146 That conclusion makes it unnecessary, for the disposition of this appeal, to consider whether Mr Clifford and Sheraz could have been joined as co-applicants under O 6 r 2 of the Federal Court Rules. That question would, in turn, raise for consideration questions of conflict of interest and whether Mr Clifford and Sheraz could have instructed the same lawyers (although there is no absolute rule of law which requires co-plaintiffs to have the same representation: Hinchcliffe v Carroll [1969] VicRp 18; [1969] VR 164, 166; cf Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia [No 6] [2014] WASC 203 [28] - [30]).

147 On the question of conflict, counsel for Sheraz (Mr Clifford) pointed out that Sheraz was the trustee of a discretionary trust, and emphasised the standards of propriety expected of trustees. He submitted, in effect, that those standards precluded Sheraz from being involved in the earlier Federal Court litigation. He said in written submissions (appellant's written submissions 11 September 2014, par 17):

To borrow from the relevant passage in Youyang [Youyang Pty Ltd (as Trustee of the Bill Hayward Discretionary Trust) v Minter Ellilson Morris Fletcher [2003] HCA 15; (2003) 212 CLR 484]:

'[32] Perhaps the most important duty of a trustee is to obey the terms of the trust ...

[33] The rigour of the rule, as Augustine Birrell QC put it, that it is the duty of a trustee "to adhere to the terms of his trust in all things great and small, important, and seemingly unimportant"'

And as the joint judgment of Gaudron J and McHugh J put it in Breen v Williams [[1996] HCA 57; [1996] HCA 57; (1996) 186 CLR 71, 108]:

'The law of fiduciary duty rests not so much on morality or conscience as on the acceptance of the implications of the biblical injunction that [n]o man can serve two masters - duty and self-interest, like God and Mammon, make inconsistent calls on the faithful.'

148 Vegas contended that the same lawyers could have acted had Sheraz and Mr Clifford given their fully informed consent: Archer v Howell (No 2) (1992) 10 WAR 33, 49. Sheraz, however, contends that even if informed consent had been given, the lawyers would not have been able to act for clients with conflicting interests as their duty to the court would preclude it. Reference was made to Clay v Karlson (1997) 17 WAR 493.

149 Three observations may be made in this regard. One is that Clay decided, in effect, that it was not appropriate for a solicitor to act in litigation for a client where the solicitor is likely to be called as a witness in the proceedings and, moreover, where the solicitor has a personal interest in the outcome of the litigation. Those considerations would not apply here. Secondly, Sheraz's appeal to propriety at this point might be thought to be somewhat confected, given that Mr Clifford, who at all material times controlled Sheraz, and for whom Sheraz was his alter ego, contended in the Federal Court that Sheraz not only had suffered no loss from the relevant transaction, but that Sheraz would be estopped from contending otherwise (see [42] above). Thirdly, although perhaps only of historical interest, Mr Clifford's solicitors in the Federal Court before Barker J were the same as in the proceedings below and in this appeal.

150 Ultimately, however, it is unnecessary to reach a final view on these matters given the conclusion that appropriate orders, at least of the kind referred to earlier, would have been made under O 29 r 5 of the Federal Court Rules in any event.

151 In all the circumstances, the continuation of the Supreme Court action would plainly have been seriously and unfairly burdensome or unjustifiably oppressive to Vegas. Sheraz was the alter ego of Mr Clifford, and Mr Clifford at all material times controlled Sheraz. Sheraz's claim could and should have been litigated in the Federal Court in connection with, in the sense of at least immediately following, Mr Clifford's claims with appropriate orders concerning the commonality of evidence. The result would have been that all of the claims of Sheraz and Mr Clifford would have been heard and determined effectively at the one time and with minimal additional time, cost and expense. The additional time, cost and expense would have been insignificant compared with the time, cost and expense involved with the pursuit of the Supreme Court action.

152 Subject only to a consideration of the 'fresh evidence' allegation raised in ground 4 of the appeal, the master was correct to conclude that Sheraz was precluded from its pursuit of the Supreme Court action. It is not necessary to decide, for the proper disposition of the appeal, whether the master's reference to an 'estoppel of a different nature', is to be read as a reference to an abuse of process. Even if his reasons, properly construed, are not to be understood as referring to an abuse of process, the master's decision should be upheld on the basis of amended ground 1 of the notice of contention (subject to a consideration of ground 4 of the appeal).

