WESTGEM INVESTMENTS PTY LTD IN ITS OWN RIGHT AS TRUSTEE FOR HOSSEAN POURZAND AND JENNY MARIA POURZAND ATF THE HELEN TRUST -v- COMMONWEALTH BANK OF AUSTRALIA LTD [No 5] [2019] WASC 310 (29 August 2019)

1. The merits of the new claims are a relevant consideration.
2. In their submissions the plaintiffs addressed in some detail the merits of the case they wished to run if permitted to re-open and supported their position by reference to the contemporaneous documents. In their responsive submissions the defendants did not engage with the merits in the same depth and, of course, the defendants foreshadowed that they may wish to adduce further evidence. In those circumstances, it would be wrong for me to express any view on the merits beyond saying that in my assessment both the construction claim and the rectification claim raise serious questions to be tried.

1. The plaintiffs bring their application on the basis that their lawyers made an inadvertent error in making the admissions contained in par 98(c) of the reply and pars 116 and 117 of the defence to counterclaim that they now seek leave to withdraw.
2. The evidence about the error made by the plaintiffs' lawyers contained in Mr Gentilli's affidavit of 27 February 2019 was problematic. The inclusion of hearsay evidence in inadmissible form in par 2 of the affidavit knowing that the affidavit was to be relied upon in a contested application was surprising. Additionally, the explanation of the error given by Mr Gentilli lacked the clarity and detail that might be expected in an affidavit sworn in support of an application to re-open based on the inadvertence of a party's lawyers. I note also that there was no explanation for the inconsistency between the allegations made in the statement of claim as to the capacity in which the Second Additional Security Providers entered into the Second Additional Securities and the admissions in the reply and defence to counterclaim.
3. Criticism of Mr Gentilli's explanatory evidence must be tempered by an appreciation of the context in which the situation has arisen. The litigation between the parties is complex and factually detailed. Teams of lawyers were engaged on both sides of the litigation for a number of years preceding the liability trial. The length of the pleadings attests to the number of issues to be determined (although the scope of the litigation was reduced as a consequence of the plaintiffs abandoning parts of their case immediately prior to and during the course of the trial). The preparation for the liability trial involved the consideration of many thousands of documents.
4. In litigation of this nature the preparation of pleadings and the preparation for and running of the case is a collaborative undertaking involving a team of lawyers extending over a number of years. Of necessity, team members rely on the work undertaken by others. Litigation of this magnitude creates situations in which, from time to time, as the majority said in De L, 'accidents and oversights can sometimes occur'. This can occur notwithstanding the competence and experience of the lawyers involved.
5. The facts of the present case may be contrasted with the facts in Nweiser, Ezra, Di Stasio and FYD each of which involved readily identifiable forensic decisions in comparatively simple cases made principally by one lawyer in each case. In the present case, where there has been a team of lawyers working on a complex case over a number of years, it is understandable that it is difficult to provide a precise and detailed explanation of an error contained in pleadings settled some three years before the liability trial commenced and nearly four years before Mr Gentilli was required to provide an explanation of the error.
6. I accept Mr Gentilli's evidence to the effect that the plaintiffs' legal team did not check the precise terms of the Second Additional Securities. The plaintiffs' primary claim in respect of the Second Additional Securities is that they should be set aside. That claim does not depend on the precise terms of the securities but on the circumstances in which they were granted and the conduct and knowledge of the defendants. I infer that the terms of the Second Additional Securities to which I have referred in the course of outlining the contractual framework and the inconsistencies between the terms of the Second Additional Securities and the Restated MOFA Limited Guarantee, the Restated MOFA Pourzand Guarantee, the deed of consideration and acknowledgment and the deeds of trust covenant were overlooked by the plaintiffs' lawyers when preparing and settling the various iterations of the reply and defence to counterclaim.
7. There are two circumstances that combine to give rise to this inference. First, there is the plea in the statement of claim that the Second Additional Securities were provided by the Second Additional Security Providers in their capacities as trustees of the various trusts - a position inconsistent with the admissions in the subsequent pleadings that they were also provided by the Second Additional Securities Providers 'in their own right'. Second, in my view, a competent legal practitioner acting for the Second Additional Security Providers who carefully examined the deeds of trust covenant, the Restated MOFA Limited Guarantee, the Restated MOFA Pourzand Guarantee and the Second Additional Mortgages would be unlikely to admit that the Second Additional Mortgages were granted by the Second Additional Security Providers in their own right or that the Tuart Unit Charge was granted by Newport in its own right. This is not to say that the only construction to be placed on these securities is that they were granted by trustees acting solely in their trustee capacity or indeed that this is the preferable construction - I make the observation from an entirely neutral perspective. Rather, it is to acknowledge that a competent practitioner considering the terms of these documents would appreciate that there was an issue as to the capacity in which the Second Additional Security Providers had granted the Second Additional Mortgages. The plaintiffs' lawyers were experienced competent lawyers and it is unlikely that, otherwise than as a consequence of oversight, they would intentionally have made an admission adverse to the Second Additional Security Providers' interests.
8. The reasoning in the preceding paragraph also leads me to conclude that the relevant admissions were not made as part of a deliberate tactical decision - they were not a Nweiser tactical decision but a Nweiser deliberate but mistaken decision made as a consequence of an oversight - perhaps more accurately, a hybrid of the Nweiser inadvertence and Nweiser deliberate but mistaken categories.
9. In my view, the inference that the admissions were made as a result of an oversight on the part of the plaintiffs' legal advisers arises from the circumstances even if no weight is attached to Mr Gentilli's evidence.

