Plan 58760 on 22 May 2008 (exhibit 1 - 56).
19. The defendants purchased Lot 900 from Mr and Mrs Adams on 5 September 2013 (exhibit 1 - 59) although they had entered into a contract to purchase the land from Mr and Mrs Adams in about July 2013.
20. The defendants subdivided, or caused to be subdivided on their behalf, the land comprised in Lot 900. That involved the creation of Lots 901, 902, 903, 904, 905 and 906. The WAPC approval of that subdivision was endorsed on Deposited Plan 405986 on 4 September 2015 (exhibit 1 - 60).
21. Lots 903, 904, 905 and 906 abut Sessilis Crescent. There is access to Sessilis Crescent from each of those Lots (exhibit 1 - 60).
22. The length of that portion of Sessilis Crescent which abuts Lots 903, 904, 905 and 906 is 60.71 m (exhibit 1 - 60; exhibit 3 [37]).
23. The relevant portion of Sessilis Crescent is 15.002 m wide (exhibit 1 - 56).
24. The area of Sessilis Crescent which abuts Lots 903, 904, 905 and 906 is approximately 910 sqm (exhibit 3 [28]).
25. The defendants paid to the Shire the sum of $136,575.00 being full payment of the Cell Infrastructure Contribution that was a condition of the conditional approval given by the WAPC on 3 December 2004.
26. On 4 July 2008 the Shire paid to the plaintiff the sum of $109,437.65 (including GST) for the installation by the plaintiff of infrastructure (stormwater pipes) that was needed for the benefit of the broader Cell 9 Local Planning Scheme No 3 (exhibit 1 - 25.9 and exhibit 4 [59] - [82]).
27. The CPI last published prior to March 2008 was 90.5 (exhibit 1 - 78).
28. The CPI published prior to 4 September 2015 was 107.7 (exhibit 1 - 78).

1. The defendants claim they are not liable to pay the plaintiff for the following reasons:
   1. they are not a later subdivider because the subdivision of Lot 900 by them was merely the fulfilment of the subdivision of the Proposed Development Area which had been approved by the WAPC on 3 December 2004;
   2. even if they are a later subdivider, by making a payment to the Shire of Kalamunda as they were required to do by virtue of the Cell Infrastructure Contributions, they had contributed to the cost of that portion of Sessilis Crescent;
   3. to find the defendants liable to the plaintiff, would be to allow double recovery of construction costs which would have been recovered by a subdivider in the sales of the lots created by the subdivision. The PD Act cannot have been intended to be construed so as to entitle a subdivider to recover the same costs twice;
   4. at the time the original subdivision of Lot 22 by the plaintiff occurred, Sessilis Cresent was not a road but rather was only a 'proposed road' with the result that s 159 has no application in respect of it;
   5. even if they are a later subdivider they are not liable to the plaintiff because they had no agreement with the plaintiff;
   6. the PD Act cannot be construed to require a person who acquires land and later subdivides it to pay an original subdivider money for a debt of which they had no notice at the time of purchase.
2. The defendants also claim that, even if they are liable to the plaintiff under s 159 and s 160 of the PD Act, they take issue with the quantum of any payment. In particular, they say the value of the land which was surrendered for the purposes of construction of the relevant portion of Sessilis Crescent has not been determined in accordance with the requirements of s 159 of the PD Act.

1. At trial the defendants conceded that they no longer resisted liability on the grounds that the plaintiff had not provided them with a taxable supply (ts 143 - 144).
2. The defendants also expressly conceded that they no longer disputed quantum on the grounds that the amount claimed included a sum that the plaintiff had in fact recovered from the Shire (ts 143). This was because the plaintiff had, by trial, amended its claim to exclude the disputed amount.

1. There is no factual dispute to be resolved in determining liability. The issue of liability turns on the construction of s 159 of the PD Act.

1. There have been few cases concerning the interpretation of s 159 of the PD Act or its predecessor, s 28A of the Town Planning and Development Act 1928 (TPD Act).
2. In Level Holdings Pty Ltd v Laurendi [No 2] [2013] WADC 33; (2013) 83 SR (WA) 96, Staude DCJ reviewed the legislative history of s 159 of the PD Act, its predecessor, s 28A of the TPD Act, and the few cases which had considered those provisions.
3. His Honour stated at [15]:

In their respective statutory contexts s 28A and s 159 provide a mechanism for an earlier subdivider to recoup part of the cost of putting in a road from which a later subdivider benefits: Cinanni v Western Australia Planning Commission [2003] WATPAT 82.

1. His Honour also noted that in Skypoint Investments Pty Ltd v Gavranich [No 2] [2004] WADC 208, Martino DCJ reached a different conclusion to Crisford DCJ in Skypoint Investments Pty Ltd v Gavranich [2006] WADC 153 concerning the application of s 28A(1) to cases where a subdivisional road joined an existing road. Those two cases, concerned as they were with the application of s 28A to a situation where an original subdivider had constructed as part of a subdivision an extension of an existing road, provide little assistance in the resolution of this case.
2. In Lakewood Estates Pty Ltd v De Boer (1985) 62 LGRA 141, the Full Court of the Supreme Court of Western Australia determined, by majority, that an original subdivider who had constructed a road entirely within the subdivided land could recover a contribution to the cost of that road from a later subdivider who had acquired land from the original subdivider which had a common boundary with the existing road. In that case, after commenting on the difficulty caused by the language of the TPD Act, Kennedy J, who dissented as to the outcome, made the following comment (148) - (149):

... what the section contemplates is a road dividing the land which was originally subdivided from the land subsequently divided, the relevant common boundaries lying on either side of the road.

1. To that extent, the case accords with the facts of this case.

When did the subdivision of Lots 900 and 9101 occur?

