MINERAL RESOURCES LTD -v- DESTEC PTY LTD [No 5] [2024] WASC 449 (11 December 2024)

1. The effect of s 141(1) of the Legal Profession Uniform Law Application Act 2022 (WA) (Uniform Law) is to confine the costs recoverable by a successful party to the limits imposed by the relevant costs determination. As was noted by the Court of Appeal in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2],[2] in referring to the identical provision in the previous Act,[3] this provision is 'protective of the party charged and, more generally, serves the due administration of justice by limiting the allowable scope for legal costs'.[4] However, the court has the power to make special costs orders pursuant to s 141(3) of the Uniform Law.
2. On an application for special costs orders, the court considers two questions:[5]

(a) Is the maximum amount allowable under the applicable costs determination inadequate, in the sense there is a fairly arguable case that, on a taxation of costs, costs may properly be allowed in an amount greater than the maximum amount?

(b) Does the inadequacy of the costs allowable under the costs determination arise because of the 'unusual difficulty, complexity, or importance of the matter'?

1. Each of these questions is addressed as a matter of impression, rather than matters of detailed evaluation, precision, or science.[6] As Martin CJ noted in Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd, on an application for special costs under the previous legislative regime:[7]

[O]nce an order is made for the taxation of costs, it is not appropriate for the court to usurp the function of the taxing officer. Rather, under s 280(2) of the Act, the function of the court is limited to setting the parameters within which the taxing officer will tax the relevant bill, providing any specific directions which will assist the taxing officer to assess the quantum of the costs to be allowed on taxation. Because the quantum of costs to be allowed is to be determined by taxation, the powers conferred upon the court by s 280(2) of the Act are to be exercised as matters of impression rather than science, taking into account the greater expertise of taxing officers in fixing the amount of costs properly and reasonably allowed.

1. In considering the first question, it is not sufficient for a party to show it has incurred costs greater than the limit in the costs determination. However, the fact that a party has incurred significantly greater costs in each step of the litigation, when viewed in the context of the unusual difficulty, complexity, or importance of the matter, may enable the court to conclude there is a fairly arguable case that each of the items identified is inadequate.[8]
2. In this case, the defendants do not assert that the application was unusually difficult. Their application for special costs orders rests on the contention that the application was complex and/or important.
3. In BCBC Singapore Pte Ltd v Pt Bayan Resources Tbk [No 5], Archer J considered the meaning of the word 'importance' in the context of special costs applications as follows:[9]

Cases in which importance has been found include cases which involve the risk of significant professional damage, test cases, or cases which involve enormous sums of money.

Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) was a case in the first category, involving serious allegations against liquidators. In Heartlink, Martin CJ said that:

'[B]y reference to "importance" in this context, the legislature is allowing the court to have regard to the question of whether the work done was appropriate to the significance of the issue that arose in the litigation. Significance can arise either because of the significance of the issues to the parties or because of the significance of the issues to other prospective parties or to the public or to the community generally. In this case, the issues raised were of considerable significance to the liquidators in the practice of their profession, and in respect of whom serious allegations were made.'

This passage was endorsed by the Court of Appeal in Sino Iron [No 2].

In Blatchford v Laine, Vaughan J commented on the passage as follows:

'His Honour's formulation involves a qualitative evaluation as to the significance of the matter. It requires an assessment of the weight, seriousness and gravity of the issues and controversy before the court. Often the question of importance will be answered as a matter of impression informed by experience. Outside of those relatively rare cases involving matters of public importance - where 'importance' may well be obvious - the importance of the matter may be evident in the amount of the claim or the nature of the allegations that are being litigated.'

It is plain from these authorities, and the context of s 141 and the Legal Profession Uniform Law Application Act as a whole, that a matter will not be 'important' in the required sense simply because a party considers it to be so. If it were otherwise, the test of importance would probably be satisfied in every litigated dispute.

Further, I consider that a matter will not be 'important' in the required sense simply because the amount of money involved is large. It would depend on the circumstances. (footnotes omitted)

Is there a fairly arguable case that the maximum amount allowable under item 10 of the Costs Determinations is inadequate?

1. The parties agree that the relevant item under the Costs Determinations is item 10(a). The maximum amount allowable under the 2022 Costs Determination (on the basis that senior counsel is briefed) is $20,790. This assumes two days' preparation and a one‑day hearing. Under the 2024 Costs Determination, the maximum amount allowable was increased to $23,430.[10]
2. Mr Sadler's evidence is that:[11]

(a) the defendants' solicitors recorded more than 150 hours in relation to the application. This included preparing the application (approximately 29 hours), extensive conferral (almost 14 hours), drafting submissions and affidavits (including submissions sought from the parties after the court reserved its decision) (more than 70 hours), and preparing for and attending the hearing of the application (approximately 50 hours);

(b) the defendants have incurred costs in excess of $110,000 in relation to the application; and

(c) applying the rates for practitioners contained in Table A of the Costs Determinations, the costs of the application are more than $80,000 (inclusive of GST).

