Successful application to strike out Defence and Counterclaim: Phillip Skelton & Wanda Meyer as Trustee for P Skelton Superannuation Fund No 1 v Leroy Nominees Pty Ltd [2020] WADC 88

Isaac Priddis appeared for my clients, the Plaintiffs, in Phillip Skelton & Wanda Meyer as Trustee for P Skelton Superannuation Fund No 1 v Leroy Nominees Pty Ltd [2020] WADC 88.

Basic Facts Summary

This case was as a ‘debt recovery’ matter, with the Plaintiffs’ claims arising from 2 separate loan agreements in 2015 & 2016.

The Plaintiffs were seeking to recover an amount of $420,000.

This was an interlocutory decision.

You can read the decision here.

We applied to strike out the amended defence and counterclaim, filed by the Defendants.

Such applications are called ‘strike-out applications’.

Striking out pleadings

The Rules of the Supreme Court 1971 (WA), in Order 20 r 19(1), provide that the Court may at any stage of proceedings strike out any pleading or anything in the pleading on the ground that:

a) it discloses no reasonable cause of action or defence;

b) it is scandalous, frivolous or vexatious;

c) it may prejudice, embarrass or delay the fair trial of the action; or

d) it is otherwise an abuse of the process of the Court.

We submitted that the defence and counterclaim should struck out because they disclosed no reasonable cause of action, were embarrassing and might delay a fair trial of the action.

Outcome

The court found a number of problems in the amended defence and counterclaim.

Firstly, there were found to be numerous pages in the Defendant’s pleadings which contained what could generously be described as evidence.

This evidence included an annual trial balance of the Defendant company, as well as various claims and declarations made in the taxation returns of parties.

Secondly, the counterclaim was found to be wholly unsustainable.

Due to these findings amongst a number of other errors, the whole of the counterclaim was struck out, with Deputy Registrar Hewett stating the following at [13]:

“My overall conclusion is that the whole of the counterclaim should be struck out not because it is necessarily wholly unsustainable but because it is riddled with various problems, has already been amended once and would be far more useful to commence with a clean sheet setting out the counterclaim in better detail.”

An Australian first costs decision: Security for costs knocked back in setting-aside application

I acted for the Plaintiff in Steven Pugh Investments Pty Ltd v Mossensons Pty Ltd [2020] WASC 225. The decision is here.

The overall case involved my client seeking to set aside a costs agreement he signed with a previous Law Practice.

This particular decision was about the Defendant Law Practice’s application for security for costs.

This was a novel application in Australian legal history.

There were no previous published decisions where a Law Practice opposing a setting-aside application had applied for security for costs.

What is a Security for Costs application?

In litigation, the purpose of an order for security for costs is to protect a defendant or respondent in whose favour the court has made an order for costs from having that order wholly frustrated by the inability of the plaintiff or appellant to satisfy it. [1]

In the context of a setting-aside of costs agreement application, the Law Practice submitted that the Court should order its former client (the Plaintiff) to provide security in the form of a payment of money into Court as a pre-condition for the application being progressed to a final hearing.

Public Interest

Master Sanderson, relied on the case of Westonia Earthmoving Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2013] WASC 57, in which Edelman J pointed to ‘public interest’ as a factor in deciding whether to exercise the court’s discretion in cases such as these.

Master Sanderson ruled that there could be no doubt that when a party seeks to set aside a costs agreement with a solicitor, it is in the public interest that the application ought to be heard.

Application of the Legal Profession Act

I relied on the Legal Profession Act 2008 (WA) in order to bring the setting aside application.

Section 260 of the Act details what disclosures of costs must be made to clients, and section 262 dictates how and when disclosure must be made.

If these sections are not complied with, then a client may apply under section 288 for the costs agreement to be set aside.

Decision

The Supreme Court dismissed the application for security of costs.

Master Sanderson stated that an order shutting out a client from attempting to establish a failure of statutory/legal obligations in a client/solicitor relationship ran contrary to the public interest and as such should not be allowed.

[1] Jodast Pty Ltd v A & J Blattner Pty Ltd (1991) 104 ALR 248  at 255 per Hill J, Fed C of A; Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 ; BC200105623 at [52] per Einstein J; Talwar v Sharma [2018] FCCA 483 ; BC201802738 at [6] per Judge Obradovic.