1. Section 159, s 160 and s 161 of the PD Act form part of pt 10 div 4 of that Act. Part 10 is concerned with subdivision and development controls. Section 160 makes clear that for the purposes of div 4 of that part, land is subdivided on the date on which the approval of the WAPC is endorsed on the diagram or plan of survey in relation to the subdivision of the land. This section is unambiguous and is not concerned with the date on which conditional approval of a proposal to subdivide is given.
2. It follows from an application of the express words of the statute that:
   1. the subdivision of Lot 9101 occurred on 22 May 2008; and
   2. the subdivision of Lot 900 into Lots 903 - 906 (inclusive) occurred on 4 September 2015.
3. It is not in dispute that the defendants were responsible for carrying out, or causing to be carried out, the works required for Lot 900 to become Lot 903 - Lot 906 (inclusive) and for applying for the approval of the WAPC which was required to be endorsed on the relevant deposited plan such that new titles could be issued for the newly created Lots.
4. The defendants' contention is that they merely carried out a part of the subdivision of the Larger Development Area which had been approved by the WAPC on 3 December 2004 and hence come under the umbrella, so to speak, of the term 'original subdivider'.
5. A conditional approval to a subdivision of land is not the actual subdivision of land as it does not legalise the division of a larger parcel of land into smaller parcels or lots: D'Orazio v Perron Developments Pty Ltd [2014] WASC 304 [55] and [56].

1. The defendants submitted that the fact that each deposited plan ultimately submitted to the WAPC for approval of subdivision bore the same WAPC reference number (WAPC 125238) supported their argument that each subdivision was merely a stage of the development of the Larger Development Area rather than a separate subdivision.
2. The fact that, in subdividing Lot 900 as they did the defendants were bringing into effect a part of the plan for the area which at an earlier time had been proposed by the plaintiff and conditionally approved by the WAPC on 3 December 2004, well prior to their involvement with Lot 900, does not alter the effect of s 161 of the PD Act.
3. The effect of s 161 of the PD Act is that the subdivision of Lot 900 took place at a later time than the subdivision of Lot 9101 and hence the defendants are a later subdivider for the purposes of s 159 of the PD Act.

No common boundary with Sessilis Cresent and proposed or existing road arguments

1. The defendants contend that s 159 of the PD Act does not apply because Lot 900, having been created within the larger Proposed Development Area, did not have a common boundary with Sessilis Crescent.
2. The defendants also resist liability on the basis that Sessilis Crescent was not an existing road at the time subdivision of the Proposed Development Area was conditionally approved.
3. These contentions misapprehend the test which is to be applied under s 159 and are underpinned by their error regarding the time at which the relevant subdivisions occurred at law. The assessment which is to be undertaken pursuant to s 159 is an assessment of whether, at the time of the later subdivision, the lots created have a common boundary with a road which was in existence at the time of the later subdivision.
4. As Staude DCJ found in Level Holdings Pty Ltd v Laurendi [No 2] [43] for s 159 to apply three preconditions must exist. They are:
   1. there is access from the adjoining subdivided land to the existing road;
   2. the existing road has a common boundary with the original subdivider's land; and
   3. the existing road has a common boundary with the later subdivision or is joined by a road of that subdivision.
5. Where those preconditions are met, s 159 of the PD Act then requires consideration of whether the original subdivider contributed to or bore the costs of providing or upgrading the relevant road. Where that is the case, then s 159 allows the original subdivider to recover half of the reasonable costs of having done so.
6. In Lakewood Estates Pty Ltd v De Boer, Burt CJ found that the point in time at which Lots must have had a common boundary with a road is the time of the later subdivision. While that case concerned s 28A of the Town Planning Act 1928 (WA), the predecessor to s 159 of the PD Act, the decision still provides guidance as to the way in which the successor s 159 is to be interpreted because it has not changed in relation to the point in time at which the assessment is to be made.
7. In this case:
   1. the defendants are a later subdivider who on 4 September 2015 subdivided Lot 900 thereby creating Lots including Lots 903 - 906.
   2. Lots 903 - 906 had a boundary with and access to Sessilis Crescent;
   3. at 4 September 2015 the plaintiff's subdivision of Lot 9101 had already occurred (having taken place on 22 May 2008); and
   4. some of the Lots created from Lot 9101 had a common boundary with Sessilis Crescent.
8. Those facts having been established, it follows that, unless as a matter of fact the defendants either establish that they contributed to the costs of providing Sessilis Crescent or succeed in their construction arguments, the plaintiff is entitled to recover from the defendants a sum being one half of the reasonable costs it contributed to or bore solely in constructing the portion of Sessilis Crescent which abuts Lots 903 - 906.

Impact of the defendants paying scheme fees to Shire

1. The defendants contend that they contributed to the cost of providing Sessilis Cresent through their payment of five Local Planning Scheme (Cell 9) Developer Contributions to the Shire as was required of them under Local Planning Scheme No 3 (exhibit 1 - 16). The Shire's Local Planning Scheme No 3, states that Scheme Fees are raised to pay for 'Cell Infrastructure Works'.
2. The expression 'Cell Infrastructure Works' is defined in the Local Planning Scheme No 3 as follows:

(a) the acquisition of land for any public facility work or service as identified on the Cell 9 ODP and also any of the works or facilities referred to in this definition;

(b) the acquisition of land for a school as identified on the Cell 9 ODP;

(c) the provision of land for and the improvement of public open space as identified on the Cell 9 ODP;

(d) the creation of any water-way identified on the Cell 9 ODP;

(e) the widening or improvement of the following roads within Cell 9:

1. The Scheme then provides at par 4 (exhibit 1 - 16):

4.2 (Works not included in Cell Infrastructure Works) For the sake of clarity, the following works are not Cell Infrastructure Works:

(e) the provision of or contribution to the cost of providing any road within Cell 9 or the widening or improvement of any road within Cell 9 other than as specified in paragraph (d) of the definition of Cell Infrastructure Works.

1. The reference in 4.2(e) to roads in par (d) is intended to be a reference to the roads in par (e) as par (d) makes no reference to roads at all. Mr Singh, who had been an employee of the Shire with responsibility for (among other things) managing its infrastructure assets and the provision and maintenance of transport assets while Local Planning Scheme No 3 was in force, gave evidence that this was the case (ts 122 - 123).
2. Applying that interpretation, it follows that the defendants' Local Planning Scheme Cell 9 Developer Contributions did not go towards the construction of Sessilis Crescent.
3. The defendants are unable to resist liability on this basis.