153 That conclusion is confirmed by, but not dependent upon, the following additional matter. The Supreme Court action also raised the prospect of conflicting judgments in the following respect. Mr Clifford controlled Sheraz and in each case it was his mind which directed the acquisition decision. In the Supreme Court action, Sheraz invited the court to find, in effect, that had any of the matters concerning the increases in the overdraft limit, the overdrawn amounts, the under-budget sales or the shareholder loans in late 2006 been disclosed to him, he would not have caused Sheraz to acquire the shares in Vegas (s/c pars 56, 65 read with 28). Barker J found, however, that those matters were not material to Mr Clifford's decision to cause the investment in Vegas [284], [348], [358] - [359] and [376].

Vegas also contended that the Supreme Court proceedings constituted a collateral attack on other findings of Barker J: that the reasonable expectation in the circumstances was not that Vegas would disclose anything in particular to Mr Clifford, but that it would respond to his reasonable requests for information in the course of his due diligence [331]; that pt V of the TPA had no application to the relevant acquisition [53] - [55]; and that Mr Clifford borrowed the funds and paid for the shares (see, eg, Full Court's reasons [81] - [82]). However, it is unnecessary to determine whether it is correct to characterise the Supreme Court action as constituting a collateral attack on those specific findings. For the reasons already given, the Supreme Court action was an abuse of process. This conclusion is subject only to a consideration of the 'fresh evidence' point raised in ground 4, to which I will now turn. (Ground 3 is more conveniently addressed after ground 4.)

155 In ground 4 of the appeal, Sheraz contends that the master erred in law in failing to 'postpone' delivery of his reasons for judgment on 19 February 2013 on account of an allegation of 'fresh evidence' made by Sheraz's solicitors in an email to the master's associate on 15 February 2013. In response to Vegas' amended notice of contention, Sheraz also contends that had the master postponed delivery of his reasons, the 'fresh evidence' would have precluded any finding of abuse of process.

156 In the letter from Sheraz's solicitor to the master dated 15 February 2013 (GB 331 - 334), it was said that 'evidence came into existence' on 1 February 2013 'effectively negativing important parts' of the findings in the Federal Court. The letter stated that '[f]or the sake of clarity' the solicitor was obtaining a transcript of the evidence given by one of the directors of Vegas previously sued by Mr Clifford (Mr Backshall) in the Federal Court action. The evidence of Mr Backshall in respect of which the transcript was being sought, was given in certain proceedings in the Federal Magistrates Court on 1 February 2013.

As discussed below, the evidence arose in cross-examination by Mr Clifford of Mr Backshall in the Federal Magistrates Court on 1 February 2013 in proceedings apparently concerning Mr Clifford's bankruptcy. There was, however, no application by Sheraz to reopen the hearing of Vegas' chamber summons. There was no affidavit sworn by Mr Clifford as to what had transpired on 1 February 2013 and its materiality to the decision in the Federal Court. In these circumstances, it was plainly open to the master not to 'postpone' the delivery of his reasons. No error is disclosed and ground 4 should be dismissed.

158 In any event, there is no substance to Sheraz's 'fresh evidence' point.

159 Sheraz made, in effect, two contentions. First, it was alleged that Mr Backshall's evidence in the Federal Magistrates Court on 1 February 2013, demonstrated that his evidence in the Federal Court trial, to the effect that he had told Mr Clifford to contact Mr Chris Rayney, the chief financial officer of Vegas, regarding any financial information Mr Clifford required for his due diligence process, was 'false'. It was said that Mr Backshall's 'false evidence' was material to Barker J's findings in that:

(a) his Honour accepted that Mr Backshall had told Mr Clifford that he should contact Mr Rayney for any financial information he required for his due diligence (Barker J's reasons [124], [223], [331] and [333];

(b) his Honour found that the reasonable expectation was that Mr Clifford would ask for whatever information he required [335] (see also [346]); and

(c) his Honour found that at no time did Mr Clifford make any enquiries of Vegas or its directors or anyone else such as Mr Rayney concerning the position of shareholder loans [356].

