The application for indemnity costs is made on the basis that, following the filing of the contempt application, the respondent's solicitors made an open offer to resolve the application on terms that each party bear their own costs. That offer was made on the basis that the application for contempt was misconceived and doomed to fail, in the context of which the respondent's solicitors foreshadowed, as indeed occurred, that the respondent would file an affidavit substantially to the effect of that filed on 19 April 2024; and that the conduct of the appellants after that point was unreasonable in such a way as to make an indemnity costs order appropriate.
The principles in relation to the ordering of indemnity costs are well established.[50] An indemnity costs order is an exceptional order, and one of the relevant principles is that a properly crafted special costs order may obviate the need for an indemnity costs order where it allows cost scale items above the applicable scale ceiling.
The capacity to make the alternative costs order sought by the respondent is therefore relevant to whether I should order indemnity costs.
As to the alternative order, the principles in relation to the application of s 141 of the Legal Profession Uniform Law Application Act 2022 (WA) (which replicates s 280(1) of the Legal Profession Act 2008 (WA)), are set out in Sino Iron Pty Ltd v Mineralogy [No 2].[51]
The power to lift a scale item depends upon the court being satisfied as to two components.
First, 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 an amount which is greater than the limit which will be imposed by the relevant cost determination.
Secondly, the court must also form the opinion that the inadequacy of the costs allowable arises because of the unusual difficulty, complexity or importance of the matter. A fairly arguable case does not require the court to determine what amount should be allowed on taxation, but only whether there is a fairly arguable case that a greater amount should be allowed.
The relevant scale item in relation to an application in an appeal in this Court (item 25(e)) is $4,730, which is calculated as being 10 hours for counsel (at the rate of $473 per hour). The relevant scale rate for senior counsel is $693 per hour. Were item 25(e) to be calculated according to the senior counsel rate, the scale item would be $6,930.
In my view, it is fairly arguable that a bill presented to the taxing officer, in this case, would properly tax an amount which is greater than the limit imposed by the scale, being $4,730. I am also of the opinion that, insofar as the relevant scale item would be inadequate in that sense, it would be because of the unusual difficulty, complexity or importance of the matter.
Given that this application was a contempt application against a senior practitioner, the importance of the matter was such that I am of the opinion that incurring more than the scale item would result simply by reason of the appropriateness of having senior counsel appear for the respondent on the application.
As such I consider that a properly formulated special costs order is available in the present case, that being a matter relevant to whether to order indemnity costs.
As I made clear to the parties in the course of argument in relation to costs, I am troubled by a number of aspects of this matter, including, for example, the appellants' refusal to provide any documents to the respondent so as to potentially further the dispute in a manner that might resolve, rather than exacerbate, the dispute.
At least from the time that the respondent filed his affidavit to the effect that, no matter what the outcome of the application, it was not going to produce any practical difference for the assessment of costs, the utility of the application as a means of resolving, rather than exacerbating, the dispute between the parties was questionable. This has caused me to consider carefully whether or not I should order indemnity costs as and from 19 April 2024 when that affidavit was filed.
By the merest of margins, I have concluded that a properly crafted special costs order would, in this case, obviate the need for an indemnity costs order and I would not, therefore, order indemnity costs. The misgivings I have expressed about the maintenance of the application should be sufficient to record whatever disapproval might have been marked by an order for indemnity costs.
I am satisfied that the amount allowable under the scale would be inadequate, and will therefore make a special costs order.
[2]
The orders I make are:
The application in this appeal filed on 22 March 2024 be dismissed.
The appellants are to pay the respondent's costs of the application to be assessed if not agreed.
In taxing the respondent's bill of costs pursuant to order 2 herein, the taxing officer is to do so without regard to the scale limits imposed under Item 25(e) of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 as to time, and apply the scale rate for Senior Counsel of $693 per hour and $6,930 per day.
[3]
I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
[4]
Research Associate to the Hon Chief Justice Quinlan
[5]
[1] Mammoth Investments Pty Ltd v Donaldson [2022] WASCA 144 (appeal decision) (Quinlan CJ, Beech JA & Bleby AJA).
[4] Caratti v Boban Pty Ltd (Administrators Appointed) [No 2] [2015] WASC 139 (Caratti v Boban) [19] ‑ [21], [84] ‑ [86] (Mitchell J); Perpetual Trustees Victoria Ltd v Allen [2012] WASC 258 [26] ‑ [28] (Beech J); The State of Western Australia v Galati [No 4] [2017] WASC 162 [25] (Tottle J); The Owners of the Wills Building Strata Plan 38579 v Coleman [2018] WASC 219 (Owners of the Wills Building v Coleman) [23] (Archer J).
[9]
[5] Caratti v Boban [80] (Mitchell J); Owners of the Wills Building v Coleman [25] (Archer J).
[10]
[6] Caratti v Boban [82] ‑ [83] (Mitchell J); see also Owners of the Wills Building v Coleman [24] (Archer J).
[49] ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248; Universal Music Australia v Sharman Networks [40] (Branson J).
Drafting rejoinder and amendments to the defence and counterclaim having regard to the 26 Volume chronological bundle provided to me and first to third defendants' documents that I was instructed did not exist, the Bank's amended pleadings, the Bank's witness outlines, seeking to reconcile all of these with the first to third defendants' case and discovered documents and evidence of Mrs Caratti and John Caratti; considering drafts of first to third defendants witness outlines of Mrs Caratti, John Caratti, Aaron Caratti and proofs of each. Research into law relevant to the expert evidence to be led re loss and damage in particular swaps cases. Considering the evidence given by Mrs Caratti and John Caratti in Esperance Cattle Company Pty Ltd -v- Granite Hill Pty Ltd [2014] WASC 279 having regard to judgment and transcript. Considering 6 emails and attachments and the matters raised in them.