1. The defendants also resist liability on the basis that the costs of the construction of Sessilis Crescent should have been, and would have been, built into the sale price of the lots which the plaintiff created by its subdivision of the land and any recovery from the defendants would amount to double, or at least over, recovery.
2. The defendants' argument assumes that the plaintiff profited from the sale of the lots. There is no evidence that that was the case.
3. No doubt a prudent developer would have endeavoured to realise the maximum sale price possible for each lot created by its subdivision of land. However, depending on the state of the market at the time lots are offered for sale, a developer may not profit from the sale of any or all lots developed. That said, the sale price of the lots created by a subdivision of the land by an original subdivider is irrelevant to the application and operation of, s 159 of the PD Act.
4. Section 159 of the PD Act sets out how the amount able to be recovered under that section is to be calculated. It does not permit any consideration of the profit that the earlier subdivider may have made from the sale of the lots which have a common boundary with the relevant road.
5. It follows that the defendants' argument on this point also fails.

1. The defendants deny liability for the sum sought to be recovered by the plaintiff on the basis that they neither:
   1. entered into any contract or agreement with the plaintiff to pay the amount claimed; nor
   2. ever acknowledged the payment was owed to the plaintiff.
2. The obligation of a later subdivider to pay an original subdivider under s 159 of the PD Act arises from the operation of the Act itself. If s 159 applies, the payment is owed to the plaintiff by the defendants irrespective of whether or not they appreciated, acknowledged or agreed that that was so.

1. The defendants also deny liability on the basis that, prior to purchasing Lot 900 they had searched the Certificate of Title for Lot 900 and had no knowledge of the possibility that they would be required to contribute to the road construction costs (defendant's submissions, pars [9], [10], [11], [12] and [18]). The effect of the first defendant's evidence is that the defendants had no knowledge of the possibility of the claim being made under s 159 at any time during the subdivision of Lot 900. They contend that any potential s 159 claim ought to have been registered as an encumbrance on the title of Lot 900.
2. The defendants' submission was expressed as follows (ts 150):

The defendants don't believe that legislation would permit a person just to drop a statement of claim or a letter of demand upon somebody without them being aware that they had a debt due. There must be some way that a person prior to subdividing land, must be made aware that they have a debt due without having to refer to the Act.

Like, to recover a debt due - the debt - what's a debt? A - a - a debt has to be an amount known by you. You must know you owe that money - to become a debt otherwise it's a false claim.

1. There is no requirement in the PD Act for any notice of potential liability to be given. The PD Act simply states that where an original subdivider can recover from a later subdivider under s 159, the amount may be recovered as a debt due, provided that any proceedings for recovery are commenced within six years from the date of the later subdivision.
2. It follows that the defendant must also fail on this ground.

1. The defendants contend that the relevant portion of Sessilis Crescent is owned by the State and that it is fraudulent for the plaintiff to claim for something it does not own (defendant's submissions [42]).
2. The ownership of a road is not what founds an entitlement to make a claim under s 159 of the PD Act. Section 159 of the PD Act recognises that a subdivider who subdivides land and who, by the terms of the subdivision approval, is required to give up a portion of that land through the creation of a road which it will not own, is entitled to recover from a later subdivider a percentage of the costs of providing the road in certain circumstances. The cost of providing the road includes the reasonable costs of designing and carrying out the construction works and the value of the relevant portion of the land which is given up to become the road.
3. Section 159 expressly acknowledges that the original subdivider gives up the ownership of the land comprising the road.
4. The plaintiff has not been involved in any fraud in making its claim and bringing this action against the defendants.

1. In their written submissions, the defendants assert that by operation of s 3(1) and s 58 of the Transfer of Land Act 1893 (TL Act), they are not liable to the plaintiff because they were the third party owners of Lot 900. This submission was not elaborated on by the defendants at the hearing.
2. Section 3(1) of the TL Act states that laws which are inconsistent with the TL Act shall not apply or be deemed to apply to land.
3. Section 58 of the TL Act states:

No instrument until registered in manner herein provided shall be effectual to pass any estate or interest in any land under the operation of this Act or to render such land liable to any mortgage or charge or to make any dealing in respect of Crown land effective, as the case requires; but upon such registration the estate or interest comprised in the instrument shall pass or as the case may be the land shall become liable in manner and subject to the covenants and conditions set forth and specified in the instrument or by this Act declared to be implied in instruments of a like nature, or the dealing in respect of Crown land is made effective, as the case required.

1. Section 159 of the PD Act is not inconsistent with the TL Act. It operates entirely separately and independently of the TL Act; allowing for monies to be recovered by an original subdivider from a later subdivider as a debt in particular circumstances. It does not create any interest in land.
2. The defendants also fail on this ground.

1. There were several documents in the trial bundle which the defendants sought to tender to which the plaintiff objected. In the interests of completing the hearing the plaintiff ultimately consented to the tender of these documents on the basis that I would consider their grounds of objection when deciding what weight I would give to the documents. The documents concerned are set out in a table below. I agreed to adopt that course in relation to these documents.

Copy of a facsimile from the Shire of Kalamunda to unknown - Tree Bonding

Copy of Lot 900 William Street - Council register of orders

Copy of Emails from Alice Clarke to Jordan Koroveshi with reply

Copy of the Certificate of Title - DP 58752 Vol 2687 Folio 92 registered 28 April 2008

Copy of Landgate Certificate of Title - Sellers for Lot 900

Copy of registered notifications on Certificate of Title (J263852 NR)

Copy of registered notifications of Certificate of Title (J284551 NO)

Copy of Development Control Policy 1.7 - Western Australian Planning Commission

Copy of REIWA & Law Society Joint Form of General Conditions for the sale of land 2002 (part only)

Copy of Water Corporation Land Development Agreement between the Water Corporation and Starshore Pty Ltd

Copy of pages from 'Minutes - Ordinary Council Meeting' 18 April 2005

Copy of Suncorp Banking Development Loan Summary for Lot 9000 William Street Wattle Grove

Copy of pages from 'Minutes - Ordinary Council Meeting' 20 February 2006

Copy of sales plan and annexure for Flame Trees Estate - Lot 22 William Street Wattle Grove

Copy of sales plan for Lot 22 William Street Wattle Grove

Copy of REIWA & Law Society Joint Form of General Conditions for the sale of land 2011

1. The defendants did not articulate the findings which they would submit I could make from these documents. Having considered these documents it seems that they evidence the inquiries the defendants made about notifications and encumbrances on the title to Lot 900 prior to it being purchased by them and the answers they received as a result of those inquiries. The point being, as I apprehend it, that they had no notice of the possibility that they could be responsible for paying for part of the cost of the construction of Sessilis Crescent by the plaintiff.
2. I would have allowed the tender of those documents on that basis. However, as I have found that there is no requirement for the earlier subdivider to give any notice of an entitlement to make such a claim before the liability of a later subdivider arises under s 159 to s 161 of the PD Act, the admission of these documents into evidence does not assist the defendants' case.

