Saraceni v Jones

[2012] WASCA 59 (S)

SARACENI -v- JONES [2012] WASCA 59 (S)

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2012] WASCA 59 (S)
Court:	THE COURT OF APPEAL (WA)
Case No:	CACV:113/2011	Heard:	ON THE PAPERS
Coram:	MARTIN CJ McLURE P NEWNES JA	Delivered:	1/03/13
No of pages:	6	Judgment Part:	1 of 1
Result:	Costs order construed
Category:	B
PDF Version

Parties:	LUKE SARACENI MARTIN BRUCE JONES AS RECEIVER AND MANAGER OF NEWPORT SECURITIES PTY LTD AND AS AGENT OF THE MORTGAGEE IN POSSESSION OF 3517 ROAD, WILYABRUP DARREN GORDON WEAVER AS RECEIVER AND MANAGER OF NEWPORT SECURITIES PTY LTD AND AS AGENT OF THE MORTGAGEE IN POSSESSION OF 3517 CAVES ROAD, WILYABRUP ANDREW JOHN SAKER AS RECEIVER AND MANAGER OF NEWPORT SECURITIES PTY LTD AND AS AGENT OF THE MORTGAGEE IN POSSESSION OF 3517 CAVES ROAD, WILYABRUP MARTIN BRUCE JONES AS RECEIVER AND MANAGER OF MAYPORT NOMINEES PTY LTD DARREN GORDON WEAVER AS RECEIVER AND MANAGER OF MAYPORT NOMINEES PTY LTD ANDREW JOHN SAKER AS RECEIVER AND MANAGER OF MAYPORT NOMINEES PTY LTD MARTIN BRUCE JONES AS RECEIVER AND MANAGER OF SEAPORT PTY LTD JOHN ROSS LINDHOLM AS RECEIVER AND MANAGER OF SEAPORT PTY LTD COMMONWEALTH ATTORNEY-GENERAL
Catchwords:	Costs Indemnity costs Solicitor and client costs Special costs Meaning of 'reasonable costs incurred'
Legislation:	Legal Profession Act 2008 (WA), s 280 Rules of the Supreme Court 1971 (WA), O 66 r 11
Case References:	Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR 95 Re Bond Corporation Holdings Ltd (1990) 1 WAR 465 Saraceni v Jones [2012] WASCA 59 Spencer v Dowling [1997] 2 VR 127 Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : SARACENI -v- JONES [2012] WASCA 59 (S) CORAM : MARTIN CJ

McLURE P
NEWNES JA

HEARD : ON THE PAPERS DELIVERED : 1 MARCH 2013 FILE NO/S : CACV 113 of 2011 BETWEEN : LUKE SARACENI

Applicant

AND

MARTIN BRUCE JONES AS RECEIVER AND MANAGER OF NEWPORT SECURITIES PTY LTD AND AS AGENT OF THE MORTGAGEE IN POSSESSION OF 3517 ROAD, WILYABRUP
First-named First Respondent

DARREN GORDON WEAVER AS RECEIVER AND MANAGER OF NEWPORT SECURITIES PTY LTD AND AS AGENT OF THE MORTGAGEE IN POSSESSION OF 3517 CAVES ROAD, WILYABRUP
Second-named First Respondent

ANDREW JOHN SAKER AS RECEIVER AND MANAGER OF NEWPORT SECURITIES PTY LTD AND AS AGENT OF THE MORTGAGEE IN POSSESSION OF 3517 CAVES ROAD, WILYABRUP
Third-named First Respondent

(Page 2)

MARTIN BRUCE JONES AS RECEIVER AND MANAGER OF MAYPORT NOMINEES PTY LTD
First-named Second Respondent

DARREN GORDON WEAVER AS RECEIVER AND MANAGER OF MAYPORT NOMINEES PTY LTD
Second-named Second Respondent

ANDREW JOHN SAKER AS RECEIVER AND MANAGER OF MAYPORT NOMINEES PTY LTD
Third-named Second Respondent

MARTIN BRUCE JONES AS RECEIVER AND MANAGER OF SEAPORT PTY LTD
First-named Third Respondent

JOHN ROSS LINDHOLM AS RECEIVER AND MANAGER OF SEAPORT PTY LTD
Second-named Third Respondent

COMMONWEALTH ATTORNEY-GENERAL
Intervener

Catchwords:

Costs - Indemnity costs - Solicitor and client costs - Special costs - Meaning of 'reasonable costs incurred'

Legislation:

Legal Profession Act 2008 (WA), s 280

Rules of the Supreme Court 1971 (WA), O 66 r 11

Result:

Costs order construed

(Page 3)

Category: B

Representation:

Counsel:

Applicant : Mr G R Donaldson SC & Mr J C Vaughan
First-named First Respondent : Mr D F Jackson QC & Mr M N Solomon
Second-named First Respondent : Mr D F Jackson QC & Mr M N Solomon
Third-named First Respondent : Mr D F Jackson QC & Mr M N Solomon
First-named Second Respondent : Mr D F Jackson QC & Mr M N Solomon
Second-named Second Respondent : Mr D F Jackson QC & Mr M N Solomon
Third-named Second Respondent : Mr D F Jackson QC & Mr M N Solomon
First-named Third Respondent : Mr D F Jackson QC & Mr M N Solomon
Second-named Third Respondent : Mr D F Jackson QC & Mr M N Solomon
Intervener : Mr R Orr QC & Mr A Buckland

Solicitors:

Applicant : Jackson McDonald
First-named First Respondent : Coulson Legal
Second-named First Respondent : Coulson Legal
Third-named First Respondent : Coulson Legal
First-named Second Respondent : Coulson Legal
Second-named Second Respondent : Coulson Legal
Third-named Second Respondent : Coulson Legal
First-named Third Respondent : Coulson Legal
Second-named Third Respondent : Coulson Legal
Intervener : Australian Government Solicitor

Case(s) referred to in judgment(s):

Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR 95
Re Bond Corporation Holdings Ltd (1990) 1 WAR 465
Saraceni v Jones [2012] WASCA 59
Spencer v Dowling [1997] 2 VR 127
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)


(Page 4)

1 JUDGMENT OF THE COURT: This court is called upon to construe a costs order made by consent on 16 March 2012 (the costs order). The costs order was formulated, and agreed to, by the parties following the delivery of judgment in Saraceni v Jones [2012] WASCA 59 (the proceedings).

2 The costs order provides that 'the Applicant pay the reasonable costs incurred by the Respondents in these proceedings to be taxed if not agreed'. The respondents have filed a bill of costs dated 1 November 2012 (the Bill).

3 On 21 November 2012 Registrar Bush made orders by consent that the following questions raised by the applicant be determined by the court as a preliminary issue on the papers, being:

(1) whether the costs order denotes indemnity costs (although not shifting the onus of proof), or in the alternative, solicitor and client costs; and

(2) whether the costs order allows the respondents to claim costs above the applicable costs scale item limit.

4 On 13 September 2011 Corboy J referred a special case for the opinion of the Court of Appeal. The Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (the Determination ) applies to the proceedings. Item 22 of the Determination applies to a special case, case stated (otherwise than by way of appeal) or trial of an issue and allows for 'such amounts as are reasonable in the circumstances' (the scale item).

5 The scale item is not capped. However, the maximum hourly and daily rates set out in the Table in cl 10 of the Determination would, absent an order to the contrary, apply in determining what was reasonable in the circumstances: Legal Profession Act 2008 (WA) (LPA), s 280; Rules of the Supreme Court 1971 (WA), O 66 r 11.

6 The Bill claims costs pursuant to the provisions of a costs agreement between the respondents and law firm Blake Dawson dated 14 September 2011 (the costs agreement). The respondents claim that the costs order allows for costs to be claimed pursuant to the costs agreement on (1) an indemnity basis; (2) a solicitor and client basis; or (3) a special costs basis.

(Page 5)

Indemnity costs

7 In Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) the Court of Appeal summarised the well-known principles applicable to the making of an indemnity costs order. Those well-known principles provide the context in which the costs order is to be construed. Moreover, the standard order for indemnity costs is that 'X should pay all the costs incurred by Y except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that, subject to the above exceptions, Y is completely indemnified by X for its costs': Re Bond Corporation Holdings Ltd (1990) 1 WAR 465, 479.

8 The context, the conduct of the proceedings in the Court of Appeal and the terms of the costs order are inconsistent with an objectively determined intention to provide for indemnity costs.

Solicitor and client costs

9 The respondents contend that the expression 'reasonable costs incurred' in the costs order should be construed to mean costs on a solicitor and client basis not a party and party basis. Reliance is placed upon criticism in Dal Pont GE, Law of Costs (2nd ed, 2009) at [15.39] of the decision in Spencer v Dowling [1997] 2 VR 127. The Victorian Court of Appeal in Spencer construed the expression 'costs reasonably incurred' in Victorian equal opportunity legislation to mean party and party costs not solicitor and client costs. The criticism is not persuasive. There is little if any practical difference between the standard order for indemnity costs and an order allowing costs reasonably incurred on a solicitor and client basis. Neither construction finds support in the terms of the costs order.

Special costs

10 The respondents claim in the further alternative that a 'special costs interpretation' ought to be given to the costs order so as to allow the respondents to claim costs at hourly rates greater than those set in the Determination.

11 The power to make a special costs order is to be found in s 280(2) of the LPA. The court may make such an order if it is of the opinion that a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter. Special costs orders are routinely sought in this court and instantly recognisable as such. See Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR

(Page 6)

95 [37] - [49]. The terms of the costs order fall well short of supporting an interpretation that the maximum hourly rates provided for in the Determination be removed.

Conclusion

12 The preliminary issues should be answered in the negative. The respondents should pay the applicant's costs of this application to be taxed.