Supreme Court of WA|2009-08-07|Before: Miere J

LEIGHTON CONTRACTORS PTY LTD -v- PUBLIC TRANSPORT AUTHORITY OF WESTERN AUSTRALIA [No 7] [2009] WASC 218 (7 August 2009)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : LEIGHTON CONTRACTORS PTY LTD -v- PUBLIC TRANSPORT AUTHORITY OF WESTERN AUSTRALIA [No 7] [2009] WASC 218

BETWEEN : LEIGHTON CONTRACTORS PTY LTD (ABN 98 000 893 667)

Practice and procedure - Costs - Whether plaintiff was the successful party - Whether defendant should pay plaintiff's costs - Turns on own facts

Practice and procedure - Costs - Special costs order - Whether costs allowable under relevant costs determination are adequate - Whether allowable amount is inadequate because of the complexity or importance of the action - Turns on own facts

Practice and procedure - Costs - Whether costs should be awarded against the defendant in favour of non-party - Turns on own facts

Non Party Australian Statistician : Australian Government Solicitor

Amaca Pty Ltd (Formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158 (S)

Cazaly Iron Pty Ltd v Minister for Resources [No 5] [2008] WASCA 181

Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373

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

Individual Homes v Macbreams Investments (2002) WL 31476344

King v GIO Australia Holdings Ltd [2001] FCA 1773; (2001) 116 FCR 509

Leighton Contractors Pty Ltd v Public Transport Authority of Western Australia [2007] WASC 196

Leighton Contractors Pty Ltd v Public Transport Authority of Western Australia [No 5] [2007] WASC 233

Naidoo v Williamson [2008] WASCA 179

Re Pan Pharmaceuticals Ltd Selim v McGrath [2004] NSWSC 129, 48 ACSR 681

Stanley v Phillips [1966] HCA 24; (1966) 115 CLR 470

Symphony Group Plc v Hodgson [1994] QB 179

The Australian Statistician v Leighton Contractors Pty Ltd [2008] WASCA 34

1 LE MIERE J: This case is about which index should be substituted for the Table 42 index in calculating Rise and Fall under the Project Deed.

2 On 18 September 2008 I delivered reasons for judgment and declared that the 4113 National index be substituted for the Table 42 index in the schedule to Annexure G to the Project Deed for the purpose of calculating the relevant Rise and Fall in progress payments. I further ordered that the defendant's counterclaim be dismissed. I made orders providing for the parties, and the Australian Statistician, to make applications and submissions in relation to costs. These are my reasons for judgment in relation to costs. These reasons should be read with my reasons for judgment delivered on 18 September 2008 which set out the circumstances of, and background to, these proceedings.

3 The plaintiff proposes five orders in relation to costs. The first is that the defendant pay the plaintiff's costs of and incidental to the claim and the counterclaim. The second and third are special costs orders pursuant to s 215 of the Legal Practice Act 2003 (WA). The fourth is to the effect that the quantum of costs be determined as a lump sum by the trial judge. The fifth is that the defendant pay the costs of applications by the plaintiff for non-party discovery.

4 The defendant does not agree with the orders proposed by the plaintiff. As to the costs of the action, the defendant says that there should be no order as to costs or alternatively the defendant should pay 20 - 25% of the plaintiff's costs (ts 2919). The defendant says that it is entitled to its costs associated with certain issues. The defendant agrees in part, but not in whole, with the special costs orders proposed by the plaintiff. The defendant opposes an order that the quantum of costs be determined as a lump sum by the trial judge. The defendant opposes any order that it pay the costs of applications by the plaintiff for non-party discovery.

5 The Australian Statistician seeks an order that the defendant pay the Australian Statistician's costs incurred in the proceedings. That is opposed by the defendant.

6 The plaintiff submits that it was the successful party and that the general rule is that the successful party to an action recovers its costs.

7 Subject to the provisions of the Supreme Court Act 1935 (WA) or any other Act and to the rules of court, the costs of and incidental to all proceedings are in the discretion of the court: Supreme Court Act s 37(1). The general rule is that the successful party to an action receives its costs from the unsuccessful party: O 66 r 1(1) Rules of the Supreme Court 1971 (WA). The general rule is subject to O 66 r 1(3) which provides that where 'a party though generally successful in an action has, by the introduction of some issues or issues on which [it] has failed, increased the costs the court may order [that] party to pay the costs of any such issue or issues'.

8 In Amaca Pty Ltd (Formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158 (S) the Court of Appeal observed:

[T]he power to adjust an order for costs by reference to particular issues upon which the generally successful party has failed, is properly exercised only where there are discrete and severable issues upon which the generally successful party has failed, and which have added to the cost of the proceedings in a significant and readily discernible way [7].

9 The plaintiff was the successful party to the action. The defendant had directed that Rise and Fall be calculated by using the Table 48 index and had calculated progress payments on that basis. The plaintiff disputed that the Table 48 index was an eligible index for substitution for the discontinued index. The court held that the plaintiff was correct in that claim. The court declared that index 4113 National should be substituted for the discontinued index. The plaintiff is entitled to a substantially greater payment for Rise and Fall calculated by using the 4113 National index than if it were calculated using the Table 48 index.

10 The defendant has identified a number of issues on which the plaintiff failed and which were introduced by the plaintiff and which the defendant submits increased the costs.

11 The defendant submitted that both parties advanced the 4113 National index as their least preferred candidate index and therefore, in substance, both parties failed in their primary cases. I do not accept that submission. The formal dispute which preceded the action was the plaintiff's notice that the determination of the PTA Representative that the Table 48 index was to replace the Table 42 index in calculating Rise and Fall was invalid and that the Table 48 index could not apply. The defendant's primary position was that the Table 48 index was the appropriate index for substitution. That issue was resolved in favour of the plaintiff.