160 Secondly, it was alleged that Mr Backshall also gave evidence in cross-examination on 1 February 2013 that Sheraz's investment of $2.5 million was to be, and was, used to pay trade creditors. It was said that this was 'not properly discovered or disclosed at any reasonable time prior to the trial' and was 'in direct conflict' with the findings of Barker J (see appellant's reply to notice of contention 28 June 2013, par 18,). The findings with which it was said this was in 'direct conflict' were to the effect that the payment of $2.5 million was not used to repay shareholder loans as alleged by Mr Clifford in the Federal Court, or to reduce a short term overdraft facility, but was rather used as 'additional working capital' for the Vegas business [260], and that the money was paid by Vegas into its overdraft facility account which, at that point in time, was in credit [169], [307] - [309], [319] [373].

161 In this context, Sheraz contended that the Federal Court judgments were themselves 'obtained as an abuse of process' and referred in this regard to the observations of Handley JA (Heydon JA (as he then was) and Hodgson JA agreeing) in Toubia v Schwenke [2002] NSWCA 34; (2002) 54 NSWLR 46:

In an action for fraud, a plaintiff must prove that he was deceived but need not prove that he was diligent. Where the action seeks the judicial rescission of a judgment, the plaintiff must prove that he and the Court were deceived and he can only do this by showing that he has discovered the truth since the trial. Where this is done, and the fresh facts are material, fraud is established. Lord Buckmaster (at 301) said that if fraud was proved the judgment was vitiated, and he can only have meant that nothing else had to be proved apart from fraud. This means there is no need to prove due diligence as well [41].

162 An allegation of fraud is a serious matter and requires a proper factual basis.

163 Further, in Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 539, Kirby P (Hope & Samuels JJA agreeing) said:

Fourthly, although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on the ground that it was procured by fraud, and although there may be exceptional cases where such proof of perjury could suffice, without more, to warrant relief of this kind, the mere allegation, or even the proof of perjury will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment; Cabassi v Vila [[1940] HCA 41; [1940] HCA 41; (1940) 64 CLR 130, 147, 148]; Baker v Wadsworth (1898) 67 LJ QB 301; Everett v Ribbands [(1946) 175 LT 143, 145, 146]. The other requirements must be fulfilled. In hard fought litigation, it is not at all uncommon for there to be a conflict of testimony which has to be resolved by a judge or jury. In many cases of contradictory evidence, one party must be mistaken. He or she may even be deceiving the court. The unsuccessful party in the litigation will often consider that failure in the litigation has been procured by false evidence on the part of the opponent and the witnesses called by the opponent. If every case in which such an opinion was held gave rise to proceedings of this kind, the courts would be even more burdened with the review of first instance decisions than they are. For this reason, and in defence of finality of judgments, a more stringent requirement than alleged perjury alone is required.

Fifthly, it must be shown by admissible evidence that the successful party was responsible for the fraud which taints the judgment under challenge. The evidence in support of the charge ought to be extrinsic. Cf Perry v Meddowcroft [1846] EngR 1070; (1846) 10 Beav 122 at 138 - 139; [1846] EngR 1070; 50 ER 529, 534, 535. It is not sufficient to show that an agent of the successful party was convicted of giving perjured evidence in the former proceeding, the result of which it is sought to impeach. It must be shown that the agent, in so acting, was in concert with the party who derived the benefit of the judgment. Ronald v Harper [[1913] VLR 311, 318]; Shedden v Patrick [(1854) 1 Macqueen 535, 643].

Sixthly, the burden of establishing the components necessary to warrant the drastic step of setting aside a judgment, allegedly affected by fraud or other relevant taint, lies on the party impugning the judgment. It is for that party to establish the fraud and to do so clearly. In summary, he or she must establish that the case is based on newly discovered facts; that the facts are material and such as to make it reasonably probable that the case will succeed; that they go beyond mere allegations of perjury on the part of witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment.

