Morris v Hutchison

The costs hearing

1. This costs dispute was heard efficiently in half a day on 3 December 2019. As for the hearing of the substantive matter, Ms Ashworth of counsel appeared for the Applicant and Mr Stretton of counsel for the Respondents.

The Applicant's proposed costs orders

1. In this costs hearing, the Applicant proposed a wide range of costs orders as appropriate to be made. The first two of those costs orders were proposed in the alternative, but the second of them was not pressed during the course of the hearing. The costs orders proposed by the Applicant were in the following terms: The Court orders: 1 The Respondents are to pay the Applicant's costs of the proceedings, such costs, subject to Order 2, to be assessable as follows: (a) as against the First Respondent, before and on 6 March 2019 on the ordinary basis and from 7 March 2019 on an indemnity basis; (b) as against the Second Respondent, 40% of such costs on the ordinary basis; 2 In the event that the Applicant intends to press an application for a lump sum costs order in respect of the orders at Order 1: (a) the applicant is to file and serve the evidence on which he intends to rely by 10 December 2019; (b) the Respondents are to file and serve any evidence on which they intend to rely by 20 December 2019; (c) the hearing of such application is set down on [insert date]; 3 The First Respondent is to pay the Applicant the lodgement fee for the Transfer of Mineral Claim 56861, in the amount of $130.52, forthwith; 4 The First Respondent is to pay the Applicant's costs of the Motion filed on 15 November 2019 on an indemnity basis in the sum of $8,116, payable forthwith; 5 The Second Respondent, as trustee of the First Respondent's beneficial interest in Mineral Claim 56862, is to apply to renew that Mineral Claim by 4:00pm on 4 December 2019 by lodgement of the form for that purpose with the NSW Department of Planning, Industry and Environment, Division of Resources and Geosicence. 6 The Second Respondent is to provide the Applicant's solicitor with a copy of the form lodged pursuant to Order 5 as soon as practicable thereafter but in any event by 10:00am on 5 December 2019; 7 Until further order, the Respondents are restrained themselves and by their servants and agents from dealing with their respective interests in Mineral Claim 56862 save for, in the case of the Second Respondent, as contemplated by Order 5; 8 Until further order, the Respondents are restrained themselves and by their servants and agents, from taking any step to mine or otherwise work Mineral Claim 56862; 9 The matter is listed for directions on [insert date] December 2019, at [insert time]; and 10 Liberty to restore on 2 days' notice.

The affidavit evidence

1. The only affidavit evidence on the costs application was an affidavit deposed by Ms Arden, the Applicant's legal representative. A number of annexures were attached to her document. It will later be necessary to consider the terms of two of them in a little detail. Those documents are: 1. The first is a letter from Ms Arden to the legal representatives of the First and Second Respondents dated 6 March 2019. This letter proposed two alternative offers to settle the proceedings. The terms and effect (the effect being contested) of this letter require later consideration; 2. The second document was an itemised account from Ms Arden setting out charges incurred by the Applicant for her services for the period between 31 October and 2 December 2019. The account also listed a number of disbursements made to give effect to the substituted performance order I had made. It will be necessary to address, later, this account in a limited fashion. Finally, with respect to this account, it is appropriate to note that it does not incorporate any fees for Ms Arden associated with this costs hearing; 3. The third relevant document annexed to Ms Arden's affidavit is a fees memorandum from Ms Ashworth covering the period from 6 November 2019 and relating to work performed by her behalf of the Applicant in connection with the substituted performance application.

The documentary evidence

1. Mr Stretton handed up an extract from the NSW Government Gazette of Friday 12 June 2015. The extract, being pages 1658 to 1661 of that gazette, set out an order made by the Minister for Industries, Resources and Energy pursuant to s 175 of the Mining Act 1992. It will be necessary to consider relevant details of this order later.

The indemnity costs application for the substantive hearing

Introduction

1. Ms Arden's letter of 6 March 2019 seeking a settlement offer is now relied upon by the Applicant as a basis for making an indemnity costs order for costs arising after the expiry of that offer. The offer now relied upon (the second of the alternatives offered) was in the following terms (note - numbering is as in letter): 2 Split of MC 56861 3.1 First Respondent to procure registration of MC 56861 in two parts of equal size, one of which is to be registered in the name of the Applicant, with the boundary of the two parts drawn by the party nominated by the First Respondent and the part to be registered in his name chosen by the other; 3.2 Judgment for the Applicant on the Claim against the First Respondent, in the amount of $1; and 3.3 Cross-Claim is dismissed on terms that the parties are not entitled to bring fresh proceedings on the same subject matter as that of the Cross-Claim.
2. Ms Arden's letter expressed that offer as being made for the purposes of r 40.8 of the UCPR, but, in the event that the offer did not provide a proper foundation for an order of costs on the indemnity basis flowing from that rule, the offer was also couched, in the alternative, as a Calderbank offer (Calderbank v Calderbank [1975] 3 All ER 333). The offer was not accepted within the nominated period and, as a consequence, expired. The Applicant now seeks that I order that his costs in the substantive proceedings be paid on the indemnity basis after the expiry of that offer period.

