HEARD : 8-10, 13-16 MAY 2002, 22 JULY & 26 AUGUST 2003

BETWEEN : WEST AUSTRALIAN CONSTRUCTION INDUSTRY REDUNDANCY FUND LTD (ACN 009 404 273)

Practice and procedure - Extension of time to seek special costs order - Principles - Special costs order - Whether required - Case turns on own facts

1 McKECHNIE J: The third and fourth defendants were successful at trial but failed to seek a special order for costs at the time of judgment on 16 August 2002.

2 On 28 October 2002 the third and fourth defendants filed chamber summons for an order to extend time for seeking special costs orders after trial and for special costs orders in respect of certain items.

3 The third and fourth defendants' application is supported by affidavits of Andrew Brantley Lu sworn 28 October 2002, 23 December 2002 and 31 January 2003.

4 Mr Lu was at the material time a solicitor employed by the defendants' solicitors. Mr Lu attended and was cross-examined. His credit was not in issue. He was not able to provide significant assistance in assessing the reasonableness of time, and hence cost, taken to perform many of the matters outlined in his affidavit.

5 I have taken all of Mr Lu's evidence into account but it is unnecessary to set it out in any detail. I am satisfied that the failure to apply for a special costs order on 16 August 2002 was due to Mr Lu's ignorance of the provisions of O 66 r 12. Mr Lu was a newly admitted practitioner, working under the supervision of a very experienced litigation partner. I accept that the partner inadvertently overlooked the need to apply for a special costs order in the circumstances.

6 The delay is not great and the plaintiff points to no particular prejudice.

7 The plaintiff submits that the principles are set out in Lewandowski v Lovell, unreported; FCt SCt of WA; Library No 960310; 14 June 1996. In that case, the appellant applied to vary an order in the Full Court so as to provide for a special costs order in the proceedings before the Master from which the appeal had been brought.

8 The majority, Murray and White JJ, refused the application. At 15 Murray J said:

"In my opinion, however, the application should not be granted, having regard to the exceptional and limited nature of the Court's inherent jurisdiction in that regard."

9 Murray J weighed the fact that the perfected order may well provide inadequate recompense for costs reasonably and properly incurred before the Master against the position of the respondent and the justification for him being subjected to the obligation to pay additional costs at what was described as a late stage. He said:

"The interests of the parties must be balanced and the wider interest of the finality of the orders made by the Court given proper weight."

"Having regard to the fact that such an order would have been made if sought at the appropriate time, and to the particular circumstances in which the order came to be extracted, I am of the view that it would be an injustice to the appellants were an order not now made."

11 The Full Court decision of Snowtop Mushrooms v Powley, unreported; FCt SCt of WA; Library No 4501; 14 May 1982 was not cited to the Court in Lewandowski nor referred to in the judgment.

12 In the judgment of the Court (Burt CJ, Brinsden and Kennedy JJ) in Snowtop Mushrooms v Powley, the fact that a special costs order would in all probability, without argument, have been made was a significant fact in the granting of an extension of time under O 3 r 5. In that case the time ran out because of an oversight on the part of the solicitor.

13 Snowtop Mushrooms v Powley was referred to and followed in Geneva Finance Ltd (Receiver and Manager Appointed) v Resource & Industry Ltd [2002] WASC 121(S) per EM Heenan J at [5] and [6].

14 Read in context, I do not consider that the result in Lewandowski stands for anything more than that the discretion to extend time must be exercised in the interests of justice having regard to the respective rights of the parties.

15 I note, however, the portion of the judgment of Murray J where he concludes:

"In my respectful opinion it is irrelevant to the exercise of the inherent jurisdiction that the special order might well have been made if sought at the appropriate time."

This is inconsistent with Snowtop Mushrooms v Powley. I consider I am bound by Snowtop Mushrooms and not by Lewandowski v Lovell because the earlier decision was not brought to the attention of the Full Court in Lewandowski v Lovell. The dissent of Kennedy J is consistent with the judgment in which he joined in Snowtop Mushrooms v Powley. Furthermore, Lewandowski v Lovell was a majority decision.

16 I draw support for this stand by the decision in Geneva Finance v Resource & Industry Ltd. It accords with my own view which is that the exercise of a judicial discretion to extend time must be exercised at all times for the interests of justice. This will involve weighing a number of different factors on a case by case basis and it is unhelpful to be overly prescriptive as to the weight to be ascribed to the differing factors.

17 To return to the present case, having regard to the general liberty to apply under O 66 r 51(2), the actual delay is a matter of some 6 weeks. There is no prejudice to the plaintiff in extending time. A failure to extend time to enable consideration as to whether a special costs order should be made would punish the third and fourth defendants for the ignorance or inadvertence of their solicitors and such a result would not be just. I therefore extend the time in which the third and fourth defendants may seek a special costs order.

18 In City of Rockingham v Curley & Anor [2000] WASCA 202(S) the Court said at [12]:

"It needs to be pointed out, as the court does from time to time, that such a special order is made in the exercise of the court's discretion as to costs and the order will not be lightly made, the general rule being that the taxation of costs should proceed in accordance with the provisions of the relevant costs determination. Where the complexity of the case, or in this case the appeal, is relied upon, it is to be noted that the rule grounds the exercise of the court's discretion upon its conclusion that the appeal involved, not simply some complexity, but 'unusual complexity'."