The weight to be attached to the admissions the plaintiffs seek to withdraw

1. When considering the weight to be attached to the admissions in the context of both the application to re-open and the application to amend the pleadings, it is appropriate to take into account that the court is not bound by admissions made by the parties. In Embleton Motor Co Pty Ltd v St Kilda Beach Taxi School and Staffing Pty Ltd Newnes JA, with whom Murphy JA and Edelman J relevantly agreed, observed:[54]

... in any event a court is not bound to act on admissions made by a party: Gramophone Co Ltd v Magazine Holder Co; Termijtelen v Van Arkel. Whether a court should act on an admission, or the weight that should be given to an admission, will depend upon all the circumstances. In the present case, the primary judge had before him extensive evidence from both sides in relation to the agreement, upon which his Honour quite properly based his decision. (citations omitted)

1. In Damberg v Damberg,[55] Heydon JA (with whom Spigelman CJ and Sheller JA agreed) described the court's attitude to admissions as follows:

In short, the courts are averse to pronouncing judgments on hypotheses which are not correct. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed.

1. In this case, the admissions made by plaintiffs concern the construction of the Second Additional Securities. As such, they concern questions of law.[56] I have already stated that I consider the construction issue raises a serious question as to the correctness of the admissions. As I am not bound by the admissions and there is a serious question to be tried about them, even if I was to refuse the leave sought by the plaintiffs to re-open, the requirements of the rules of procedural fairness are such that I should extend to the parties an opportunity to make further submissions on the issues.