1. It follows from what I have found above that the defendants are liable to the plaintiff for one half of the reasonable costs which the plaintiff contributed to or bore solely in providing the relevant portion of Sessilis Crescent.

1. Having determined that the defendants are liable to the plaintiff, it falls to determine the quantum of that liability.
2. As I stated at the outset, the defendants dispute quantum, asserting that the calculation was not undertaken in accordance with the requirements of the PD Act. In particular, the defendants assert that the market value of the land was not determined as a percentage of the market value of the total area of land comprised in the subdivision as the area of the road bears to the total area as s 159(3)(a) requires.
3. The defendants did not, however, take any other issue with the plaintiff's evidence regarding the calculation of quantum and adduced no evidence of their own regarding the quantum.

Calculation of the defendants' portion of road costs

1. Section 159(1) of the PD Act effectively provides that where the later subdivider has not contributed to the cost of providing the common road, the original subdivider may recover from the later subdivider a sum representing one half of so much of the reasonable costs as was borne by the original subdivider in providing or upgrading the part of the existing road which has a common boundary with the lot or lots created by the later subdivider.
2. Section 159(3) then sets out what the expression 'the cost of providing a road' means in s 159(1) while s 159(2) defines some of the terms used in s 159(3). Those sections were set out earlier in this judgment and do not need to be repeated here.

Market value of the relevant portion of Sessilis Crescent -s 159(3)(a)

1. Section 159(3)(a) directs attention to the market value of the common portion of road as assessed at the time of the earlier subdivision.
2. Evidence was given by Mr Geers, a licensed valuer, as to his assessment of the value of the portion of Sessilis Crescent which abutted the later subdivision.
3. His evidence was that he assessed the value of the relevant portion of Sessilis Crescent as at the date of the original subdivision (exhibit 1 - 2, page 3) and that he undertook that task in accordance with the requirements of s 159 and s 155 of the PD Act (exhibit 1 - 2, page 3).
4. Mr Geers' evidence was that he valued the 910 sqm of Sessilis Crescent at $237,000 (exhibit 1 - 2, executive summary and page 18).
5. The defendants contend that the assessment of the value of the relevant portion of Sessilis Crescent has not been done in conformity with the requirements of s 159 of the PD Act and therefore they are not liable for the costs. Their complaint is that Mr Geers' assessment of the value of the relevant portion of land given up for the creation of Sessilis Crescent is arrived at by valuing the land per square metre rather than being expressed as a percentage of the value of the totality of the area which was given to the creation of Sessilis Crescent.
6. The fact is that the value of the land would be the same irrespective of whether it were calculated as a percentage of the valuation of the whole of the land or by working out a cost per square metre and then multiplying that cost by the number of square metres which are comprised in the relevant portion of Sessilis Crescent.
7. Therefore, given that neither Mr Geers' expertise nor his valuation was challenged by the defendants, I accept Mr Geers' evidence as to the market value of the relevant 910 sqm portion of Sessilis Crescent.

Reasonable costs of designing and carrying out specified works - s 159(3)(b)

1. The plaintiff's evidence was that it engaged various experts to assist it in carrying out the subdivision of the Proposed Development Area which had been conditionally approved by the WAPC. It is not in dispute that VDM Engineering was an engineering company which was engaged to oversee the project and to design the civil works which were to be undertaken in the course of the subdivision. It is also not in dispute that Miluc Civil Pty Ltd (Miluc) is a civil contractor who was engaged by the plaintiff, on the advice of VDM, to undertake the civil works which had been designed by VDM.
2. The undisputed evidence of the plaintiff is that the civil construction works progressed in stages and that at the completion of each stage Miluc issued to the plaintiff an invoice for what is known as a 'progress payment' for the stage. Each invoice was then assessed by VDM and provided to the plaintiff for payment only after VDM had assessed that the amount invoiced was reasonable and the works for which payment was being claimed had actually been completed (exhibit 4 [45] - [56]).
3. The plaintiff's evidence was that it paid 10 progress payments to Miluc which represented the total payments for all of the works carried out by or for it in connection with its development of the Proposed Development Area, including the construction of Sessilis Crescent (exhibit 2 [48] - [54]). The total paid was $865,801.36 (exhibit 1 - 70.9; exhibit 1-- 69.13).
4. Mr Golder is a civil engineer. He was engaged by the plaintiff to calculate the costs of providing the works for the relevant portion of Sessilis Crescent. His expertise in this regard was not challenged by the defendants.
5. His unchallenged evidence was that the costs charged by Miluc for the works which it undertook for the plaintiff in the development of the Proposed Development Area were, in his expert opinion, reasonable (exhibit 3 [73]). In the absence of any evidence to the contrary I accept his evidence on this point.
6. Mr Golder's evidence was that he calculated the costs of designing and carrying out the works set out in s 159(3)(b)(i) - (iii) in so far as they related to the relevant portion of Sessilis Crescent by reference to the rates and quantities which were set out in Miluc's Progress Payment 9 because that was the payment that covered the works involved in constructing Sessilis Crescent (ts 90 - 91). He gave evidence that he utilised three different methods in calculating the cost (ts 95; exhibit 3 [24]). Mr Golder gave reasons for adopting each of the three methods. Mr Golder's evidence was that, based on his expertise and experience, the methods he employed to calculate and apportion the costs of the construction of portions of roads within a development area were methodologies he and others in his field would engage when a valuation of this type is being undertaken (ts 95).
7. Neither the methods used nor the calculations themselves were challenged by the defendants in these proceedings.
8. I therefore accept Mr Golder's evidence that the reasonable costs of providing the works for the relevant portion of Sessilis Crescent was $33,143.10.
9. It follows that the cost of providing the relevant portion of Sessilis Crescent for the purposes of s 159(3)(a) and s 159(3)(b) of the PD Act is the sum of the cost of providing the land ($237,000) plus the costs of the relevant works ($33,143.10), being a sum of $270,143.10.