12 The plaintiff initially claimed that the DHW index should be substituted for the Table 42 index. At the commencement of the trial the plaintiff submitted that each of four output indexes met the requirement of an index for substitution and in order of preference the 4113 National index was its fourth preference. The defendant submitted that if the Table 48 index was not an eligible candidate index for substitution then the HB index should be substituted for the discontinued index. In this part of the case the principal dispute was whether the 'nearest index' to be substituted for the discontinued index was the HB index as submitted by the defendant or one of the output indexes as submitted by the plaintiff. The plaintiff was successful in that part of the case.

13 The defendant submitted that if, contrary to its primary and secondary positions, the appropriate index for substitution was one of the output indexes then of those indexes the 4113 National index was the nearest index to be substituted for the discontinued index. Having regard to the way in which the case was fought I find that the plaintiff was the successful party in relation to the major issues in the action.

Defendant claims it was successful on three issues

14 The defendant submits that it was successful, and the plaintiff failed, on three specific issues. The first is that part of the plaintiff's claim advancing the single index case. The second was the plaintiff's claim that the Davis Langdon index was an available substitute index. The third was the plaintiff's claim for relief that the matter be referred to a referee. The defendant's argument is based on the history of the plaintiff's pleaded case. I will first briefly outline relevant parts of that history.

15 On 2 June 2006, the plaintiff commenced this action by a writ of summons indorsed with a statement of claim. The statement of claim sought a declaration that upon the proper construction of the Project Deed the DHW index should be substituted for the materials index referred to in Annexure G to the Project Deed. On 28 June 2006 the defendant filed a defence and counterclaim. The defendant denied that the plaintiff was entitled to the relief claimed and sought a declaration that the second OTHB, or Table 48 index should be substituted for the index referred to in Annexure G to the Project Deed. The pleadings were subsequently amended on a number of occasions. At the commencement of the trial the plaintiff submitted that the following indexes all met the requirement of an index for substitution for the materials index in Annexure G in the following order of preference: Rawlinsons index, the 4113WA index, the DHW index and the 4113 National index. The defendant claimed that the appropriate index or substitution was the Table 48 index, or alternatively the HB index, or further alternatively the 4113 National index.

16 The plaintiff first advanced the single index case in its substituted statement of claim of 29 September 2006. In that statement of claim the plaintiff claimed a declaration that the DHW index, alternatively the Davis Langdon index, alternatively the 4113 WA index, alternatively the Rawlinsons index, alternatively the 4113 National index should be substituted for both the materials index and the labour index referred to in Annexure G to the Project Deed. The plaintiff then sought an alternative declaration that the DHW index, alternatively Davis Langdon index, alternatively 4113 WA index, alternatively Rawlinsons index, alternatively 4113 National index, should be substituted for the materials index. On the first day of trial, 12 September 2007, the plaintiff abandoned that part of its claim that advanced the single index case. The plaintiff's single index case did not, of course, occupy any time at trial. I am not satisfied that the advancement of the single index case caused the defendant to obtain or prepare any expert evidence that it would not otherwise have obtained. The advancement of the single index case would have caused the defendant to undertake some work to prepare to meet the case but having regard to the issues in the action and the litigation as a whole I find that the additional work undertaken by the defendant is not substantial in the context of the case as a whole.

17 In its substituted statement of claim of 29 September 2006 the plaintiff put forward a case in which it advanced the Davis Langdon index as one of the five indexes which it submitted should be substituted for both the materials index and the labour index, or alternatively for the materials index, in Annexure G to the Project Deed. At the commencement of the trial the plaintiff abandoned the Davis Langdon index as an available substitute index. I am not satisfied that any evidence was obtained or prepared by the defendant which was addressed solely to the Davis Langdon index. The expert witnesses called by each party considered a range of indexes as well as the principles and approaches that were relevant to determining which was the nearest index to the discontinued index. Having regard to the manner in which the evidence was presented and dealt with at trial I am not satisfied that the introduction of the Davis Langdon index into the case by the plaintiff caused any substantial addition to the costs of the litigation.

18 In its substituted statement of claim of 29 September 2006 the plaintiff claimed relief in the form of an order appointing an independent expert or referee to report to the court as to the appropriate method of reasonable indexation of the effective value of each progress payment to be made under the Project Deed so as to give effect to the intention in Annexure G, including if necessary the use of a single index rather than separate indexes for each of the labour and material indexes. The plaintiff abandoned its claim to that relief at the commencement of the trial. There is no evidence that the defendant incurred any additional costs in obtaining or preparing evidence in relation to that abandoned claim for relief. The plaintiff would have incurred some costs in doing work to prepare to meet that claim for relief. However, I am not satisfied that that would have amounted to a substantial amount of work in the context of the case as a whole.

19 In determining the appropriate costs order where a litigant is not successful on each issue in the action, the court must seek to give effect to two policies that are likely to collide. On the one hand, it should not adopt an approach so rigid as to dissuade a party, by the risk of an adverse costs award, from canvassing all issues, however doubtful, which might be material to the decision in the case. On the other hand, in view of extensive court delays and high legal costs, the court should encourage parties to consider carefully the matters they do put in issue in their litigation. Litigants who realise that they will not necessarily recover the whole of their costs where they have unsuccessfully raised a discrete issue are more likely to consider whether the raising of that issue is a justifiable course to take. Which policy should prevail in any given case depends on what, according to the court, the justice of the case requires: see Dal Pont G E, Law of Costs (2003) [8.9].