164 As to Sheraz's first contention, there was an email dated 25 October 2006 from Mr Backshall to Mr Clifford, tendered in the Federal Court action, which was headed 'New Share Register', which referred to the share register of Vegas and how it would appear if Mr Clifford were to 'come on board as a new shareholder subject to due diligence' (GB 337). It suggested a proposed settlement date for the transaction and referred to the possibility of Vegas' bank being able to help out Mr Clifford if he needed bridging finance. It concluded with the words:

If you have any queries give me a call, I'm in the office all day today.

The email attached a document recording various shareholdings or proposed shareholdings.

165 In the Federal Magistrates Court on 1 February 2013, Mr Clifford referred this email to Mr Backshall and asked, by reference to the document (GB 339):

And you finished it by saying if I had any queries, to give you a call. You were in the office all that day?

166 To which Mr Backshall said 'Yes'. Mr Clifford then asked:

And so what you had said to me was, 'Look at it', because we had a meeting the night before, and 'if you've got any questions' to ask you?

168 The following observations may be made. First, if (it is not clear) the email dated 25 October 2006 in the appeal papers (GB 337) is the same email to which Barker J referred at [331] of his reasons, the particular finding that the email indicated that Mr Clifford could approach 'Mr Rayney' might be thought to be inaccurate in that the email does not, at least in terms, refer Mr Clifford to Mr Rayney. However, Mr Rayney was the Chief Financial Officer (CFO) of Vegas and the email of 25 October 2006 did refer to Mr Clifford's 'due diligence', and it may be that, construed in light of the other matters to which Barker J referred at [331], his Honour construed the email as implicitly indicating that Mr Clifford could approach Mr Rayney for financial information regarding his due diligence.

169 Secondly, and more fundamentally, Mr Backshall's acceptance that he wrote the email with the concluding words referred to by Mr Clifford is not inconsistent with his evidence in the Federal Court that he told Mr Clifford to contact Mr Rayney, the chief financial officer of Vegas, if Mr Clifford required any financial information for his due diligence. Mr Backshall's statement in the email that he was 'in the office all day' (on Wednesday, 25 October 2006) and that Mr Clifford could 'give [him] a call' does not negative a more general proposition that if at any time, Mr Clifford required financial information in relation to his due diligence, he could contact Mr Rayney, the CFO of Vegas. There is no reasonable basis for contending that Mr Backshall's answers in the Federal Magistrates Court provided any evidence that the Federal Court judgment was obtained by fraud or an abuse of process.

170 Thirdly, Sheraz has not established any relevant materiality. According to the letter written to Master Sanderson on 15 February 2013, Sheraz contended that the truth was that Mr Backshall 'told Mr Clifford to ask him (Mr Backshall) and not Mr Rayney regarding any financial information he required' (GB 333, third last par). However, the precise identity of the person whom Mr Clifford could approach has not been shown to be material. Mr Rayney was apparently not a director of Vegas, but the burden of Barker J's findings in this context was that Mr Clifford could approach either the directors, or Mr Rayney, about matters concerning the financial position of Vegas in relation to this due diligence enquiries. At [335], Barker J said:

The reasonable expectation was that Mr Clifford would ask for whatever information he needed.

However at no time did Mr Clifford make any enquiries of Vegas or the directors (or anyone else such as Mr Rayney, apparently) concerning the position with shareholders loans.

Put shortly, as in relation to the other alleged issues of non-disclosure, the circumstances were such that the respondents were entitled to expect that Mr Clifford would raise with them any issues concerning the operation of the company that might touch on such issues. He did not.

173 Accordingly, there is no merit in Sheraz's first contention.

174 As to Sheraz's second contention, Mr Backshall was cross-examined by Mr Clifford on 1 February 2013 with respect to an email dated 21 November 2006 from Mr Gordon McGuire (apparently of Deloitte) to Mr Rayney and Mr Backshall (see GB 345 - 347) and an email dated 21 December 2006 from Mr McGuire to Mr Backshall (GB 348 - 349). The former email was headed 'Updated List' and referred to a discussion earlier that evening. The attachment to the email had an overall heading 'Rusty Queries - Monday 20 November 2006' and contained a number of questions under various subheadings with certain answers inserted after the question. It contained the following:

1. Why are Trade Debtor and Trade Creditor days at June 2007 forecast to be significantly higher than at June 2006?

(a) Debtor days: 60 days as at June 2006, 86 days as at June 2007;

(b) Creditor days: 23 days as at June 2006, 61 days as at June 2007.