1. The plaintiffs submitted that the mere fact the defendants had incurred significant costs in relation to the application did not mean that a special costs order was warranted. In their submission, these costs were disproportionate in all of the circumstances.
2. While I accept that a party incurring significant costs is not determinative and it is necessary for the court to consider, as a matter of impression, the proportionality of the costs incurred, I do not consider that, in this case, the work done by the defendants' solicitors was disproportionate. On this application, both parties filed detailed submissions and affidavits and instructed experienced counsel to appear on the application. That is, the work done by both parties was considerable and reflected the parties' view as to the importance and complexity.
3. Mr Sadler's evidence does not descend into detail as to the specific work that has been done. However, based on my knowledge of the matter, the materials filed on the application, and as a matter of impression, for the following reasons, it is my view that it is fairly arguable that, on a taxation of costs, costs may be allowed in an amount that exceeds the maximum amount allowed under item 10 of the Costs Determinations.
4. First, while the hearing of the application did not take a full day, I accept that this was due, at least in part, to the comprehensive submissions filed by the parties in relation to the application and the approach taken by experienced counsel who appeared at the hearing.
5. Second, as noted in the Primary Reasons, the material before the court on the application was voluminous. By way of example, the annexures to the particulars of the statement of claim ran to more than 250 pages and listed thousands of documents. This material was relevant to the issues on the application and consideration of it necessary to its outcome.
6. Third, while the Costs Determinations do not specify what work falls within 'preparation', the commentary in Civil Procedure: Western Australia suggests that the allowance covers the preparation of written submissions and preparing for a hearing in chambers.[12] In this case, in addition to these matters, the defendants' solicitors also engaged in extensive conferral, drafted and filed affidavits in support of their application, and were required to consider the responsive affidavits filed by the plaintiffs. It is arguable that this work is not specifically covered by item 10 of the Costs Determinations.
7. Fourth, while I accept that the defendants did not succeed in striking out the entirety of the statement of claim, in my view, they were the successful party on the application. The defendants obtained orders in respect of all but one paragraph that was the subject of the application either to strike the paragraph out or to require the plaintiffs to provide further particulars to remedy the issues identified. I do not consider that the failure to strike out all paragraphs of the statement of claim nor the delay in bringing the application is a reason to decline the defendants' application for special costs. As set out in the Primary Reasons, it was my view that the defects of the statement of claim were substantive. Having found this, it is my view that costs (including special costs orders were appropriate) should follow the event.

Does the inadequacy arise because of the unusual difficulty, complexity, or importance of the matter?

1. In answering this question, I have approached it as a matter of impression rather than as a matter of detailed evaluation, precision, or science.
2. In this case, for two primary reasons, I consider that the inadequacy of the amount of costs allowable under item 10(a) of the Costs Determinations arises because of the complexity of the application.
3. First, it is clear from the pleadings that the plaintiffs' claim at trial will be both factually and legally complex. On the application, it was necessary to consider a number of these issues, including the similarities and differences between definitions of confidential information in each of the agreements and the manner in which the plaintiffs had pleaded the misuse of its information.
4. Second, in determining the application, it was necessary to consider not only the pleadings, but also the affidavits and lengthy reports which are annexed to the particulars of the statement of claim. This material was, as stated above at [18], voluminous.
5. For these reasons, I am prepared to make a special costs order in relation to the application pursuant to s 141(3) of the Uniform Act. It is important to stress that in making this order, this does not mean nor reflect a view that the defendants are entitled to recover costs in the amount set out in Mr Sadler's affidavit. Ultimately, it will be a matter for the taxing officer to consider and determine the reasonableness and necessity of the work that was undertaken by the defendants' solicitors.

1. For these reasons, I will make the following orders:

1. Pursuant to s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) (Uniform Law), the costs payable to the defendants pursuant to order 4 of the orders of the Honourable Justice Hill dated 11 December 2024 are to be assessed without reference to the limits as to aggregate amount or hours (though by reference to the rates, save for Mr Evans' rate as contained in the order below) provided for in respect of item 10 of Table B of the Legal Profession (Supreme and District Courts) (Contentious Business) Costs Determination 2022 and Legal Profession (Supreme Court and District Courts) (Contentious Business) Determination 2024 (Costs Determinations). 2. Pursuant to s 141(3) of the Uniform Law, costs with respect to Mr Evans be allowed at the maximum hourly rate specified for senior counsel in Table A of the Costs Determinations, namely:

(a) $693.00 for work undertaken on or between 1 July 2022 and 30 June 2024, inclusive of GST; and
>
> (b) $781.00 for work undertaken on or after 1 July 2024, inclusive of GST.

1. The plaintiffs pay the defendants' costs of the application for special costs filed 31 January 2025, to be taxed if not agreed.

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

[1] Mineral Resources Ltd v Destec Pty Ltd [No 5] [2024] WASC 449 (Primary Reasons).

[2] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S); (2017) 55 WAR 36.

[3] Legal Profession Act 2008 (WA) s 280.

[4] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [11].

[5] Cape Lambert Resources Ltd v MCC Australia Pty Ltd [2013] WASCA 66 (S) [3]; Heartlink Ltd v Jones (as liquidator of HL Diagnostics Pty Ltd) (in liq) [2007] WASC 254 (S) [11].

[6] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [12]; EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7]; Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2) [14].

[7] Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd [2014] WASC 469 (S) [4].

[8] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [14].

[9] BCBC Singapore Pte Ltd v Pt Bayan Resources Tbk [No 5] [2023] WASC 116 [75] ‑ [79].

[10] These figures are inclusive of GST.

[11] Affidavit of Peter Edward Sadler filed 31 January 2025 [29] - [30].

[12] LexisNexis, Civil Procedure: Western Australia, vol 1 (66.0 - 66.1).