20 In Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 Beazley, McColl and Basten JJA said:

Where there are multiple issues in a case the court generally does not attempt to differentiate between the issues on which the appellant was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed [6].

21 The claims on which the plaintiff failed - the single index case, the advancing of the Davis Langdon index and the relief of referral to a referee - are identifiable separate issues in the sense that the advancement of each claim involved a distinct argument. However, the advancement of those claims did not involve any significant addition to the evidence.

22 I find that the plaintiff is the generally successful party and failed on only minor issues which did not add substantially to the cost of the proceedings and it is not appropriate to depart from the general rule that the successful party should recover its costs. The appropriate order in this case is that the defendant pay the plaintiff's costs of the action.

23 The defendant was unsuccessful in its counterclaim. There is no good reason why the general rule should not apply. The defendant should pay the plaintiff's costs of the counterclaim.

24 Section 215(2) of the Legal Practice Act 2003 (WA), until replaced by s 280(2) of the Legal Profession Act 2008 (WA) on 1 March 2009, relevantly provided:

[I]f a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a legal 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 taxed.

Section 280(2) of the Legal Profession Act 2008 is in the same terms.

25 The plaintiff submits that the nature of this case was of sufficient complexity and importance to warrant special orders for costs. In this case, the plaintiff must cause the court to be of the opinion that:

(a) the amount of costs allowable in respect of the action under the relevant legal costs determination is inadequate; and

(b) the amount so allowable is inadequate because of the complexity or because of the importance of the action.

26 In Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd [2007] WASC 254 (S) the Chief Justice said:

[T]he requirement of inadequacy will be demonstrated if the applicant shows that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant costs determination. Of course, as I have pointed out, that is only the first question which the court must address. The second question is whether that inadequacy arises because of the unusual difficulty, complexity or importance of the matter [16].

27 I am of the opinion that the amount of costs allowable under the relevant legal costs determination is inadequate. I am satisfied of that matter by the affidavit of Juliana Nicole Jorissen sworn 7 October 2008, a solicitor for the plaintiff, together with my knowledge of the action as case manager and trial judge. I am of the opinion that the amount of costs allowable in respect of the action under the legal costs determination is inadequate because of the complexity and because of the importance of the matter. I am satisfied of those matters from my knowledge of the action as case manager and trial judge.

28 The defendant did not oppose an order increasing the limits on costs fixed in the legal costs determination in relation to some of the items advanced by the plaintiff but opposed others. Before considering the specific items in relation to which the plaintiff sought an increase in, or removal of, the scale limits I will refer to two issues raised by the defendant. The first concerns hourly rates. The defendant, in effect, submits that I should make an order increasing, or removing, the limits on costs fixed in the legal costs determination but should specify that the increase in, or removal of, the limit applies only to the number of hours allowed for the item of work and not to the hourly rate upon which the scale item is calculated.

29 The Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2006 (the Determination) applies to the remuneration of practitioners for costs incurred after 1 July 2006. By cl 4 of the Determination the Committee stated that the information gained as a result of its inquiries satisfied the Committee that the manner in which legal services are provided make it 'appropriate to continue to adopt the hourly and daily rates charged by practitioners as the basis for the rates used in the [Determination]'. The calculation of the remuneration of practitioners is set out in the schedule to the Determination. Clause 8 of the schedule provides that the hourly and daily rates set out in that clause are the maximum hourly and daily rates which the Committee determines shall be used to calculate the dollar amounts in the scale of costs set out in the table to cl 9. Each item in the scale of costs specifies a dollar amount with reference to the fee earner. The clause then sets out maximum allowable hourly and daily rates for a senior practitioner, junior practitioner, counsel and senior counsel. The maximum allowable hourly rate for a senior practitioner is $363. The maximum allowable hourly and daily rates for senior counsel are $506 and $4,730 respectively. Clause 9 of the schedule provides that, subject to exceptions not presently relevant, the costs recoverable by one party from another party shall not exceed the amounts set out in the attached scale of costs table. The scale of costs table sets out items of work, a period of time, a fee earner and a dollar amount. For example, item 1(b) is statement of claim. The table provides that the time for that item is 10 hours, the fee earner is a senior practitioner and the dollar amount is $3,630. The defendant submits, in effect, that if the court removes the limit on the amount recoverable for the statement of claim the court should specify that the maximum allowable rate remains that prescribed in cl 8 for a senior practitioner and the taxing officer may only increase the amount recoverable for drawing the statement of claim by allowing more hours at that rate.

30 The special costs order sought by the plaintiff is an order that the limits provided in relation to specified items of the Determination be removed. The effect of an order in substantially the same terms was considered by the Court of Appeal in Cazaly Iron Pty Ltd v Minister for Resources [No 5] [2008] WASCA 181. In that case, after a directions hearing in relation to the second respondent's bill of costs for taxation the taxing officer referred to the court for determination the question:

In making allowances for the costs of the second respondents in accordance with the orders of the Court of Appeal made 28 August 2007 is the taxing officer precluded from allowing hourly and daily rates in excess of those contained in paragraph 8 of the [Determination] [5]?

The Court of Appeal held that the question should be answered 'no'. Wheeler JA stated:

The order which was made removes the limits provided for in any relevant item. That order affects the dollar value of the item, which is calculated by reference to cl 8 and by reference to the various columns for 'time' and 'fee earner' referred to in each of the relevant items. Altering that dollar limit must necessarily have the result that each of the matters that go to make up that dollar limit are susceptible of variation at the discretion of the taxing officer. That is, once one alters the final dollar value by removing its limit, an increased amount is capable of being arrived at either by an alteration of the number of hours or by an alteration of the rate or by an alteration of the nature of the fee earner involved. For that reason it seems to me that the order made by the court affects all of those matters [1].