175 In the Federal Magistrates Court, Mr Backshall was asked, with respect to that item (GB 342):

Is it right to conclude that because Vegas was short of money, as at 21 November, when this was done, you were putting off paying the creditors and that you had put them out from 23 day[s] to 61 days?

Let me just read this again. I don't know what the answer was.

177 The latter email contained an attachment which Mr Backshall accepted indicated that the Sheraz payment was 'taken against trade creditors' (GB 343).

178 Sheraz contends that this evidence was 'not properly discovered or disclosed' prior to trial (emphasis added). However, it has not been established that these emails or their attachments were 'fresh evidence' which has emerged since the trial. Nor has any application been made in the Federal Court to apply to set aside the judgment on the basis that proper discovery was not given in accordance with the principles in Commonwealth Bank of Australia v Quade [1991] HCA 61; (1991) 178 CLR 134. Nor in any event, has Sheraz demonstrated in this appeal that the information in the emails relating to creditors is in 'direct conflict' with the findings of Barker J to the effect that the sum of $2.5 million was not used to repay shareholder loans as Mr Clifford had alleged, or to reduce a short term overdraft facility, but was rather used as additional working capital. The use of money to pay trade creditors is not inconsistent with the use of money for working capital.

179 Nor has Mr Clifford commenced any process in the Federal Court seeking to set aside the judgments on the basis that they were obtained by fraud.

180 Ground 4 of the appeal should be dismissed and the alleged 'fresh evidence' point has no merit.

181 Ground 3, in effect, takes issue with the following passage of the master's reasons:

In answer to that the plaintiff says it is running a case which is pleaded in an entirely different way from the case that was pleaded in the Federal Court. That is so. Mr Clifford went through each paragraph of the statement of claim in this action and if these paragraphs are compared with the pleadings in the Federal Court proceedings it can be seen there is a material difference. But everything that is pleaded in this action could have been pleaded in the Federal Court action. During the course of submissions I put that to Mr Clifford (ts 36 - 37). Mr Clifford['s] response was to criticise the conduct of the defendants in the Federal Court proceedings. But no issue was taken in relation to that conduct in the Federal Court trial or on appeal. There was no allegation by Mr Clifford in the Federal Court proceedings that he was unfairly treated because of the way the defendants ran their case. It is and remains the fact all of the matters presently pleaded could have been raised in the Federal Court action. They were not and the parties have to live with the consequences [12].

182 The effect of the passage is that there was no evidence that Vegas had somehow precluded Sheraz from asserting its own claims or rights in the Federal Court action. Sheraz has not pointed to any evidence which would indicate that the master's conclusion was wrong. The ground must fail.

183 By its second ground of contention, Vegas contended that the master should have struck out the whole of the statement claim and Sheraz's action on two bases. The first was that it was an abuse of process to relitigate the issue of who paid for the acquisition of the shares and the costs associated with the acquisition and, accordingly, the action as a whole had no prospect of success. Secondly, it was alleged that the financial performance representation was not reasonably arguable and that the statement of claim should have been struck out on that account.

184 As I have already found that the first ground of contention succeeds on the basis that the Supreme Court action was an abuse of process, it is unnecessary to consider this particular allegation of abuse raised in ground 2 of the notice of contention.

185 As to the second matter, the financial performance representation was allegedly conveyed by the provision of the accounts.

186 Turning first to the audited accounts up to 30 June 2005, the provision of those accounts, without more, could not reasonably arguably convey a representation that, as at October/November 2006, Vegas had the capability of maintaining or improving its financial performance or reducing its debt levels. The same observation applies to the unaudited accounts for the year ended 30 June 2006. Without more, that historical information cannot reasonably convey anything about Vegas maintaining its financial performance and its ability to maintain or reduce its debt levels as at October/November 2006. Nor does the plea that the unaudited accounts contained a statement that since 30 June 2006, apart from a bad

debt provision, there was no 'item, transaction or event of a material and unusual nature' assist Sheraz (s/c par 49.2). It does not arguably convey a representation that as at October/November 2006, the company was capable of maintaining or reducing the debt disclosed in the unaudited accounts for the year ending 30 June 2006. Nor is there any allegation that there were, contrary to the fact, items of a 'material and unusual nature' that had occurred within the meaning of that statement, since 30 June 2006.