Consideration

1. Although Ms Ashworth and Mr Stretton made submissions addressing the satisfaction or otherwise of r 40.8 of the UCPR by the offer now relied upon and as made by Ms Arden's letter of 6 March 2019, it is unnecessary to address all of those matters in detail. Similarly, the submissions that each of the advocates made, in the alternative, as to whether that offer constituted a valid Calderbank offer (in the event that I did not accept that it satisfied the UCPR requirements) are unnecessary to be considered in detail.
2. This position arises as a consequence of my acceptance of the proposition advanced by Mr Stretton that the relevant elements of the Minister's order of 12 June 2015 demonstrate that the offer was one which was incapable of being given effect and that, as a consequence, was no offer at all.
3. This conclusion arises from a consideration of the terms of 3.1 (the first element) of the offer in the 6 March 2019 letter now relied upon. It is appropriate to reproduce again the terms of this paragraph: 3.1 First Respondent to procure registration of MC 56861 in two parts of equal size, one of which is to be registered in the name of the Applicant, with the boundary of the two parts drawn by the party nominated by the First Respondent and the part to be registered in his name chosen by the other;
4. I have earlier noted that Mr Stretton had handed up an extract from the NSW Government Gazette of 12 June 2015. The order made by the Minister, as shown in that extract, set out a number of substantive provisions in a table. Each gridline in that table set out the provisions to apply with respect to the class of mineral claim in the Lightning Ridge Opal Mining District.
5. The chapeau to the table is in the following terms: 1 Classes of mineral claims The following types (classes) of mineral claims can be granted in Lightning Ridge Mineral Claims District. Claims not fitting into the following classes are not permitted to be granted.
6. The substantive table was in three columns. The first line in the table is identified as applying to small scale mineral claims. Mineral Claim 56861 falls within this category. The relevant portion of the table relating to small scale mineral claims is reproduced below:
7. As Mr Stretton submitted, the order mandates compliance with these provisions for all small scale mineral claims. The elements contained in the row entitled "Shape", for such small scale mineral claims, prescribe what are mandated to be the dimensions of such claims for them to be able to be registered and sets out, in limited terms, the exceptions to those mandated dimensions.
8. Mr Stretton submitted that, in the present instance, there was no physical or legal constraint arising with respect to Mineral Claim 56861 that could act to set aside the otherwise mandated dimensional requirements.
9. In circumstances where the inevitable outcome of the process anticipated by 3.1 of the offer would be the attempted creation of two mineral claims which would be incapable of registration, he submitted it was clear that the offer in itself was, as a consequence, an offer incapable of acceptance as it was incapable of implementation.
10. Although Ms Ashworth valiantly endeavoured to persuade me that I should read the restrictions applicable to small scale mineral claims as containing some broader discretion or (by implication) that I could make some order embodying 3.1 (although this would be contrary to her submissions made concerning other validity aspects under consideration), thus establishing a legal requirement for a split of Mineral Claim 56861 as envisaged, I am satisfied that the relevant elements of the Minister's order are unambiguous and act as an absolute barrier to implementation of the 6 March 2019 offer now relied upon.
11. The principles of construction of such statutory instruments are well‑established. The starting point for interpretation, in circumstances such as these, must necessarily be the oft-cited passage of the judgment of plurality of the High Court in Project Blue Sky v ABA [1998] 194 CLR 355; [1998] HCA 28, at [69] to [71]. The passage is in the following terms (footnotes omitted): 69 The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed. 70 A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme. 71 Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".
12. There is no ambiguity or uncertainty in the terms of the element of the order applicable to small scale mineral claims and thus to Mineral Claim 56861. There is nothing in the context of what is there contained that necessitates or facilitates importation by implication of any additional words in the fashion necessary for Ms Ashworth's position to prevail.
13. The consequence of this is that the offer of 6 March 2019 was no offer at all, and the failure of the First Respondent to accept that "offer" cannot trigger any costs consequences for him. The Applicant's claim that he should be entitled to his costs of the substantive proceedings from 7 March 2019 on the indemnity basis is hopeless (and has always been hopeless) and is rejected.