The nature and extent of the hearing required if leave to re-open is granted

1. If permitted to re-open, the only interlocutory steps to be completed from the plaintiffs' perspective are the amendments to the pleadings foreshadowed in the applications. The plaintiffs intend to adduce no oral evidence and the additional documentary evidence is limited to the four documents referred to at [49]. In my assessment, if re-opening and amendment of the pleadings is permitted as sought by the plaintiffs', their case should occupy no more than one to two days of hearing time.
2. It is more difficult to make an assessment of the work the defendants will be required to complete to prepare for a re‑opened hearing and the length of time their case on the re‑opened issues may take.
3. In his affidavit Mr Wang deposed about the need to conduct a further review of the defendants' discovered documents to identify documents relevant to the plaintiffs' new claims, to the possibility of seeking further discovery from the plaintiffs and from third parties by the issue of subpoenas and to the possibility of challenging claims to legal professional privilege previously made in respect of some of the plaintiffs' documents. Mr Wang also deposed to the necessity to proof witnesses in relation to the new issues.
4. My assessment of the work that the defendants will be required to undertake to prepare for a re‑opened trial and the time that the defendants' case on re‑opening will take is made in the context of the evidence given, and the submissions made, in the course of the liability trial.
5. The commercial background to the development, the circumstances in which the MOFA was executed and the commercial imperatives that led to the renegotiation of the MOFA have been canvassed thoroughly in the evidence given in the liability trial. The steps in the negotiation of the facility documentation that culminated in the Restated MOFA and, among other instruments, the Second Additional Securities, were events also covered by the defendants' evidence and submissions in the liability trial. In responding to the plaintiffs' claim that the defendants engaged in unconscionable conduct in the context of the negotiation and execution of the Restated MOFA, the defendants submitted that the terms of the Restated MOFA and the Second Additional Securities were the subject of substantial negotiations between the parties. The defendants incorporated into their written closing submissions a schedule of the documents they contended evidenced the negotiation of the Restated MOFA and the Second Additional Securities.[57] The schedule referred to many of the documents relied upon by the plaintiffs to establish the merits of the claims they now wish to raise.
6. In their submissions the plaintiffs described the liability trial as a 'documentary trial'. In my view, this is an apt description that reflects the heavy reliance by both sides on the contemporaneous documents and inferences arising from those documents.
7. I accept that the defendants' lawyers will need to review the documents available to them with an eye attuned to the claims that the plaintiffs now wish to raise, and that the defendants may need to search for further relevant documents, but my assessment based on the existing documentary evidence is that it is unlikely that the determination of the construction claim will result in any significant expansion of the documentary evidence. I accept that it is possible, as Mr Wang deposes, that there may be interlocutory applications concerning further discovery or the production of documents in answer to subpoenas but, given the nature and extent of the documentary evidence already before the court, I think the scope for applications of that nature is limited.
8. In his affidavit Mr Wang referred in general terms to the necessity for the defendants to speak to and proof potential witnesses and then make a decision as to which witnesses may be called. My assessment, however, is that the construction issues will be determined solely by reference to the relevant contemporaneous documents. This assessment reflects the documentary nature of the trial process to date and the restrictions on adducing evidence of parties' subjective intentions on issues of contractual construction. The scope for the defendants to adduce oral evidence in order to 'explain and contextualise' relevant documents, as it was put by Mr Wang in his affidavit evidence, is limited.
9. The rectification claim may well, however, involve the defendants adducing oral evidence going to their subjective intentions. Whilst the possibility of such oral evidence must be accepted, my assessment is that any such oral evidence would be of a limited nature because, as with other issues in this action, the primary focus will be on the contemporaneous documents and what might be inferred from them.
10. My assessment of the evidentiary scope of the re-opened hearing and the nature of the legal submissions is that the re-opened hearing is likely to last between three and four days, depending on whether the defendants call witnesses.

Prejudice to the defendants if leave to re-open is granted

1. I accept that leave to re-open may involve potential prejudice to the defendants of the nature described in Mr Wang's affidavit. That is, first, the defendants cannot be assured of co‑operation from potential witnesses and the recollections of witnesses will have faded with the passage of time; and second, having to prepare for and defend a re‑opened case will be more time consuming and expensive than if the new claims had been dealt with in the liability trial, and the preparation and running of the re‑opened case will be more difficult because the team of lawyers has disbanded. I also accept a re‑opening may re‑impose strain and anxiety on potential witnesses.
2. I am required to make an assessment of how the potential prejudice may impair the defendants' ability to defend the new claims. I have already recorded my view that the contractual construction claim will be resolved solely by reference to documentary evidence. On that basis, my assessment is that the potential prejudice to which Mr Wang deposed is unlikely to have an impact on the defendants' ability to defend the construction claims.
3. As to the rectification claim, whilst I accept that oral evidence of subjective intentions may be required, I think it is likely the contemporaneous documents and inferences to be drawn from them will constitute the evidence that determines the outcome of the rectification claim as well as the contractual construction claim, and that would have been so had the rectification claim be made at an earlier stage in the action. Thus, I accept there is the potential for the defendants' ability to defend the rectification claim to be impaired by difficulties of the nature described by Mr Wang but, because of my view of the importance of the documentary evidence, I do not accept the prejudice is sufficient to weigh decisively against the grant of leave to re-open.
4. I accept the inefficiency inherent in permitting the plaintiffs to re-open will have time and cost consequences of the nature described by Mr Wang but I have reservations that the consequences will be as severe as described by Mr Wang in his affidavit because, in my assessment, the claims the plaintiffs seek to raise are confined in nature and, as already explained, the evidence will be largely, if not exclusively, documentary.
5. In making an assessment of the potential prejudice that the defendants may suffer if the plaintiffs are permitted to re-open I have considered whether the defendants have suffered prejudice in the form of forensic decisions made in the course of the litigation that cannot now be reversed or overcome. I recognise that had the plaintiffs made the rectification claims before the liability trial the defendants may have included evidence relevant to the defendants' subjective intentions in the statements of their witnesses who were involved in the negotiation of the Restated MOFA, but I have not otherwise been able to identify any forensic decisions that have consequences that prejudice the defendants' ability to defend the new claims.