1. Section 159(3) then requires the sum arrived at be escalated by the percentage by which the CPI last published prior to the date of the subsequent subdivision has increased over the CPI last published prior to the original subdivider subdividing the land referred to in s 159(1)(b).
2. It was agreed that the CPI last published prior to 22 March 2008 was 90.5 and the CPI last published prior to 4 September 2015 was 107.7. The relevant percentage is therefore to 19.0055%.

Total cost of providing Sessilis Crescent and sum to be apportioned to the defendants

1. When $270,143.10 is escalated by 19.0055%, the total of the reasonable costs of providing the relevant portion of Sessilis Crescent which were borne by the plaintiff is found to be $321,449.20. Fifty percent of that sum is $160,724.60.

1. Any sum ordered to be paid in respect of a claim under s 159 of the PD Act will be a taxable supply. Goods and Services Tax Ruling GSTR 2001/4 confirms that this is the case. Accordingly, the defendants are also liable to pay to the plaintiff the amount of GST which the plaintiff will be required to remit to the Australian Tax Office (ATO).

1. The plaintiff claimed interest on the GST amount claimed. No submissions were made by either party about why interest on the GST should or should not be payable. As it is not apparent to me that the plaintiff would be required to remit to the ATO the GST payable on the judgment sum together with interest on that sum, I have not awarded the plaintiff interest on the GST amount which the plaintiff is to be paid by the defendants.
2. I will however give liberty to the parties to make further submissions in relation to that matter within 14 days should they wish to pursue their claim for interest on the sum of $16,074.26.

1. It follows from the above that the defendants are liable to the plaintiff in the following amounts:
   1. $160,724.60 (being the sum owed under s 159 of the PD Act);
   2. Interest on the $160,724.60 at a rate of 6% per annum calculated from 4 September 2015 until the date of judgment.
   3. $16,074.26 (being the GST amount).
2. I will allow the parties 14 days to file further written submissions in relation to the claim for interest on the GST amount, and I will also hear from the parties as to what orders should be made, including as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

CITATION : STARSHORE PTY LTD -v- KELLAS [2018] WADC 113 (S)

Practice and procedure - Costs - Special orders - Whether costs should be taxed on an indemnity basis - Whether rejection of Calderbank offer was unreasonable - Whether if costs to be taxed on party/party basis the maximum allowances for certain items in Determination should be removed

Legal Practitioners (Supreme Court) (Contentious Business) Determination 2016

Legal Profession Act 2008 (WA), s 280(2)

Legal Profession (Supreme Court Appeals) (Contentious Business) Report 2016

Planning and Development Act 2005 (WA)

Rules of the Supreme Court 1971 (WA), O 66 r 1 and 2

Bhagat v Royal Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159

Colgate Palmolive Company v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225

Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S)

Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1

Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435

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

Starshore Pty Ltd v Kellas [2018] WADC 113

Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)

Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S)

Woodley v Woodley [No. 2] [2017] WASC 94 (S)

1. In a decision delivered 6 September 2018 (Starshore Pty Ltd v Kellas [2018] WADC 113), I found the defendants liable to the plaintiff for one half of the reasonable costs which the plaintiff had incurred in providing a portion of Sessilis Crescent. The liability arose by virtue of the operation of relevant sections of the Planning and Development Act 2005 (WA) (PD Act). I found for the plaintiff in the sum of $160,724.60 together with the sum of $16,074.26 (being the GST payable on the judgment sum) and interest on the sum of $160,724.60 at a rate of 6% per annum from 4 September 2015.
2. At the time of delivery of my decision the issue of costs was reserved and directions were made for the filing of affidavits and submissions in relation to costs and the then unresolved issue of whether interest should be awarded on the GST component of the judgment sum.
3. Pursuant to the directions the plaintiff:
   1. Informed the court that it that it no longer wished to proceed with its application for interest on the GST; and
   2. Filed the following documents:

(a) a minute of proposed orders (dated 26 September 2018) to be made consequent upon the decision, including that judgment be entered for the plaintiff in the sum referred to above;

(b) an affidavit of Helen Jennifer Burnside dated 28 September 2018; and

1. The plaintiff's minute of proposed orders sought, among other things:

(i) that costs be paid by the defendants to the plaintiff on an indemnity basis; or

(ii) as an alternative to (i), that costs be taxed on the basis that:

(a) costs incurred up to and including 22 December 2017 be taxed on a party/party basis but without regard to the maximum hourly rates in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2016 and/or the maximum allowances fixed for items 1(a), 1(c), 6(b), 7(b), 8, 16, 17 and 24(a) in that Determination; and

(b) from 22 December 2017 costs be taxed on an indemnity basis.

(i) a minute of proposed orders dated 1 October 2018;

(ii) an affidavit of Ms Alice Clarke dated 8 October 2018; and

1. Most of the defendants' submissions and affidavit material was concerned with the issue of why the decision which I have reached in this matter is wrong at law and sought to re-agitate or supplement the submissions made at trial with a view to persuading me to revisit my decision.
2. At the hearing of the costs application on 18 October 2018, I declined to have regard to material directed at those issues or to hear submissions regarding why my decision was wrong and confined the defendants to making submissions on the question of costs.
3. The defendants submitted that no order for costs should be made.

1. The principles regarding the award of costs are well settled and understood.
2. The power to award costs is a statutory power and its exercise is discretionary: s 64(1) of the District Court Act 1935 (WA). Where no order as to their payment of apportionment is made the default position is that costs shall abide the event: s 64(1) District Court Act.
3. As Pritchard J said in Woodley v Woodley [No. 2] [2017] WASC 94 (S) [14] (footnotes omitted):

That statutory discretion is not unqualified and must be exercised judicially in accordance with established principle and factors directly connected with the litigation. The most important factor which guides the exercise of the costs discretion is the result of the litigation.