Introduction

1. In my primary judgment at [305], I indicated that I did not consider it appropriate to make any costs order against the Second Respondent. As can be seen from the first of the orders sought on behalf of the Applicant in these costs proceedings, what is now proposed is that I should order that the Second Respondent have joint and several liability with the First Respondent to the extent of 40% of the Applicant's costs of the substantive proceedings.

The Applicant's position

1. Ms Ashworth proposed that, in circumstances where there were multiple respondents and the outcome of the proceedings was success for the Applicant with respect to matters raised concerning both Respondents, it was appropriate that both Respondents bear responsibility for those costs - although, under the circumstances, she submitted that it was appropriate that there be a proportionate allocation of those costs with the Second Respondent not having liability for the totality of those costs (citing Trade Practices Commission v Nicholas Enterprises Pty Ltd and others (1979) 28 ALR 201).

The Second Respondent's position

1. Mr Stretton submitted that it was not appropriate that any costs order be made against the Second Respondent. First, he advanced the proposition that I had already dealt with that matter in my primary decision and that the proposal that I revisit that conclusion amounted to an impermissible canvassing of my determination on that point.
2. Second, the fact that no relief was sought against the Second Respondent (and none ordered) was to be distinguished from the position arising in the cases cited by Ms Ashworth.

Consideration

1. There is no doubt that, as the nominal holder of Mineral Claim 56862, the Second Respondent was properly joined as a party to the proceedings (Ross v Lane Cove Council [2014] NSWCA 50).
2. It is also the position that the Second Respondent deposed an affidavit which was read during the substantive hearing and that he was required for cross‑examination on it. Indeed, as can be seen from [172] to [176] of my primary judgment, it was necessary to consider his evidence in some detail in order to explain why a proper analysis of the evidence given by the First Respondent and the Second Respondent on the transfer of Mineral Claim 56862 to the Second Respondent provided one of the elements supporting my conclusion as to the unreliability of the evidence of the First Respondent on substantive issues.
3. However, the necessity for, and utility of, the participation of the Second Respondent in the proceedings does not provide any proper basis, in my assessment, for me revisiting the conclusion in my primary judgment that no costs order should be made against the Second Respondent.
4. In summary, the Second Respondent was, fundamentally, a passenger in the proceedings, joined because of the necessity for this to occur as matters relating to his property rights required to be considered.
5. His joinder had been raised by me during the pre-trial phases of the substantive proceedings for this reason.
6. Although there is the presumption that costs will follow the event (see Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [39[), there is no rational basis for concluding that "the event" (that is, the outcome of the substantive proceedings) imposed any functional obligations on the Second Respondent (and, indeed, none was sought).
7. However, I do not accept the proposition advanced by Mr Stretton that the proposal by the Applicant that there be some costs order made against the Second Respondent constitutes an impermissible canvassing of an aspect of my primary decision. The liberty to seek an alternative costs order to the costs order proposed in my Order (6) disposing of the primary proceedings was, as can be seen from its terms as set out at [1] in this decision, an unconstrained one. The Applicant, now seeking a costs order against the Second Respondent, although unsuccessfully, clearly fell within the leave given to seek an alternative to the costs outcome I had ordered.
8. Under all these circumstances, I remain of the view that it would be completely inappropriate to make any costs order against the Second Respondent.

Introduction

1. I have earlier noted that I had made an indemnity costs order in the gross sum of $5,000, to be paid by the First Respondent, as an outcome of the substituted performance application process. I had, however, stayed that order at the request of the First Respondent's legal representatives, as they were not present for the hearing of the substituted performance application and I considered it appropriate that they have the opportunity, given that there was already going to be a hearing on costs of the proceedings, to be heard on that discrete costs issue. It is to be noted that the stayed costs order was in the sum of $5,000, being a gross sum costs order made pursuant to s 98(4)(c) of the Civil Procedure Act 2005.
2. As additional work had been performed by Ms Arden and Ms Ashworth in order to give effect to the substituted performance ordered for the transfer of Mineral Claim 56861 from the First Respondent to the Applicant, the orders proposed to be made as outcomes of these costs proceedings (as earlier set out at [9]) proposed, in Order (4), an increase in the quantum of a gross sum costs order on the indemnity basis to be made against the First Respondent. This proposed order sought that the quantum be increased from $5,000 to $8,116 and that that order require the First Respondent to pay that sum to the Applicant forthwith.