Prejudice to the plaintiffs if leave to re-open is refused

1. The following analysis of the prejudice that may be suffered by the plaintiffs if leave to re-open is refused proceeds on the premise that the application to set aside the Second Additional Securities fails.
2. The defendants' advisers calculated that the total amount owing to the defendants as of 31 March 2019, inclusive of default interest, was $217,876,310.[58] This figure takes into account $28,436,693 applied in reduction of Westgem's debt from the realisation of the Second Additional Securities up to the conclusion of the liability trial.
3. If the Second Additional Security Providers were to succeed in their claim that they are not liable otherwise than in their trustee capacities or that the liability of each of them was limited to the amount realised by the defendants from enforcing the Second Additional Securities, then they would not be liable, either in their personal capacities or at all, for the balance of the debt due to the defendants of approximately $200 million. If the plaintiffs are not permitted to re-open, then they will not be able to argue the serious questions raised by them as to the basis upon which the defendants claim this sum. The prejudice to the Second Additional Security Providers in those circumstances is both plain and severe. They will either be obliged to pay approximately $200 million which they may not owe to the defendants and if they cannot pay they face insolvency or bankruptcy. Conversely, assuming the Second Additional Security Providers have the capacity to pay some or all of the $200 million, the defendants stand to gain a substantial benefit to which they may have no legal entitlement.
4. The defendants may realise a windfall gain to which they are not entitled if the Second Additional Securities Providers are not permitted to re-open. In these circumstances, it would not be in the interests of justice to confine the Second Additional Securities Providers to their rights of action against their lawyers.

1. I consider that the interests of justice favour a grant of leave to the plaintiffs to re-open and to make the amendments proposed by them to their pleadings. My reasons, distilled from the observations made in the preceding analysis, are as follows.
2. First, unless permitted to re-open, the Second Additional Security Providers will not be able to advance claims that raise serious questions and, if they fail in their primary case that the guarantees be set aside, they will be subject to enforcement action by the defendants to recover amounts for which they may have no liability and to which the defendants may have no entitlement. Such a result is not in the interests of justice.
3. Second, the prejudice to the plaintiffs inherent in the situation described in the preceding paragraph outweighs the prejudice to the defendants in permitting re-opening.
4. Third, in the circumstances of this case, the objective of a just determination of the litigation weighs more heavily than the inefficiency inherent in permitting the re-opening. The consequences that flow from this inefficiency are attenuated, in part, because the claims that the plaintiffs wish to raise are confined and will not extend the evidentiary and factual matrix as it presently stands to any significant extent and, in part, because the re-opening of the case can be managed in way that does not delay the enforcement of the Second Additional Securities in the event that the plaintiffs' claims fail and the defendants succeed.
5. Fourth, I am satisfied that the admissions made by the plaintiffs that they now seek to withdraw were due to inadvertent error on the part of the plaintiffs' lawyers. It is not in the interests of justice to allow the defendants the opportunity to recover from the plaintiffs sums in the region of $200 million to which they may have no legal entitlement and to confine the plaintiffs to any rights they may have against their lawyers for that oversight.
6. Fifth, the court is not bound by the admissions made by the plaintiffs and, as attention has now been drawn to the question of whether those admissions correctly reflect the proper construction of the relevant documents, further submissions will be sought from the parties in any event.