31 I propose to make an order in similar terms to that considered by the Court of Appeal in Cazaly. The order will affect the dollar value of each item in the scale of costs. Each of the matters that go to make up that dollar limit, that is the nature of the fee earner, the hourly rate and the number of hours, will be capable of variation at the discretion of the taxing officer. I decline to decide whether, in relation to each item of work, the hourly rate allowable should be increased. To make such a decision would require me to consider in relation to each item of work the identity or seniority of the fee earner who undertook the work, the work undertaken and whether it was appropriate for it to have been undertaken by a practitioner of the seniority of the practitioner who undertook it, for how many hours the fee earner, or fee earners, undertook the work and whether it was reasonably necessary or appropriate for the fee earner, or fee earners, to have spent that amount of time to undertake the work. That would require an examination in the nature of a preliminary, or provisional, taxation of costs which is not appropriate. In some cases it may be appropriate to undertake such a task but it is not in this case. It is appropriate that that matter be left to the discretion of the taxing officer.

32 The next general issue in relation to the special costs order is whether the order should fix higher limits on costs than those fixed in the Determination or remove the limits on costs fixed in the Determination. This was a complex action. The evidence discloses that extensive work was done by numerous fee earners on behalf of the plaintiff. If I were to fix higher limits on costs rather than remove those limits it would necessitate a consideration of the plaintiff's costs that would approximate a preliminary, or provisional, taxation of costs. In this case, I do not consider that to be appropriate. In this case the appropriate order is to remove the limits on costs fixed in the Determination. It will be for the taxing officer to decide the amount to be allowed for each item in respect of which the limit is removed unfettered by my decision.

33 The defendant submits that there is nothing significantly difficult about the pleading itself. Second, the defendant submits that the statement of claim underwent six iterations but the defendant should not have to pay the costs of those revisions.

34 The amount allowed under the scale is $3,630. The scale item covers all work reasonably undertaken to draw the statement of claim, including taking instructions and obtaining and considering any statements or materials necessary for that purpose as well as the application of the law to those facts. In this case it was necessary to consider the proper construction of a lengthy and complex agreement and how its various parts interacted with or provided the relevant context for construing cl 5 of Annexure G to the Project Deed. It is fairly arguable that the taxing officer may allow an amount in excess of the scale limit if the limit is removed. The taxing officer will not allow for the costs of more than one iteration of the statement of claim, except if the plaintiff has been awarded the costs of any amendment. The limit for the item 'statement of claim' should be removed.

35 The scale allows an amount of $3,630 for the reply. The reply is not a lengthy or complex document. However, the costs of drawing the reply include the costs of considering the defence and taking instructions in relation to it. It is fairly arguable that the taxing officer might properly allow costs in excess of the amount allowed for the reply. That is a matter for the taxing officer. I will remove the limit for the reply.

36 Giving particulars of a pleading is item 6(b) on the scale of costs. The maximum amount allowable is $1,265, being five hours work by a junior practitioner. It is fairly arguable that the taxing officer might properly allow a greater sum. That is a matter for the taxing officer. I will remove the limit for the item giving particulars.

37 The defendant concedes that the scale limit should be removed, or at least increased, for this item. I will remove the limit for giving discovery.

38 The plaintiff asks that the scale limit be removed for the following item:

getting up case for trial including, but not limited to, counsel fees and lawyers on the record preparing opening, closing and responsive submissions.

The defendant concedes that an order should be made removing, or at least increasing, the limit for that item. I will order that the limit be removed for that item.

39 The plaintiff seeks that the scale limit be removed for 'counsel fees on brief including first day of trial and subsequent days of trial (item 19)'. Counsel for the defendant queried the way in which the proposed order was drafted. However, counsel did not oppose the removal, or at least increase, of the amount allowable under item 19 being counsel fees and each of the sub items of item 19. The scale limit for counsel fees will be removed.

40 The plaintiff seeks an order that the taxing officer be directed to make reasonable allowance, in addition to any other allowance available, in relation to:

(a) two senior counsel at trial including mastery of the brief and reasonable allowances for preparation in addition to an allowance for subsequent days of trial; and

(b) the preparation of opening and closing responsive submissions including fees of both counsel and the lawyers on the record.

41 Counsel for the plaintiff did not press for an order in terms of [(b)] above. Paragraph (a) is intended to provide for the taxing officer to make reasonable allowance for two senior counsel. The reference to 'including mastery of the brief and reasonable allowances for preparation in addition to an allowance for subsequent days of trial' is not intended to add to the allowances provided for under item 19 (counsel fees) of the scale but simply to identify the items of work in relation to which the taxing officer is to make an allowance for two senior counsel.

42 I am not persuaded that it was reasonably necessary for the plaintiff to engage two senior counsel.

43 The Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2008 provides that the 'practice of certification for second counsel or for senior counsel is no longer required by the scale': cl 5. However, that provision was introduced into the scale of costs after this trial was completed. In my view it is proper for this court to consider whether the plaintiff should be allowed the costs of two senior counsel. The basic enquiry in determining whether a successful party should be allowed the costs of two senior counsel, or three counsel, is equivalent to that which has been applied by courts in respect of two counsel: Would a reasonable and prudent man acting with ordinary prudence have ventured into the court without two senior counsel?

44 However, the court must be mindful that to allow costs of two senior counsel further increases the costs for an unsuccessful litigant and will only be allowed where the case is of such difficulty, complexity or importance to justify burdening the unsuccessful party with those costs.