Costs awarded in SAT guardianship application in favour of my clients

My clients were awarded costs in a guardianship application. The costs were payable to them by the Applicant (who was a family member they were opposed to in the application).

This was rare.

Costs are rarely awarded in guardianship anyway. When they are awarded, it is more common for costs to come from the estate of the Represented Person, rather than from a family member who you are opposed to in the application.

The decision is here.

The main proceedings

The substantive application was for a review of a guardianship order previously made by the SAT, as well as an application for the appointment of an Administrator of the Represented Person’s estate.

The Tribunal refused to grant the applications.

My clients made an application for their costs incurred in responding to the proceedings.

Application for an extension of time

The Applicant objected to my client’s application at first instance as it was made more than 21 days (24 days) after the orders to which the application related.

Rule 42A of the SAT Rules prescribes the 21-day requirement.

In my submissions, however, I drew the Member’s attention to the operation of rule 46 of the SAT Rules.

Rule 46 relevantly provides that the SAT retains a discretion to waive non-compliance with requirements arising under the rules.

This, read in tandem with the objectives set out under s 9 of the SAT Act, as well as the relatively minor delay and the existence of extenuating circumstances, meant the Tribunal granted an extension of time. Only a few days extension was required.

Costs applications generally in SAT

Section 87 (1) of the SAT Act provides that parties ordinarily bear their own costs, subject to an order of the Tribunal to the contrary.

Section 16 of the Guardianship and Administration Act (GA Act) deals with costs in relation to proceedings commenced under the GA Act. Section 16 (5) of the GA Act provides that nothing in the GA Act limits any power exercisable by the SAT under the SAT Act.

Consequently, the SAT retains considerable discretion in the determination of whether costs ought to be paid, conferred by s 87 (2) of the SAT Act.

The key issue in the application was whether the proceedings were commenced or continued unreasonably.

In the Tribunal’s reasons it was noted that there were plain deficiencies in the Applicant’s case.

The Tribunal at [54] affirmed the position that a weak case alone is not sufficient to warrant an adverse costs order.

However, the Member pointed out a variety of circumstances, raised in my client’s submissions, that enlivened the Tribunal’s discretion to award costs pursuant to s 87 (2) of the SAT Act.

Delay, Irrelevance and Improper Purpose

Prior to the substantive review hearing, the Applicant was late in providing its material to the Tribunal.

At the hearing it was clear to the Member that the Applicant had potentially misconceived the nature and purpose of the proceedings.

The Applicant focused heavily on scrutinising a report of a delegate of the Public Advocate and cross-examining my client on issues irrelevant to the dispute.

The delay ultimately led to a prolongment of the matter as the Tribunal did not have time to hear from the other parties and required written submissions to be filed as a result of running out of time.

At [50] – [51] the Tribunal referred to the potential that the review application was brought for an improper purpose to influence the discretion of the Public Advocate. Additionally, the Tribunal in its reasons pointed out that the Applicant and its Counsel were advised at the original directions hearing as to the role SAT plays in relation to the dispute before it.

Therefore, the delay and conduct of the Applicant following such directions from the Tribunal (in pressing ahead with its scrutiny of the Public Advocate’s report and its cross-examination of my client), was considered to be unreasonable conduct.

For the above reasons, the Tribunal awarded costs to my clients in the sum of $7,000.

Grieving parents who were defamed in emails, awarded $60K damages plus costs

I acted for Matthew and Lyndal Trott at this defamation trial.

I was Trial Counsel, together with Junior Counsel, Isaac Priddis.

The facts were tragic.

My clients’ Son, Samuel Trott, drowned in a lake near his home.

Matthew and Lyndal, were neighbours of the defendant, Ms Ansuya Rajoo.

The relationship with her broke down about 4 years after Sam died.

Sam was a toddler, who had autism.

He had wandered from the family home after a tradesperson left the front door open.

His body was found after an extensive search by community members at the lake about 600 metres away.

The coroner concluded that his death was an accident. 4 years later, the neighbour sent emails to the local police inspector and the principal of the school of the surviving siblings with a number of defamatory imputations.

These included that my clients had conspired to kill their son by conditioning him to jump into the backyard pool with a life jacket on. She said this gave him a false sense of security so that he jumped into the lake and drowned.