Seaport Pty Ltd ACN 085 027 176 as trustee for the Seaport Trust

Mayport Nominees Pty Ltd ACN 070 052 603 as trustee for the Mayport Unit Trust

Hossean Pourzand and Jenny Maria Pourzand as trustees for the Sherin Trust

Newport Securities Pty Ltd ACN 050 217 439 as trustee for the Newport Family Trust

Queen Street Properties Pty Ltd ACN 076 299 477 as trustee for the Queen Street Properties Unit Trust

(a) Westview Asset Pty Ltd ACN 119 774 266 as trustee for the Westview Trust; and

(b) Oakcure Pty Ltd ACN 075 388 564 as trustee for the Zahra No.2 Trust;

(a) Cityscape Investments Pty Ltd ACN 143 905 131 as trustee for the Faramaz Trust; and

(b) Rangeway Investments Pty Ltd ACN 111 258 087 as trustee of the Rangeway Investments Trust;

Grand Edition Pty Ltd ACN 127 106 209 as trustee for the Farah Investment Trust No. 4

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

CITATION : WESTGEM INVESTMENTS PTY LTD IN ITS OWN RIGHT TRUSTEE FOR HOSSEAN POURZAND AND JENNY MARIA POURZAND ATF THE HELEN TRUST -v- COMMONWEALTH BANK OF AUSTRALIA LTD [No 5] [2019] WASC 310 (S)

BETWEEN : WESTGEM INVESTMENTS PTY LTD IN ITS OWN RIGHT TRUSTEE FOR HOSSEAN POURZAND AND JENNY MARIA POURZAND ATF THE HELEN TRUST

HOSSEAN POURZAND IN ITS OWN RIGHT TRUSTEE FOR THE HELEN TRUST & THE SHERIN TRUST & THE POURZAND TRUST

JENNY MARIA POURZAND IN ITS OWN RIGHT TRUSTEE FOR THE HELEN TRUST & THE SHERIN TRUST & THE POURZAND TRUST

PAKWEST PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR NEWPORT SECURITIES PTY LTD & TRUSTEE FOR VARIOUS OTHER COMPANIES

NEWPORT SECURITIES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) ATF THE PAKWEST TRUST THE NEWPORT FAMILY TRUST & THE LUKE SARACENI FAMILY TRUST

OAKCURE PTY LTD OWN CAPACITY AND TRUSTEE FOR THE PARRY TRUST

SEAPORT PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR THE SEAPORT TRUST

MAYPORT NOMINEES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR THE MAYPORT UNIT TRUST

QUEEN STREET PROPERTIES PTY LTD IN ITS OWN RIGHT TRUSTEE FOR THE QUEEN STREET PROPERTIES

GRAND EDITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR THE FARAH INVESTMENT TRUST NO 4

MAREE SARACENI PTY LTD ATF THE TOKYO CITY TRUST AND THE LUKE SARACENI FAMILY TRUST

SINGLE HOLDINGS WA PTY LTD ATF THE TUART INVESTMENTS UNIT TRUST

SARACEN PROJECT MANAGEMENT PTY LTD ATF THE SARACEN PROJECT MANAGEMENT TRUST

CARDUP INDUSTRIAL LAND HOLDINGS PTY LTD IN ITS OWN RIGHT TRUSTEE FOR THE CARDUP INDUSTRIAL LAND TRUST AND THE CARDUP INDUSTRIAL LAND TRUST NO 2

GOLDEN WEST PROPERTIES PTY LTD ATF THE POURZAND FAMILY TRUST THE OZRA TRUST THE GOLD HOUSE TRUST AND JENNY'S TRUST

Costs - Costs following an application for an indulgence of the court - Where plaintiff successful in application - Where defendant acting reasonably in opposing application - Where plaintiff should pay costs of the application notwithstanding success - Whether costs should be on indemnity basis - Turns on own facts

Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA)

Legal Profession Act 2008 (WA), s 280(2)

Briggs v Curtis Quick & Associates (Unreported, WASC Full Court, Library No 980141, 30 March 1998)

Currie v Currie [No 2] [2019] WASCA 2 (S)

CVW Group Holdings Pty Ltd v Addison [2011] WASC 267 (S)