45 The test 'is concerned not with what a reasonable litigant might be prepared to do in order to win but with what such a person would adjudge necessary or prudent in order to have his or her case properly presented': see Dal Pont G E, Law of Costs (2nd ed, 2009) [17.76]. Barwick CJ explained the point as follows in Stanley v Phillips [1966] HCA 24; (1966) 115 CLR 470, 478 - 479:

The emphasis throughout is upon obtaining an adequate presentation to enable justice to be done; it is not upon the propriety of the steps taken by a litigant to ensure the maximum of success in his own cause. That of course he may do but not ... at his opponent's expense ... [the question is not whether] a man in seeking his own maximum advantage would be imprudent not to engage counsel of a particular level of experience or skill. The question is whether the services of more than one counsel are reasonably necessary for the adequate presentation of the case.

46 The volume of material to be handled, the nature and extent of the cross-examination required, the anticipated length of the case, the complexity and difficulty of its issues and the importance of the outcome to the parties justify the engagement of two counsel. However, the engagement of two senior counsel is an unusual expense and will be justified in few cases. I am not satisfied that this is such a case. The taxing officer should be directed to allow costs for senior counsel and a second counsel but not for two senior counsel.

47 The plaintiff initially proposed that the quantum of costs be determined as a lump sum by the trial judge. However, in the face of opposition from the defendant, the plaintiff did not press for that course.

48 The plaintiff made seven applications for non-party discovery seeking relevant documents from:

(a) Keyfield Investments (John Stranger, the creator of the DHW index);

(b) Minister for Planning and Infrastructure;

(c) Department of Treasury and Finance;

(d) Minister for Housing and Works;

(e) Department of Housing and Works;

(f) Main Roads Western Australia; and

(g) Australian Bureau of Statistics.

49 In return for provision of documents by the various non-parties, the plaintiff undertook to pay the reasonable costs of each of these parties in answering the non-party discovery applications and complying with the discovery orders made. The parties accepted that the costs to be paid by the plaintiff in relation to each of these non-parties should be treated as costs in the cause. Each of the non-parties, except the Australian Statistician, have submitted a bill of costs to the plaintiff, none of which have been taxed.

50 The plaintiff submits that if it pays these costs it would seek to recover them against the defendant as costs in the cause. All of the non-parties are government ministers, departments or agencies, except for Keyfield Investments. The defendant is a government agency. The plaintiff submits that to avoid wasting time and costs the court should order that the defendant pay the bills of costs submitted by each of the non-parties directly.

51 The plaintiff applied for orders that the Commissioner for Main Roads, the Department of Treasury and Finance, the Minister for Planning and Infrastructure, the Minister for Housing and Works and the Department of Housing and Works provide non-party discovery. The court ordered that the Commissioner for Main Roads and the Department of Housing and Works should discover certain documents but not all that had been requested. The court decided that the Department of Treasury and Finance, the Minister for Planning and Infrastructure and the Minister for Housing and Works did not need to provide discovery. The defendant submits that the plaintiff incurred some costs unnecessarily in pursuing the non-party discovery. The defendant submits that the taxing officer should determine what proportion, if any, of the non-parties' bills should be born by the defendant.

52 In my view each of the non-parties should present their bills for taxation and the taxing officer should determine the costs properly allowable to them. The plaintiff should include in its bill of costs those costs in relation to non-party discovery that it considers to be properly recoverable from the defendant and that matter should be determined by the taxing officer. I decline to make the orders sought by the plaintiff in relation to non-party costs.

53 The Australian Statistician (the Statistician) seeks the following orders:

The order dismissing the plaintiff's application before the Hon Justice Le Miere dated 28 August 2007 be varied in [2] by adding after the words 'the application' the following words, 'to be taxed without reference to the amount specified in item 10(a) of the Supreme Court scale of costs'.
The defendant pay the Statistician's cost of attending the trial of this action on 21, 22, 23, 26, 27 and 28 November 2007 to be taxed if not agreed.
That all costs awarded to the Statistician in CIV 1570 of 2006 and CACV 137 of 2007 be taxed as one set of costs.

54 Proposed orders 1 and 3 were not opposed. I am satisfied that it is proper to make proposed orders 1 and 3. As to proposed order 1, the Statistician applies for an order pursuant to s 215(2) of the Legal Practice Act 2003, which has since been replaced by s 280(2) of the Legal Profession Act 2008 which is in the same terms. Under that statutory provision the court may remove limits on costs fixed in the relevant legal costs determination if it is of the opinion that the amount of costs allowable in respect of a matter under the determination is inadequate because of the unusual difficulty, complexity or importance of the matter. The application is supported by an affidavit affirmed on 25 March 2009 by Melissa Jane Forbes, a solicitor employed by the Australian Government Solicitor which acts on behalf of the Statistician in this matter. I am satisfied by the evidence and from my knowledge as case manager and trial judge that the amount of costs allowable in respect of this matter under the relevant legal costs determination is inadequate because of the complexity of the matter.

55 The defendant opposes an order that it pay the Statistician's cost of attending the trial. I will now address that issue.

56 On 22 February 2007, on the application of the plaintiff, I made orders for non-party discovery against the Statistician. On 22 March 2007 the Statistician filed and served a list of documents verified by an affidavit sworn by Geoffrey Mark Neideck. The Statistician claimed public interest immunity for nine classes of documents. The plaintiff sought orders that the Statistician allow the plaintiff to inspect the documents in respect of which it had claimed public interest immunity. On 28 August 2007 I dismissed the plaintiff's application: Leighton Contractors Pty Ltd v Public Transport Authority of Western Australia [2007] WASC 196.