Leave to discharge the earlier order and to rely on the new proposed order

1. As I had earlier made a costs order on the indemnity basis for the substituted performance element of the proceedings (although that order had been stayed as earlier noted), consideration of the proposed new order required me to lift the stay on the earlier order; vacate that order; and grant leave for the Applicant to seek the proposed substituted order (involving substitution as to quantum and timing of the obligation to pay, both these differing from that with which I had earlier dealt).
2. I proposed to Mr Stretton that the appropriate course for me to follow under the circumstances was to take those three steps (noting that, in doing so, he would be afforded the opportunity to address me as to why I should not make a costs order for the substituted performance application on the indemnity basis and, if I remained minded to do so, why the amended quantum was unreasonable). Mr Stretton did not demur from that process. As a consequence, I lifted the stay on the earlier costs order and vacated it; granting leave to the Applicant to seek to rely on the new proposed gross sum indemnity costs order for the substituted performance application.

Costs quantum for the substituted performance application

1. I have earlier noted that fees memoranda from Ms Arden and Ms Ashworth were amongst the annexures to Ms Arden's affidavit read in these costs proceedings.
2. I observed to Ms Ashworth that her memorandum of fees addressed work undertaken on and after 6 November 2019, work confined to the substituted performance application. I pointed out to her that Ms Arden's memorandum of fees not only encompassed work during the period commencing 6 November 2019 on the substituted performance application, but also encompassed, in the context of the overall quantum of her account, significant fees for work undertaken prior to 6 November 2019 - work identified in the memorandum in a fashion that made it clear that it could not conceivably relate to the substituted performance application.
3. Ms Ashworth examined Ms Arden's account and accepted that those items contained in it, relating to work prior to 6 November 2019, should be deleted as they evidently related to costs arising out of the substantive proceedings. As a consequence, Ms Ashworth sought leave to amend the quantum in the now sought indemnity costs order for the substituted performance application by reducing the proposed gross sum quantum to $7,165.50.
4. Mr Stretton did not oppose that amendment being made.

Mr Stretton's submissions on this proposed order

1. Mr Stretton submitted that, first, it was not appropriate that any costs order for the substituted performance application be made on the indemnity basis. He submitted that, although I had ordered (in the terms of Order (1) of my primary decision) that the First Respondent was required to transfer Mineral Claim 56861 to the Applicant within 14 days, that period was taken up by the need for the First Respondent to consult with, and be advised by, his legal representatives concerning my primary judgment and that the First Respondent had been travelling around the State during that 14-day period, resulting in him, under both these circumstances, not taking steps to effect the transfer of the mineral claim as ordered.
2. Mr Stretton also submitted that, on an examination of Ms Arden's memorandum of fees, a significant proportion of the items noted on the account were ones charged out at what appeared to be a single six‑minute unit at a cost of $45 per unit. This, Mr Stretton submitted, was excessive and represented a rate which I should, by implication, discount in some fashion.

The response for the Applicant in support of indemnity costs

1. Ms Ashworth submitted that costs on the indemnity basis were appropriate as the substituted performance order had needed to be sought solely as a consequence of the failure of the First Respondent to give effect to the obligations created by Order (1) of my primary decision. The imperative for substituted service arose as a consequence of the imminent expiry of Mineral Claim 56861 (it being due to expire at the end of December 2019) and the fact that guidance provided on the Department's website indicated that, in the ordinary course of events, applications for renewal were required to be lodged at least two months prior to the expiry date of the mineral claim.