Gaskin v Ollerenshaw [2010] NSWSC 788

Griffin v Coe [No 2] [2012] NSWSC 1239

Lucantonio v Kleinert [2009] NSWSC 1277

Stanley v Layne Christensen Company [2006] WASCA 56

Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 5] [2019] WASC 310

Yara Australia Pty Ltd v Oswal [2012] WASCA 264

(This judgment was delivered extemporaneously on 24 October 2019 and has been edited from the transcript)

1. The parties have been unable to reach agreement on the costs orders that should follow my decision to allow the plaintiffs to re-open their case.[59]
2. There are two issues:

(a) Was the defendants' opposition to the plaintiffs' application unreasonable with the result that the general rule that a party seeking an indulgence must pay its opponent's costs should not apply in this case?[60]

(b) If the general rule is not displaced, so the plaintiffs are ordered to pay the defendants' costs, should those costs be assessed on an indemnity basis?

1. The application to re-open was heard as part of the trial but it is common ground that if an indemnity costs order is not made the costs of the application should be taxed as if it was an application in chambers to which item 10 of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA) applied and that a special costs order should be made under s 280(2) of the Legal Profession Act 2008 (WA) removing the limits on the amount of time for which costs may be recovered under items 10(a) and (b). I am satisfied that the circumstances of this application warrant the making of a special costs order.

The defendants' opposition to the application was not unreasonable

1. In my view the defendants acted reasonably in opposing the application to re-open. I have reached that conclusion for the following reasons:

(1) The decision to re-open involved the exercise of a discretion requiring the weighing of many competing factors. The outcome of such an exercise is a matter upon which reasonable minds may differ. Hindsight should not be used to say that opposition to an application was unreasonable only because the opposition was ultimately unsuccessful.

(2) Applications to re-open are approached with caution.

(3) This is not a case in which the only consideration was the merits of the plaintiffs' claim. Other considerations (as my reasons disclosed) were relevant. Those considerations included the questions of the efficient conduct of the trial process, the requirement for expedition and the finality of litigation. Those factors weighed against the plaintiffs' application.

(4) The responsibility for the need to re-open lay entirely with the plaintiffs.

(5) The evidence relied upon by the plaintiffs was problematic, as described in my primary reasons.

(6) The defendants will be subject to prejudice of the general nature which they have described (even if I do not accept their view of the extent of that prejudice).

(7) In allowing the plaintiffs' application for leave to re-open I did not record and do not accept that the defendants' arguments in opposition were devoid of merit or otherwise plainly untenable.

1. I add that I am not willing to infer that the defendants' opposition to the application was motivated by the prospect of a windfall gain to which they are not entitled. No conclusion has been reached on the merits of the plaintiffs' claims. Put another way the defendants may well be successful in showing that they are entitled to recover the funds pursuant to the relevant securities.
2. The plaintiff should pay the defendants' costs of the application to re‑open in accordance with the general rule.

The circumstances do not justify an order for indemnity costs

1. I do not, however, accept that the circumstances of this case are such that an indemnity costs order is warranted. The principles by which applications for indemnity costs are determined are well known. It is unnecessary for me to repeat the statements of Murphy JA with whom McLure P relevantly agreed in Yara Australia Pty Ltd v Oswal,[61] but I note that an indemnity costs order is exceptional in nature and is seen as a mark of disapproval on the part of the court of the improper or unreasonable conduct of litigation.
2. In support of their application for indemnity costs the defendants primarily relied on two decisions of the New South Wales Supreme Court in Gaskin v Ollerenshaw[62] and Lucantonio v Kleinert.[63] Each of these cases involved an application for an indulgence and indemnity costs were ordered. I do not doubt that other examples exist where indemnity costs were ordered in similar circumstances.
3. In Griffin v Coe [No 2],[64] Davies J was considering the appropriate costs orders to be made in relation to a successful application to re-open the case. His Honour referred to but declined to follow the previous decisions of Gaskin v Ollerenshaw and Lucantonio v Kleinert. After referring to these cases and the awards of indemnity costs made, his Honour said:[65]

Neither of the Judges in those cases offered further reasons for making the costs payable on an indemnity [basis].