57 The defendant proposed to call a number of employees, or former employees, of the Statistician to give evidence at the trial. The Statistician's solicitors were involved in the preparation of witness statements by the employees or former employees of the Statistician. The defendant subpoenaed the following employees of the Australian Statistician to give evidence at the trial: Stephen Whennan, Mathew Berger, Paul McCarthy, Gary Whitefield and Robert Allsop. In addition, the plaintiff subpoenaed Peter Harper, a deputy Australian Statistician.

58 The trial of the action commenced on 12 September 2007. At the commencement of the trial Ms F Humphries, counsel for the Statistician, stated that she sought to appear on behalf of the Statistician when an Australian Bureau of Statistics (ABS) witness was present and some matter relevant to the Statistician arose.

59 On 21 September 2007 the Statistician was represented by Mr T Howe QC and Mr A J Power. The plaintiff required the Statistician to produce certain documents specified in its notice to produce documents dated 14 September 2007. The Statistician responded to the demand by stating that he did not have any documents within some of the categories of documents required to be produced and resisted producing the remaining documents on the ground of public interest immunity. The plaintiff's application was heard initially on 21 September 2007 during the course of the trial and was further heard on 24 September 2007. On 8 October 2007 I rejected the Statistician's claim of public interest immunity in respect of certain documents and parts thereof and ordered that the Statistician produce to the parties certain documents on certain conditions including that certain parts of the documents may be redacted and that the documents were to be inspected only by counsel and solicitors for the parties: Leighton Contractors Pty Ltd v Public Transport Authority of Western Australia [No 5] [2007] WASC 233. The Statistician appealed against that decision. The Court of Appeal heard the appeal on 1 November 2008 and subsequently upheld the Statistician's claim of public interest immunity and ordered that prior to the production of the documents they were to be redacted so as to remove relevant indentifying information: The Australian Statistician v Leighton Contractors Pty Ltd [2008] WASCA 34.

60 Evidence was given by Mr Harper on 14 September 2007. The Statistician does not claim any costs in relation to the attendance of counsel during the giving of that evidence. The Australian Statistician claims costs of counsel attending the trial on days when evidence was given as follows:

Gary Whitefield 21 November 2007 11.10 am - 11.13 am, 12.11 - 1 pm, 2.15 - 3.56 pm; 22 November 10.30 am 12.38 pm; 23 November 9.09 am 11.26 am

Paul McCarthy 22 November 2007 12.45 pm - 4.22 pm; 23 November 11.30 am - 1.05 pm, 2.15 pm - 2.25 pm.

Mathew Berger 23 November 2007 2.27 - 4.19 pm; 26 November 11.05 am - 1 pm, 2.15 - 4.18 pm; 27 November 10.30 - 11.52 am

Stephen Whennan 27 November 2007 12.28 - 1.02 pm, 2 - 3.16 pm

Robert Allsop 27 November 2007 3.32 - 4.18 pm; 28 November 10.38 - 11.29 am.

61 The involvement of counsel for the Statistician during the giving of evidence by those witnesses was as follows:

Mr Whitefield: no objections taken, but counsel sought to explain some matters going to the redaction of information within documents the subject of the notice to produce.

Mr McCarthy: no objections taken or intervention by counsel.

Mr Berger: two objections taken by counsel which related to questions concerning index 4113 WA and its availability.

Mr Whennan: no objections taken or intervention by counsel.

Mr Allsop: no objections taken or intervention by counsel.

Legal principles relating to award of costs to non-parties

62 It is common ground that the court has the power to award costs against a party in favour of a non-party pursuant to s 37 of the Supreme Court Act 1935 (WA): Naidoo v Williamson [2008] WASCA 179, [42].

63 In Naidoo v Williamson the grounds of appeal required the Court of Appeal to consider whether the trial judge had a discretion to award to the respondent costs incurred prior to the respondent becoming a party. The court was not called upon to consider whether or not the trial judge had erred in the exercise of his discretion. In the course of considering whether the trial judge had the discretion to award costs Steytler P, with whom Pullin JA and Murray AJA agreed, said:

These cases, and others ... seem to me to establish that, in the context of a wide conferral of jurisdiction such as that given by s 37 of the Supreme Court Act, a judge of the Supreme Court has jurisdiction to award costs against a party in favour of a non-party, although that jurisdiction will be exercised only in exceptional cases and with considerable caution [42].

64 Counsel for the Statistician submits that the discretion to award costs to a non-party should only be exercised in an exceptional case and where it is appropriate to do so. The Statistician submits that the word 'exceptional' means no more than unusual or out of the ordinary, and that, for the reasons advanced by the Statistician, the present case is exceptional.

65 The authorities provide little guidance to the exercise of the discretion in favour of a non-party. In Individual Homes v Macbreams Investments (2002) WL 31476344 Steinfeld QC sitting as a deputy judge of the High Court said at page 3 that various guidelines for the making of an order against a non-party are set out in the judgment of Balcombe LJ in Symphony Group Plc v Hodgson [1994] QB 179 at 192, 194 but none of those guidelines provides any assistance as regards the circumstances in which it would be appropriate for the court to make an order in favour of a non-party against a party to the action, although the first guideline, namely that an order for the payment of costs by the non-party would always be exceptional, would equally apply to an order for the payment of costs in favour of a non-party. Steinfeld QC said at page 4 that the only relevant guideline in that case was that the court should exercise its discretion in accordance with reason and justice.