1. Order 66 r (1) and (2) of the Rules of the Supreme Court 1971 (WA), which apply by operation of s 87 of the District Court Act, essentially provide that without limiting the discretion, the court will ordinarily order that a successful party recover its costs. Rule (2) provides that a court may deprive a successful party of its costs in whole or in part or order costs be paid in whole or in part by the successful party to the unsuccessful party if the conduct of the successful party has resulted in unnecessary or unreasonably incurred costs.
2. The usual order that costs follow the event was explained by McHugh J in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72. In that case his Honour said [67]:

The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in the reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

1. Misconduct by the successful party may disentitle a successful party to an award of costs. In Oshlack v Richmond River Council, McHugh J referred to 'misconduct' as follows [69] (footnotes omitted):

'Misconduct' in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual orders as to costs when the successful party by its lax conduct effectively invites the litigation, unnecessarily protracts the proceedings, succeeds on a point not argued before a lower court, prosecutes the matter solely for the purpose of increaking of any costs order against them. They do so on the following bases:

1. the plaintiff's failure to comply with the orders of the court as to the timing of the filing and serving of certain documents (particularly its witness statements) demonstrates its disregard for the court, was designed to show the defendants that the plaintiff was in charge of the litigation process and was thus intimidatory;
2. the plaintiff refused to accept a settlement offer made by the defendants on 1 March 2017 which refusal resulted in the defendants being compelled to pursue their defence and was the cause of the plaintiff incurring costs after that date;
3. the defendants will be unable to pay any costs order without selling their primary residence;
4. at the time they purchased Lot 900 the defendants were unaware that the plaintiff had deferred the payments which it was liable to make for Cell Contributions in respect of the proposed subdivision of that Lot (Cell Contributions being payments which a subdivider was liable to pay to the Shire of Kalamunda (in which Sessilis Crescent was located) in connection with the subdivision of land within the Shire). This meant that the defendants were ultimately required to pay the Cell Contribution sums as conditions of their subdivision of the Lot. They say that as they have, therefore, already made payments for subdivision costs which should have been incurred by the plaintiff, they should not now also be required to pay the plaintiff's legal costs.

• While delay in complying with court imposed timeframes is unfortunate, it is not uncommon in litigation. In this case, the delay in filing and serving the relevant documents was not lengthy. Further, there is nothing in the affidavit material before me that would support the claim that the delay was occasioned as a deliberate strategy to intimidate the defendants albeit that the defendants, as, by that time, self-represented litigants, may have found the delay distressing. It is clear from the material in the affidavits that the plaintiff communicated with the defendants when it became apparent that there would be a delay in complying with the relevant court timetable and, as was appropriate, indicated to the defendants that it would not take objection to them having a corresponding extension of the time in which to file documents in response. In those circumstances, I do not regard the delays of which the defendants complain as capable of being characterised as demonstrating conduct of the kind that would disentitle the plaintiff to an order for costs following the event of its success.
• The lawful deferral of the payment of the Cell Contributions by the plaintiff does not constitute misconduct by the plaintiff, although I do not understand the defendants to have characterised it in that way. The fact that the defendants had to make those deferred payments, and that they did not know of their liability to do so prior to purchasing Lot 900, does not bear upon the question of whether the plaintiff should be able to recover its legal costs.
• Further, the fact that the paying party may be unable to meet a costs order does not disentitle the claiming party from being awarded costs.
• The defendants acknowledge that their offer to settle of 1 March 2017 proposed a settlement sum which was considerably less than the plaintiff had demanded (see the defendants' outline of submissions at [49]). They say this was so because in making the offer they had taken into account that they had made Cell Contribution payments which the plaintiff had deferred and had also had to pay for the decommissioning and removal of a septic disposal system as part of its subdivision. The defendants say the plaintiff should have made those payments when it owned the land. The defendants say that their payment of these costs meant that the plaintiff had a financial benefit in its subdivision such that the defendants should not have had to pay the costs of the litigation.
• The fact that the defendants had to bear those expenses and that they did not know of their liability to do so prior to purchasing Lot 900, again, does not bear upon the question of whether the plaintiff should be able to recover its legal costs.
• I am satisfied that, in this case, there is no reason to depart from the usual position that the successful litigant should be awarded costs.

1. A party entitled to costs may apply to the court for an order that costs awarded in their favour be paid other than as between party and party.
2. To warrant a departure from the ordinary rule that costs should be paid on a party and party basis there should be some special or unusual feature in the case. The question must always be whether the particular facts and circumstances of the case warrant the making of an order for payment of costs other than on a party and party basis: Colgate Palmolive Company v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225, 233 - 234.

1. The plaintiff has applied for costs to be paid on an indemnity basis.
2. The plaintiff says that it is entitled to an award of indemnity costs for the following two reasons:
   1. The defendants' case was 'hopeless'.
   2. The defendants' rejection of the Calderbank offer made 22 December 2017 was unreasonable.
3. The principles upon which indemnity costs orders should be made are well established. They were set out in Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10] where the court said:

The principles applicable to the making of indemnity costs orders in litigation may be briefly summarised, as follows;

1. A superior court, in its inherent jurisdiction, may make an indemnity costs order (see also Supreme Court Act 1935 s 37, and Legal Profession Act 2008 s. 280).
2. An indemnity costs order departs from the usual costs disposition order, whereby costs are awarded on a party/party basis: EMI Records Ltd v Ian Cameron Wallace Ltd [1938] Ch 59.
3. The court's discretion as to the making of an indemnity costs order is a discretion that must be exercised judicially. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd [1988] FCA 202; (1988) 81 ALR 397, 400 Woodward J said:

Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases, where 'there is some special or unusual feature in the case to justify the court exercising its discretion in that way'. (emphasis added)

1. To obtain an indemnity costs order, it is not the case that the successful party needs to show a collateral purpose, or establish some species of fraud against the unsuccessful party. In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) [1993] FCA 70; (1993) 46 IR 301 at 303 French J by reference to the observations of Woodward J in Fountain Selected Meats, said:

It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.

1. Furthermore, in Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (Unreported, FCA, 3 May 1991) (referred to by Ipp J in Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190, 191), French J observed:

The categories in which the discretion may be exercised are not closed.