The Plaintiffs were successful in having the application re opened. In those circumstances, although it is appropriate that the Plaintiff pay the costs of the re-opening because the Plaintiffs were seeking an indulgence, the costs should be payable on the ordinary basis.

1. In CVW Group Holdings Pty Ltd v Addison,[66] Le Miere J declined to order indemnity costs in an application for an indulgence. In that case the defendants had pursued an appeal against a springing order, however the defendants' solicitors had failed to apply for a stay of the time to comply with the springing order pending the outcome of the appeal. Prior to the appeal being determined the springing order executed and judgment was entered against the defendant. The defendants were successful in their appeal against the springing order and his Honour found that even if the appeal was unsuccessful he would have extended the time for complying with the springing order. His Honour recorded that the conduct of the defendants fell below the standard expected of litigants and their legal representatives, but still ultimately concluded that indemnity costs were not justified in the circumstances.
2. There is limited precedential value in the authorities because of the variation in the factual circumstances of each case. The ability to award costs on an indemnity basis, even in applications to reopen, remains at the discretion of the court to be exercised judiciously and according to the facts of each individual case.
3. As I have said, I do not consider that the plaintiffs' conduct in this case has been improper or so unreasonable as to justify an order for indemnity costs. I do not need to repeat all that I said in my substantive reasons for allowing the plaintiffs to reopen. The matters which the plaintiffs sought to be brought before the court were important to the final resolution of the parties' claims. As I recorded in those reasons, it is in the interests of justice for the issues to be determined, irrespective of the reasons why they were not included in the issues to be resolved at the liability trial. The plaintiffs were ultimately successful in what was a hotly contested application. In those circumstances, I consider that costs should be awarded on a party and party basis, taking into account the making of a special costs order.
4. In that last respect, what was said by the Court of Appeal in Currie v Currie [No 2],[67] to the effect that a properly crafted special costs order may obviate the need for an indemnity costs order (though not directly applicable) reinforces my view that an indemnity costs order is not appropriate in this case.[68]

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

[1] The pleadings the plaintiffs seek leave to amend are the Sixth further amended second substituted statement of claim filed on 7 June 2018, and the reply and defence to counterclaim filed on 14 June 2018.

[2] There were other guarantees given pursuant to the Restated MOFA but they are not relevant to the present application.

[3] Defendants' outline of closing submissions - Schedule 5.1 and the documents referred to (DEF.201.041.0001, 0265).

[4] The pleading added a new claim. The defendants applied unsuccessfully to strike out the application, see Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 3] [2018] WASC 73.

[8] Clause 1(137) of the MOFA (RSQ.006.0001.0030).

[9] A clause in these terms appears where the mortgagor is a trustee for a single trust. Where the mortgagor is a trustee for more than one trust the clause refers to each relevant trust.

[11] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104; [46] - [52] (French CJ, Nettle and Gordon JJ).

[14] Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 260 CLR 85 [103].

[16] New Energy Minerals Ltd v Arena Structured Private Investments (Cayman) LLC [2019] WASC 259 [5].

[18] DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226 [34] (Gleeson CJ, Gaudron, McHugh, Gummow & Hayne JJ) cited in Lashansky v Legal Practitioners Complaints Committee [2005] WASCA 217 [128] (Wheeler & McLure JJA and Miller AJA).

[19] Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471, 475G - 476A (Clarke JA, Mahoney and Meagher JJA agreeing); Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 [26] (Kenny J); Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232; (2012) 46 VR 1 [26] (Harper & Tate JJA and Beach AJA).

[20] Wentworth v Woollahra Municipal Council [1982] HCA 41; (1982) 149 CLR 672, 684 (Mason ACJ, Wilson and Brennan JJ).

[21] Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22.

[22] Defendants' outline of submissions [30].

[23] Wentworth v Woollahra Municipal Council [1982] HCA 41; (1982) 149 CLR 672, 684 (Mason ACJ and Wilson and Brennan JJ).

[24] Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300, 303 (Mason CJ).

[25] De L v Director-General, NSW Department of Community Services (No 2) [1997] HCA 14; (1997) 190 CLR 207, 215 (Toohey, Gaudron , McHugh , Gummow and Kirby JJ).