187 Sheraz, nevertheless, contends, in effect, that its plea must be arguable because the court in another case upheld, on differently pleaded facts, a pleaded representation to similar effect: Slinger v Southern White Pty Ltd [2005] SASC 267; (2005) 92 SASR 303. In that case, various documents were provided to the purchaser of a business by a vendor prior to contract. They included information as to the expectations of the gross income that would be generated by the business and various financial projections [10] - [18], but they were inaccurate by the time of contract [30].

188 The decision of Slinger does not assist Sheraz. Here the financial performance representation is not arguably conveyed by the accounts as alleged. The second aspect of ground 2 of the notice of contention is made out, although it is unnecessary to rely upon that for the disposition of the appeal.

189 Leave should be given to amend the notice of contention. The appeal should be dismissed. I would add that I also agree with the additional observations made by Chaney J in this matter.

190 CHANEY J: I agree with Murphy JA that, for the reasons which he gives, leave should be given to amend the notice of contention and the appeal should be dismissed.

191 It will be noted that Mr Clifford appeared and argued this appeal, as a barrister instructed by Alan Rumsley (a solicitor), on behalf of Sheraz. He did so notwithstanding that:

1. as found by Barker J [421(2)], and submitted by Mr Clifford in the Federal Court [395], he controlled Sheraz at the time the relevant events took place, and he was described by Master Sanderson as the 'alter ego' of Sheraz;

1. Sheraz sought to bring the action in this Court as the trustee of the Terranora of Family Trusts, a discretionary trust of which Mr Clifford is a beneficiary; and

1. Mr Clifford would have been the key witness for Sheraz in the Supreme Court proceedings had they proceeded. It is highly likely that significant parts of his evidence (such as on questions of reliance) would have been challenged.

192 Rule 32 of the Legal Profession Conduct Rules 2010 (WA) made under the Legal Profession Act 2008 (WA) calls for independence by practitioners engaged to represent clients in a matter before a court. Rule 33(2) precludes a practitioner acting as counsel for a client 'if it would be difficult for the practitioner to maintain professional independence because of a connection with the client'. Rule 42 provides that a practitioner must not act for a client in the hearing of a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence centrally material to the determination of contested issues before the court. That rule reflects the rationale underlying the decision of Templeman J in Clay, a case in which a firm of solicitors were restrained from continuing to represent a defendant where a practitioner from the firm was likely to be called as a witness in the proceedings and where the practitioner had a personal interest in the outcome of the action. Rule 95 of the Western Australian Barristers' Rules published by the Western Australian Bar Association requires a barrister to refuse to retain a brief to appear before a court where the barrister has reasonable grounds to believe that he or she may, as a real possibility, be a witness in the case, or where the barrister has a material financial or property interest in the outcome of the case.

193 The question of Mr Clifford's role as counsel was raised with him by the Court at the outset of the hearing of the appeal. He justified his appearance by saying that he had ceased to be a director of Sheraz, that he had no direct interest in the outcome of the proceedings because he was only one of a number of beneficiaries under a discretionary trust, and that, while he would be a witness if the matter proceeded to trial, he was not a witness for the purposes of the appeal.

194 Given Mr Clifford's intimate involvement in the transactions the subject of the action and his obvious personal interest in the outcome, there is at least a serious risk that he could not bring to the Court the independence expected of counsel. The rules which preclude a person from acting as counsel when they are to be a witness do not only apply to the hearing at which evidence is to be given. Once it becomes apparent that a practitioner's independence is affected by some personal connection, either with the client or the subject matter of the proceedings, of the type with which the rules referred to above deal, the practitioner should cease to act in the matter generally.