Consideration

1. I am satisfied that it remains appropriate to order that the costs of the substituted performance application be paid by the First Respondent on the indemnity basis. In reaching this conclusion, I am mindful of the general position with respect to costs that they are compensatory not punitive and that there must be good reason to depart from the conventional position that costs orders be on an ordinary basis.
2. There are, in my view, cogent reasons why the position advanced by Mr Stretton in opposition to these costs being on the indemnity basis should be rejected.
3. First, the timing matters raised by Ms Ashworth for this application are undoubtedly correct.
4. The failure by the First Respondent to comply with the order to transfer Mineral Claim 56861 within the nominated timeframe had the potential to frustrate that order being given effect. This would arise as a consequence of the potential imminent lapsing of Mineral Claim 56861 if the mineral claim was not transferred in a fashion which gave the Applicant sufficient time to effect its renewal prior to its expiry. A mineral claim automatically lapses if not renewed during its currency and is unable to be resuscitated after such automatic lapsing.
5. In addition, as I put to Mr Stretton during the course of the costs hearing, the substituted performance application could be regarded as somewhat analogous to contempt proceedings - in that what was sought was not merely the protection of the Applicant's private right to the fruits of his success, but also the ensuring of the integrity of the Court's orders in circumstances where delay, for the timing reasons outlined immediately above, rendered it impossible for more conventional enforcement proceedings (such as contempt proceedings) would have had no utility.
6. I also reject Mr Stretton's submission that I should, in some fashion, moderate the quantum of the unit-based rate underpinning many of the elements of Ms Arden's fee memorandum.
7. Although a rate of $45 per six-minute unit (equating to $450 per hour) might potentially be regarded as a little on the high side for a small practice in a country location, I have no evidence as to the basis upon which Ms Arden may have entered into the costs agreement with the Applicant (particularly the question of whether or not the arrangement for the litigation was on any contingent basis).
8. No call was made by Mr Stretton during the course of the costs hearing for the production of Ms Arden's costs agreement, nor was there any suggestion that the matter should be adjourned to enable steps to be taken to obtain that document. In making that observation, I am certainly not to be taken to be criticising Mr Stretton. To the contrary. Given the fact that the indemnity costs amount of this element of the proceedings is only (now) a little over $7,000, any such process would have been entirely disproportionate to the amount in dispute.
9. However, in the absence of any evidence to establish a proper basis for me rejecting these elements of Ms Arden's account, it is inappropriate that I make any adjustment to the quantum of Ms Arden's fees when making a costs order on the substituted performance application on the indemnity basis.
10. Given that I have concluded that it is appropriate to maintain the costs order on the substituted performance application as being on the indemnity basis, it also remains appropriate that that order be in the revised, amended amount now sought.
11. Finally on this aspect, I indicated to Ms Ashworth that she would need to provide some basis of substance as to why I should order that these costs be made payable forthwith rather than, as might more conventionally be the position, within a nominated period of time - me suggesting that 28 days would be appropriate. In response, Ms Ashworth indicated that she did not press for that element of the order.
12. As a consequence, I am satisfied that the appropriate position is to order that the nominated indemnity costs sum be paid by the First Respondent to the Applicant within 28 days of the date of the orders disposing of these costs proceedings.

The incidental sum

1. In Order (3) of the orders proposed by the Applicant in these costs proceedings, reimbursement was sought for the amount paid to the departmental office in Lightning Ridge as the necessary fee incurred to effect the transfer of Mineral Claim 56861 to the Applicant as part of the substituted performance implementation of the first of the orders in my primary decision. Mr Stretton did not raise any objection to my ordering the reimbursement of this amount. The orders at the conclusion of this decision will so provide.

The proposed Mareva-like orders

1. As can be seen from the proposed Orders (5) to (8), additional orders were sought that would have had, if made, the effect of guaranteeing the equitable interest in Mineral Claim 56862 remained held by the First Respondent. These protective orders, Ms Ashworth informed me, were necessary to preserve this asset of the First Respondent, so that it would be available to satisfy (if necessary) the costs orders that she proposed I make against the First Respondent.
2. During the course of the hearing, I enquired of her as to what was the basis upon which it was suggested that it was appropriate that I make these Mareva-like orders, given the total absence of any evidence concerning the assets of the First Respondent or any suggestion that there was any likelihood that he would either dissipate those assets or flee the jurisdiction.
3. In response to my request for a proper evidentiary basis to be provided even to contemplate whether or not I should make the proposed orders (even assuming I was satisfied that they were within jurisdiction), Ms Ashworth advised me that those orders would not be pursued further.

Costs of the costs hearing

1. As each party has had partial success in this costs contest, I am satisfied that it is appropriate that there be no order for costs of this costs hearing.

Orders

1. As a consequence of all of the foregoing, the orders of the Court are: 1. The application that the Applicant's costs of the proceedings from 7 March 2019 be paid on the indemnity basis is dismissed; 2. The application that the Second Respondent pay any of the Applicant's costs of the proceedings is dismissed; 3. The First Respondent is to pay, within 28 days of the date of these orders, the Applicant's costs of the application for substituted performance of Order (1) made on 31 October 2019 on the indemnity basis in the gross sum of $7,165.50 pursuant to s 98(4)(c) of the Civil Procedure Act 2005; 4. The First Respondent is to pay the Applicant the additional sum of $130.52 within 28 days of the date of these orders; 5. The application for orders concerning Mineral Claim 56862 is refused; and 6. No order for costs of this costs application.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 December 2019