1. Competing principles need to be balanced in assessing the making of a potential award of indemnity costs. In Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7] Wheeler J observed:

On the one hand, a party should not be discouraged, by the prospect of an unusual costs order, from persisting in an action where its success is not certain. Uncertainty is inherent in many areas of law and the law changes with changing circumstances. It is inappropriate that a case be too readily characterised as 'hopeless' so as to justify an award of indemnity costs to the successful party. However, where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear the increased cost. Persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct a rise to the costs should bear them in full.

1. An indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers: see Colgate-Palmolive Company v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 233 (Sheppard J), referred to by Pullin J in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9].
2. A properly crafted special costs order may obviate the need for an indemnity costs order, where components of cost scale items are allowed above the applicable scale ceiling: see Flotilla [20] - [24].
3. An indemnity costs order may not be appropriate if the claimed costs would be likely to be recovered under the standard order for party and party costs, or under a special order raising or removing a scale ceiling allowance: Flotilla [11]. In Unioil (No. 2) (193), Ipp J observed:

However, counsel for the plaintiffs was unable to identify any costs so incurred that would not be covered by an order for party and party costs. An order for indemnity costs on this ground is therefore not warranted.

1. Nonetheless, an indemnity costs order will constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct: see Brookvista Pty Ltd v Meloni [2009] WASCA 180 [32], Flotilla [25]. In Flotilla Pullin J said [26]:

A solicitor should not, in my view, resort to an application for an indemnity costs order merely to secure the recovery which could be achieved by a properly formulated special costs order, unless the unsuccessful party's conduct is genuinely to be impugned by the successful party.

1. Pritchard J in Woodley [18] added the following additional principle (footnotes omitted):

... an order for costs on an indemnity basis may be made on the grounds that an action was 'hopeless' in the sense that the action was 'commenced or continued in circumstances where the plaintiff, properly advised, should have known that the action had no prospect of success. An action which appears to have been commenced or continued in circumstances where the applicant, properly advised, should have known that he or she had no chance of success, may be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of known facts or the clearly established law.

1. Rejection of a Calderbank offer may justify an award of indemnity costs if its rejection was unreasonable: Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115 [16]; [2009] WASCA 115; (2009) 41 WAR 1. The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted, does not mean that its rejection was unreasonable: Ford Motor Company of Australia Ltd v Lo Presti [18].
2. The party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an award of indemnity costs in his or her favour.
3. The exercise of the court's discretion in relation to applications for indemnity costs and other special costs orders draws on the trial judge's knowledge of how the parties approached the litigation, and of the reasonableness of the parties' conduct in all of the circumstances. Deciding whether conduct is 'reasonable' or 'unreasonable' always involves matters of judgement and impression: Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 [24].
4. Factors which are considered by the court in considering whether to award indemnity costs following the rejection of a Calderbank offer were set out in Ford Motor Company of Australia Ltd v Lo Presti [19] citing Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [25] as follows:

(a) the stage of the proceedings at which the offer was received;

(b) the time allowed for the offeree to consider the offer;

(d) the offerees prospect of success, assessed as at the date of the offer;

(e) the clarity with which the terms of the offer were expressed; and

(f) whether the offer foreshadowed an application for indemnity costs in the event of the offerees rejecting it.

1. Although the courts are more reluctant to make order for indemnity costs against litigants in person than legally represented ones, in appropriate cases they will do so: Woodley v Woodley [No 2] [33] - [36] (Pritchard J). At [33] her Honour observed:

... While it is true that parties who are unrepresented in litigation face the same potential costs outcomes as represented parties, the fact that a party is not legally represented is an important consideration in assessing whether their conduct was improper or unreasonable, so as to warrant the sanction of an order for costs on an indemnity basis. Whether an action was commenced or pursued for an improper purpose, or unreasonably, requires attention to what the party knew, or ought reasonably to have known, in the circumstances. If a party is unrepresented, and has no legal training, they are likely to have considerable difficulty, for example, in determining whether they have a cause of action, in properly pleading a case, in assessing the strength of particular allegations from a legal perspective, or in assessing the admissibility of evidence. Allowances must clearly be made for that lack of knowledge in assessing whether an indemnity costs order is warranted.

1. In Bhagat v Royal Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 [13] Hodgson CJ considered the issue of costs orders where a party was self-represented and observed:

... I accept that a court does have to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. The Court may in those circumstances refrain from making orders against litigants in person for conduct that might be considered as justifying orders for costs against represented litigants. By the same token, litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they otherwise would be, by not focusing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstances that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event.

1. The Calderbank offer was made by the plaintiff in a letter dated 22 December 2017 which was annexed to the affidavit of Ms Burnside. It was therefore made some five months prior to the trial. The offer was open until 19 January 2018. That offer was rejected by the defendants prior to it lapsing. The Calderbank offer was 13 pages long and went into great detail about the law which applied to the plaintiff's claim and why the defences advanced by the defendants at that time had no prospects of success. It clearly stated that if the settlement offer was rejected and the matter proceeded to trial, the plaintiff would seek costs on an indemnity basis in the event that it were ultimately successful and alternatively on the basis of party and party costs until 22 December 2017 and thereafter on an indemnity basis.
2. The offer made was that the claim be settled for the sum of $180,000 with no order as to costs. This was clearly less than the sum of $201,232.17 which the plaintiff said was then owing and the approximately $120,000 in costs which the plaintiff informed the defendants would be its estimate of the costs that would have been incurred following a two day trial.
3. The defendants put the plaintiff to the expense of refuting grounds which were either hopeless or devoid of any prospects of success. The circumstances are such that, if properly advised, and acting reasonably, the defendants would not have taken this matter to trial.
4. Further, the defendants effectively put the plaintiff to proof of the costs which it claimed in connection with the provision of land for, and the construction of, the relevant portion of Sessilis Crescent notwithstanding that they did not seriously cross-examine any of the witnesses about those costs and despite the fact that they led no evidence of their own to dispute those costs. While these might be said to be matters uniquely in the knowledge of the plaintiff, it was in my view, unreasonable to require the plaintiff to prove these matters at trial in circumstances where no alternate was to be put forward. The better approach in that circumstance would have been to accept the amount claimed was correct and simply to resist liability on the statutory construction points thereby avoiding the costs of the preparation for and the attendance of witnesses at the trial.
5. It is perhaps easy, with the benefit of hindsight, to construe the defence as always having been hopeless no matter how honestly the defendants hold the belief to the contrary. However, it is notable that the plaintiff did not bring a summary judgment application in the proceedings as would have been the appropriate course of action where it took the view that the defence was hopeless from the outset.
6. The defendants informed me at the hearing of the costs application that their lawyers ceased to act for them following the mediation not because they had formed the view that the case had no merit, but because the defendants could no longer afford to be legally represented. The court was told that the defendants' solicitors had informed them that they had a case. I accept that the defendants did not defend the action for any improper purpose and at all time held, and continue to hold, the honest belief that their construction of the law is the correct one notwithstanding that the plaintiff had, by the very comprehensive terms of its Calderbank offer, endeavoured to persuade them from that view.
7. Given no summary judgment application was made and given that I accept that there was no demonstrated improper or collateral purpose in the maintenance of the defence case, I do not consider that the high threshold for the exercise of the discretion to make an order for indemnity costs to be paid from the outset has been met.
8. I do, however, consider that the rejection of the Calderbank offer was unreasonable. The offer was clearly a legitimate attempt to resolve the proceedings on terms which were reasonable in light of the defendants' case. The reasons why each ground of appeal then raised by the defendants was untenable were carefully articulated as was the fact that rejection of the offer would lead to an application for indemnity costs being made in the event that the plaintiff were to be successful after trial. The defendants were given an adequate period of time within which to consider and accept the offer, the settlement sum was to have been paid in full within 14 days of the parties executing the settlement deed, and the offer itself was for a sum which was significantly less than the amount for which the defendants were ultimately found to be liable to the plaintiff, particularly when regard is had to the fact that the offer was that each party would bear its own costs.
9. In those circumstances, I consider that it is appropriate for the defendants to pay the plaintiff's costs on an indemnity basis from the time of making of the Calderbank offer.