In assessing damages, the District Court of Western Australia found that although there was a limited extent of publication and no impact on their professional reputations, there could be no more serious an allegation than the imputation that parents murdered an infant son with autism. The emails attacked them “in the worst possible way as parents”. The impact of the allegation was significant and devastating. Their hurt in grieving their son’s death was exacerbated, being forced to relive it. They felt fear for their surviving children. They felt they needed to move house to get away from the neighbour.

Their good reputation as parents and community members was unchallenged and presumed.

The defendant made no apology. She had acted with malice. Aggravated damages were awarded and indemnity costs orders made.

You can read the decision here.

Here is a media article about the case.

Appeal from the Magistrates Court of WA

I appeared for the Appellant in Chapple v Dulux Group (Australia) Pty Ltd [2022] WADC 73. The decision is here.

The case involved an Appeal from a Minor Case in the Magistrates Court of Western Australia.

The case related (amongst other things) to the Appellant’s allegation that the Respondent failed to provide goods (paint coating and render) in accordance with the description offered by the Respondent.

Magistrates Court Proceedings

At trial, both the Appellant and Respondent adduced expert evidence and tendered expert reports in support of their respective cases. The Magistrate made a finding that the expert witness called by the Appellant did not possess the relevant expertise to give opinion evidence at trial.

The Magistrate dismissed the Appellant’s claim, brought under the Australian Consumer Law, and awarded costs in favour of the Respondent.

Appeal

The Notice of Appeal alleged on three separate grounds that the Magistrate had denied him natural justice.

The decision of Commissioner Collins of the District Court of Western Australia highlights several crucial features of the Magistrates Court as compared to other jurisdictions.

Minor Cases 

Part 4 of the Magistrates Court (Civil Proceedings) Act 2004 (MCCP Act) relates to Minor Cases, defined under s 26 of the MCCP Act.

There are limited grounds upon which an appeal can be brought in relation to the decision of a Magistrate in a Minor Case. Relevantly here, s 32 (3) (b) permits an appeal on the ground of a denial of natural justice.

 Each ground of appeal relied upon in the Appellant’s case asserted a denial of natural justice.

Costs in the Magistrates Court

The Magistrates Court is typically a “no costs jurisdiction”.

However, s 31 (3) of the MCCP Act allows a successful party to claim costs other than “allowable costs” if the Court is satisfied that there are “exceptional circumstances” that would create an injustice if costs were not awarded to the successful party.

The Magistrate delivered brief reasons for the award of costs (see at pages 44 and 45 of the decision).

Decision

The District Court allowed the Appeal (in part) and set aside the costs order made by the Magistrate in favour of the Respondent.

The Court, after considering thoroughly the law on natural justice, ultimately agreed with my submission that the learned Magistrate, in awarding costs, failed to disclose adequate reasons in relation to the existence of “exceptional circumstances” as required by s 31 (3) of the MCCP Act.

The case highlights the importance of decision makers providing adequate reasons for their decisions.

Additionally, the Court highlighted the necessity of a thorough consideration of the legislative context of a decision and the relevant jurisdiction, when determining the content of the duty of natural justice that applies in any given case.

Crucial here, was the overriding objects of the Magistrates Court as a court of summary jurisdiction and the explicit requirements for “exceptional circumstances” in the legislation before an adverse costs order can be made.

For these reasons, the Court held that the Magistrate was required to identify the relevant facts upon which the decision was based and allowed the Appeal on this point.

Carter v Napper

I appeared for the Plaintiff in Carter v Napper [2022] WADC 25. The decision is here.

Judge Prior of the District Court of Western Australia held that 4 matters published by the Defendant were defamatory of the Plaintiff.

His Honour found that the Plaintiff was entitled to an award of damages in the amount of $30,000 and an additional $10,000 for aggravated damages.

The Court also granted the Plaintiff’s application for a final injunction and awarded indemnity costs to the Plaintiff. 

My client was the owner of a cleaning business who worked in an apartment building. The Defendant was a tenant who asserted the owner was not doing his job, was a danger to children and a paedophile. My client and his husband lived in the apartment building as well as running the cleaning and gardening business which cleaned the building. The also ran a clothing business.