[26] Di Stasio Pty Ltd v R & K Services Pty Ltd [2018] VSCA 340 (Tate, McLeish and Niall JJA).

[27] State Rail Authority (NSW) v Codelfa Construction Pty Ltd [1982] HCA 51; (1982) 150 CLR 29, 38.

[28] University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 60 ALR 68 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ).

[29] University of Wollongong v Metwally (No 2), (71).

[30] Wentworth v Woollahra Municipal Council (684).

[31] Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256.

[32] Smith v New South Wales Bar Association (266 - 267).

[33] Autodesk Inc v Dyason (No 2) (302).

[34] De L v Director-General, NSW Department of Community Services (No 2) (215).

[35] De L v Director-General, NSW Department of Community Services (No 2) (216).

[36] Di Stasio Pty Ltd v R & K Services Pty Ltd [59].

[37] Di Stasio Pty Ltd v R & K Services Pty Ltd [78].

[38] Di Stasio Pty Ltd v R & K Services Pty Ltd [81] quoting Kirby J in Goldsmith v Sandilands [2002] HCA 31; (2002) 190 ALR 370, 385 [58].

[39] Ezra Abrahams Pty Ltd v Milburn [2017] VSCA 355.

[40] Di Stasio Pty Ltd v R & K Services Pty Ltd [83].

[41] Urban Transport Authority of New South Wales v Nweiser (478).

[42] Ezra Abrahams Pty Ltd v Milburn [80] (Kyrou, Kaye and McLeish JJA).

[43] FYD Investments Pty Ltd v Promptair Pty Ltd [2017] FCA 1097 (White J).

[44] FYD Investments Pty Ltd v Promptair Pty Ltd [32] (White J).

[45] FYD Investments Pty Ltd v Promptair Pty Ltd [33].

[46] LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1141.

[47] LED Builders Pty Ltd v Eagle Homes Pty Ltd [34].

[48] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [5] (French CJ).

[49] Rules of the Supreme Court 1971 (WA) O 1 r 4A and 4B; Aon Risk Services Australia Ltd v Australian National University [5] (French CJ); [101] (Gummow, Hayne, Crennan, Kiefel and Bell JJ); Eastman v Director of Public Prosecutions (ACT) [2003] HCA 28; (2003) 214 CLR 318 [31] (McHugh J, Gummow J agreeing).

[50] Goldsmith v Sandilands [58] - [59].

[51] G D Pork Pty Ltd v Derby Industries Pty Ltd [2018] WASC 223 [16] (Vaughan J).

[52] See G D Pork Pty Ltd v Derby Industries Pty Ltd [17] - [18]; Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296 [52]; Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 3] [47].

[53] Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212.

[54] Embleton Motor Co Pty Ltd v St Kilda Beach Taxi School and Staffing Pty Ltd [2014] WASCA 183 [46].

[55] Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492 [160].

[56] Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA 37; (2011) 244 CLR 239 [82] (Heydon J).

[57] Defendants' outline of closing submissions - Schedule 5.3 - Negotiations of Facility Documents June 2010 to September 2010 (DEF.201.041.0001, 0241).

[58] Affidavit of James Yu-Wen Wang sworn 17 April 2019, par 92.

[59] Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 5] [2019] WASC 310.

[60] See Briggs v Curtis Quick & Associates (Unreported, WASC Full Court, Library No 980141, 30 March 1998) (Owen & Parker JJ); Stanley v Layne Christensen Company [2006] WASCA 56 [51] - [55] (Wheeler JA, Steytler P & Pullin JA agreeing).

[61] Yara Australia Pty Ltd v Oswal [2012] WASCA 264 [33].

[62] Gaskin v Ollerenshaw [2010] NSWSC 788.

[63] Lucantonio v Kleinert [2009] NSWSC 1277.

[64] Griffin v Coe [No 2] [2012] NSWSC 1239.

[65] Griffin v Coe [No 2] [5], [8].

[66] CVW Group Holdings Pty Ltd v Addison [2011] WASC 267 (S).

[67] Currie v Currie [No 2] [2019] WASCA 2 (S).

[68] Currie v Currie [No 2] [15] (Murphy, Mitchell & Beech JJA).