1. The plaintiff has sought, as an alternative to the making of an indemnity costs order, an order that the hourly rates and the maximum allowances provided in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2016 (the Determination) for certain aspects of the work performed prior to the making of the Calderbank offer be removed so that costs can be taxed without regard to those maximums. The items are:

(4) 8 - inspection and giving inspection of discovered documents;

(7) 24(a) - pre-trial, mediation, conferrals and other conferences.

1. Section 280(2) of the Legal Profession Act 2008 (WA) provides that if the court 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 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.

1. The principles upon which special costs orders may be made were set out by the Court of Appeal in Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S) [7] - [9] summarised by Edelman J in Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S) [5] as follows (footnotes omitted):

(i) The court must form an opinion which has two components. First, the court must determine that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate. Second, the court must conclude that the inadequacy arises because of the 'unusual difficulty, complexity or importance of the matter'.

(ii) Having heard the matter and being familiar with the way in which the case was conducted and the issues which were litigated the court is in a position to form the opinions required under the section as matters of impression rather than 'detailed evaluation', 'precision', 'science', or 'mathematics'.

(iii) As to the first question (inadequacy) the court must form the view that the maximum amount allowable under the relevant scale item is inadequate in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the relevant costs determination. Until that threshold is crossed, the power will not ordinarily be exercised.

(iv) A conclusion that it is fairly arguable that the taxing officer might properly allow costs at an amount greater than the amount allowable under the Scale does not always require evidence of the costs actually incurred.

(v) As to the second question (the cause of the inadequacy being unusual difficulty, complexity or importance), the word 'unusual' in this context means unusual having regard to what one might describe as the usual run of civil cases determined in the Supreme and District Courts. That essentially involves the making of a value judgement by the court, having regard to the court's experience of the particular case when compared with the usual run of cases. And the word 'importance' in s 280(2) encompasses importance to the parties; it does not require broader importance to the public or a sector of the public.

(vi) Although replacing the amount of the Scale item with a different ceiling may be appropriate where sufficient information exists to make that assessment, it is not uncommon for an order to be made removing the limit for the Scale item without replacing that limit with a different ceiling.

(vii) One of the principles that should guide a court in addressing an issue under s 280(2) is that the court should not usurp the role of the taxing officer.

1. In considering that application I have had regard to Ms Burnside's affidavit sworn 28 September 2018 and particularly to the draft bill of costs annexed as HJB 1 to that affidavit (the Draft Bill). I have also had regard to what I know about the case as a result of having been the trial judge. I have had regard to the court file and to the hourly rate and to the maximum allowances provided in respect of the relevant items provided in the Determination. I have also had regard to the public purpose for which the Determination is made and the process by which maximum hourly rates and maximum allowances in the Determination are set.
2. It appears from my consideration of the Draft Bill and the case itself that it is fairly arguable that the bill of costs to be presented to the taxing officer may properly tax at an amount greater than the limit which would be imposed by the Determination for the relevant items. I do not, however, accept that the inadequacy arises from any unusual difficulty of the case. While there were many grounds upon which liability was resisted by the defendants, I do not regard the case to have been unusually difficult having regard to the types of cases which would usually come before this court.
3. I do accept though that the costs allowable in respect of the provision of discovery and inspection and the preparation for the trial would be inadequate because of the complexity of the proceedings, which complexity arose from the manner in which the defendants conducted the case.
4. I find, therefore, that it is appropriate that those items should be taxed without regard to the maximum amount allowable in the Determination.
5. However, I do not consider that it is appropriate to remove the maximum hourly rate provided in the Determination for those items. Those rates are set after recommendations were made by the Legal Costs Committee following its detailed consideration of the relevant issues and involved a processes of consultation and public submission: see Legal Profession (Supreme Court Appeals) (Contentious Business) Report 2016. I can see no reason to depart from the maximum hourly rates set in the Determination in this case.

1. Consequent upon the decision which I reached in the main action and for the reasons which I have set out, I propose to make the following orders:
   1. There be judgment for the plaintiff.
   2. The defendants pay to the plaintiff:

(c) interest on the sum of $160,724.60 at a rate of 6% per annum from 4 September 2015 to judgment 7 December 2018 being a sum of $31,069.92.

1. The defendants pay the plaintiff's costs of the action, including any reserved costs:

(a) until 22 December 2017, on a party and party basis to be taxed if not agreed; and

1. The limits on costs fixed in the applicable Determination for the following items be removed:

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.