The tenant, Mr Napper, lived opposite the couple.

He asserted in an email to the strata manager that my clients ran photoshoots in the building, inappropriately rented out their property, and that the age difference between Mr Carter and his husband suggested that he was a paedophile and unsafe to be around children.

Injunctions restraining Mr Napper were also made.

The case highlights the approach the Court will take where the Defendant’s conduct exacerbates the Plaintiff’s hurt following a defamatory publication and where further conduct is unreasonable in the context of settling the resulting dispute.

For these reasons, the Court agreed with my submissions that aggravated damages and indemnity costs should be awarded to the Plaintiff.

Local Government Standards Panel - SAT decision

I appeared for Cr Ben Kunze of the City of Canning, the Applicant in Kunze and Local Government Standards Panel [2021] WASAT 159. The decision is here.

The Local Government Standards Panel had found that the Councillor had contravened reg 8 of the Regulations and thereby committed a minor breach. The Panel decided to order that the Councillor make a public apology at the City's next ordinary council meeting.

After the Tribunal hearing at which I appeared for the Councillor, the Tribunal set aside the Panel's order and substituted it with an order that no sanction be imposed.

Higher cap for non-economic loss under Defamation Act

As at 1 July 2022, the cap for non-economic loss has increased.

It is now $443,000.

See here for the relevant edition of the Government Gazette.

Statistics on the small number of cases that go to trial in WA

It is very interesting to get statistics about how only a small number of cases actually go to trial.

In the Department of Justice's Annual Report 2015/2016 the raw numbers are published for the Supreme Court of Western Australia and the District Court of Western Australia.

Only 51 civil cases went to trial in the Supreme Court, out of 2,964 cases that were finalised.

This means 98.25 % of cases were settled / discontinued etc and only 1.75 % went to trial.

Only 50 civil cases went to trial in the District Court, out of 4,948 cases that were finalised. 

This means 98.99 % of cases were settled / discontinued etc and only 1.01 % went to trial.

Similar statistics are not available online for the Magistrates Court of WA.

I have put together this spreadsheet, showing more detail.

Questions to ask before hiring a lawyer

You should ask these questions before hiring a lawyer.

Duplication of work

To avoid duplication of legal costs it is important to find out who will actually be doing the work.

1. Will the Partner, or person you speak to on the first occasion, be getting a junior lawyer to do the work?

2. Does this include Court appearances and mediations?

3. How is the potential for duplication of legal costs, as a result, avoided?

4. If the case goes to trial, or there are any contested hearings in the lead up to trial, will a barrister be hired too?

5. How will any duplication of legal costs be avoided as a result of hiring a barrister?

Experience

It is important to know what legal experience the lawyer or lawyers doing the work have.

1. How long have you been admitted as a lawyer? Have you done this type of work, before, and how frequently?

2. How often do you appear in Court?

3. If the matter is likely to be heard in the Magistrates Court of Western Australia, do you have experience in the Magistrates Court and in Magistrates Court procedure? 

4. If the matter is likely to be heard in the District Court or Supreme Court of Western Australia, do you have experience in those Courts?

5. What extra training have you done and do on an ongoing basis, relevant to the work I am engaging you to do?

Costs & advice

The most frustrating part of hiring a lawyer is the limited information available your future legal costs.

1. On what basis are the costs estimates provided? Has a spreadsheet been used to do the estimates? Can the spreadsheet be made available?

2. What is the method for providing advice? Is this provided in writing or orally or both? If both, what factor determines whether the advice is provided in writing vs orally?

3. If we need to get in touch, can we send each other text messages to avoid wasted time leaving messages for each other, by telephone? Do you use Skype?

4. Based on your experience, what % of costs in a case like this are recovered if we win? What am I getting from you for the "gap"?

5. Do you charge anything extra for work done by secretaries and non-legal staff?

6. Will you provide me options for work to be contracted out, including offshore? (This is such as in relation to preparation of list of documents for discovery)?

7. If there is any need for a taxation of costs in relation to costs awarded during the course of the case, do you personally do the bill of costs and attend any hearing, or do you hire an external costs consultant?

8. If I have questions about my bill, how do you make it easy for me to ask questions?

9. Do you provide audio recordings of our meetings, at request? What about telephone conversations, as well?