195 No objection was taken by Vegas to Mr Clifford's appearance as counsel for Sheraz. Although the court did not prevent Mr Clifford from presenting the case for Sheraz, as was in effect foreshadowed to Mr Clifford in the exchange on this issue, I would not wish it to be taken that I consider his appearance as counsel to have been appropriate.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : SHERAZ PTY LTD -v- VEGAS ENTERPRISES PTY LTD [2015] WASCA 4 (S)

BETWEEN : SHERAZ PTY LTD as Trustee for the TERRANORA FAMILY TRUST

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : SHERAZ PTY LTD -v- VEGAS ENTERPRISES PTY LTD [2013] WASC 45

Practice and procedure - Costs - Costs orders on appeal and at first instance

Rules of the Supreme Court 1971 (WA), O 66 r 1(1), O 66 r 10(2)

Supreme Court (Court of Appeal) Rules 2005 (WA), r 5(1)

Supreme Court Act 1935 (WA), s 37(1)

Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4

1 REASONS OF THE COURT: This court has published its reasons for decision in the appeal today. See Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4. The solicitors for the parties were provided with an advance copy of the reasons to enable them to make submissions about the orders that should now be made.

2 The parties are in dispute as to the orders that should be made in relation to the costs of the appeal and the costs order made by Master Sanderson at first instance. The master ordered the appellant in effect to pay the respondent's costs of the action, including the costs of the respondent's application for summary judgment, alternatively, to strike out the action.

3 Section 37(1) of the Supreme Court Act 1935 (WA) confers a broad discretion on the court in relation to costs with full power to determine, relevantly, to what extent such costs are to be paid. This discretionary power enables the court to make orders with respect to the allowance of costs generally. See also O 66 r 1(1) of the Rules of the Supreme Court 1971 (WA), which should be read together with s 37(1) of the Act.

4 By O 66 r 10(2) of the Rules of the Supreme Court, relevantly, in the case of an appeal, the costs of the proceedings giving rise to the appeal, as well as the costs of the appeal and of the proceedings connected with it, may be dealt with by the court hearing the appeal.

5 Rule 5(1) of the Supreme Court (Court of Appeal) Rules 2005 (WA) provides that the Court of Appeal Rules must be read with the Rules of the Supreme Court.

6 In the present case, the appellant relied on four grounds of appeal and the respondent relied on a notice of contention.

7 The appeal was part heard on 14 March 2014. It was necessary to adjourn the hearing on that date because the respondent applied in the course of the hearing for leave to amend its notice of contention. The amendment was significant. The appellant opposed a grant of leave to amend. The court directed the parties to file and serve written submissions in relation to the application to amend and the substantive proposed amendment. This was done. The appeal was relisted for a further hearing on 22 August 2014 and the hearing of the appeal was completed on that date.

8 The court has decided unanimously that the respondent should have leave to amend its notice of contention and that the appeal should be dismissed. However, the appellant had some success. It failed on grounds 3 and 4 but it made out ground 1 of the appeal.

9 The court considered ground 2 of the appeal and ground 1 of the amended notice of contention together. The respondent made out ground 1 of the amended notice of contention and the appeal was dismissed on that basis. The amendment to ground 1 was critical to the outcome of the appeal.

10 The respondent also made out the second aspect of ground 2 of the amended notice of contention, but the court decided it was unnecessary to rely upon that aspect in the disposition of the appeal. It was unnecessary for the court to deal with the first aspect of ground 2.

11 After taking into account the successes and failures of each of the parties on particular issues at first instance and on the appeal, the necessity to adjourn the appeal part heard on 14 March 2014 as a result of the respondent's application to amend its notice of contention, the necessity to order the parties to make written submissions in connection with the application to amend, the significant nature of the amendment, the court's reasons for decision in the appeal and the submissions of the parties on the orders that now should be made, justice would be done as between the parties if:

(a) the appellant was ordered to pay 70% of the respondent's taxed or agreed costs of the appeal, including the costs of the notice of contention, the amended notice of contention and any reserved costs; and

(b) the order as to costs made by Master Sanderson was not disturbed.

12 These orders are preferable to this court endeavouring to make individual orders by reference to particular issues or events in the appeal. Overall, the respondent has in the result been successful at first instance and on the appeal.

13 Accordingly, the orders that the court makes are as follows:

(2) The appellant do pay 70% of the respondent's taxed or agreed costs of the appeal, including the costs of the notice of contention, the amended notice of contention and any reserved costs.