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A Reminder to Sue the Proper Party

It has been a long time since the last post here but hopefully that will change.

A recent decision of the Supreme Court of Western Australia caught my eye this week involving an application for indemnity costs.

Threats of indemnity costs orders are often thrown around in solicitors correspondence without any real thought as to the grounds must first be made out. That is, improper or unreasonable conduct which requires an indemnity costs order to signal the court’s disapproval of that conduct.

In Lance v QAV Pty Ltd [2013] WASC 13, Mr Lance was a litigant in person, although on his account, not by choice. According to Mr Lance, his solicitor was on leave over the Christmas period when Mr Lance appears to have ‘had enough’ and decided to start superior court litigation on his own. I mean hey, it can’t be that hard can it.

Anyway, Mr Lance sued the registered proprietor of the bulk of the lots in the Strata Plan where he had a dispute. Mr Lance should have sued the Strata Company. This was pointed out to him by the solicitors for the registered proprietor along with an open offer to discontinue with no order as to costs. Mr Lance in his ultimate wisdom did not accept that offer.

The end result is that his claim went from filed to dismissed with an order for indemnity costs within 4 weeks (12 days if you only count from when the claim was served).

That is what I call speedy justice!

Special Costs Orders

This is just a quick post to highlight what seems to me to be a recent increase in the making of special costs orders. 

A special costs order is, simply put, an order either removing or increasing the limits on party and party recovery imposed by the Legal Practitioners (Supreme Court) Contentious Business Determination 2010 (WA) (and other relevant determinations).  

Section 280(2) of the Legal Profession Act 2008 (WA) provides the basis for such an order. 

In order to obtain a special costs order, you need to satisfy the court of two matters. 

  1. is the scale, or the scale item inadequate?
  2. that the inadequacy arises because of the unusual difficulty, or complexity, or importance of the matter. 
To show inadequacy, you need only show that if the bill that would be presented to the taxing officer might tax out at an amount greater than the amount provided for by the relevant determination. This can usually be done by having an affidavit outlining the work undertaken and with an explanation why the work was necessary. It is also becoming increasingly common for parties to file affidavits from so-called ‘Costs Specialists’ meaning a practitioner who mainly practices in the area of legal costs, for example someone such as David Garnsworthy. 
Once an apparent inadequacy has been demonstrated, the second ‘limb’ of a special costs order needs to be fulfilled. There are three ways to do this. Show that the matter was unusually difficult. Show that the matter was complex. Show that the matter was important.  
I think it is fair to say that these are broad grounds and will usually be determined on the facts of the case and how the case proceeds. However, one could imagine that most Supreme Court litigation would likely fall into one category or another.
It is worth noting that even if you are successful in obtaining a special costs order, your bill might still tax out at less than the relevant determination. 
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