19 The general principles on special costs orders are set out by Wheeler J in Verdell Pty Ltd v F & G Nominees Pty Ltd & Anor [2002] WASC 58(S). I adopt her analysis.

20 A special costs order has the effect of allowing the taxing officer to assess a proper amount of costs without regard to an artificial restraint imposed by the maximum scale, but does not mean that an amount larger that the maximum scale would necessarily result: see Geneva Finance Ltd v Resource & Industry Ltd at [15].

21 With the principles in mind, I now turn to the orders sought:

"2. The third and fourth defendants have leave to apply for a special order to extend the limit of the Supreme Court scale of costs for Item 13 of the fees set out in Part 6 of the determination of the Legal Costs Committee ('the Schedule') for getting up the case for trial.

3. The third and fourth defendants have leave to apply for a special costs order to extend the limit of the Supreme Court scale of costs for Item 9(b) for giving discovery of documents.

4. The third and fourth defendants have leave to apply for a special costs order to extend the limit of the Supreme Court scale of costs for Item 14(c) for Counsel's fees for trial (including subsequent days of trial).

5. The Taxing Master, in taxing the bill of costs of the third and fourth defendants do make reasonable allowance, having regard to the work done and the tariff in the Schedule for:

(a) getting up, without regard to the limits imposed by Item 13 of the Schedule;

(b) the making and receiving of discovery, without regard to the limits in Item 9(b) of the Schedule;

(c) Counsel's fees, without regard to the limits in Items 14(a), 14(b) and 14(c) of the Schedule."

22 The scale refers to 100 hours at a level of a senior practitioner.

23 My impression gained as the trial Judge is that the case was not of such unusual complexity or importance as to justify a special costs order.

24 The issues relating to the third and fourth defendants were relatively confined. Nor were the legal issues particularly complex. I therefore go to Mr Lu's evidence to see whether there are matters of unusual complexity or importance which are disclosed or there is any other good or sufficient reason to make the order. It may be accepted that the actual amount of the bill can amount to good and sufficient reason in appropriate cases.

25 Mr Lu deposed that the time spent in getting the matter up for trial well exceeded 100 hours and the cost of getting up for trial exceeded $100,000. He further deposed as to the reasons why he said that the matter was factually and legally complex. The different witness statements made by the plaintiff's chief witness certainly were an unusual matter which required an extra amount of work. The third and fourth defendants have provided a draft bill of costs for taxation, although the assistance such a bill provides is of questionable value.

26 Having considered the matters in Mr Lu's evidence, and the submissions advanced as to why a special costs order should be made, I nevertheless remain unpersuaded that the conditions under O 66 r 12 have been satisfied in this case. I do not regard the case to be of unusual complexity, nor do I regard the amount of the draft bill in this case as constituting a good and sufficient reason to make a special costs order.

27 Mr Lu deposes that discovery took more than 90 hours at a cost of over $4,000 which exceeds the scale amount provided for discovery in scale item 9(b); 10 hours or $1,800. Mr Lu points to the fact that two separate discovery affidavits were prepared and filed by lawyers for the third and fourth defendants.

"The discovery process involved numerous drafts of discovery lists and document management of 142 of discovered documents, many with multiple pages and attachments, ..."

29 In their written outline of submissions, the third and fourth defendants state at [48]:

"The solicitors for the third and fourth defendants spent over 20 hours giving discovery of 117 documents at an average rate of approximately $200 per hour."

30 At first glance it is difficult to see why a discovery involving 117 or 142 documents, even allowing for two affidavits, should exceed the scale. Nothing in Mr Lu's evidence persuades me that the first glance is wrong. The problems with the plaintiff's discovery, to which reference is made by the defendant, were dealt with at various times by summons with appropriate costs orders made.

Item 14(c): Counsel's fees for trial (including subsequent days of trial)

31 The third and fourth defendants submit that the costs of allowing for counsel ought to be assessed without regard for the limit for junior counsel or at rates applicable to a senior counsel. The short answer to that proposition is that counsel, though very able and experienced, is not in fact senior counsel.

32 Mr Lu deposes that counsel's fees exceed the scale allowance by $7,500 because of the number of additional hours spent by junior counsel in getting up for trial by attending multiple conferences with the third and fourth defendants' solicitors to discuss the plaintiff's late witness statements, trial bundles and responsive statements.

33 I am not persuaded to increase item 13 for getting up case for trial because of the changing nature of the plaintiff's case. It is possible, however, to distinguish the role of instructing solicitor and that of counsel faced with the same set of circumstances. Having observed the trial unfolding, I am of opinion that the changing nature of the plaintiff's case, as principally represented by the various statements of the chief witness, is such as to constitute good and sufficient reason to lift the scale in respect of counsel's fees.

34 For the reasons outlined, I make the following orders:

1. The time to apply for special orders in CIV 1722 of 1999 be extended to a date not later than 14 days after the making of these orders;

2. There be a special costs order to extend the limit of the Supreme Court scale of costs for item 14(c) for counsel fees for trial (including subsequent days of trial);

3. The Taxing Master in taxing the bill of costs of the third and fourth defendants do make reasonable allowance having regard to the work done and the tariff in the schedule for counsel's fees without regard to the limits in item 14(a), 14(b) and 14(c) of the Schedule.