66 In relation to the making of costs orders against non-parties Dal Pont op cit at [22.16] makes a number of points in relation to the exercise of the discretion. One of the points made by the learned author is:

Second, given that in the bulk of cases it is unjust to award costs against a non-party [Aiden Shipping Co Ltd v Interbulk [1986] AC 965, 980 Lord Goff], the circumstances in which such an order will be made are necessarily confined, as a question of discretion, not of jurisdiction [Knight v F P Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178, 203 Dawson J]. Courts have cautioned that applications for costs orders against non-parties should be treated 'with considerable caution' [Symphony Group plc v Hodgson [1994] QB 179, 193 Balcombe LJ; Metalloy Supplies Ltd (in liq) v M A (UK) Ltd [1996] EWCA Civ 671; [1997] 1 All ER 418, 422 Waller LJ] and granted only sparingly [Marriage of McAlpin [1993] FamCA 71; (1993) 16 Fam LR 888, 896 Nicholson CJ and Maxwell J; Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406, 413, Callinan J. See also Marriage of Pagliarella [No 3] [1994] FamCA 16; (1994) 122 FLR 443, 447 Hannon J ('The circumstances in which the discretion to award costs against a non-party should be exercised should ... be confined and orders only made in very clear cases')] and 'when exceptional circumstances make such an order reasonable and just' [Murphy v Young & Co Brewery plc [1997] 1 All ER 518, 531 Phillips LJ. See also Re Land & Property Trust Co plc [1991] 1 WLR 601, 604 Nicholls LJ; Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178, 203 Dawson J; Carborundum Abrasives Ltd v Bank of New Zealand (No 2) [1992] 3 NZLR 757, 764 Tompkins J; Separate Representative v J H E & G A W (1993) 16 Fam LR 485, 508 Nicholson CJ and Fogarty J ('special circumstances'); O'Neill v De Leo [1993] TASSC 162; (1993) 2 Tas R 225, 230 Green CJ; Metalloy Supplies Ltd (in liq) v M A (UK) Ltd [1996] EWCA Civ 671; [1997] 1 All ER 418, 424 Millett LJ ('rarely appropriate'); Re JJT [1998] HCA 44; (1998) 195 CLR 184, 189 Gaudron J; Flinn v Flinn [1999] VSCA 109; [1999] 3 VR 712, 760; Naomi Marble and Granite Pty Ltd v FAI General Insurance Co Ltd (No 2) [1998] QSC 18; [1999] 1 Qd R 518, 544 Shepherdson J]. But the 'exceptional' threshold should not be seen to fetter the curial discretion and may mean no more than 'outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense' [Dymocks Franchise Systems (NSW) Pty v Todd [2004] UKPC 39; [2004] 1 WLR 2807 at [25] per Lord Brown. See also Cf Globe Equities Ltd v Globe Legal Services Ltd [1999] EWCA Civ 3023; [1999] BLR 232, 239 - 240 Morritt LJ (who considered that an exceptional case in this context 'is one to be recognised by comparison with the ordinary run of cases not defined in advance by reference to any further characteristic': at 240].

67 In Re Pan Pharmaceuticals Ltd; Selim v McGrath [2004] NSWSC 129, 48 ACSR 681 the plaintiff sought various orders in two sets of proceedings against the defendants who were initially the administrators of Pan Pharmaceuticals Ltd (Pan) and subsequently the liquidators of Pan. Upon the creditors resolving to wind up Pan the first proceeding became redundant and was dismissed. The second proceeding was heard and the plaintiff's claims were dismissed. A number of parties were granted leave, pursuant to Supreme Court (Corporations) Rules 1999 (NSW) r 2.13, to be heard without becoming a party. On the disposition of the plaintiff's claim, some of those parties sought costs against the plaintiff. Barrett J held that s 76 of the Supreme Court Act 1970 (NSW) empowered the court to order a party to pay a non-party's costs incurred in relation to proceedings. Barrett J considered that the relevant rules focussed on 'additional costs' incurred by a party by reason of the non-party's participation in the proceedings. His Honour considered that the rule tends to imply that there should not be a costs order against the non-party except with respect to a party's 'additional costs', at least in the ordinary course of events. His Honour observed:

There is a clear concern to guard against the award of more than one set of costs except where good reason is shown [18].

After further considering the relevant rules of court Barrett J stated:

These considerations, coupled with the emphasis by members of the High Court in Knight's case on the extraordinary nature of the aspect of the general costs power that involves orders against non-parties, lead me to think that some very special factor outside the ordinary and expected course of events and engendering a justifiable expectation of compensation in the mind of the non-party would have to be found before any relevant aspect of the comprehensive jurisdiction with respect to costs might be regarded as properly and regularly invoked in favour of a non-party as against a party. In other words, such an award, if ever appropriate, will be extraordinary and exceptional. Someone who seeks and is granted leave under r 2.13(1) chooses a course entailing the limited costs exposure described in r 2.13(2). Such a person can have very little expectation of being awarded costs [20].

68 The Statistician submitted that there are a number of reasons why the court should exercise its discretion to award costs in his favour. The Statistician submits that he played an active part in this litigation. Specifically, his appearance before the court on the days in relation to which costs are sought, during the examination and cross-examination of ABS witnesses, when he was present to protect the relevant public interest immunity during that evidence and played a significant role in that part of the case. It was submitted that the presence of counsel for the Statistician was necessary during the cross-examination of the witnesses to prevent the witnesses from inadvertently disclosing information that was the subject of the public interest immunity claim upheld in the Court of Appeal. It was submitted that the Statistician had already successfully defended the public interest immunity claim and was therefore entitled to be heard at the trial on the admissibility of evidence from its witnesses that was potentially the subject of the public interest immunity claim. It was submitted that more than simply protecting his client from prejudice to its interests, counsel for the Statistician was effectively being heard on the protection of a legal right not to disclose established in the Court of Appeal.

69 Prior to the ABS' witnesses being called to give evidence the Statistician was aware of the issues in the case and the evidence that was to be led from each of the ABS witnesses. The Statistician's solicitors were involved in the preparation of the ABS witness statements and in the Statistician providing documents to the parties. The Statistician had determined that nine classes of documents should be withheld from the parties on the grounds of public interest immunity. In Leighton Contractors Pty Ltd v Public Transport Authority of Western Australia [2007] WASC 196 I upheld the Statistician's claim to public interest immunity on the ground that the documents identified businesses, prices and other information which is at a sufficient level of detail to enable the identification of respondents and/or prices collected on a confidential basis and that the documents contain information that may expose the ABS indexes to manipulation. The plaintiff subsequently sought inspection of reports of interviews conducted by ABS officers with survey respondents (interview reports) and ABS working documents collating the raw data supplied by the survey respondents as recorded in the interview reports (working documents). In The Australian Statistician v Leighton Contractors Pty Ltd [2008] WASCA 34, the Court of Appeal held that the disclosure of information in the interview reports and working papers would directly identify the respondents to the surveys and the confidential information they provided in relation to the nine items which formed part of the data for the construction of Table 48. Thus, it was established that that information was protected by public interest immunity and was not to be disclosed.

70 Counsel for the Statistician submitted that the presence of counsel for the Statistician was necessary during the cross-examination of the ABS witnesses to prevent the witnesses from inadvertently disclosing information that was the subject of the public interest immunity claim upheld in the Court of Appeal. However, the court and counsel for each of the parties was aware of the documents and information held by the Court of Appeal to be the subject of public interest immunity. Counsel for the Statistician submits that during the evidence of the ABS witnesses there was the potential for a breach of the public interest immunity to be caused by questions put by counsel for the parties.

71 In fact, there was no occasion for counsel for the Statistician to intervene during the examination or cross-examination of any witness to protect the public interest immunity. The Statistician submits that the nature and extent of the intervention of senior counsel for the Statistician on 21 - 23 and 26 - 28 November 2007 is not a proper measure of the need for the Statistician to be represented by counsel on those dates. The Statistician submits that it may well have been the case that it was the presence of counsel for the Statistician on those dates which ensured the limited need for intervention. I reject the latter submission. Each of the parties was represented by senior counsel. The court and counsel were aware of the public interest immunity upheld by the Court of Appeal and the basis for it. I reject the proposition that counsel may have conducted themselves differently if they had not been aware of the presence of counsel for the Statistician. The Statistician did not elaborate upon how there was a reasonable likelihood of the public interest immunity upheld by the Court of Appeal being inadvertently breached by questions put by counsel for the parties.

72 The Statistician submitted that he was interested in the subject matter of the litigation by reason of (at the very least) the challenge to the reliability of the ABS Table 48 and the consequent scrutiny of the methodology and data used to construct it. The Statistician submitted that it was this scrutiny which required the protection of the Statistician's immunity. The Statistician's interest in the subject matter of the litigation, it was submitted, was demonstrated by his role in the litigation and his appearance before the court. The Statistician submitted that the protective role required of counsel for the Statistician was not a matter of about which the Statistician had any real choice. It was submitted that the Statistician's interest in the subject matter of the litigation was implicitly recognised by the court in permitting counsel for the Statistician to appear and represent his interests and the parties in not disputing that role.

73 The court allowed counsel for the Statistician to appear for the purpose of raising any matters of public interest immunity or confidentiality arising in the course of evidence given by any of the ABS witnesses. The court did not otherwise recognise any interest of the Statistician in the subject matter of the litigation. The court did not grant to the Statistician, and the Statistician did not seek, the right to question witnesses or lead evidence in relation to the reliability of the ABS Table 48 or the methodology and data used to construct it. In so far as the Statistician had an interest in supporting the reliability of the ABS index and the methodology and data used to construct it, that task was adequately undertaken by the defendant whose primary interest it was to uphold the reliability of that index.

74 The court does not usually award costs in favour of a subpoena recipient who engages legal representation, see for example King v GIO Australia Holdings Ltd [2001] FCA 1773; (2001) 116 FCR 509. In Individual Homes v Macbreams Investments (2002) WL 31476344 the court made a costs order in favour of a bank that was not a party to the proceedings. The costs related to the costs incurred by the bank in assisting one of its employees to comply with a witness summons to attend the trial to give evidence and to produce certain documents. However, in that case the costs related to work in regard to collating, obtaining and sifting the documents.

75 I am not satisfied that in accordance with reason and justice the defendant should be ordered to pay the Statistician's costs. It may have been prudent for the Statistician, out of an abundance of caution, to have counsel present in court in case anything happened that might lead to a disclosure of the information that was subject to public interest immunity. However, it was not reasonably necessary for the Statistician to be so represented. There is not sufficient reason to depart from the general rule that an unsuccessful defendant should not have to pay an additional set of costs being those of a non-party. For those reasons I refuse the application of the Statistician that the defendant pay the costs claimed by the Statistician.

Court (Corporations) Rules 1999

(1993) 16 Fam LR 888

(1993) 16 Fam LR 485

LEIGHTON CONTRACTORS PTY LTD -v- PUBLIC TRANSPORT AUTHORITY OF WESTERN AUSTRALIA [No 7] [2009] WASC 218 (7 August 2009)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (123 paragraphs)

LEIGHTON CONTRACTORS PTY LTD -v- PUBLIC TRANSPORT AUTHORITY OF WESTERN AUSTRALIA [No 7] [2009] WASC 218 (7 August 2009)

Legislation Cited (5)

Cases Cited (9)